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On this episode of the Dr. Friday Radio Show, Dr. Friday tackles key tax season concerns, from handling 1099 discrepancies to adoption tax credits. She also answers listener questions about property tax freezes, Social Security taxation, and dealing with IRS notices. Tune in for expert tax tips and real-world scenarios to keep you informed and prepared this tax season.
Topics Covered:
- Tax Season Prep: Ensuring you have all your W-2s, 1099s, and other necessary documents before filing.
- 1099 Income Mismatches: What to do when a 1099 doesn’t match what you received in the bank.
- Adoption Tax Credit: Eligibility and how to claim up to $16,810 in 2024 for adoption expenses.
- Dependent Care Tax Considerations: Qualifying conditions for claiming an elderly parent or adult child.
- Property Sale and Taxes: How escrow delays affect when you owe taxes on home sale proceeds.
- Head of Household Filing Status: Who qualifies and how it can increase deductions.
- IRS Notices & Disputed 1099s: Steps to take when the IRS claims you owe taxes for income you never received.
- Medical Reimbursement & HSAs: Reporting rules for HSA distributions and tax-free employer medical stipends.
- Social Security & Taxes: Income limits before Social Security becomes taxable and filing requirements.
- Property Tax Freeze for Seniors: How homeowners on limited income may qualify for property tax relief.
- Extensions & Tax Payments: Why filing an extension doesn’t delay your tax payment deadline.
Transcript
G’day, I’m Dr. Friday and the doctor is in the house.
And if you want to join our show on this beautiful Saturday right before the Super Bowl, you certainly can.
You can join us at 615-737-9986.
615-737-9986.
Taking your calls. Talking about my favorite subject, which is taxes, which is what I’m working on all weekend.
But it’s also the time to think about what you’re going to be needing to organize, right?
It’s time for you to think, okay, so have I received all of my W-2s?
Did you work any part-time jobs?
Did someone send you a 1099, but it doesn’t match what you actually put in the bank.
Sometimes that happens, you know, sometimes depending on when they paid you.
I had a situation where one of my clients said, well, I didn’t get the check until January 4th,
but they mailed it and it was posted.
I mean, theoretically, it was dated December 21 or something like that, 21st.
So the 1099 was higher than they expected.
And that’s fine.
They wrote the check at the time that they received it,
and you’re cashing it at the time that you’re going to pay it.
Now, here’s the biggest problem.
If that is your only payment, and the IRS gets a check for more,
and you report less, you need to put explanation in there why.
The 1099, there is a way of doing that, but you want to explain it,
because otherwise the IRS is going to think you understated your income
based on what somebody had reported.
So it’s important that you address it.
You don’t just let it slide and then you turn around
and you’re like, oh, wow, what do I need to do on this
or whatever.
You need to make sure that you have all that information
because again, the IRS is going to match that information
and if you don’t have it,
you’re going to end up with a nice little love letter
that they say, turn around and say,
hey, you owe more money.
All right, let’s go to Steve in Nashville.
Hey, buddy.
What can I do for you?
Our daughter passed on 23.
When we adopted the four-year-old last year,
you had a commercial on saying that we could take a tax credit for the
expenses.
So I can just write that whole thing off.
Right.
Well, you get up to a certain dollar amount.
I think the credit in 2024 is $16,810.
I’m assuming if you spent more than that,
you would have a possibility that some of that might have to roll over.
If you spent less than that, you’ll pay in whatever you paid.
Okay.
And then my daughter was on disability,
and they were given my granddaughter Social Security.
She was getting a small check from that,
and then she’s continued to get in that check.
survivor benefit or something.
But is that,
they just send us a 1099 SSN.
Do we count that as part of our income?
Right, and you don’t need to report that.
That is not income for you.
It is a benefit.
Therefore, if that person was working
or if there was a situation,
but on a minor child,
that is not taxable income.
So I don’t have to put it on our return at all?
No, sir.
Okay, thank you very much.
No problem.
Thanks for doing what you’re doing.
All right. Talk to you later. All right. That’s great. And there is adoptions credits for everyone
that, you know, I mean, it’s a wonderful thing to do. But there is an adoption credit. Like I said,
in 2024, you can get federal income tax up to 16, 8, 10. That’s the qualified expenses. And it is a
credit, right? We like credits. Credit means refundable, where a deduction means that they
will reduce your income. And for some years, they were actually deductions versus credits.
So they have brought it up. I think it was like $14,000 in 2021, and it’s come up from there. So
if you’re adopting a child, then you can use that because it’s not an inexpensive thing to do.
So again, if you’ve got tax questions, maybe you have a situation like that, or maybe even have a
situation where you have a similar situation would be a grown parent that maybe lives in the house with
you or you’re paying more than 50% of their care to stay in an extended care or older person home,
whatever. I can’t think of the proper term. Sorry, guys. And you’re helping to pay because maybe they
don’t have enough to do that. Then that person could qualify to be your dependent. You do have to
meet that 50% of care. So if they’re living in your house, it’s a little easier, especially if
all they have is social security, because you think about your, your roof or your, your, your
mortgage or rent. So you have utilities, you have food, you, you know, all those things adding up.
And if they’re, you know, if there’s only two of you and that person, most of their money might be
going to medical or, or just basic care, then sometimes it would add up to being a benefit.
And I will generate that.
The benefit is if you’re a single person and you have a parent or someone that lives, you
would be able to qualify for head of household, which would give you a better standard deduction.
The actual credit is $500.
The standard deduction would go up by another five or so thousand.
So that would help a little bit.
But I mean, it’s not a huge tax credit.
It is better than nothing.
And therefore, always don’t want to leave anything on the table.
But sometimes I had a situation where a father called and his daughter and her children had moved in with him.
And she was making $35,000 or $25,000 a year.
And he was helping to support the whole thing.
And he wouldn’t know if he could deduct them.
And I basically said it wouldn’t be beneficial because theoretically the mother is covering 50% of the care of the children.
and she is working, taking care of herself.
So when we did the math, it worked out.
Basically, she was providing most of the care.
I mean, it is costing him more than it was before she moved in.
No question.
But that being the fact, he didn’t really meet the 50% care and moving from there.
So it is important to look at the whole picture.
And a lot of times people are looking for just another way of putting more money.
If you have a child that’s under the age of 16, then the child credit is $2,000.
But anyone that is 17 and older, it’s going to be only $500.
But again, if it’s just you and you have your mom or dad living with you and they’re living
in your house, then it would be a good thing to think about possibly because that would qualify
you as head of household.
So again, just making sure you understand the qualifications because you can’t just take your
girlfriend’s child and say, Hey, that child’s living with me, even though the girlfriend may
be still living with you. Um, and now you qualify, you don’t qualify if that person is actually the
parent and they are actually doing what they need to do to cover their care. Um, IRS is really funny
about making sure and they’re doing better and better on that particular situation. All right.
Uh, let’s go to Devin, Devin and Franklin. Let’s see if I can help Deb out. Hey, Deb.
So, hey, I’ve got a question about a house that I sold last year with one of my ex-fiance.
It went into escrow with the courts since it’s under a partition, you know, I guess a legal lawsuit, whatever.
Do I end up paying taxes from when it was sold or from when the money gets dispersed from escrow?
well that’s a great question so I’m assuming it’s being held up in court
somehow Devin yeah we’re gonna go on over the ends and out of who gets how much
money or you know right yeah well I mean I guess it still comes down to the the
answer to that is not black and white and I hate to say that because at this
point is it a 50/50 did they send you a 1098 s where the where the property was
or did that have you received anything on the sale of that property at this point
um so no i haven’t received anything from the sale like on the sale of the property from the uh
i guess the brokerage company you know whoever dealing with that paper was um
because i mean basically i would say that in in honesty at the time of sale you were responsible but
there is this clause where it’s basically saying that you didn’t have access to the funds uh because
it was held up in a court case happens more times in estate situations that I know. I mean,
I don’t deal with a lot of divorce or separation or whatever this would be called. Um, so I can’t
say I’m an expert, but my, my first thought would be is that you would only have to file it when they
actually settled the case, assuming, but again, you know, if it’s an estate and money goes into the
estate first. This money was actually held in yours and your ex’s name. And then they took it
into the courts because of this, of settling the estate of some sort. Right. And I’m, um,
so I would double check. I mean, personally, Devin, if I were you, I would contact my lawyer and ask
him, do I need to be paying tax? Cause I would be leaning towards the fact that you need to pay tax
on it, but that may be wrong under this unique situation. Normally we sell a house, you know,
we get the money, it closes in 30 days, it’s kind of black and white. I will honestly say that’s
probably outside my expertise. So I would double check with your attorney first, because you never
got the money in your pocket. It wasn’t like it went to the IRS and paid off a debt. You know what
I’m saying? Because in those cases, we do have to pay tax first, even though we didn’t get the money,
the money was paid to pay off a debt. In your case, it sounds like the court is holding all the
money in an escrow. In an escrow, you are not liable until you receive it. So I just wonder how
the brokerage house handled it because at the time you and your ex had to sign paper saying that you
were selling it in your name. It didn’t go into that escrow. So I would just confirm it with my
attorney before I finished it out just to make sure you didn’t have the IRS changing your tax
return because they found out about the home sale and you were thinking, well, hey, I never got the
money so I shouldn’t have to pay tax on it yet.
Yeah.
And then I guess my
second question would be
like with a sale of the house
like the proceeds, I know there’s
you know some ways of reinvesting
that into another property
and kind of, I don’t want to say
Is this your primary home, Devin, while you
guys were living in it?
Yeah, it was. How long did you
guys live in that house?
A little over
a year and a half. Okay.
but due to the fact that you got divorced or separated or I don’t, I mean, I know you weren’t
married since you was, but that there was a, um, a dispute, uh, I don’t know the proper term,
sorry, Devin. Um, then I mean, you may have reasonable cause for the reason to move out of
that house. Um, so therefore you might still be able to take a portion of the exclusion,
the 250,000 that you’re entitled to. And then your, your ex would be also entitled to how much did
you guys make on the gain of the house? So I’m going to, I’ll end up walking away with about 55,000
profit from, you know, when we bought it to when we sold it. Okay. So you, you sold it for about 110.
Well, I don’t know if it’s 50, 50, but so the, when you say profit, that’s it, you brought it
for 300 and you sold it for 400 kind of situation, right? Just making sure we’re on the same page.
Yep, correct.
Okay. All right.
So you might want to talk to whoever does your taxes,
because I think due to this situation and the fact that it’s not in your control,
you might meet, there are some exclusions under the $250,000 home exclusion.
You might qualify and therefore not have to pay tax on that.
Oh, that would be nice.
Yeah. So you need to find out a little bit more and then you can,
that would be great.
Yes. And to be able to eat up part of your exclusion on it.
So they do it by day due to the situation that you had to sell the house.
It wasn’t that you wanted to.
It was a situation you had to.
A lot of times that happens with divorce.
I’m kind of putting this in the same category.
And in divorce, if it happens, they do have an exclusion for it.
So that might be something to look into, all right?
Okay, perfect.
I guess I’ll talk to the lawyer, and then I might need to call you back and get on the schedule to have you do a exclusion tax.
Thank you.
I appreciate it, Devin.
All right, we’re going to take a quick break.
Devin and I cooked me over a little bit.
So if you have a phone call, you can call us at 615-737-9986.
We’ll be right back.
All righty, we are back here live in the studio.
This is Dr. Friday.
I’m an enrolled agent licensed by the Internal Revenue Service to view taxes and representation.
And let’s go right to Greg in Nashville and see if I can help him out.
Hey, Greg.
Hey, Dr. Friday.
The wife and I received notice from the IRS that they were adjusting our 2003 income taxes
to receiving a 1099 for a collections notice from a company that we don’t think we ever had any dealings with.
On the notice, it had the company name, the account number.
We’ve talked to that company.
They say they see no record of us ever having an account.
We’ve looked at our credit reports, never had an account on the credit report with them.
What’s my next step?
I would actually go ahead and open up a case.
It’s called a 911 with a local tax advocator’s office.
The tax advocator is, they are the, I mean, they’re actually a great office.
They do.
But I would put all that together, Greg.
I would actually pull up a copy.
I mean, you can black out your social security numbers.
I would have a copy of your Expedia or whatever,
your report for what you have in credit.
I would see if you can actually get a name,
a number, a person at the place that you called and spoke with.
They may not put anything on paper.
It’d be great if they could send a letter or something just saying,
hey, according to this, we have no record of this person.
I would put together a little case and then have them saying,
hey, this is not us.
This is probably someone that has stole an ID or maybe it’s a typo.
But, you know, you don’t want to pay tax on it.
It’s that simple.
So I would go.
I mean, you could try to send a letter directly to the IRS.
I have found that they do not read my nail.
That’s why I go to the tax advocator.
And all you have to do, if you look up tax advocate, I’m saying that word wrong.
But do you know what I’m saying, Greg?
Because I am spilling it.
I’m still not getting it to come out of my mouth the proper way.
Advocates.
Advocate off.
Anyways, and the form is called a 911.
Easy to remember.
If you Google 911 tax advocate, it will bring it up.
It basically just says, what do you want us to do?
What have you already done?
I would send a letter to the IRS, just to the address you received that love letter from.
Respond and just say, this is not our information.
maybe just in a simple form, here’s what we’ve done. And just so they can’t say you didn’t respond
and they immediately turn it directly into collections. Because right now it’s basically
just saying, hey, we think you’re in the wrong place and we’re going to adjust your taxes if we
don’t hear from you. Right? I think that’s what the letter you have right now. It doesn’t say that
they’re in collections. It says that they want to change your tax return because of information
received from someone else, right? Yeah, correct. Yeah. So I would go both ways. I would respond to
the letter so they have it. And I always, always, if you have a, sometimes they’ll give you a link
that you can upload documents with that letter or a fax number. If they don’t have either of those,
send priority with a tracking, something that just says, I did my duty. I would immediately,
within about 30 to 45 days, the tax advocate office will actually contact you, a human. And then
They’ll look at your case and then they’ll go into the actual IRS files, which you and
I have no control over and contact someone over there and they’ll be able to move behind
the scenes much better.
And then they usually will say, hey, I’ll call you back in about 25 days or 30 days and I’m
going to do this, this and this and we’ll wait and see what the response.
They can also put a hold on your account so that no one does anything nasty like levy or
do something silly.
And then that would be the answer.
As far as if I were to take the case, that would be the direction I would go with it.
Okay.
Thank you very much.
No problem.
Good luck.
All right.
That was a great question.
And we, I mean, I can’t tell you how many times I get some of those letters.
And normally it’s not, I mean, people always think, well, I got to change because I did
something wrong.
It is not always because you’ve done something wrong.
Sometimes it’s just like this.
I’ve had several two cases last year that when they sold a home, both the closing and the selling agents both posted the 1099.
So it looked like they had two home sales exact same day, exact same dollar amount.
But since two of them sent it, the government’s saying, hey, you sold two homes at the same day at the same dollar amount.
Therefore, you didn’t pay enough in taxes.
Now, finally got some of that taken care of.
But it takes a while and it can be very stressful.
So just take a deep breath. Tax advocate office in Tennessee, the Nashville office, I can’t say enough about them. We probably always have two, three cases going with them at any given point.
Because after I’ve exhausted sending things to the IRS, trying to respond to the letters,
sending it certified, trying to upload or fax or call, you know, after a period of time,
I had one, I think it’s 2021.
We just resolved the issue last week.
Finally, and it was through the tax advocate office.
She finally got everything handled for us.
And sometimes it’s not so much that the IRS has dropped the ball, to be quite honest.
We’re sending documents.
It just doesn’t seem like the same person is in there.
So a lot of times things just get kicked back, but you don’t get any love letters telling you
why it’s gotten kicked back.
All you get is a collection letter saying you still owe $22,000 or whatever.
And you don’t know you don’t owe that money.
And that’s where it gets a bit frustrating.
So I’m sure the advocate office is not going to be overly excited that I’m totally saying
that’s the way.
But if you’ve exhausted calling the IRS and saying, hey, here’s my situation, if you’ve
already done all that, you still have a situation where the IRS is just not really listening,
this is when the tax advocate office is there for you.
They are basically a resolution office, as far as I think of them, a resolution office
within the IRS.
But they don’t necessarily, they’re not the IRS.
They’re there to help us do resolution, which if anyone’s listening that deals with the IRS,
I think we could have more resolution officers.
That would be awesome.
You know, instead of hiring 80,000 people to collect, it might be nice to see if we can
actually have a few more people in resolution first, because, I mean, I probably have half
million dollars worth of supposed taxes due with different clients.
And in most of those cases, zero is due or very little.
people are making payments on what we know is due, but the rest of it is not. So it’s just one of
those things, just getting that information into the right hand so the people can actually do the
right situation. I mean, and one, they mailed a check, 70 some thousand dollars for the 2023.
It accidentally got sent in with the year 2024. So, hey, the IRS didn’t make a mistake. We didn’t
and label the proper information on it.
So we sent a copy of the check along with the first collection letter,
and this was probably, well, back in like June, July of 2024.
And so sure enough, they turn back around,
and another 30 days later, they send another letter saying,
nope, we still have this much money due.
And we’re saying, wait, we’ve already paid this.
We’ve already paid this.
So finally, just again, another one last week,
we had some success on that day.
the taxpayer and myself got on the phone.
We were within 30 minutes,
had someone on the phone that actually could help us.
And she looked in there and sure enough,
she saw the money sitting in 2024
that needed to be moved back, right?
The money was there.
Then of course, it eliminated $15,000
worth of penalties and interest
because the money was there on time.
And the resolution was done.
It was how long it took five minutes
for someone to look in the account,
see the money was there,
moving to the proper time, but we were working with paper and e-filing or uploading and faxing
this information for a good year almost, but it was finally resolved. So just don’t get up,
give up and don’t get so excited or discouraged about it that you let it go that way. So just,
just putting that out there. All right. So if you want to join the show, you can at 615-737-9986,
615-737-9986. For any of you that may just be catching the show, I am Dr. Friday. I’m an
enrolled agent, been doing taxes and resolution work for just about 30 years here in the Nashville
area. We’re actually in Britwood. And if you have love letters or you know some family members that
maybe haven’t filed taxes. The sad part is 2020 was, if you don’t file 2020, 21, 22, 2020, 21,
22, yeah, so 2020 is pretty much off the books. So you have 21, 22, and 23. 21 will fall off come
April pretty much. And so if you haven’t filed during the time that you needed to file 19 and
20 and 21 were big years for government giving out some money, if you don’t get those filed,
very quickly. You’re going to lose those funds. It’s not refundable. Now, that doesn’t mean that
it can’t apply against existing funds that you owe the IRS for that year. So in 2020, let’s say you
owe $5,000 and you have monies that they should have given you for that, then that applies, but
it won’t get refunded. So I had a client that came in and we had filed a number of years and he lost
400 and some dollars because it was after the time period. So it’s very important to file your taxes
within those three years, especially a lot of people just don’t realize that they have refunds.
And come on, we don’t want to leave money on the table, people. The government’s not going to do a
good job with it. You’d be better off with it. All right, we’re going to take our second break.
If you want to join the show, you can 615-737-9986. We’ll be right back. We are back here live in
studio and again you can join us by phone at 615-737-9986 615-737-9986 talking about taxes
preparing for taxes thinking about things we might need to do if we’re doing don’t wait to the last
minute and i will say you know if you’re in a very complicated or crazy year that you might be having
think about doing an extension now i want to start this early this year because sometimes people aren’t
hearing. When I say an extension, there’s nothing wrong. I love extensions. They make life so that we
don’t rush through and get something done in taxes just to get them done, but it doesn’t extend the
money. So if you think you’re going to owe $5,000 because you’ve worked up the basic numbers and
everything’s not in and there could be some give or take, you need to make sure by the time you file
your extension and or april 15th that you have paid that five thousand dollars if you have it if
you don’t then there’s nothing you can do about it and we’ll have to set up a payment plan and deal
with the penalties and interest that come with that but if you have the money just because we’re
filing an extension does not mean you do not have to pay everybody would do it then right i mean why
would we not all wait till october if we didn’t have to pay um by april 15th so again always good
to think about that and making sure that you’re actually, you know, taking that into account. If
your tax person says, hey, we’re going to file an extension, that’s fine. That’s great. But make
sure they’re telling you how much you should be paying in estimates to cover that situation,
right? Because that’s the important part of that conversation, just to make sure you have that.
All right, let’s head to the phone lines. Bill was good enough to give us a call. Hey,
Bill, what can I do for you? Yes, I have a question about medical reimbursement. So I got a
form. The account is from my employer, and I got a tax form saying that I reimburse medical expenses
of 200 plus dollars and i do my own savings account is this an hsa yes okay easy enough
when you do your own taxes you’re going to go in there and you’re going to put in i think it’s a 1099
essay i’m winging this a little bit i think it says on it yeah that’s the form that i received
so you put that in there make sure when you’re filling that out in whatever tax software that
you check that that is used totally for medical reimbursement and that it’s an HSA. At least in my
tax software, that’s the two things we have to check. If you don’t, they’re going to think that
you got 200 and some dollars as just money, right? They’re going to tax you on it. So make sure when
you’re in your tax software, they should ask you, what was it used for? And you’re going to say for
medical or if you’re over the age of 65 and then the other one says hsa so i’m old-fashioned and i
do it through the forms and i there’s like an 88 56 or something that says i got 200 but it’s
reimbursed for doing medical expense so there’s a couple lines down is deduct the 200 that i got
So that 88.56 zeros out, which goes to schedule one, I believe it is, which has a zero on it.
And that’s the only number on that schedule.
And then that zero goes to the 10.
Well, it ends on the schedule one, basically, because there’s no place to carry it forward at that point.
But you are correct.
It is going to carry over.
And then so you’re going to take the 8.8.
Was it the 8.8.8?
8867 or whatever.
Yeah, 8867, I think.
No, 8889.
That’s what mine goes to it.
8889, and it’s all going to be zeros, right?
Because now you may contribute to a health savings account.
I don’t know.
On your W-2, you’d have a code W, if that’s the case.
So it will actually require you to file the 8889,
and you’ll be self-individual or family,
because that tells how much you can put in.
But bottom line is all of that’s going to be zero.
If it’s done incorrectly, you’re going to end up with a schedule one where on box, I’m
cheating here and using a computer, on box 8Z, it would actually have a number like 200
and some dollars, whatever that number was.
Okay.
So that’s like my first question is the reimbursement.
So the bigger question is that I’m retired and I have a medical stipend.
Okay.
And the company puts money in and when Social Security takes money out of my premiums for Medicare and for my supplemental, I get reimbursed for that.
Well, that’s a couple thousand dollars, but I don’t have any forms on that.
So is that taxable?
It is not.
I think you’re, is it medical?
I mean, is this military?
No.
Or no.
Okay.
I don’t believe that is going to show up on any of the taxable situation.
It’s just a benefit that you’ve signed up for.
Yes.
There’s no place for it to actually show up.
But because they sent me a form for the $200, I have to fill out all these forms that zero out.
But on the bigger money, I don’t have to worry about.
Unfortunately, that’s correct.
It’s just the type of program.
And the 1099 SA people supposedly could go use for anything other than medical.
I don’t have any idea.
The other one is directly a medical reimbursement.
It’s tied directly to medical.
You and I would say the HSA is as well, because I’ve never been able to go buy my dinner with
an HSA card.
But theoretically, it supposedly can be.
Yeah, you can’t use the card unless it’s medical.
I know.
I agree.
All right.
Okay.
Well, you’ve given me good peace of mind.
I appreciate your feedback.
No problem.
Thanks for calling, buddy.
I appreciate it.
All right.
So if you want to join the show, you can.
It’s 615-737-9986.
615-737-9986.
I know I deal with a lot of military individuals, and sometimes they have certain benefits that
will come to them.
That’s why I wasn’t too sure exactly what Bill had.
But, you know, if you’re a disabled vet or any kind of military, none of that is, thank goodness, it should not be.
But none of it is taxable.
So, you know, I think it shouldn’t be.
Anyway, so if you join the show, 615-737-9986, 615-737-9986.
Not to me, people are doing things by hand nowadays.
I will give Bill credit for that if he’s actually printing out the forms and actually having to fill them out that way.
I would say it’s a great practice.
My father had me do that when I first started learning to do taxes, and that was 30-plus years ago.
As soon as I figured out that there was actually software to do it, I was not going back.
But it does help you understand how some of that rolls over from one form to the next and how it affects the taxes.
So it’s a great practice.
I would honestly say if you have teenagers and you wanted to actually teach them so they
understood how to, how taxes work, because I’ll be quite honest with you.
Sometimes it is funny where I have a lot of, you know, 20 ish individuals that have never
filed their own taxes.
And most of the time it’s only a W2.
Now given as we start getting more involved in investments and businesses, that’s a little
different.
You really don’t want to probably file your own taxes because you might be leaving money
on the table if you didn’t know what you’re doing. But you would have a single W-2. The only
problem I want to tell you is if you’re a college kid or a high school child and you are getting W-2s,
great, no worries. But be careful because if your parents are still able to claim you because you
made $6,000 and they still have more than 50% of your support, be careful if you’re filing your own
taxes because I have every year at least four or five situations where the child, the young
adult, whatever the proper term is, has already filed their taxes.
The parents, we file them.
We get kicked out because the kids already filed.
Therefore, we lose the deduction.
In some cases, we’ve lost the college credit.
Not always, but sometimes.
So again, very important to be able to make sure if you’re filing your own taxes, and I
am an advocate because a lot of you can file for free.
If you go to irs.gov, click on free taxes, but make sure you check that box that says you can be claimed as a dependent by somebody else.
It’s right there on the first page of your, your forms.
It’s make sure you check that box.
Cause if you don’t, you’re going to mess up your parents and them filing their taxes possibly.
And I realize you want to have your refund as soon as possible.
If you qualify for one, if you are a high school or college kid, and if you’re not sure if you should even file,
if you’re looking at your w2 and box two says federal withholdings if there is any money in there
and you’ve made less than let’s just say ten thousand dollars you’re likely to get all of that
money back um so again depending on certain circumstances but 90 of you would get whatever’s
in box two back so it’s important that if you don’t have anything in box two no sense in really
filing a tax return because you’re not going to get a refund all right let’s go really quick to
Terry in Nashville and see if we can get his question before the next break. Hey, Terry, what
can I do for you? Yes. What’s my limit on where I have to file taxes? What is the limit? I mean,
are you on social security only? That and some interest, you know, from like money market.
Okay. So can I ask ballpark? I mean, let me tell you this. Is it less than $10,000 that you have
from the other other incomes um or more it’s right on it it’s okay so you basically if you’re
single your standard deduction is around fourteen thousand dollars so whatever that standard deduction
is pretty much you could have an interest then after that you’re going to end up having some of
your social security being taxed so theoretically um an answer to that i mean again it really
If you’re making $40,000 in Social Security plus this $14,000, you would need to file taxes if you’re single.
If you’re married, you would not.
I got $30,000 in Social Security.
Then I got, say, around $10,000 in different things.
Okay, so if you’re around 15, or I mean, 15 is 50%, so the provisional tax code takes
50% of your Social Security, which is 15 plus the 10, puts you at 25, you would be still
at the zero tax situation.
You’d be just on it.
So if you ended up with 11 or 12 in interest, you need to file.
Okay.
10 or under, I’m okay.
10 or under, you’re great.
Okay.
All right.
Thank you very much.
No problem. Thanks for calling, guys. All right. We’re going to go ahead and head into our last
break. If you want to join the show, you can at 615-737-9986. We’ll be right back with the Dr.
Friday show. All righty. We are back. Last part of the show. So if you’ve been thinking about a
question and you haven’t thought about calling, you might want to pick up the phone. 615-737-9986.
1-5-7-3-7-9-9-8-6 is the number here in the studio.
And again, right now we’re, what, it’s February the 8th?
So we are full-fledged into tax season.
Time to start thinking.
Now, I will tell you, if you have investments with Merle Lynch,
TD Ameritrade, whatever might be out there, Charles Schwab,
don’t just file yet.
Because I know many of you may have your statements,
But I can tell you from experience, half the time we get corrected returns in the next week or two.
I would wait almost to the end of February before I actually hit the sin button.
Or you may expect that you will have to amend a tax return, depending on what the changes are.
Sometimes they’re not enough to make a difference.
Sometimes they’re big enough where you have to do it.
So just important to make sure that you get that done and corrected.
Other than that, just double check to make sure you do have all of the information that
you wanted to have.
Make sure that you have what you need to be doing what you’re doing and that you have all
the documents.
Don’t rush just because you see that there’s a refund.
I started with one just the other day and then he kept coming back and he said, oh, I forgot
I took some money out of a retirement account.
My daughter got married.
Oh, I got this.
And we started out with basically a small refund, ended up with $4,000 due.
So again, nothing wrong with, oh yeah, I forgot this, you know, add those in.
You want to be the one doing that, not having the IRS come back with the change notice.
That is never enjoyable as far as I’m concerned.
So just make sure that you, you know, do what you need to do, how you’re going to do it and,
you know, make it work.
If you have questions and you need some help, that’s what we’re here for.
I am Dr. Friday Tax and Financial Firm.
You can either Google or you can give us a call at 615-367-0819, 615-367-0819 is the
number here in the studio.
You can also email friday at drfriday.com or you can go to our website.
Our calendar is in there.
There’s also a tax organizer.
So if you’d like to, and you don’t have to use our service, it’s something to help people
get started.
If you don’t have one, it may be something you can download and that way you’ll get an
idea of maybe what you may have forgotten. Maybe you didn’t think about something. That’s the whole
purpose of a good tax organizer is one to help you organize, but really also to help you think
about things you might not have put in if you were just taking a stack of papers and doing it. So,
uh, very important to make sure that, uh, is there. So again, you can go to drfriday.com,
book an appointment. Uh, Chris is an enrolled agent. He’s new to the firm. He is also working
in the office. So if you don’t see an opening for me, Chris is great. And he can also handle your,
your taxes. And he’s got as many years, if not more than I have an experience and also an enrolled
agent. So very important, but his calendar or mine, I’m obviously Dr. Friday. So either of us can help
you get your taxes done and also help you understand what maybe some movements moving forward.
You know, that’s what tax planning is all about. Not just throwing numbers on a tax return, but also
determining what the next year is going to be or what your plans are. I’m going to be retiring soon.
I’m going to be doing this soon. You know, what does that really mean and how does that actually
going to work for us? So, um, you know, just have somebody, you know, that you can ask those
questions because I know I’ve had more than one that has ended up in my office after, you know,
using other services and the people might be good at putting numbers on a tax return. Um, I don’t
think that probably takes a whole bunch of talent, but they don’t ask a lot of questions. They don’t
go into was your plans to do a conversion or have you thought you have an NOL so maybe you should
think about cleaning up this or I’m not a financial planner and I want to put that out there right now
I don’t do financial planning I can tell you what a Roth or a traditional IRA or a SEP might save you
in tax dollars I will not be able to tell you where to invest or what to do with it I can help you save
tax dollars all right we got enough time for Alan hey Alan if you want to join the show we can uh
see what we have. What can I do for you, boss? Yeah, thanks for taking my call. Yeah, I just
wondered if you’re on Social Security and you own your home, but you’re not making a whole lot a
year. Is there any forms that you can turn in to do with your property or anything like that to
get some type of refund? Some counties, yeah, that’s a great question. And I know one of my
regular clients, she called the other day and she’s always just a little bit too much. But
dollars in Davidson County. I’m sure, Williams, where you can freeze your property tax. And I don’t
know the form, to be honest, but I would go to the property tax collectors and call them and say,
hey, do you have any kind of, normally I think you have to be usually over the age of 65 or legally
disabled, and then you have to own the house, obviously. And then I think all of your income,
and they take 100% of Social Security, also tax-free savings bonds, things that may not be on
tax return, but still income to you. Um, and they add all that up to get you qualified. Um, so,
um, yes. What County do you live in, Alan? Uh, where, where, where, where you can see County.
Yeah. So you would go down to the, uh, the old school down there in Franklin is where the property
property tax assessor is. And, uh, or you can get them on the phone. You don’t have to go there
personally. Uh, but I would give them a call Monday and just see if they have anything that
will help freeze the property tax. I’m 99% sure they do. I just don’t know what the dollar amount
is that they use, how low it is, you know? Yeah. Okay. Yeah. I was also wondering, do we need to
file income tax form when you’re on social security? No, great question. If you only have social security,
you’re not required to file taxes. All right. Well, thanks for taking my call.
Sure. Thanks for calling. I appreciate you, Alan. So that’s a great question. And I do know now is
the time, if you are a person that might qualify for the property tax, again, I have one client every
year. We try to do it. Some years we get fortunate, but most of the years not. But it is now. I think
you need to start thinking about that now. I think we actually pay our property taxes at the end of
this month. If you haven’t got them on escrow, pretty sure they’re due at the end of the month.
So, you know, you want to go in and see if you’re, if you have them froze or not. Also, if you are a
single member LLC or a multi-member LLC that has residential rentals only in your LLC, which a lot
of us do, you want to make sure you go to your 10 tap and qualify for the exclusion for residential
rentals so that you don’t have to pay F&E tax. So if you haven’t done that already, you need to do
that. So that way you, you know, you don’t have to file F&E and you don’t have to pay whatever
the dollar amount, but this is only for residential rentals. If you’ve got commercial or farm or any of
the others, it doesn’t apply in the same way. There are some farm ones as well. Commercial rentals do
not fall and you have to file franchise excise. So again, all these questions, all these different
things, we are winding down the show. Another wonderful, beautiful Saturday, actually. I got a
chance to go out with, I’m going to call him a beekeeper. I’m getting into bees. Some of you guys
may be into them as well. And I had one of my first true upfront experience with beehives and
how they’re actually maintained and done. And Craig was awesome. And he works with Heroes for Hives,
which is working along with the military. So you’ll probably hear more about that as I find out more
about that. But it sounds like a wonderful, anything that works with, as far as I’m concerned,
bees and that kind of thing, I like to learn more about it. So if you guys know more about it,
You can also share them with me as we learn about bees here.
I know nothing to do with taxes, but you know, sometimes you got to get out of that tax window,
just get your brain refreshed so you can go back in and enjoy it.
So, okay.
So we’re getting down.
If you want to call my office Monday morning, you can at 615-737-9986.
615-737-9986 is the direct number to my office.
Again, you can go to drfriday.com, make a tax appointment, set up a tax consult.
We do do Zoom meetings as well.
I prefer face-to-face, just my generation, I suppose.
But we do phone calls or Zooms as well, and you can choose that.
Also, you can email friday at drfriday.com.
We’ll do our best to get to those questions as fast as I can.
During this time of the year, I will tell you I’m often running days behind.
But one of us will get to it and do something as soon as we can.
So again, that’s Friday at drfriday.com.
My suggestion when it comes to the taxes, get yourself a manila envelope.
Start putting everything or a basket or something where you can label, check off,
make sure you’ve received this year’s information.
I had a couple of people that thought they had this year’s and it was actually 2023 documents.
So check the year on your documents to make sure you have the proper year
and then everything else will fall in place and you’ll be able to get your taxes done relatively fast
once you have all of your documents and everything in play.
If you need help, again, back taxes,
doing individual or business tax returns,
that’s what we specialize in.
Phone number 615-367-0819.
Hope you enjoy this Saturday.
Hope you enjoy the Super Bowl.
Cop you later.