Dr. Friday Radio Show – January 27, 2024

The Dr. Friday Radio Show
The Dr. Friday Radio Show
Dr. Friday Radio Show - January 27, 2024
/

In this episode of the Dr. Friday Radio Show, Dr. Friday delves into crucial tax updates and financial strategies. From the essentials of tax preparation to navigating new IRS regulations, this episode offers valuable advice for both individuals and businesses. Key highlights include:

  • Preparation for Tax Season: Importance of gathering W-2s and 1099s without rushing the filing process to ensure accuracy.
  • 1099-K Form Thresholds: Updated requirements for digital and small-scale sellers, emphasizing its effect on gig economy participants.
  • Tax Filing Requirements: Guidance on who needs to file taxes, focusing on income thresholds and specific financial circumstances.
  • Dependents and Education Credits: Tips on claiming dependents and maximizing education-related credits.
  • Digital Assets and IRS Regulations: Overview of new IRS guidelines on reporting digital assets.
  • Business Tax Compliance: Insights into beneficial ownership information compliance and clean energy credits under new tax laws.

This episode is packed with expert advice to help listeners efficiently navigate their tax responsibilities and optimize financial planning for the year ahead.

Transcript

00:00:00.000 –> 00:00:06.280
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your
00:00:06.280 –> 00:00:07.280
financial woes.
00:00:07.280 –> 00:00:09.540
She’s the how-to girl.
00:00:09.540 –> 00:00:11.120
It’s the Dr. Friday Show.
00:00:11.120 –> 00:00:19.800
If you have a question for Dr. Friday, call her now, 737-WWTN.
00:00:19.800 –> 00:00:23.520
That’s 737-9986.
00:00:23.520 –> 00:00:29.520
So here’s your host, financial counselor and tax consultant, Dr. Friday.
00:00:29.520 –> 00:00:34.600
G’day, I’m Dr. Friday and the doctor is in the house today.
00:00:34.600 –> 00:00:38.920
We’re going to be talking about my favorite subject, which of course is taxes.
00:00:38.920 –> 00:00:44.120
There has been a few minor upchanges on a few things that might be on the other, ununique
00:00:44.120 –> 00:00:47.480
side of things, but we’re going to cover that.
00:00:47.480 –> 00:00:51.960
And of course, many of you are probably getting all of your tax records together, so it’s
00:00:51.960 –> 00:00:56.280
time for you to probably start thinking about, I wouldn’t rush still because I know many
00:00:56.280 –> 00:00:57.840
people are still waiting.
00:00:57.840 –> 00:01:00.760
W-2s do not have to be out quite yet.
00:01:00.760 –> 00:01:05.120
1099s are still being processed, at least in our office.
00:01:05.120 –> 00:01:11.360
So many of those will be something that may hold you up in processing that information
00:01:11.360 –> 00:01:15.520
and don’t rush to file something until you have all of your documentation.
00:01:15.520 –> 00:01:20.760
It’s not worth the IRS turning around and changing your tax return, which is something
00:01:20.760 –> 00:01:26.380
that can happen anytime they don’t have the right information on the right lines that
00:01:26.380 –> 00:01:28.160
matches what they think you should have.
00:01:28.160 –> 00:01:30.360
All right, we’re going to go right to the phone lines.
00:01:30.360 –> 00:01:31.360
We’ve got Ryan.
00:01:31.360 –> 00:01:34.040
I love it when my phone lines start lighting up early.
00:01:34.040 –> 00:01:35.040
Hey Ryan, what’s happening?
00:01:35.040 –> 00:01:36.040
I hope it’s Brian because that’s me.
00:01:36.040 –> 00:01:37.040
Oh, okay.
00:01:37.040 –> 00:01:38.040
Brian, I am so sorry.
00:01:38.040 –> 00:01:39.040
My typo on that one.
00:01:39.040 –> 00:01:50.040
Let me give you my total and see if I need to say federal.
00:01:50.040 –> 00:01:51.040
29,865.
00:01:51.040 –> 00:01:55.820
Social Security of that is 27,816.
00:01:55.820 –> 00:02:00.820
And the other is PBC and just a little bit of bank interest.
00:02:00.820 –> 00:02:01.820
Is that all you have total?
00:02:01.820 –> 00:02:02.820
Unfortunately, that’s it.
00:02:02.820 –> 00:02:06.620
Okay, then you don’t need to file taxes.
00:02:06.620 –> 00:02:10.060
Oh, I’ll take that as the gospel.
00:02:10.060 –> 00:02:11.060
Thank you so much.
00:02:11.060 –> 00:02:12.060
No worries.
00:02:12.060 –> 00:02:13.060
Thanks, babe.
00:02:13.060 –> 00:02:14.060
All right.
00:02:14.060 –> 00:02:17.260
And that’s always a good question because sometimes life changes every year, right?
00:02:17.260 –> 00:02:19.020
I mean, sometimes you get a little more interest.
00:02:19.020 –> 00:02:20.200
Interest rates have come up.
00:02:20.200 –> 00:02:24.680
So people might actually get a little interest for the money that they have in the bank.
00:02:24.680 –> 00:02:28.640
It’s also one of those situations where you just want to make sure that, you know, the
00:02:28.640 –> 00:02:32.320
biggest thing is most of his income was coming through Social Security.
00:02:32.320 –> 00:02:37.320
Social Security in itself is not taxable unless you have other income, then it can be made
00:02:37.320 –> 00:02:41.140
taxable up to 85% of what you receive.
00:02:41.140 –> 00:02:46.580
So it’s just important to make sure you understand how that works and what you have going on.
00:02:46.580 –> 00:02:50.880
So the IRS has released just recently the 1099K.
00:02:50.880 –> 00:02:53.140
I think I’ve brought that up in the past.
00:02:53.140 –> 00:02:56.100
That’s the one that started out back in 2021.
00:02:56.100 –> 00:03:01.940
If you guys remember, they were going to basically do $600 or 20 transactions, whichever you
00:03:01.940 –> 00:03:06.300
had and they pushed it out.
00:03:06.300 –> 00:03:11.320
And now it’s going to be $5,000 or 20 transactions.
00:03:11.320 –> 00:03:19.020
So if you’re using eBay, PayPal, some sort of cash app to receive money through doing
00:03:19.020 –> 00:03:25.100
different things, the max is if you have overall, not just one transaction, but if you have
00:03:25.100 –> 00:03:32.100
more than $5,000 in a 12 month cycle of January through December or 20 transactions, they
00:03:32.100 –> 00:03:35.960
will be issuing you a 1099K.
00:03:35.960 –> 00:03:42.780
Now I’m going to tell you that I’ve already had one person receive one that was based
00:03:42.780 –> 00:03:45.060
on the $600.
00:03:45.060 –> 00:03:52.220
So one of the companies, I guess had already set up and started to try to do the loss and
00:03:52.220 –> 00:03:59.100
they had issued one to her and she had had more than $600, but she did not yet have 5,000
00:03:59.100 –> 00:04:05.420
last year, but yet she did receive the 1099K from one of the cash app organizations.
00:04:05.420 –> 00:04:11.520
So that’s going to be an interesting situation that you want to make sure that, again, this
00:04:11.520 –> 00:04:17.480
is really for individuals that maybe are big on garage selling through the internet.
00:04:17.480 –> 00:04:22.580
I call it garage selling, taking things from your own house and selling it, or people that
00:04:22.580 –> 00:04:27.880
like to go out shop and then put them on the internet to sell, which is truly a legitimate
00:04:27.880 –> 00:04:28.880
business.
00:04:28.880 –> 00:04:33.700
And if you’re selling 20 or 30 things a year, I would say the IRS would probably consider
00:04:33.700 –> 00:04:37.720
that a business, even if it was your own, because most people have a very difficult
00:04:37.720 –> 00:04:43.480
time finding the proof that that was something you purchased 10 years ago, not something
00:04:43.480 –> 00:04:49.280
you may have put up at a garage sale or something you got some other way.
00:04:49.280 –> 00:04:55.120
So it’s really important if you’re an individual that really likes the idea of, you know, buying
00:04:55.120 –> 00:04:59.460
something, living with it for a while, and then instead of just storing it or whatever
00:04:59.460 –> 00:05:03.840
you put it on the internet, you need to start tracking your personal expenses.
00:05:03.840 –> 00:05:07.920
So that way, because that’s what the IRS, otherwise they’ll say your basis is zero and
00:05:07.920 –> 00:05:09.440
you sell it for $500.
00:05:09.440 –> 00:05:14.040
Now you’re paying tax on $500, which would be normally zero because you probably paid
00:05:14.040 –> 00:05:15.320
a thousand for that item.
00:05:15.320 –> 00:05:17.520
All right, let’s hit Laura in Gallatin.
00:05:17.520 –> 00:05:20.480
Hey Laura, what can I do for you, sweetheart?
00:05:20.480 –> 00:05:26.600
Hey, I would like to know, I have a 21 year old daughter who was in full time college
00:05:26.600 –> 00:05:27.600
last year.
00:05:27.600 –> 00:05:37.480
She had, she made $5,000 on her W-2 and I am just wondering, can I still claim her as
00:05:37.480 –> 00:05:40.360
a dependent or is she past that age?
00:05:40.360 –> 00:05:42.440
Yeah, age, I know one.
00:05:42.440 –> 00:05:43.440
Yes.
00:05:43.440 –> 00:05:44.440
I mean, here’s the true test.
00:05:44.440 –> 00:05:47.040
Did you provide more than 50% of her care?
00:05:47.040 –> 00:05:50.480
And if she lived at home, that means room and board.
00:05:50.480 –> 00:05:54.040
If she’s still on your health insurance, then you’ve covered that.
00:05:54.040 –> 00:05:57.560
If she has a car and she’s on your car, all of those things would add up.
00:05:57.560 –> 00:06:03.760
And if she only earned $5,000, I’m going to guess that you did actually, even if she didn’t
00:06:03.760 –> 00:06:07.700
live in the house, but she lived on campus cause she was away, they still consider that
00:06:07.700 –> 00:06:11.600
at home for the purpose of the test.
00:06:11.600 –> 00:06:16.520
So she would still qualify as your dependent for that year.
00:06:16.520 –> 00:06:20.360
And you might want to make sure she may have some college credits that you could qualify
00:06:20.360 –> 00:06:23.440
for as well.
00:06:23.440 –> 00:06:24.440
All right.
00:06:24.440 –> 00:06:27.640
So yeah, that was another question that I had.
00:06:27.640 –> 00:06:28.640
What kind of credits?
00:06:28.640 –> 00:06:35.240
I saw something last year for you could get credit for books.
00:06:35.240 –> 00:06:36.840
We bought her a new laptop.
00:06:36.840 –> 00:06:39.380
So she would get a form.
00:06:39.380 –> 00:06:44.160
She will get a form from the college called the 1098-T. It’s going to show how much her
00:06:44.160 –> 00:06:50.000
tuition and then if she had any grants, scholarships, whatever, you know, that may have been paid
00:06:50.000 –> 00:06:51.760
back on her behalf.
00:06:51.760 –> 00:06:56.520
And if there is a difference and then you can add in some college, if you do lifetime,
00:06:56.520 –> 00:07:01.960
you could add in the books, tutors, things like that, that may have also come into play.
00:07:01.960 –> 00:07:05.480
And it doesn’t make a difference if there was college loans or if you paid for it one
00:07:05.480 –> 00:07:09.320
way or the other, it will be paid with after tax dollars, assuming they don’t give everyone
00:07:09.320 –> 00:07:15.120
a free ride then, you know, so she would still be a dependent and you can use that 1098-T
00:07:15.120 –> 00:07:20.080
to see up to $2,500 depending on income and situations.
00:07:20.080 –> 00:07:22.520
All right, great.
00:07:22.520 –> 00:07:23.520
Thank you so much.
00:07:23.520 –> 00:07:24.520
I appreciate that.
00:07:24.520 –> 00:07:25.520
Thanks for listening.
00:07:25.520 –> 00:07:26.520
I appreciate you.
00:07:26.520 –> 00:07:27.520
All right.
00:07:27.520 –> 00:07:29.520
If you want to join the show, you can.
00:07:29.520 –> 00:07:30.520
615-737-9986.
00:07:31.520 –> 00:07:42.640
This next section we’ll talk about is for qualified business, mostly tax exempt organizations
00:07:42.640 –> 00:07:47.520
or entities such as state or tribal, which doesn’t really apply in most of ours.
00:07:47.520 –> 00:07:50.200
There’s the new elective payment and transfer credit.
00:07:50.200 –> 00:07:55.160
This is really dealing with, they’re starting to really get into the clean energy accounts.
00:07:55.160 –> 00:08:01.240
If you are a business that deals with the clean energy, you do want to go on to the
00:08:01.240 –> 00:08:02.240
IRS.
00:08:02.240 –> 00:08:07.800
There’s a website and you want to go ahead and get registered under the IRS, the Inflation
00:08:07.800 –> 00:08:11.940
Reduction Act, as well as the CHIPS Act of 2022.
00:08:11.940 –> 00:08:15.240
You can pre-file registration right there on the website.
00:08:15.240 –> 00:08:17.520
The publication is 5884.
00:08:17.520 –> 00:08:20.000
Reason I’m bringing it up, it’s just opening.
00:08:20.000 –> 00:08:24.600
There are more people than you think that are really working, trying to get qualified
00:08:24.600 –> 00:08:28.400
and get the credits because those are credits that you can use.
00:08:28.400 –> 00:08:31.960
Even in a nonprofit that doesn’t pay tax, you may still want to register if you’re dealing
00:08:31.960 –> 00:08:33.920
with the clean energy.
00:08:33.920 –> 00:08:36.560
That way you can start applying those credits.
00:08:36.560 –> 00:08:41.920
That way you also get certain qualifications that come along with that as well.
00:08:41.920 –> 00:08:44.800
That may be useful if you’re in that particular type of business.
00:08:44.800 –> 00:08:49.240
We all know that there’s a lot more going towards clean energy and battery operated
00:08:49.240 –> 00:08:50.960
vehicles and all that good stuff.
00:08:50.960 –> 00:08:55.240
All right, real quick, let’s hit Chase in the borough and then we’ll come to Mary.
00:08:55.240 –> 00:08:56.240
Hey, Chase.
00:08:56.240 –> 00:08:57.240
Hey.
00:08:57.240 –> 00:09:03.440
My question is, me and my wife got a divorce three years ago.
00:09:03.440 –> 00:09:07.760
Our four-year-old goes to daycare.
00:09:07.760 –> 00:09:15.760
The tax credit that you get for paying daycare or whatever, the credit, do we both get to
00:09:15.760 –> 00:09:17.480
file that?
00:09:17.480 –> 00:09:19.480
Every other year we file.
00:09:19.480 –> 00:09:22.320
One of us filed last year.
00:09:22.320 –> 00:09:23.640
This year I get to do it.
00:09:23.640 –> 00:09:24.640
Right.
00:09:24.640 –> 00:09:28.720
Every other year you may qualify as head of household, but you both won’t be able to take
00:09:28.720 –> 00:09:29.720
that credit.
00:09:29.720 –> 00:09:35.640
If it’s a 50/50 deal, someone theoretically, according to the IRS, has one day longer than
00:09:35.640 –> 00:09:39.600
the other because of the way the calendar is.
00:09:39.600 –> 00:09:40.880
You guys already decided that.
00:09:40.880 –> 00:09:43.560
Even years is yours, odds hers, whatever.
00:09:43.560 –> 00:09:45.600
You guys get the child every other year.
00:09:45.600 –> 00:09:48.000
That’s the year you’re ending up with the child credit.
00:09:48.000 –> 00:09:49.840
Too bad.
00:09:49.840 –> 00:09:53.160
If you’re in a great relationship with a spouse, it would be great if you could do the same
00:09:53.160 –> 00:09:57.120
year you pay it and then she gets 100% and you get 100% in the years that you claim the
00:09:57.120 –> 00:09:59.120
child because I don’t know how much you pay.
00:09:59.120 –> 00:10:00.120
Okay.
00:10:00.120 –> 00:10:05.160
The half of daycare that she pays for, do I get to file for her half that she pays?
00:10:05.160 –> 00:10:06.160
No.
00:10:06.160 –> 00:10:07.160
You don’t get that credit?
00:10:07.160 –> 00:10:08.160
No.
00:10:08.160 –> 00:10:10.840
Now do I get to file the full amount of $7,000 or?
00:10:10.840 –> 00:10:11.840
No.
00:10:11.840 –> 00:10:13.640
You get to claim what you paid.
00:10:13.640 –> 00:10:15.480
You don’t get to claim the part that she paid.
00:10:15.480 –> 00:10:16.480
That’s what I said.
00:10:16.480 –> 00:10:21.660
Unfortunately, if you’re in a team effort trying to outdo the IRS, which I have some
00:10:21.660 –> 00:10:25.240
clients that are really good at doing that, the years that you claim the child are the
00:10:25.240 –> 00:10:30.240
years that you pay 100% and the years she claims and she pays 100% and then that way.
00:10:30.240 –> 00:10:34.200
To be honest with you, it cuts off at $2,500.
00:10:34.200 –> 00:10:37.160
The maximum credit is like $500 you get.
00:10:37.160 –> 00:10:39.160
You don’t get all of the money you pay.
00:10:39.160 –> 00:10:43.040
You may already be maximizing Chase the amount anyways.
00:10:43.040 –> 00:10:46.720
It may not be something you have to worry about chasing because $7,000 is above the
00:10:46.720 –> 00:10:47.720
number.
00:10:47.720 –> 00:10:48.720
Okay.
00:10:48.720 –> 00:10:50.320
Well, thank you so much.
00:10:50.320 –> 00:10:51.320
No worries.
00:10:51.320 –> 00:10:52.320
Thanks.
00:10:52.320 –> 00:10:54.560
Let’s hit Mary really quick so she doesn’t have to go through the break.
00:10:54.560 –> 00:10:55.560
Hey, Mary.
00:10:55.560 –> 00:10:56.560
Hi.
00:10:56.560 –> 00:10:59.560
I have a question.
00:10:59.560 –> 00:11:03.320
Yes.
00:11:03.320 –> 00:11:04.320
From the first caller.
00:11:04.320 –> 00:11:10.400
The first caller asked about the need to file taxes and he only made so much so did he have
00:11:10.400 –> 00:11:11.400
to file?
00:11:11.400 –> 00:11:12.400
Right.
00:11:12.400 –> 00:11:19.640
So my question is, doesn’t social security make and if shouldn’t he file to get that
00:11:19.640 –> 00:11:20.640
back?
00:11:20.640 –> 00:11:24.920
No, because social security, I mean, right now we don’t have any refundable credits.
00:11:24.920 –> 00:11:29.840
We don’t have any, he doesn’t pay in any federal withholdings with his social security because
00:11:29.840 –> 00:11:32.080
he’s in a zero tax bracket.
00:11:32.080 –> 00:11:36.080
Now I will have say some clients of mine have federal withholding come out because they
00:11:36.080 –> 00:11:41.160
know they’re in a tax bracket that they’re going to pay tax on their social security.
00:11:41.160 –> 00:11:46.420
This gentleman from my experience does not have anything coming out.
00:11:46.420 –> 00:11:48.280
So Mary, you’re correct.
00:11:48.280 –> 00:11:53.680
If someone’s listening and you had any kind of federal withholdings come out of either
00:11:53.680 –> 00:11:57.880
the small pension that he may have been getting or your social security, you always want to
00:11:57.880 –> 00:12:00.000
file to get your own money back.
00:12:00.000 –> 00:12:02.280
But I would also say change your withholdings.
00:12:02.280 –> 00:12:03.280
Okay.
00:12:03.280 –> 00:12:04.280
All right.
00:12:04.280 –> 00:12:05.280
Thank you.
00:12:05.280 –> 00:12:06.280
No problem.
00:12:06.280 –> 00:12:07.280
Thank you so much.
00:12:07.280 –> 00:12:08.280
Great question.
00:12:08.280 –> 00:12:11.600
All right guys, I’m going to get back here, but reiterate what Mary was saying just so
00:12:11.600 –> 00:12:12.880
I make sure I’m straight.
00:12:12.880 –> 00:12:14.140
She’s correct.
00:12:14.140 –> 00:12:18.320
If you’re having any type of withholdings, even if you’re at that lower income bracket.
00:12:18.320 –> 00:12:23.020
So Brian who had called in, if you have a small amount of money or small pension or
00:12:23.020 –> 00:12:28.120
something and they’re withholding or on your social security, any federal withholdings,
00:12:28.120 –> 00:12:30.500
you always want to file to get that money back.
00:12:30.500 –> 00:12:32.420
You don’t want to leave money on the table.
00:12:32.420 –> 00:12:36.740
But I would also say in Brian’s case, at least don’t have any withholding.
00:12:36.740 –> 00:12:38.380
You don’t owe any taxes.
00:12:38.380 –> 00:12:41.380
Therefore don’t give them any money and therefore you don’t have to file.
00:12:41.380 –> 00:12:45.580
So just make sure that you understand if you do or don’t have to file.
00:12:45.580 –> 00:12:50.820
I’m not saying there’s not a lot of people that don’t get to file, but just putting that
00:12:50.820 –> 00:12:51.820
out there.
00:12:51.820 –> 00:12:52.820
All right.
00:12:52.820 –> 00:12:53.820
We’re going to take a quick break.
00:12:53.820 –> 00:13:01.100
We’ll be right back in studio 615-737-9986.
00:13:01.100 –> 00:13:06.380
We’ll be right back with the Dr. Friday show.
00:13:06.380 –> 00:13:09.400
All righty.
00:13:09.400 –> 00:13:12.760
We are back here live in studio.
00:13:12.760 –> 00:13:15.700
You can join us live if you want it.
00:13:15.700 –> 00:13:16.700
615-737-9986.
00:13:16.700 –> 00:13:23.540
Do you want to make an announcement?
00:13:23.540 –> 00:13:27.620
Monday is the day that the IRS is opening up for e-file.
00:13:27.620 –> 00:13:29.300
That’s the 29th.
00:13:29.300 –> 00:13:33.700
Then we can start actually sending out tax returns.
00:13:33.700 –> 00:13:36.380
That would actually be for 21, 22, and 23.
00:13:36.380 –> 00:13:42.220
E-file officially reopens for the years in that situation that are allowed to be e-filed,
00:13:42.220 –> 00:13:44.260
which is three years at this point.
00:13:44.260 –> 00:13:45.940
So just putting that out there.
00:13:45.940 –> 00:13:48.940
And the IRS does have free filing.
00:13:48.940 –> 00:13:56.300
You can go to irs.gov, available for, they say millions of taxpayers can get free filing.
00:13:56.300 –> 00:13:57.300
Just be careful.
00:13:57.300 –> 00:13:58.300
Make sure.
00:13:58.300 –> 00:14:01.620
I’ve had people say that they went on thinking they were going to get free filing and it
00:14:01.620 –> 00:14:04.420
turned out that they tried to have to pay.
00:14:04.420 –> 00:14:09.620
I don’t know what the qualification for free filing is.
00:14:09.620 –> 00:14:12.100
It used to be $65,000 or less.
00:14:12.100 –> 00:14:14.900
No schedule C’s, no earned income credit.
00:14:14.900 –> 00:14:15.900
Here we go.
00:14:15.900 –> 00:14:21.500
It’s $79,000 or less for individuals on most of them.
00:14:21.500 –> 00:14:25.540
And that would double, I would think if it was a married couple, but it’s really only
00:14:25.540 –> 00:14:26.660
for W-2s.
00:14:26.660 –> 00:14:31.820
If you have rental properties or you have children and you qualify for earned income
00:14:31.820 –> 00:14:37.380
credit, my understanding, all of those would come back into play where you would actually
00:14:37.380 –> 00:14:40.940
possibly have to have to pay something.
00:14:40.940 –> 00:14:45.500
Also on the IRS website, I want to lead you guys to that site, especially now when you’re
00:14:45.500 –> 00:14:51.500
getting ready to file your taxes and you see that you owe money and you’re a W-2.
00:14:51.500 –> 00:14:56.460
So in most cases you shouldn’t owe money because you’re basically taking out every paycheck
00:14:56.460 –> 00:14:58.540
enough to cover your taxes.
00:14:58.540 –> 00:15:02.700
Unless you of course have a side kick or a side business where you do some Uber or you
00:15:02.700 –> 00:15:05.940
do something and you make a little money on the side, then sure, you’re going to owe money
00:15:05.940 –> 00:15:07.820
on the profit of that business.
00:15:07.820 –> 00:15:10.620
But normal W-2 individuals should not owe.
00:15:10.620 –> 00:15:18.180
And if you don’t, or you do owe money, excuse me, you can go to irs.gov, click under individuals,
00:15:18.180 –> 00:15:22.120
and then you can actually do a paycheck checkup.
00:15:22.120 –> 00:15:25.280
So you can recalculate maybe what you’re doing.
00:15:25.280 –> 00:15:30.460
The biggest reason I find that people have a situation where they do two things.
00:15:30.460 –> 00:15:34.520
One, sometimes they work off a lot of bonuses and sometimes people will play with it a little
00:15:34.520 –> 00:15:40.140
bit because if you get a $40,000 bonus on one check, they’re going to take 28%.
00:15:40.140 –> 00:15:45.620
And maybe you only made a total for the year of 80,000 and therefore it would have taken
00:15:45.620 –> 00:15:47.740
way too much tax out at the time.
00:15:47.740 –> 00:15:52.060
But it’s also a game that’s very difficult to play, especially with the new W-4.
00:15:52.060 –> 00:15:57.080
The other side of it is, is one of you make more than, for a married couple, let’s say
00:15:57.080 –> 00:16:03.420
a married couple, one of you make more than 150 or your combined income is over the 150,
00:16:03.420 –> 00:16:05.300
then you’re actually in another tax bracket.
00:16:05.300 –> 00:16:10.200
So if you’re claiming married in two and your husband’s playing married in two and you’re
00:16:10.200 –> 00:16:13.860
married with two children, you’re not going to have enough taxes coming out if you’re
00:16:13.860 –> 00:16:17.300
in the higher tax brackets because both of you are claiming children.
00:16:17.300 –> 00:16:21.460
Well, only one person can claim the children and actually get the right amount of tax to
00:16:21.460 –> 00:16:22.460
come out, right?
00:16:22.460 –> 00:16:23.460
Because it makes sense.
00:16:23.460 –> 00:16:28.180
And you’re both claiming married, which means in essence, according to tax code, married
00:16:28.180 –> 00:16:32.740
means you’re supporting a spouse and two children with married in two.
00:16:32.740 –> 00:16:37.540
Well, if you’re married and the other person’s making as much or more than you, then you
00:16:37.540 –> 00:16:39.100
really don’t want to always be claiming married.
00:16:39.100 –> 00:16:42.180
I’ve had people walk in my office more than once because I’ll say, you know what?
00:16:42.180 –> 00:16:45.860
You should be claiming single in zero and you should be claiming single in two because
00:16:45.860 –> 00:16:50.300
single means one person and then the dependents being whatever they are.
00:16:50.300 –> 00:16:55.780
And again, this really affects more people that are making more than 150 combined because
00:16:55.780 –> 00:16:57.660
now you get into the other taxations.
00:16:57.660 –> 00:17:02.660
Once you’re over 250, then there’s the penalty for making more than 250,000 as a married
00:17:02.660 –> 00:17:04.140
couple and there’s additional tax.
00:17:04.140 –> 00:17:08.980
So as you go up, it is definitely going to be more of a game of understanding.
00:17:08.980 –> 00:17:13.820
If you’re in the lower tax brackets and you’re both making 20 or 30,000 and you’re both claiming
00:17:13.820 –> 00:17:18.340
married and two kids, it’s probably not having a huge effect because by the time you get
00:17:18.340 –> 00:17:21.020
your standard deduction out, you’re probably having enough.
00:17:21.020 –> 00:17:25.860
But I have people that will somehow they’ll make 30 or $40,000 and they’ll pay three or
00:17:25.860 –> 00:17:30.500
a hundred dollars, but yet they say they’re claiming married in one or married in two
00:17:30.500 –> 00:17:31.940
and that’s where it gets distorted.
00:17:31.940 –> 00:17:36.220
So very important to check your paychecks and now’s the perfect time.
00:17:36.220 –> 00:17:37.220
It’s January.
00:17:37.220 –> 00:17:40.740
Any changes you make now will pretty much affect you all the way through to the end
00:17:40.740 –> 00:17:41.740
of the year.
00:17:41.740 –> 00:17:45.480
If you wait till April or May when you actually finish your filing, some people will file
00:17:45.480 –> 00:17:48.460
in April, then you’ve already missed the first quarter.
00:17:48.460 –> 00:17:53.060
So now you’re, you know, you may have to accelerate a little extra withholding just to compensate
00:17:53.060 –> 00:17:56.140
for the first four months that you had going there.
00:17:56.140 –> 00:18:00.860
So very important to basically look at your income information now and say, okay, if I
00:18:00.860 –> 00:18:07.060
file my taxes and I’m owing more than $500, more than a thousand, whatever that comfort
00:18:07.060 –> 00:18:11.720
zone is, cause you anything over 500 you can get hit with a penalty depending on prior
00:18:11.720 –> 00:18:12.940
year amounts.
00:18:12.940 –> 00:18:14.860
So we don’t want penalties, right?
00:18:14.860 –> 00:18:15.960
I mean, that’s just silly.
00:18:15.960 –> 00:18:19.740
Give the government more money just because you had it sitting in the bank or something.
00:18:19.740 –> 00:18:23.460
I know it’s nice to have your own money in your bank, but theoretically it’s the IRS
00:18:23.460 –> 00:18:24.460
money.
00:18:24.460 –> 00:18:25.700
So why not give them the money?
00:18:25.700 –> 00:18:27.780
And then that way you don’t have to worry about it.
00:18:27.780 –> 00:18:31.540
So it’s kind of important to make sure that you’re not just sending out money to have
00:18:31.540 –> 00:18:34.580
it in the bank just in case.
00:18:34.580 –> 00:18:39.100
And then you turn around and you’re like, oh wait, now I have to pay them plus a penalty
00:18:39.100 –> 00:18:40.100
and interest.
00:18:40.100 –> 00:18:44.500
And that is never a good thing for any of us.
00:18:44.500 –> 00:18:49.860
So just making sure that you have that information and how that’s going to work.
00:18:49.860 –> 00:18:55.860
And for the individual that likes to go and buy a big truck every year, every few years,
00:18:55.860 –> 00:19:02.500
you need to understand, you know, the rule allowing 100% deductible capital expenditures,
00:19:02.500 –> 00:19:03.500
how that’s going to work.
00:19:03.500 –> 00:19:08.940
Cause right now you’re going to get 80% under bonus depreciation.
00:19:08.940 –> 00:19:14.180
And bonus depreciation in 2024 is going to drop to 60%.
00:19:14.180 –> 00:19:19.420
And by the, you know, they’re trying by year 2027 to bring that down to 20%.
00:19:19.420 –> 00:19:22.900
So the person that basically runs out and says, you know what, I’m going to go and buy
00:19:22.900 –> 00:19:26.060
my 40,000, 60, $80,000 truck.
00:19:26.060 –> 00:19:29.520
And I’m going to put it on cause I need a truck for my business and I use it all only
00:19:29.520 –> 00:19:32.660
for my business, a legitimate true tax deduction.
00:19:32.660 –> 00:19:34.740
And you’re, you’re used to writing that off.
00:19:34.740 –> 00:19:36.280
That is not going to happen this year.
00:19:36.280 –> 00:19:40.780
You are not going to hit that 100% of that tax deduction.
00:19:40.780 –> 00:19:43.140
You’re going to get 80% this year.
00:19:43.140 –> 00:19:47.300
So again, in your mathematics, when you’re doing this and can’t go backwards.
00:19:47.300 –> 00:19:53.100
So if you thought you were going to get a full deduction of your section 179 situation,
00:19:53.100 –> 00:19:57.620
you’re going to find out that those rules allow 100%, but they’re going to change bonus
00:19:57.620 –> 00:20:03.020
depreciation, clarified bonus depreciation phases out.
00:20:03.020 –> 00:20:04.900
That was based on the 2017.
00:20:04.900 –> 00:20:08.600
And right now bonus depreciation is at 80%.
00:20:08.600 –> 00:20:16.540
So kind of important to know, you know, section 179 is allowed for certain things placed in
00:20:16.540 –> 00:20:22.380
business, but that’s going to start kicking out because if you purchase 130, assuming
00:20:22.380 –> 00:20:27.280
35% tax bracket, you’re going to free up about $70,000.
00:20:27.280 –> 00:20:31.300
Section 179 will have some limitations based on income.
00:20:31.300 –> 00:20:35.140
So they’re trying to move that down.
00:20:35.140 –> 00:20:41.760
So again, section 179 allows business to deduct 100% of the product, but that’s not bonus
00:20:41.760 –> 00:20:45.640
bonus depreciation is only going to allow 80%.
00:20:45.640 –> 00:20:49.400
Section 179 will allow a hundred percent, but that has to be qualified equipment and
00:20:49.400 –> 00:20:52.540
software placed in during the year.
00:20:52.540 –> 00:20:53.540
And that’s going to change.
00:20:53.540 –> 00:20:59.180
And again, it may test you as far as if your income is higher.
00:20:59.180 –> 00:21:02.100
It may bring it out where we’re not going to get a hundred percent on those.
00:21:02.100 –> 00:21:03.820
So just putting that out there.
00:21:03.820 –> 00:21:09.720
So start looking at not only 2023, but you’re in 2024 and you may need to start evaluating
00:21:09.720 –> 00:21:16.140
if you’re going to be qualifying for 100%, 80%, 60%, depending on the year we’re talking.
00:21:16.140 –> 00:21:19.820
So it’s very important that, you know, the wonderful thing about tax law changes all
00:21:19.820 –> 00:21:20.820
the time.
00:21:20.820 –> 00:21:30.380
Your SUV does have to be over 6,000 pounds is $28,900 for section one.
00:21:30.380 –> 00:21:31.380
Okay.
00:21:31.380 –> 00:21:32.380
So let me clarify.
00:21:32.380 –> 00:21:37.020
Section 179 had someone just send me saying, well, can I deduct my a hundred thousand maximum
00:21:37.020 –> 00:21:47.900
depreciation you can take is $28,900 for the tax year of 2024, $30,500 on a section 179
00:21:47.900 –> 00:21:50.400
for a heavy SUV.
00:21:50.400 –> 00:21:52.240
So there is some changes on here.
00:21:52.240 –> 00:21:54.660
So just make sure you’re doing your taxes.
00:21:54.660 –> 00:21:58.380
If you do them yourself, or I’m sure your tax person should know this.
00:21:58.380 –> 00:22:02.860
But just, you know, make sure that you understand that you may not be qualifying for as much
00:22:02.860 –> 00:22:09.740
as you had in the past on some of the depreciation that was on the books prior to this time period.
00:22:09.740 –> 00:22:12.060
So again, tax law changes.
00:22:12.060 –> 00:22:23.900
If you want to join the show, you can 615-737-9986, 615-737-9986, taking your calls, talking about
00:22:23.900 –> 00:22:27.780
all kinds of different types of limitations.
00:22:27.780 –> 00:22:34.700
I had someone send an email earlier this week that also asked about a like kind exchange.
00:22:34.700 –> 00:22:37.380
And she was trying to do it on her primary home.
00:22:37.380 –> 00:22:41.900
And just so you know, like kind is a business, not an individual.
00:22:41.900 –> 00:22:46.020
So it is a, it’s part of real personal tangible property.
00:22:46.020 –> 00:22:47.940
It is investment property.
00:22:47.940 –> 00:22:55.540
So and you do want to make sure that you are handling that completely right.
00:22:55.540 –> 00:23:01.100
Most likely you want to hire an attorney that does 1031 exchanges, and then they can handle
00:23:01.100 –> 00:23:04.820
putting the money in escrow, transferring it to the new property.
00:23:04.820 –> 00:23:05.820
Everything is kosher.
00:23:05.820 –> 00:23:09.780
So that way you don’t have to get in the middle of did you ever touch the money?
00:23:09.780 –> 00:23:12.740
Was the money ever a part of your situation?
00:23:12.740 –> 00:23:16.360
Very important to see how all that’s going to work and what that’s going to be.
00:23:16.360 –> 00:23:20.260
Because 1031s, I’m totally an advocate for.
00:23:20.260 –> 00:23:23.700
But if it’s handled wrong, then it’s not going to be a good day for us.
00:23:23.700 –> 00:23:27.100
So just making sure that you have some of those, we’re going to come back and talk about
00:23:27.100 –> 00:23:30.720
some of the changes to fringe benefits and a couple new credits that’s available for
00:23:30.720 –> 00:23:32.620
businesses with employees.
00:23:32.620 –> 00:23:36.700
And you can also join the show at 615-737-9986.
00:23:36.700 –> 00:23:37.700
615-737-9986.
00:23:37.700 –> 00:23:49.560
I’m Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes
00:23:49.560 –> 00:23:50.560
and representation.
00:23:50.560 –> 00:23:52.860
I’ve been doing this for 20 plus years.
00:23:52.860 –> 00:23:56.980
So if you have questions and you’re not too sure, even if I don’t know the exact answer,
00:23:56.980 –> 00:24:01.380
I guarantee you I can find someone that’s an expert most likely, or at least someone
00:24:01.380 –> 00:24:06.580
that handles that part of tax law or business law that can help you get your situation straightened
00:24:06.580 –> 00:24:07.580
out.
00:24:07.580 –> 00:24:08.580
So we’re going to take a break.
00:24:08.580 –> 00:24:11.580
We get back, we’ll take to your call 615-737-9986.
00:24:11.580 –> 00:24:19.620
Alrighty, we are back here live in studio.
00:24:19.620 –> 00:24:25.620
And if you’ve got questions, you can join the show 615-737-9986.
00:24:25.620 –> 00:24:27.620
615-737-9986.
00:24:27.620 –> 00:24:38.500
As I said before, Monday will be the beginning of actually filing taxes from that point on.
00:24:38.500 –> 00:24:45.220
Most people should be able to see their refunds within 21 days from the date of filing.
00:24:45.220 –> 00:24:46.540
Some people get it faster.
00:24:46.540 –> 00:24:47.840
Some people get slower.
00:24:47.840 –> 00:24:55.060
They have told that people with earned income or child credits may be out till mid February.
00:24:55.060 –> 00:24:59.780
That being the fact because they’re trying to verify the children and just making sure
00:24:59.780 –> 00:25:05.780
that they are giving the credit to the right information for all of that.
00:25:05.780 –> 00:25:09.020
There is actually a big movement on that.
00:25:09.020 –> 00:25:12.940
Another important thing is the IRS is also saying, reminding taxpayers that they must
00:25:12.940 –> 00:25:18.700
again, answer the digital asset question and report it on your 2023.
00:25:18.700 –> 00:25:23.380
That would mean cryptocurrency or other digital assets that you might have.
00:25:23.380 –> 00:25:24.600
You have to ask.
00:25:24.600 –> 00:25:27.100
Now they’re asking, have you ever purchased it?
00:25:27.100 –> 00:25:30.540
Have you ever sold it?
00:25:30.540 –> 00:25:34.460
It’s quite the question that we have to deal with on that one.
00:25:34.460 –> 00:25:36.820
So it’s a little bit more than last time.
00:25:36.820 –> 00:25:40.720
I think it started out basically 2021 was pretty simple.
00:25:40.720 –> 00:25:43.940
Did you sell any virtual currency?
00:25:43.940 –> 00:25:48.620
Now they’re moving into, and also more questions on that.
00:25:48.620 –> 00:25:55.860
Also for business owners, they are double checking your NIC number to make sure they’ve
00:25:55.860 –> 00:25:59.620
changed some of those regulations as far as what fits into what.
00:25:59.620 –> 00:26:03.640
So when you file the return, you’ll need to double check the code.
00:26:03.640 –> 00:26:08.540
It’s a six digit code that they have out there that you’ll have on your tax return.
00:26:08.540 –> 00:26:17.860
So if you have any questions, again, you can join the show, 615-737-9986.
00:26:17.860 –> 00:26:19.220
Let’s go to Pat in Cookville.
00:26:19.220 –> 00:26:22.100
Hey Pat, what can I do for you?
00:26:22.100 –> 00:26:28.660
Yeah, I’m just wondering, I heard on your show that when you gift your required minimum
00:26:28.660 –> 00:26:33.060
distribution to a charity, it’s non-taxable to you.
00:26:33.060 –> 00:26:34.780
So I’m wondering how that would work.
00:26:34.780 –> 00:26:38.360
Is it a separate form to fill out on tax return?
00:26:38.360 –> 00:26:41.380
It falls under the 8606.
00:26:41.380 –> 00:26:44.500
So basically you’re going to have, it is, it’s a continuation.
00:26:44.500 –> 00:26:49.620
So if you’re filling out the 1099-R, where you put that in the tax software, there is
00:26:49.620 –> 00:26:53.580
a section that will ask what your qualified charitable deduction is.
00:26:53.580 –> 00:26:58.100
And then if you’re multiple, I usually list the charities that it went to and how much.
00:26:58.100 –> 00:27:00.980
Some of my people do multiple if it’s only one.
00:27:00.980 –> 00:27:07.780
And then that information then will immediately reduce it from the 1040 on the front page.
00:27:07.780 –> 00:27:12.220
So it’s a hundred percent tax deduction.
00:27:12.220 –> 00:27:15.540
So the form is 8606 that I would need to fill out?
00:27:15.540 –> 00:27:16.540
Right, right.
00:27:16.540 –> 00:27:21.100
You’re going to complete the 1099-R, but it will bounce over to the 8606, which is where
00:27:21.100 –> 00:27:26.380
all the information for retirement end up working its way through.
00:27:26.380 –> 00:27:32.900
Yeah, I don’t, I don’t complete the 1099-R.
00:27:32.900 –> 00:27:35.820
You receive it and then you have to put it into your tax software.
00:27:35.820 –> 00:27:37.420
I’m assuming you use a tax software.
00:27:37.420 –> 00:27:40.220
I don’t know if you use paper or do you do tax software?
00:27:40.220 –> 00:27:42.340
No, I do it on paper.
00:27:42.340 –> 00:27:43.340
Okay.
00:27:43.340 –> 00:27:45.340
So then you’re going right onto the 1040.
00:27:45.340 –> 00:27:50.340
So in your case, you’re just going to, let’s see here.
00:27:50.340 –> 00:27:53.600
You’re going to complete, you’re going to, since you don’t, you know, this is what happens
00:27:53.600 –> 00:27:55.100
when you put that on.
00:27:55.100 –> 00:28:01.340
Because on ours, basically all you’re going to do is you’re just going to put it in under
00:28:01.340 –> 00:28:03.220
gross distribution on the 1040.
00:28:03.220 –> 00:28:07.900
You know, on the first side, there’s usually two boxes for the 10 on the 1040, what’s gross
00:28:07.900 –> 00:28:09.740
and what’s taxable.
00:28:09.740 –> 00:28:14.300
You’re going to put the total amount of your gross under the gross one and then taxable
00:28:14.300 –> 00:28:18.220
will be zero or the remaining amount be that if you didn’t give a hundred percent of your
00:28:18.220 –> 00:28:19.220
1099.
00:28:19.220 –> 00:28:20.220
Okay.
00:28:20.220 –> 00:28:21.220
That makes sense.
00:28:21.220 –> 00:28:26.940
So box, I think it’s 5A would be the gross amount.
00:28:26.940 –> 00:28:28.900
5B would be less the charity.
00:28:28.900 –> 00:28:29.900
Yeah.
00:28:29.900 –> 00:28:30.900
Okay.
00:28:30.900 –> 00:28:31.900
Thank you very much.
00:28:31.900 –> 00:28:32.900
No problem.
00:28:32.900 –> 00:28:33.900
All right.
00:28:33.900 –> 00:28:36.420
Let’s go to Lisa in Nashville and see if I can help.
00:28:36.420 –> 00:28:37.420
Hey, Lisa.
00:28:37.420 –> 00:28:38.420
Hi, Dr. Friday.
00:28:38.420 –> 00:28:39.420
You’re awesome.
00:28:39.420 –> 00:28:40.420
I just absolutely love you.
00:28:40.420 –> 00:28:41.420
I had a quick question.
00:28:41.420 –> 00:28:42.420
My mom’s 84.
00:28:42.420 –> 00:28:51.740
She collects social security for, you know, for years she’s retired, but she works about
00:28:51.740 –> 00:28:57.420
35 hours at Sam’s club just to keep busy and they take social security, you know, out of
00:28:57.420 –> 00:28:58.420
her paycheck.
00:28:58.420 –> 00:29:01.420
Are they supposed to be?
00:29:01.420 –> 00:29:02.420
Yes.
00:29:02.420 –> 00:29:06.940
Unfortunately, there is nothing in tax law that says just because you’re a worker and
00:29:06.940 –> 00:29:10.820
you don’t want to sit at home and watch the grass grow that you don’t have to pay into
00:29:10.820 –> 00:29:11.820
social security.
00:29:11.820 –> 00:29:16.520
Theoretically every year they reevaluate, but the fact is, let’s be honest, she made
00:29:16.520 –> 00:29:23.420
more money or her husband probably made higher income back in the day than it did, you know,
00:29:23.420 –> 00:29:24.420
than she is now.
00:29:24.420 –> 00:29:28.380
So she probably, but yes, there’s no time that you don’t pay social security no matter
00:29:28.380 –> 00:29:29.380
how old you are.
00:29:29.380 –> 00:29:30.380
It’s just a shame.
00:29:30.380 –> 00:29:35.300
So it’s, so it’s, so it’s correct coming out of her paycheck even though she’s like social
00:29:35.300 –> 00:29:36.300
security.
00:29:36.300 –> 00:29:37.300
Okay.
00:29:37.300 –> 00:29:38.300
That’s it.
00:29:38.300 –> 00:29:39.300
Okay.
00:29:39.300 –> 00:29:40.300
Love your show.
00:29:40.300 –> 00:29:41.300
Great question.
00:29:41.300 –> 00:29:42.300
Thank you so much.
00:29:42.300 –> 00:29:43.300
All right.
00:29:43.300 –> 00:29:44.300
Bye.
00:29:44.300 –> 00:29:47.860
Again, I was talking about the digital assets says at this time during 2023, did you receive
00:29:47.860 –> 00:29:54.740
as a reward award or payment of property or service, sell, exchange, otherwise dispose
00:29:54.740 –> 00:30:00.100
of digital assets or financial interest in digital assets?
00:30:00.100 –> 00:30:06.420
So pretty much if you have any digital assets, even if you’re just sitting on it, you pretty
00:30:06.420 –> 00:30:11.060
much need to say yes to that question as far as I’m concerned, because most people have
00:30:11.060 –> 00:30:16.380
either purchased it, you know, um, and what they’re, they’re really looking for, not the
00:30:16.380 –> 00:30:19.700
person that went out and brought Bitcoin because that’s an exchange.
00:30:19.700 –> 00:30:24.760
What they’re looking for is somebody receiving it in a form of a tax or award that normally
00:30:24.760 –> 00:30:30.460
would come through the tax return on a 1099 MIS or some other format.
00:30:30.460 –> 00:30:34.420
And so they’re trying to make sure that people are not, not reporting income, right?
00:30:34.420 –> 00:30:36.380
I mean, that’s what it comes down to, right guys.
00:30:36.380 –> 00:30:41.560
They’re just looking to make sure that people aren’t working on the world of digital and
00:30:41.560 –> 00:30:42.560
ignoring it.
00:30:42.560 –> 00:30:49.960
I will say that more and more of the digital wallets are now reporting to the IRS.
00:30:49.960 –> 00:30:53.960
So just keep that again out there.
00:30:53.960 –> 00:30:58.640
If you know, if you are a person that does things in digital currency, you know, you’re
00:30:58.640 –> 00:31:00.540
not really hiding, it’s up to you.
00:31:00.540 –> 00:31:04.520
But as far as your tax person, if I’m your tax person, I’m going to ask that question
00:31:04.520 –> 00:31:05.920
and you’re going to answer it.
00:31:05.920 –> 00:31:10.980
And that will be the answer I go with, because I will have no way of knowing, um, if you
00:31:10.980 –> 00:31:15.960
have virtual currency or not, but I do believe the IRS is getting more and more access to
00:31:15.960 –> 00:31:17.720
more and more of that information.
00:31:17.720 –> 00:31:20.440
So I don’t think you’re really hiding.
00:31:20.440 –> 00:31:21.920
And you know, I’m just, I’ll be honest.
00:31:21.920 –> 00:31:23.400
I’ve always been one of those people.
00:31:23.400 –> 00:31:27.680
I like to sleep at night and I, I just never been one of those people that I’m going to
00:31:27.680 –> 00:31:31.960
turn around and you know, I’ll be the one call that, uh, just say no to something and
00:31:31.960 –> 00:31:34.320
then find out that you didn’t have it.
00:31:34.320 –> 00:31:39.600
Um, and if you do have cryptocurrency and maybe some of it has went, um, completely
00:31:39.600 –> 00:31:46.200
down to zero, keep in mind that converting, um, and changing, um, to, to some of that
00:31:46.200 –> 00:31:52.520
digital currency, you may not be able to deduct it because it wasn’t possibly reported properly.
00:31:52.520 –> 00:31:54.720
Or if you’re holding digital in your wallet.
00:31:54.720 –> 00:31:59.000
Um, so the IRS says if you’re holding digital currency in a wallet or an account, you can
00:31:59.000 –> 00:32:01.080
say no to that question.
00:32:01.080 –> 00:32:04.160
Transfer digital assets from one wallet to another account.
00:32:04.160 –> 00:32:05.560
You can say no.
00:32:05.560 –> 00:32:09.960
Purchase the digital assets using a US or other currency, including through electronic
00:32:09.960 –> 00:32:11.160
platforms.
00:32:11.160 –> 00:32:16.160
You can say no, but if you receive digital as a payment of property, yes.
00:32:16.160 –> 00:32:19.960
If you received assets resulting from award or reward, yes.
00:32:19.960 –> 00:32:24.360
Digital currency asset resulting from mining, which means if you’re creating digital currency
00:32:24.360 –> 00:32:27.200
stakes or similar activities, you have to say yes.
00:32:27.200 –> 00:32:31.920
Digital assets resulting from hard fork, a branch of the crypto black chain that is a
00:32:31.920 –> 00:32:34.160
split, probably a little more than most of them.
00:32:34.160 –> 00:32:37.400
I know a few of you guys are hardcore, so I shouldn’t say that.
00:32:37.400 –> 00:32:41.620
Sold any digital currency or disposed of any financial digital currency.
00:32:41.620 –> 00:32:44.140
The answer to that question would be yes.
00:32:44.140 –> 00:32:47.520
So if you’ve got questions, you can always call the show or you can email me at Friday
00:32:47.520 –> 00:32:49.720
at drfriday.com.
00:32:49.720 –> 00:32:55.160
I will be more than glad to do my best to answer those questions and do the best that
00:32:55.160 –> 00:33:01.280
we can to get you on the right track because that’s the important part of everything, right?
00:33:01.280 –> 00:33:03.280
Just making sure that we’re all reporting our things.
00:33:03.280 –> 00:33:08.320
We don’t want to be looking over our shoulder dealing with the IRS two or three years later
00:33:08.320 –> 00:33:11.960
had a situation where normally six years is the window.
00:33:11.960 –> 00:33:15.000
As long as you stay in compliance, most things are good.
00:33:15.000 –> 00:33:18.760
But I’ve had a gentleman come in and he was self-employed for a number of years and we’re
00:33:18.760 –> 00:33:23.680
having to go back to 2012, 2013 dealing with some of those issues because they weren’t
00:33:23.680 –> 00:33:24.800
dealt with.
00:33:24.800 –> 00:33:30.440
And so making sure that you have all of your taxes and you know, even if you can’t pay
00:33:30.440 –> 00:33:33.360
them, filing them are kind of important.
00:33:33.360 –> 00:33:38.320
If you file, then the time clock starts and then you know, they only have 10 years to
00:33:38.320 –> 00:33:42.800
collect unless we stop the time clock doing something like an offer and compromise or
00:33:42.800 –> 00:33:44.420
something like that.
00:33:44.420 –> 00:33:50.320
It’s just really important that you understand how the time for collection works in 10 years
00:33:50.320 –> 00:33:51.320
is a long time.
00:33:51.320 –> 00:33:54.840
You know, right now you’d be having a really, really hard time, which might be a perfect
00:33:54.840 –> 00:33:59.920
time to have the conversation with the IRS because when you’re not at your best is when
00:33:59.920 –> 00:34:01.520
you kind of want to have the call.
00:34:01.520 –> 00:34:06.380
If you wait till you’re back on your feet and you’ve got equity in a home and your jobs
00:34:06.380 –> 00:34:10.760
are back up, then you can end up having to pay more or not even be able to really make
00:34:10.760 –> 00:34:11.760
a deal.
00:34:11.760 –> 00:34:12.760
Just pay off the total amount.
00:34:12.760 –> 00:34:13.760
All right.
00:34:13.760 –> 00:34:17.480
Let’s go really quick to Jerry in McMinnville and see if I could answer his question before
00:34:17.480 –> 00:34:18.480
the break.
00:34:18.480 –> 00:34:19.480
Hey, Jerry, what’s happening?
00:34:19.480 –> 00:34:20.480
Not much.
00:34:20.480 –> 00:34:27.800
I was wondering if I sold some land and made a profit off of it and I reinvest the money
00:34:27.800 –> 00:34:35.160
in some property in Florida, let’s say in Tennessee, can I count the profit off of the
00:34:35.160 –> 00:34:37.480
purchase price of the other place?
00:34:37.480 –> 00:34:39.680
No, we don’t have that on the tax code.
00:34:39.680 –> 00:34:43.960
In fact, I had a young lady come in that had thought that that was the case and she’d sold
00:34:43.960 –> 00:34:46.440
and brought and sold and bought.
00:34:46.440 –> 00:34:48.920
Right now it would be straight capital gains.
00:34:48.920 –> 00:34:54.560
Now you might be an individual that might want to talk to someone about a 1031 exchange
00:34:54.560 –> 00:34:56.920
if this isn’t your primary home.
00:34:56.920 –> 00:35:00.360
Is it your primary or is this just some dirt, some land that you own?
00:35:00.360 –> 00:35:06.880
Well, the land was just the investment and the home is like a vacation home that I bought
00:35:06.880 –> 00:35:08.200
in Florida.
00:35:08.200 –> 00:35:14.200
So if the land can turn into a vacation home, as long as it’s a vacation home in which you’re
00:35:14.200 –> 00:35:15.840
Airbnb or renting out.
00:35:15.840 –> 00:35:20.840
If it’s just a vacation home for you and your family, then a 1031 would not be allowed.
00:35:20.840 –> 00:35:25.640
But if you go from investment property to investment property, you could do a 1031,
00:35:25.640 –> 00:35:31.280
not pay tax on the land sale, change the basis on the new house based on that, and then you
00:35:31.280 –> 00:35:32.280
can keep that.
00:35:32.280 –> 00:35:36.200
And then when that one sells, you basically pay capital gains on the whole thing or continue
00:35:36.200 –> 00:35:38.760
doing 1031 exchanges.
00:35:38.760 –> 00:35:41.400
But that would be something to think about, Jerry.
00:35:41.400 –> 00:35:45.560
If it’s a decent amount of capital gains, if we’re only looking at 20 or 30,000, it’s
00:35:45.560 –> 00:35:47.000
probably not worth the headache.
00:35:47.000 –> 00:35:52.180
But if you’re looking at $100,000 or more, it may be worth the conversation of having
00:35:52.180 –> 00:35:57.160
a 1031 exchange, taking your investment land and investing it into an investment property
00:35:57.160 –> 00:35:58.160
in Florida.
00:35:58.160 –> 00:36:00.080
I’ve got a number of people that have done it very successfully.
00:36:00.080 –> 00:36:04.360
Well, I didn’t say in the forties, what would you do?
00:36:04.360 –> 00:36:05.840
If the profit was 40?
00:36:05.840 –> 00:36:10.280
Yeah, I mean, the capital gain would have been 40, what I’ve made out of the land.
00:36:10.280 –> 00:36:15.200
Well, I’m just saying, if the capital gains like $40,000 and you’ve got 15%, that’s like
00:36:15.200 –> 00:36:19.080
$6,000, $7,000 in taxes.
00:36:19.080 –> 00:36:25.480
So personally, I probably would just pay it and not have the government in any of my investment.
00:36:25.480 –> 00:36:26.480
You know, that would be-
00:36:26.480 –> 00:36:27.480
Okay, thank you.
00:36:27.480 –> 00:36:28.480
No problem, buddy.
00:36:28.480 –> 00:36:29.480
Thanks.
00:36:29.480 –> 00:36:31.040
All right, we’re going to take another break here.
00:36:31.040 –> 00:36:33.080
We get back, we can take more of your calls.
00:36:33.080 –> 00:36:36.400
615-737-9986.
00:36:36.400 –> 00:36:37.400
We’ll be right back.
00:36:37.400 –> 00:36:38.400
All righty, we are back.
00:36:38.400 –> 00:36:43.680
This is the last part of the show.
00:36:43.680 –> 00:36:47.080
So if you’ve been holding your breath and you’re like, “Oh my gosh, I’ve got a question
00:36:47.080 –> 00:36:52.760
and I’m not sure if I want to ask,” go ahead and pick up the phone.
00:36:52.760 –> 00:36:53.760
615-737-9986.
00:36:54.760 –> 00:37:00.800
It’s going to start getting busier and busier.
00:37:00.800 –> 00:37:02.400
You should have most of your returns.
00:37:02.400 –> 00:37:06.680
So employers, make sure you’ve got your W-2s.
00:37:06.680 –> 00:37:09.920
Now keep in mind, many employers are sending out links.
00:37:09.920 –> 00:37:13.360
They’re not actually having to print them and send them in the mail.
00:37:13.360 –> 00:37:14.680
It’s very expensive.
00:37:14.680 –> 00:37:20.280
They’re actually going to just basically be sending you a link to download your W-2.
00:37:20.280 –> 00:37:24.400
And so just keep looking for that if you haven’t received it yet.
00:37:24.400 –> 00:37:30.080
Know organizations like ADP, which is who we use, or Paycheck or any of the other ones,
00:37:30.080 –> 00:37:33.560
most of them have links for the employees to download their pay stubs along with their
00:37:33.560 –> 00:37:36.200
W-2s and those were available weeks ago.
00:37:36.200 –> 00:37:38.640
So you’re able to get your W-2s.
00:37:38.640 –> 00:37:45.520
If you have 1099s, 1099 miscellaneous or 1099 NECs, that as an employer, any service that
00:37:45.520 –> 00:37:51.200
someone provides to you that they are not a corporation, then you need to be 1099ing
00:37:51.200 –> 00:37:52.200
them.
00:37:52.200 –> 00:37:56.960
So that means if you’re a person that has rentals, I use this a lot, but I know many
00:37:56.960 –> 00:38:03.640
people forget, rental properties and you had a new repair on your AC unit, or you have
00:38:03.640 –> 00:38:09.920
a lawn person that cuts the grass, or whatever you may have had done, windows replaced, then
00:38:09.920 –> 00:38:13.560
those people should be receiving 1099s.
00:38:13.560 –> 00:38:16.000
So that way they have the information for what you have.
00:38:16.000 –> 00:38:20.600
Now, if they’re a corporation, you do not need to 1099 them.
00:38:20.600 –> 00:38:28.240
Also for all of those that might’ve applied for the ERTC credits or the ERC credits, you
00:38:28.240 –> 00:38:32.920
need to make sure there’s, for one, there’s huge a number of audits going on.
00:38:32.920 –> 00:38:38.560
So you may get a love letter that says they’re auditing your employee retention.
00:38:38.560 –> 00:38:43.240
And if you didn’t use a CPA firm, maybe you just use one of those that advertised.
00:38:43.240 –> 00:38:47.400
I don’t know if they’re going to stand behind the work that they did.
00:38:47.400 –> 00:38:52.200
I know that we actually contracted out to a CPA firm for this reason, to make sure things
00:38:52.200 –> 00:38:57.080
were filed properly, that the information was submitted properly, and that that way
00:38:57.080 –> 00:39:02.120
they also someone that would stand behind the work if something were to happen.
00:39:02.120 –> 00:39:06.120
Because this is a very specific part of the code and it’s very important to make sure
00:39:06.120 –> 00:39:12.060
that you had 941Xs that got filed, all kinds of different things that had to go.
00:39:12.060 –> 00:39:18.280
And so it’s really important that if you file for it, and April is basically the end of
00:39:18.280 –> 00:39:20.340
when they’re going to be giving those credits.
00:39:20.340 –> 00:39:25.380
And I know they’re way behind on some of the processing, but they’ve also opened up a ton
00:39:25.380 –> 00:39:27.020
of audits in this category.
00:39:27.020 –> 00:39:32.940
So again, if you receive the ERC credit, remember first, that’s taxable income.
00:39:32.940 –> 00:39:37.420
So theoretically the years that they refunded it, you need to go back to those years and
00:39:37.420 –> 00:39:42.380
file those returns and you need to make sure you picked up all the money on your tax return,
00:39:42.380 –> 00:39:44.820
because that is not like PPP money.
00:39:44.820 –> 00:39:47.120
This was completely taxable.
00:39:47.120 –> 00:39:51.860
Second part of that conversation is if you are still interested in getting ERC, this
00:39:51.860 –> 00:39:53.740
is your employee retention credit.
00:39:53.740 –> 00:39:59.180
There’s probably every week, five or six people calling your phones if you’re a business owner,
00:39:59.180 –> 00:40:01.260
saying that they can process it.
00:40:01.260 –> 00:40:05.660
But it’s very important to make sure you do have someone that really understands the system
00:40:05.660 –> 00:40:10.980
because last thing you really want to do is get yourself in trouble because of that.
00:40:10.980 –> 00:40:15.860
And 1099s, 1099-MIS again are due the last day of January.
00:40:15.860 –> 00:40:20.620
So next Wednesday or thereabouts, we’re going to have to make sure all of those have been
00:40:20.620 –> 00:40:21.620
put out.
00:40:21.620 –> 00:40:27.040
They can be sent electronically or you mail them to the individuals.
00:40:27.040 –> 00:40:29.000
But again, it is your responsibility.
00:40:29.000 –> 00:40:34.860
Keep in mind, as far as 1099 individuals, if you don’t receive a 1099, that doesn’t
00:40:34.860 –> 00:40:38.260
mean you don’t report the income.
00:40:38.260 –> 00:40:43.380
If you were paid by anybody, it doesn’t make a difference who, you pick up all of the income,
00:40:43.380 –> 00:40:48.460
even if it came in through cash, no matter what, it went towards your lifestyle, which
00:40:48.460 –> 00:40:52.540
means that you want to make sure you can justify how did you pay for your car payments, your
00:40:52.540 –> 00:40:57.940
car repairs, your mortgage, your property tax, your food bill, your clothing bill, all
00:40:57.940 –> 00:40:59.500
of that went towards that.
00:40:59.500 –> 00:41:03.540
And if you’re showing that you didn’t make all that money, then likeliness is it’s going
00:41:03.540 –> 00:41:08.140
to eventually, eventually, I’m not going to say I’m, I don’t know if you’ll ever be audited
00:41:08.140 –> 00:41:13.420
at all, but I think it’s important to make sure tax law says you need to file all of
00:41:13.420 –> 00:41:15.620
it when it comes time.
00:41:15.620 –> 00:41:18.860
If you never get 1099, it’s not there.
00:41:18.860 –> 00:41:21.180
They’re just recapping how much they sent to you.
00:41:21.180 –> 00:41:25.200
Your job is to track all of the income that comes to you no matter what.
00:41:25.200 –> 00:41:30.360
So very important to check that you can also, once you start e-filing again, e-file opens
00:41:30.360 –> 00:41:32.260
on Monday, the 29th.
00:41:32.260 –> 00:41:38.740
That means once the returns are being accepted, you can then go to irs.gov, click on refund,
00:41:38.740 –> 00:41:41.740
track your refunds from there.
00:41:41.740 –> 00:41:48.580
Also a major policy change will end unannounced visits to taxpayers.
00:41:48.580 –> 00:41:50.140
This is something that was going on.
00:41:50.140 –> 00:41:55.060
The IRS announced a major policy change that will end unannounced visits to taxpayers by
00:41:55.060 –> 00:41:59.620
agent revenue officers to reduce public confusion and increase safety.
00:41:59.620 –> 00:42:04.020
That’s great news because I tell people all the time, the IRS isn’t going to just show
00:42:04.020 –> 00:42:05.020
up.
00:42:05.020 –> 00:42:06.020
They’re not going to call.
00:42:06.020 –> 00:42:07.020
They’re going to send you a bunch of letters.
00:42:07.020 –> 00:42:08.380
You’re going to have time.
00:42:08.380 –> 00:42:12.000
This is a huge change though, because for a long time, revenue officers would come knock
00:42:12.000 –> 00:42:16.220
on doors just to try to get information because people are avoiding them.
00:42:16.220 –> 00:42:18.320
But that has come down the line.
00:42:18.320 –> 00:42:21.780
So that’s something that’s kind of new, a really unique circumstance.
00:42:21.780 –> 00:42:24.340
But I think part of that is for safety.
00:42:24.340 –> 00:42:29.540
I think a lot of people, for one, think that every revenue officer that comes in or comes
00:42:29.540 –> 00:42:34.060
around carries a gun and that they’re going to be threatening.
00:42:34.060 –> 00:42:35.060
Not the case.
00:42:35.060 –> 00:42:40.480
Many, many good friends that are working for the IRS, they’re a collection agency, guys.
00:42:40.480 –> 00:42:44.340
But I do think it’s probably for their safety that we don’t have them knocking on doors
00:42:44.340 –> 00:42:47.020
and just showing up unannounced.
00:42:47.020 –> 00:42:50.620
Doesn’t mean they’re not going to drive by your house and see how you live.
00:42:50.620 –> 00:42:52.420
I have had a lot of audits.
00:42:52.420 –> 00:42:56.620
And one of the first things a revenue officer will say to me is that, “Hey, we drove by
00:42:56.620 –> 00:42:57.620
the house.
00:42:57.620 –> 00:42:58.620
We saw where they live.
00:42:58.620 –> 00:42:59.620
We saw the cars.
00:42:59.620 –> 00:43:03.580
We saw the toys, the boat, all these different things.
00:43:03.580 –> 00:43:08.580
And if you have those kinds of circumstances, again, just remember that these are the kinds
00:43:08.580 –> 00:43:13.540
of things that you don’t want to come back and bite you later.
00:43:13.540 –> 00:43:17.180
Better to show it on your return, show the information, and then that way you can sleep
00:43:17.180 –> 00:43:18.180
well at night.”
00:43:18.180 –> 00:43:19.180
All right, guys.
00:43:19.180 –> 00:43:22.380
So that will be pretty much all we have for the show today.
00:43:22.380 –> 00:43:25.020
We’re going to be wrapping up here in just a few minutes.
00:43:25.020 –> 00:43:31.380
So if you want to ask a question during the week, I will do my best to respond to emails.
00:43:31.380 –> 00:43:35.780
I can’t say it’s going to happen as fast as it was prior to now because we’re kind of
00:43:35.780 –> 00:43:38.860
working seven-day weeks now, working on taxes.
00:43:38.860 –> 00:43:41.460
But you can email Friday@DRFriday.com.
00:43:41.460 –> 00:43:48.180
Again, Friday, F-R-I-D-A-Y @DRFriday.com.
00:43:48.180 –> 00:43:53.460
Also if you want to set up a time to talk, if you’ve got tax issues or maybe you haven’t
00:43:53.460 –> 00:43:59.180
filed taxes in a long time and you’re like, “Oh my gosh, I’ve got to get myself back together.
00:43:59.180 –> 00:44:03.580
I’m tired of waiting to see if the next ball is going to drop,” or maybe they’re sending
00:44:03.580 –> 00:44:08.260
letters to your employer, which can be very embarrassing, you can also call my office
00:44:08.260 –> 00:44:11.820
Monday morning, 615-367-0819.
00:44:11.820 –> 00:44:13.300
615-367-0819.
00:44:13.300 –> 00:44:19.940
615-367-0819.
00:44:19.940 –> 00:44:24.820
If you are an existing client of mine and you haven’t yet set up your tax appointment,
00:44:24.820 –> 00:44:31.420
please call our office again at 615-367-0819 or text that number so we can get you on the
00:44:31.420 –> 00:44:32.420
calendars.
00:44:32.420 –> 00:44:37.700
We are pretty much filled up for new clients, but returning clients always, always will
00:44:37.700 –> 00:44:38.820
have time for you guys.
00:44:38.820 –> 00:44:43.540
So I need to get you on the calendar so we can make sure we’ve got your taxes ready for
00:44:43.540 –> 00:44:45.620
you in time to prepare those.
00:44:45.620 –> 00:44:50.620
If you, again, if you haven’t filed taxes, maybe you have a certain or unique situation
00:44:50.620 –> 00:44:54.940
or you’ve received some love letters and you’re really not sure how to respond.
00:44:54.940 –> 00:44:57.700
I mean, we’ve had some unique love letters in the last couple of weeks.
00:44:57.700 –> 00:45:02.860
I’ll be honest, things that are coming back from 17, 18, 19, normally they’re only going
00:45:02.860 –> 00:45:07.900
back a couple of years, but I’ve had a couple that have just come back, 941 taxes, different
00:45:07.900 –> 00:45:12.460
things like that where it looks like maybe the IRS is just preparing forms because they
00:45:12.460 –> 00:45:15.220
didn’t receive them in the proper time.
00:45:15.220 –> 00:45:19.380
But just because you’ve got a letter that says you owe money doesn’t always mean you
00:45:19.380 –> 00:45:21.860
truly owe that money.
00:45:21.860 –> 00:45:27.940
But if you don’t respond and get to the bottom of it, you may owe it because after a while
00:45:27.940 –> 00:45:31.740
the IRS is going to take their numbers and not pay attention to what you’re saying because
00:45:31.740 –> 00:45:33.300
they’ve already sent out the information.
00:45:33.300 –> 00:45:38.660
You had time to review and change this information and it wasn’t done.
00:45:38.660 –> 00:45:42.060
So again, not everything’s going to stay as it is.
00:45:42.060 –> 00:45:45.260
If you just ignore the IRS, it’s not always going to be a good thing.
00:45:45.260 –> 00:45:55.140
All right, so one more time, phone number to the office, 615-367-0819, 615-367-0819,
00:45:55.140 –> 00:45:57.820
Friday at drfriday.com.
00:45:57.820 –> 00:46:00.860
Probably one of the easiest ways to get ahold of me.
00:46:00.860 –> 00:46:06.820
Email Friday at drfriday.com or check us out on the web, drfriday.com.
00:46:06.820 –> 00:46:08.780
You can find out who I am, what I do.
00:46:08.780 –> 00:46:15.100
I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation,
00:46:15.100 –> 00:46:16.380
which basically all I do.
00:46:16.380 –> 00:46:20.900
So it means I’m kind of like the shield between you and the IRS, but we’re also here to help
00:46:20.900 –> 00:46:26.020
you get into compliance and understand what is your taxes that needs to be filed, where
00:46:26.020 –> 00:46:27.500
are you at and what you need to do.
00:46:27.500 –> 00:46:29.060
I hope you guys enjoyed this Saturday.