Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers’ tax questions and covers the following topics:
- Sales Tax Holiday in Tennessee Starting August 1, 2023
- Dr. Friday’s Tips on Saving Money on Taxes
How Do I Avoid Paying Taxes On My Investment Account?
- Should You Exclude a Home Sale From the Schedule D?
- The Difference Between Gifting and Inheriting Money
- How to Protect Your Assets From a Lawsuit or Creditors
- What You Need To Know About Bonds and Taxes
- How To Set Up An Irrevocable Trust
- How To Make Sure You Have Enough Money for Taxes
- How To Do Tax Preparation and Financial Planning The Right Way
And much more!
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.
Dr. Friday 0:29
Good day, I’m Dr. Friday and the doctor is in the house, I will tell you it is a very warm day outside. So hopefully, you guys are all getting a chance to listen to me. While we are inside either an air conditioned vehicle or actually at your house, listen, I Heart Radio. But if you are out there having to put up with a lot of this weather then drink lots of water and keep yourself hydrated about the only thing I can share with you. But let’s talk a little bit about some of my favorite subjects first, you can join the show 615-737-9986.
Dr. Friday 1:11
So right now from Friday through Sunday, in Tennessee, we have the sales tax weekend we call it and it covers three different categories. You have school and art supplies. So any supplies, folders, pens, pencils, as long as that individual item is $100 or less. And you can’t do anything crazy like and say, Well, I want to buy this art kit. But this is one big kit and you want to say well, I’ll buy this and this and split it in half, and it’ll be under the $100. Now if it’s usually sold as a kit, that’s what they’re going to say. So anything under $100 per an item, which is great, especially for school supplies, paper supplies, things like that, that you might have. Even small business owners think about it, you can buy reams of paper, you can buy pens, papers, folders, whatever you might usually use might be a great weekend here in Tennessee and Williamson County, I believe were 9.75 Murray County 9.25. And in some of the other counties 9.5, no matter what we are at nine plus percent.
Dr. Friday 2:14
So that is a healthy savings on every dollar. The second one of course is clothing, right? You actually have your general apparel, anything less than $100 per item, that would be Jeans, shoes, you cannot split the shoe. So you can’t buy $200 with the shoes and put one on each, they’re not going to allow it. But anything else socks, dresses, etc, etc. Anything that you might have if your kid goes to school and has a dress code or uniform, again, buying the pants or the shirts that would qualify as long as each of those items are under $100. And again, this is only from yesterday, Friday till midnight on Sunday. So today is a busy day for a lot of people another one for small business owners as well as just individuals or people that have kids in college or nowadays all grades almost is the computer $1,500 or less.
Dr. Friday 3:07
If you want to buy a computer, now might be a time to think about it. They always talk about Black Fridays and all that. But nowadays we have black Friday’s goodness in May, June, July, they kind of took the true black friday away, but this is definitely going to save you the sales tax. So again, if you’re looking for something that you would normally have now, this doesn’t include game consoles, it doesn’t include flash drives, any kind of keyboards, monitors, etc, etc. It does obviously provide computer printers and supplies, it is not going to cover just the computer.
Dr. Friday 3:45
So if that’s you know what you’re looking at, and then as soon as this one ends on the Sunday, come Tuesday, we start the sales tax three month holiday for food, and that would be fresh food. Now if you go into your gas station and you go buy a sandwich that’s not going to qualify for the sales tax free. They want you shopping at a grocery store, buying fresh foods, it’s not going to cover your tobacco or your candy or any of that kind of situation what it will cover is your fruits, your vegetables, your meat, all the basic things and this is for three months until October 31. So it’s a good time.
Dr. Friday 4:24
I always think about I don’t know about everybody but in our house we always have a pantry and a lot of times we want to stock up on some of the things that we like tomato sauce, you know, things we use when we’re cooking and different things. This is a perfect time again, this is a 9.75% savings in Williamson County. So it is a healthy savings if you’re going to have to buy it anyways. Right so that is kind of the way this next week or two especially to this weekend. I’m sure most people are concentrating on school and school clothing and school supplies. But again, starting August 1 You’ll be able to start are buying food products with a sales tax three months sales tax free situation, which takes you through October, which, you know, considering Thanksgiving and Christmas.
Dr. Friday 5:10
And that’s some of the big times that some of us that aren’t really great cooks, buy a lot of things you might want to think about, Do I need to buy some flour? Do I need to buy some sugar to make all those wonderful desserts, that kind of thing you might want to pre buy, some of them don’t require having to be purchased that day to you. So a little prepping is what it comes down to just the little preppy. Alright, so if you want to join the show, you can at 615-737-9986, taking your calls talking about my favorite subject, which is pretty much money, how we can save it, what’s the best way.
Dr. Friday 5:49
And then you know, this last week, we had an individual come in my office, and I thought it was an interesting conversation because a lot of people come into my office thinking, Okay, Doctor Friday is gonna tell me how I can save money. And saving money is part of what we do. But we have to also look at the big picture, sometimes paying taxes today, knowing where the tax rate is, and having certain expectations that taxes will be going up in the next few years. Sometimes it’s better to look at if we were to go ahead and do this now at 12% instead of 15. Or, or even higher than that in this particular situation, was it worth doing certain conversions or selling something that had a high value to be able to make that difference?
Dr. Friday 6:36
And so sometimes we’re crunching the number not only to try to save you tax dollars today, which is often what a lot of tax people do. But also thinking about the big picture 2025 The end of the current tax code. What will that mean, in 2026? If you were to do the same thing today in 2026, because sometimes we have the choice, sometimes we have options of do we want to do this or that when should we do it? You know, even I had one that sold like three of their pieces of real estate. And of course, we got into a 1031 exchange situation. But these people were reaching retirement.
Dr. Friday 7:14
And so we were also talking about you can’t do just for anyone listening a 1031 exchange is what a lot of people if you have investment property, you can sell that investment property, not pay any tax and reinvest in other investment properties. Your home, your primary home is not an investment property. So if you sell your primary home or you sell real estate that then go buy a primary home, you cannot qualify for a 1031 exchange, it’s kind of important to understand because 1030 ones may or may not be in the future. I mean, I know that bharden would love to eliminate 1030 ones in the eye. And it’s a two sided edge. Because in my opinion, in some ways, if we pay the tax as we go, it probably would produce a better tax situation for the government and tracking because 1030 ones make it more difficult, especially when you have generations of doing it. So it does lead to a situation where if you didn’t have 1030 ones, we probably have more tax dollars going in. But the the offset to that is will be half as much investments going.
Dr. Friday 8:24
Alright, let’s hit Jay from Franklin real quick. And we’ll see what we have. Hey, Jay.
Good afternoon. How are you today?
Dr. Friday 8:32
I am awesome. Thanks for calling. What can I do for you?
Yes, I have been investing in comic books for the last 45 years and sold a sizable collection back in February. My question is, can I take off the investment amount when I go to pay taxes on that?
Dr. Friday 8:49
Absolutely. It is considered a collectible, which is going to be taxed a little bit higher than on capital gains. You probably know this if you’ve been in the business, but your basis would still be deductible on that. And then any cost of selling if there was a commission paid or anything else that may have tied into those comic books, but yeah, unique collection, but I have had friends that have done the same thing. And it’s, you know, it’s just like wine collectors or anything else. There’s a market for comic books. Definitely.
Yeah. Especially if you’re looking for you know, rare ones from the early 60s on on. That’s kind of what I invested in and had them sent off and graded and a lot more autographed by artists and authors and stuff which increased the value.
Dr. Friday 9:37
So yeah, I should have had my brother saved his comic books. Had I been a smart person they would have been used. Hey, I was from the 60s.
Dad threw him out. Got great escape got rich on people trying to pay their Vanderbilt tuition by selling bands comic book collections.
Dr. Friday 9:55
Oh, wow. Okay, there you go.
Well, I used to be like a block and a half from Vandy. Andy Belmont, they used to buy collections when everybody was time to pay tuition.
Dr. Friday 10:04
Well, that was smart actually mean someone held on to him. So I know we’ve got some old baseball cards around here, my brothers had saved and I think my parents locked away somewhere. But other than that, we didn’t, didn’t keep the see that’s even the lunchboxes. Right. I mean, there’s some of them. I know if they use lunchboxes nowadays.
But again, like I said, the ones the rare, the more expensive everything is so
Dr. Friday 10:28
Well, thanks for calling. Hopefully, that helps.
Thank you. Thanks. Bye.
Dr. Friday 10:32
Bye. All right. And yes. Anytime you have a question, that’s what this shows about, I can lead you in the right direction, not always be able to give you 100% The answer, but that was a simple one. But if you have questions, you can certainly call the show at 615-737-9986, I would definitely say if you have a situation, one of the things we talk a lot about usually here on the radio is inheritance. Because if you inherit certain things, there’s what’s called a step up in basis. But I you know, what, I have a story to share after the break, we’re gonna be taking one in about a minute.
Dr. Friday 11:11
And then we really want to be able to, to cover a little bit about people documenting how they inherit things. Because sometimes people are inheriting things years before they’re basically wanting to sell them. And where the base is, has to come from. And if mom or your aunt’s in the case of a situation that happened this week, gifts you their their land that they’ve been sitting on for 45 years, and now it’s worth, you know, in the millions, but they gift it to you how that isn’t necessarily the best way to inherit, unless, unless, of course, it’s just as well for you to sell it then her but all in all, that’s that creates a lot more tax situation.
Dr. Friday 11:56
And basis is not the same as if you inherit. So it becomes a lot harder to generate, especially when someone inherits it. 40 years ago, what was the value then what was the step up and basis, etc, etc. So we’re gonna take a quick break here, and then we come back, we’ll talk a little bit about how those bases is affected. And also, I think we might have a caller on the line. So we’ll get to that as well. This is the Dr. Friday show and we’ll be right back.
Dr. Friday 12:25
Alrighty we are back here live in studio, you can join the show at 615-737-9986. And we’ll go right to Robert in Clarksville, who was nice enough to hold to the break. Hey, Robert.
Hi there, Dr. Friday, I have a daughter who who lived in a home in Tullahoma. For a year and a half. He sold it for about an 80,000 gain, she moved 50 miles away to a new job. And that’s where I’m hung up because when I do the taxes, it shows that she has about $80,000 gain on the Schedule D. But the exception on the 50 I was reading said that you get to exclude that 18 months out of 24 which is more than $80,000. So in effect, getting to exclude that.
Dr. Friday 13:17
So how long did she live there? When did she move? I mean, how long did she live in the house?
Dr. Friday 13:24
Okay. So she lived in 18 months.
She didn’t. She didn’t live there for years now.
Dr. Friday 13:31
Okay, she didn’t meet the two years. But she had, did she sell the house because of job?
Yes, he took a new job and moved to an apartment in that city. So from Tullahoma the Murfreesboro was you know, 50 miles.
Dr. Friday 13:45
Okay, so when you’re filling out the home sale sheet, you’re using that bottom section which says, you know, you’re you’re meeting the exclusion for in, they’ll take a percentage, she won’t get all $250 1000. But she’ll get a percentage of that based on the time there because she had an extenuating circumstance.
The percentage is more than her gain. What I’m saying is my when I’m using a software, it’s not doing that it’s going into the Schedule B. I guess I’ll have to do it manually then.
Dr. Friday 14:19
Well, yeah, it should not be well, the homesale shouldn’t be on a Schedule D at all. D should be deleted. This is a homesale. So you should be doing under the homesale. She, I mean, they should have a separate worksheet for a home sale. And on that sheet. There’s where you’re going to enter the price that you paid the the date it was sold, the data was purchased, blah, blah, blah. Lot like it but don’t put any of that on Schedule D because D is going to think of it as capital gains as investment property. This was a primary home so you need to fill out. Hopefully in the tax software, we actually have a form called home sale it doesn’t have a number on it or I’d be more than glad to share that number. It doesn’t share it. I’m sorry. In a look myself right now to come up and see if there was actual number but all it comes up with is a home sale. See if I don’t know we use an Intuit product. Not that you know, but I’m just saying. So if nothing else, ask them because if it’s on the Schedule D, it won’t offset it.
Okay. And being in Murfreesboro, she got to July 31. file. So that’s coming soon, too.
Dr. Friday 15:22
Yeah, yes, exactly. I’m so glad you remind me of that. So yes, that way, there’s no penalty. But yeah, just go back and delete the Schedule D and put it onto the homesale and see if that won’t make the problem go away if you can find the right form.
Okay, your lifesaver. Thank you very much. Bye.
Dr. Friday 15:36
No problem. Thanks, buddy. Bye. All right. And Robert brought up a good thing, I should have wrote that down. But just for all of you that may be living in Rutherford County, that’s the main one that’s in this couple other counties, you guys have to the 31st of July, if you did not file an extension, you didn’t do anything, because maybe you actually did have storm damage. But either way, you meet the criteria that you have till the 31st of July. To file what many people had to file back in April. That was your deadline due to federal extensions. So if you’ve been sitting around and you’re like, “Oh, shoot, I need to file I forgot to do my extension.” Boom, they need to be done by Monday. Right? I think Monday, because I think maybe it’s actually Sunday, whatever day Today’s the 29th rights 30/31. No, it’s Monday. So you need to file those by Monday.
Dr. Friday 16:30
And you know, really, this can save you in some people’s cases 1000s and 1000s of dollars. In other cases, you don’t owe any money. It’s probably not a big deal. You don’t get penalized if you don’t owe money, you’re giving the government alone. So therefore they’re not complaining. But it is one of those situations where you want to make sure that you you do file, I mean, I know people always did, you know, I found that a really cool thing I was doing middle of an audit. I know I changed gears quickly, guys. But in Tennessee, I was in the middle of a state audit with some of my one of my clients that was just brought up and as it turned out great. But you know, a lot of times people just don’t file right.
Dr. Friday 17:11
This particular client due to not understanding how certain things worked, put zeros on but he was always on time, always filed it always zero. And so what was interesting was they don’t charge a penalty if you file I thought that was pretty good. Because the IRS isn’t that way, if you make a mistake, they’re penalizing you for making a mistake. The state is not I will tell you though the state is now charging 12.25 interest, that’s pretty high guys, it’s you might want to think twice about not paying the state their full dollar amount, even if you don’t have a penalty, which they do have healthy penalties if you haven’t filed, but the interest rates are going to kill a lot of us.
Dr. Friday 17:53
So you really want to make sure that your information business licenses franchise excise sales tax are filed on time paid on time. So you don’t get hit with any more penalty than you have to in dealing with, you know, with not getting something done. And it’s easier sometimes I understand for people to say than others. But either way, you want to make sure you have that going, Oh, I was talking a little bit about basis before the last break and the basis. When I say basis, it’s what you either inherited something at or it is what somebody is going to use when we inherit or when someone gift it to us.
Dr. Friday 18:37
So gifting is totally different than inheriting first thing people get that confused a little bit. So if grandma or your mom a lot of times parents love to, to gift their children, their homes, their land everything they can because they don’t want to have a problem if something happens to them. Well, for one, there’s a five year look back on Medicare doesn’t always help by gifting it to your children, you’re not going to avoid Medicare coming back if that is prior to that deadline.
Dr. Friday 19:08
Second thing is by doing that you’ve just eliminated in many cases, hundreds of 1000s of dollars now becomes taxable because your home is worth $400,000 You paid $40,000 Your children have to take what you paid. And the problem with that is is that sometimes we don’t know what you paid. And the IRS says if you don’t know what someone pays, guess what your balance is? Zero. That’s right. So if someone gifts you a piece of a home a piece of land like something I was talking to someone this last week, they were gifted a piece of land that she had inherited like 40 years ago, and now she wants to make sure he has it so she gifts it to him.
Dr. Friday 19:54
And in all honesty, we have no proof of what it was valued at the time of her and her ordinance 40 years ago, there was really no paperwork, there was nothing there. Were working on trying to pull proper comps, trying to get someone that can actually do a pass appraisal. Sometimes that can be done to come up with people like to use property taxes, but the IRS is not always taking property tax as an accepted appraisal. So it is very important for if you’re an older individual, or even just you and I guys, whoever’s listening. But if you have property and you have the paperwork where you purchase that property, it is a vitally important piece of paper that should be put in with all of your other important documents.
Dr. Friday 20:42
If you don’t have that, during your lifetime, it might be nice to go ahead and try to come up especially if you’re going to gift it doesn’t make a difference. If you let your children inherit after you pass away, we don’t need to know how much you paid for it, or how much it was worth when you got it. Because we get what’s called a step up in basis, we get the appraised value at the time of death, when we inherit. What messes up is when people try to bypass that by giving it to their children before they have passed away, then we only get the value that it was when you purchased it or inherited it.
Dr. Friday 21:21
And like I said 40 years ago, and you know, Rutherford County, the land was worth like $1,000 for every 10 acres. And now it’s worth you know, $100,000 every acre. So it is a huge difference. And by thinking you’re giving someone something that they can do something with, you may want to rethink it, or just sell it in your own name, deal with it as an you know, as if it was yours and just pay the taxes and then you can gift the proceeds to your children up to $11 million. So most people will never have to worry about exceeding that gifting law, under most circumstances.
Dr. Friday 22:03
So I’m just saying that is the way that kind of work. So if you have property, if you have assets, and you want to make it easier for your children, put them in a will or better yet. I’m not an attorney, so don’t take this as an attorney’s advice. I am a tax Enrolled Agent, but put it in a trust. Nice thing about trust is you have a pour over well, that goes through the courts basically. And they basically says we’re going to handle everything through the trust. So nothing is disclosed, none of your personal information is in the courts. Then the person that is the executor or executor tricks, they then process the trust, and then everything goes to the people you want. Without everyone knowing your business.
Dr. Friday 22:49
That’s my two cents on that. Now a good attorney, I’m sure will have more personal advice. So you should go to an attorney like Ross cook or Jack McCann, both great guys that I’ve received, then I have been working together probably for 25 years. But both have extended waiting, educations on how exactly to make sure that your wishes will be followed through. And that’s again with a trust with a well it has to be probated, theoretically a judge gets involved in some cases, and then people can come in and say, Well, I don’t agree with what my mom says she said I was gonna get the house and you shouldn’t get it. Another way of protecting everything is most of the things your bank account, your 401 K’s, your investment accounts, all of those can be po deed to anybody you want. So if you’ve got two children, you could pod 50/50.
Dr. Friday 23:40
And that means paid on death. Boom, you don’t have to have to worry about it doesn’t have to go through anything. It’s automatically distributed at that time. But again, there are rules and there is ways and you want to talk to an attorney to make sure your estate is in good shape. But just think twice before you eliminate the tax advantages. That’s what the whole point of that long conversation was. We’re going to take our second break when we come back we’ll get to more of your phone calls and emails. Phone number here is 615-737-9986. We’ll be right back with the Dr. Friday show.
Dr. Friday 24:18
Back here in studio and we are taking your calls at 615-737-9986, taking your phone calls. I had an email come in and I just want to remind any small business owner that had employees keep in mind there are a lot of scams going on out there about E RTC employee retention tax credits. You first have to have employee second if it was only you the owner on payroll which some small businesses you will not qualify for ERTC if you receive p p one and p p too, you’re not going to receive that $22,000 an employee or whatever I had someone just call me the other day and said, “My company qualified for certain things. And I don’t know how any of them know what we qualified because the information is not public knowledge of how many employees or you know how much I pay or anything else.”
Dr. Friday 25:17
So, they’re just putting a number out there trying to get your attention. So just be careful, it is still available right now. But you do really want to try to get them put in and make sure you have all of that put into the system. But if you have, if you have had employees, 2020 2021, you had full time employees, you may qualify for ERTC, I’ve had several small ones, but you know, we’re talking and in some cases, 1015, I’ve had a couple that do not qualify, they didn’t have enough employees, they didn’t have enough income loss, it’s all comes into the calculation. If your business did better during COVID, then then worse, like, you know, using 2019 as a guide, you may not qualify there, again, there are different qualifiers for it.
Dr. Friday 26:05
And it’s very important that you, you know, understand and have someone that is qualified, I’ll be honest, our firm has hired a CPA firm to do it, because it’s not something that we have done. And I don’t feel qualified to actually be able to get the information through. But if you have someone, just make sure it’s someone that you trust, and that the information is being put out there correctly. Because we had people with PPP, several of them ended up having to pay the whole PPP back because they did not get it correctly. We have people that went out and got unemployment. We talked a little bit about that a week or two ago, where the unemployment, people are coming back and saying you now owe money for the unemployment even though somehow these people qualified for it at that time.
Dr. Friday 26:48
And so it comes into the situation where you need to make sure that if you’re signing your name to these forms, and to this information, that you at least understand enough on how it’s going to come out for you. So it’s quite important that you understand how the system works enough to be able to get your data, you know, again, you’re you’re signing, you’re saying that this is correct. So if it is great, if it’s not don’t sign because the government is going to come after you. They’re not going to come after that company. All right. Looks like we’ve got Bob and Woodbury I think he’s available. Hey, Bob, what’s happening? Hello, Hey, Bob.
Hey, I’m sorry, I’ve been kind of running around, doing a whole bunch of stuff and haven’t been able to pay attention to the show. And I didn’t know you had your special things that you’re doing, but and I did. I thought I was calling the radio show. But I guess I was calling your office. So when you go in there Monday just disappeared? Yes, you can disregard that.
Dr. Friday 27:55
No problem, Bob, no problem. So what the question is, what do you have?
Well, excuse me. I was in the service. And then I worked for the government stuff and got my payroll, government savings bonds, and all that. And then, you know, listen to the different shows, they say, you know, those are really not good investment, tools and stuff. And then at some point I heard, well, you can use those interests free for like a child’s education. I said, Well, okay, I guess I’ll hold on to him. And then and so they just been sitting there. And then once I got into them, it’s it’s the doubly bonds and it’s 1989. Well, I’ve got the single bonds, and they’re pre 1989. I will have some of those eventually. But I’ve got all those and so I know I can’t you know not have to pay the interest on that just like income. But I was wondering, when I was trying to research all this and I’m not a good researcher. I’ll say that up front. Going different ducks. I’m just like anybody else trying to save a buck? And so it looks like you could from some of the cost of his school, take off some of those deductions. And so that’s I guess my question.
Dr. Friday 29:31
So you said this is a Series E as a Series EE, series I. What series is it?
It’s the single e in they’re pre-1989.
Dr. Friday 29:41
Okay. Again, some of those I’m not a financial planner, but I know that the Series E and what the series I believe both can can be transferred over for college education. Most people will cash them in and roll them over to what like a 529 plan or something but I can honestly tell you I don’t know much about bonds per se, with extension of, you know, like you just said, once they come mature yours are going to be taxable, which is not a, you know, now, I don’t know for sure, I would say the answer to that to get a better answer on that would be to call either Hank parent, and if you want to call me, I can always text you that information, a financial planner, because many of them deal with the bonds. And there may be a way like you just said that still, the higher education can be somehow transferred.
Dr. Friday 30:38
I know we can do some of them, there is a tax form and 8815 that we use that explain some of the ins, you know, instead of cashing in, it goes converted over. But first, I would say you need to make sure that these kinds of bonds, because again, I usually am dealing more with E or I I don’t know for sure much about the IE bonds. To be honest, I just don’t want to give you bad advice on that one. But if you call me earlier, I think I see you because all you know, I’m one of those people that love her cell phone. And don’t go very far with that one. And so I can text you a financial guy that you could probably ask that question of and he might be able to give you a little better. I’m with you. Let’s not pay taxes if there’s a way of investing into your child’s education.
Absolutely. Well, I just wanted to say that. I said I had started this when I was in the service. And I had a I didn’t get the opportunity to go to Australia, but half of our group did. And that really, they really loved it. That we split it up. I don’t know exactly. It’s been so long. I can’t remember the all the reasons all that happened. But they went to Australia and to Tasmania. And I went to the where was it? I can’t remember. I know we went to Tinian where they watch us with qualm and where they flew the atom bomb from I was I was in the Navy as a Navy corpsman with the Marines over there. And so, but we went to the Philippines at a different place that they don’t We don’t normally go to.
I came late at Tacloban City which was in the news a couple of years ago, you know, they had the typhoon went through there. And I’ve talked a little bit in this and talk club in that way. Did a lot of bad destruction over there. But anyway, I just want it for serving. Oh, yes. Well, those were the really good years. There wasn’t anything going on back then. It was it was I had a lot of fun back then. But they just yeah, just you know, love, listen to your show, love the accent and everything. And there was a guy he traded. And excuse my my Australian accent. He said, a mate, how you trade me or your kidneys. And I didn’t even know what he’s saying. But it’s those little medical conduces that we wear on our collar. And he actually you which you can get at the px for, you know, probably $1 or something like that. Got that guy. The Australian guy traded him a bush hat. And one of those Australian footballs for it. So my buddy, he came out way ahead there. And he was really proud to have those.
Dr. Friday 33:28
Well, there you go. It was pretty cool. Thanks.
Well, I enjoyed talking with you and have a nice, good day there. Yeah.
Dr. Friday 33:38
Yeah, good day. Thanks mate.. All right. Bye. Bye. All right, that was always always nice to have a conversation. If you have a question, hopefully I can do a little better. Unfortunately, with Bob, he got into savings bonds. And that’s not necessarily my expertise unless he cashed them out. And then we could talk about the taxes that were the implication. But hopefully, we can get him over to a financial planner that could probably answer that question better. But if you want to join the show, we’re gonna have a few minutes when we get back from our next break. The phone number here is 615-737-9986. And we’re gonna be talking more about taxes and tax issues. Again, just want to put a shout out there.
Dr. Friday 34:19
We have two big deadlines this weekend. We have the filing for anybody that was like in Rutherford County and a few of the counties surrounding there for storm damage, you are now going to have to file your federal taxes many of you may have already sent them in, but for some of you that may have just got lucky or waited, you need to hit that button by July 31. And then this is the big sales tax free weekend for computers, clothing, and school supplies.
Dr. Friday 34:46
So if you have a list or and I do know, there are some organizations that are probably looking for some school supplies, so if you’re even thinking about just buying some extra and dropping them off at the schools are at those organizations, that’s always a great way to probably help out. I know, my niece is a teacher and it seems like they never have enough supplies to make it through the school year no matter what. So it’s always probably nice to have some extra. So right now, maybe you can give 10% more, right? Because you’re going to save almost 9.75% in Williamson County. All right, we’re gonna take our next our last break here. So if you’ve been waiting and you want to get through, you can.
Dr. Friday 35:26
The phone number is 615-737-9986. I’m Dr. Friday, I’m an enrolled agent licensed by the Internal Revenue Service. Did you taxes and representation, plain and simple, that’s all I do is talk taxes and represent you. If you haven’t filed taxes in 10 years, guess what, I have a way to help you out. If you have a love letter sitting in a drawer and you’re like, I don’t know what to do with them. Yes, what, that’s what I deal with. So we can help you get back on track, get into compliance, and maybe start living life again, instead of just trying to avoid the IRS. So if you need help with that, keep listening. You can give us a call in the studio right now. 615-737-9986. We’ll be right back.
Dr. Friday 36:19
You’re back here live in studio. You can reach me at 615-737-9986. This is Dr. Friday. Can you hear me from Dixon?
Dr. Friday 36:46
Hi, what’s your name? Sweetie? Sandra, Sandra. Okay, sorry, I couldn’t tell what it was. What can I help you with?
I am an 80 year old widow. And I’m considering putting some of my savings into a long an irrevocable trusts for my grandchildren. Okay, hoping that would keep me from paying so much tax. I don’t know.
Dr. Friday 37:16
You know, in theory, some of it can be but since it’s savings, you’ve already paid tax on that money. You know, in essence normally with with a trust, it’s more of a farm a home, you know, something that could become taxable with your savings, the only difference will be I mean, because the money in the savings has already been taxed the interest or the growth on it hasn’t. So there may be some investments, you could put it in how old are your grandchildren?
27, 24, 17.
Dr. Friday 37:50
Okay, so, with the hopes that the youngest one is 17, I think you said, as long as, as long as you plan to hang around for a few more years, all of them will be old enough to be able to be able to inherit pretty much. You know, at that time, none of them were minor children. Least the younger one will, hopefully. So I mean, it’s a great idea. I mean, I think in some ways, but if it’s if it’s just cash sitting in the bank, in all honesty, and I’m not an attorney, but you can do what’s called a pod or paid on death.
Dr. Friday 38:22
And at that time, you can take whatever percentage you told the bank that I want to go to this child, this child and this child, they can do a distribution, right at the time of your passing. If it’s if it’s cash, because they really won’t pay tax audit, whoever handles your estate will have to pay tax on any interest earned like you do every year, right? I mean, you know, you have to pay tax on it. And then if there’s a house or something like that, there won’t be much tax unless, unless somebody holds on to it for a while because they’ll get the step up and basis. So the house itself will be an another gift that you’ll be giving them in that situation.
Dr. Friday 39:03
So, again, normally 401k is IRAs, tax deferred accounts, that’s the ones that we have to be a little bit more careful with. But you know, it’s certainly up to you. And I would definitely say talk to a tax attorney, or even your tax person you’re dealing with just to make sure you’re not spending 2500 to $5,000 to set up a trust, which, again, there are good reasons to have them just to pass something to the grandchildren that are almost all over the age of 18. Okay, you know, so I would just have a second conversation on that. But again, you do want to have something because normally the generation skipping normally you would have it go to your children and the children will give it to their grandchildren. Yeah. So you have to figure that out. Does that make sense? Sandra?
Yeah, it does.
Dr. Friday 39:55
Okay. I’m glad you called. Thank you. And if there’s anything else I can do, you can always call me at the office. Okay?,
Okay. Thank you very much.
Dr. Friday 40:03
Thanks Sandra, I appreciate you. Alright, so we’re going to see if there’s anyone else, I guess there’s no one else on hold. So we’ll be good there. We’re going to cover up one more time again, guys, I’m only pushing the sales tax free thing because well, it’s only this weekend. And I think there’s two a year actually. But right now, the biggest things that you want to look at computers under $1,500, clothes items or school supplies, any one item under $100. And, and you don’t have to pay tax on it.
Dr. Friday 40:35
And in this state, we have quite the healthy sales tax. And then starting on Tuesday, the August 1, you have the food for three months sales, tax free, fresh food, let me clarify, you go into your I don’t know grocery store, and you buy, you know, dried, frozen solid, dehydrated, those foods are the you know, those are great. fruit, vegetables, eggs, all those will be part of this. But if you go into the gas station and you’re buying a sandwich, even though it’s still food, or candy bars, or tobacco, any of those will not be part of this.
Dr. Friday 41:11
So again, just making sure that you have it. And then if you’re in the Rutherford County in the neighboring counties, just double check, if you do actually have a tax return that hasn’t been filed, and you did not file an extension, you need to file the extension, or you need to file your taxes. Those are the very, very important situations for you. And if you have questions, you can always also email Friday at Dr. friday.com. Again, Friday at Dr. friday.com, making sure that you have the ability to at least ask the question, if I don’t know the answer, which you know, obviously can happen, I will send you to the expert that should know the answer, or we’ll find out the answer for you.
Dr. Friday 41:57
That’s what we enjoy doing here. That’s what the show, then we’re getting what 1414 plus years that we’ve been on the radio. And it’s it’s been fun listening and helping people try to figure out taxes, which is what I do a lot of. And so if you have questions, when you’re not on the radio, I have to do is call my line Direct, which is 615-367-0819. As I said before, I’m an enrolled agent, licensed by the Internal Revenue Service to do like to do taxes and representation. The difference between CPAs and enrolled agents is we’re licensed by the IRS CPAs are licensed by the state. Now there are some my friends that are EAS and CPAs, and even an attorney all in one package. So you know their licensing is different.
Dr. Friday 42:46
All we do is taxes. So if you have tax issues, maybe you haven’t filed taxes for a number of years, or maybe you have a friend or a family member that you know, is maybe not up to date, or they’re avoiding certain tax questions or just not filing taxes. In some cases, we all know that they’ve lost money. But keep in mind 20 and 21 were big years for the government to give money out that 20 year is dropping off very soon. I mean, we’re talking April of next year, after that you’re most likely not going to be able to collect. If you did have that money, the IRS only gives us three years to collect our refunds. They can collect up to 10 years, but we only get three years up to collect for refunds.
Dr. Friday 43:33
So if you haven’t filed taxes, or even if you owe money, think about it. If you owe money, wouldn’t it be nice for them to pay some of the bill so that way you have it out there and once it’s out there, then we can deal once you’ve got your your compliance no matter if you have to go back 10 years, five years, six years minimum normally six years, you then can start talking payment plans, offering compromise, adjusting so that you can eventually get out of tax debt. And also it also gives you the ability to go do things right? I mean, you you have the ability to put your kids through college because without it FASFA will not work. You can apply for a home loan. I don’t know some car places I understand. You can get car loans without tax returns, but you’re not going to get a home loan. And maybe you don’t want a home.
Dr. Friday 44:25
But even renting sometimes requires tax returns people. So you may be able to live off the grid and not have to worry about it. But if you’re actually at a point where you’re ready to start talking about building your credit back up and trying to get back on track with the IRS. It is not an impossible situation. But it will take a little time. Take a little patience and take the ability to start someplace and that’s where we can help you we can help you figure out where to start, get the transcripts figure out what we’re going to do and then make that deal with the IRS so that we’re able to make sure that we can get the payment going. So again, if you want to reach me, you can do that at 615-367-0819.
Dr. Friday 45:14
Open Monday through Friday. You can also email firstname.lastname@example.org. That’s email@example.com. Or you can check me out on the web drfriday.com. Check us out, figure out what we’ve been doing been doing this for 25 years here in this town. So we’re right off of in the Brentwood area right off Maryland way. And you have the ability to find a place to start, right because that’s really what’s most important when it comes to doing or catching up with the IRS. So again, and the initial meetings are always free, because if we can’t help you, I don’t want to bill you if I can help you, I want to be able to tell you what I’m going to do to be able to do that. So if you want to set up an appointment, the easiest way right now is to actually just give us a call at 615-367-0819. The easiest way to get a hold of us. But also you can email firstname.lastname@example.org. email@example.com I hope you guys are enjoying this Saturday. Try not to spend too much time outside it’s too hot as we say in Australia, Call you later.