Welcome to another episode of the Dr. Friday show! In this episode, Dr. Friday talks all about taxes, upcoming dates, and the following topics:
- Do I Have To Pay Back The Stimulus/ Pay Taxes On It?
- How Much Of Unemployment Is Going To Be Taxed?
- Do You Need Help With Tax Preparation/Representation?
- How Entrepreneurs Need To Do Taxes
- Will There Be A Second Stimulus Check Coming Out?
- What To Do If You Need Help With Tax Preparation/Representation
- What To Do If You Don’t Need/Want Your Stimulus Money
- I Owe The IRS Money, Will I Get The Stimulus?
And so much more!
No, no, no, she’s not a medical doctor, but she can share cure your 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 at 615-737-9986. So here’s your host financial counselor and tax consultant, Dr. Friday.
Dr. Friday 0:30
Good day. I’m Dr. Friday and I am all set to have a wonderful show today. Hopefully, you guys are too. We’ve had a few chances for individuals that may be small business owners. The President didn’t sign in and additional change. So instead of having the eight weeks we now have 24 weeks to spend the money for the PPP. Instead of some of them expiring in July it’s going to go through December. We’re going to have five years to pay back if you can’t meet forgiveness instead of two. There’s going to be some additional things with the extension of a company paying portions of their payroll taxes, they are going to be able to be forgiven. So they’re really working hard to find ways to be able to help small business owners to continue to try to figure out how to get their doors open with all the people and things stopping and doing things. It’s very difficult when you can’t get the employees because, in my opinion, they’ve maybe over thought unemployment. The Federal the cares act, unemployment expires on July 31. I know many people who really need that money. In statistically in a large number of cases, people are making more money on unemployment than they were making when they were working, and that is a problem, which they are trying to address in the Heroes Act, which is now at the Senate. They’re trying to figure out possibly another stimulus check, that’s on the table. But we don’t know for sure what or where that’s going to lead. The president’s office has basically said nothing’s going to be done until after July and now with many people protesting, rightfully, some of the things going on, they’re wondering if that’s going to slow down what’s happening in the Senate and Congress because they’re going to be trying to figure out additional things that need to be done with that situation.
Dr. Friday 2:34
So if you’ve got questions, if you’re a small business owner, especially maybe dealing with PPP, or EIDL loans. At this point, I don’t think there’s a lot of ideal loans going out. But if there’s either those you have questions on along with what we’re going to do to move forward. Don’t forget July 15, we have to file our taxes or we file an extension. Now, it used to be the extension was six months after the due date. That has changed, obviously, unless something changes from now, it used to be six months from April 15. So if you choose to file an extension in July, it will still be due in October for individuals, and in September for business owners. Either way, you can join the show 615-737-9986 if you have questions concerning taxes, or maybe something that’s going on as far as the PPP or additional small business loans that are out there. 615-737-9986 talking about things mainly about taxes, that’s what I love. So, there have been some changes, especially for people that are doing taxes or looking at taxes, you want to stay on top of this. We all know the due date is July 15, 2020, for the 2019 tax period, but we also know that there’s additional again, we’ve got the PPP we also know that there’s the stimulus check but unemployment, many people are receiving it and that is taxable income. So keeping that in mind, especially if you decide to go back to work and you start earning additional money. Did you have enough money come out of it is really going to be the biggest question. So, people that have to take required minimum distributions, are not required to have to do that.
Dr. Friday 4:20
Now, remember, if you take a requirement on distribution, you use the qualified distribution, which is for charity, right? I’m a firm believer and in pain your charity out of your required minimum distribution, you may want to continue to do it, but under the Security Act, the requirement or distribution, anyone over 70 and a half to 72 would be taking it, you don’t have to you can do 2019 requirement is not going to have to come out. So if you want to delay it, you can do that, without a problem. Secured Act also allowed owners of traditional IRAs to make contributions past the age of 70 and a half in 2020. In addition, folks having a baby or adopting a child can take payroll payments out of IRAs or 401 K’s up to $5,000 without paying the 10% penalty. But, keep in mind you’re still going to pay taxes. Also, you have the fellowship or stipends that are similar for graduate postgraduate beginning in 2020. Students are treated as income therefore they can make IRA contributions. So if you are getting a fellowship, a stipend, or similar types of graduate funds, you might consider putting money into an IRA before it wasn’t really considered income, even though they were taxing it. Kind of an important thing to do and generally this will help graduate or qualified students to have savings accounts, which is actually really cool. Alrighty, we’ve got Alan on the loan. We go ahead and click Alan to get him on the show. Hey, Alan.
Howdy. My son is about to get married a both he and his wife are public school teachers in Williamson County. They have been told that there’s about a 90% chance that they will have to teach remotely, if not, exclusively a significant amount, beginning in the next school year. They are moving into a two-bedroom apartment, one of those rooms is going to be used as an office. My question is, is that tax-deductible? And if so, how much?
Dr. Friday 6:29
No, it’s not at this point. Part of the tax change that happened in 2017, for the 2018 tax year was eliminating 2106 for employees. I’m expecting to see that that may change because we’ve never had so many people working from home in our lives. It’s mandated by the employers before it was more of a choice, sometimes, you know, things like that. The government’s like, “Well, we shouldn’t have to pay for you If you could go to work and you don’t want to.” That’s fine, but this is being more mandate. So at this moment, there is no tax advantage. If it was it would be based on square footage. So let’s say it’s 1000 square foot apartment and 100 square feet of it in the office, they would get one 10th of all of their costs to maintain that apartment.
I see. So even though they are being mandated by their employer to work from home, that doesn’t allow them to have a deduction for a home office?
Dr. Friday 7:26
No, the home office only applies to self-employed but that’s a great question, Alan. I’m getting that question a lot because I’ve had more than one person walk in, and say, “I’ve got more utilities going out. I have more costs, you know, the house is being used more AC electricity and all this.” And there’s no tax advantage at the moment.
I appreciate your time. Thanks.
Dr. Friday 7:46
Thanks. Appreciate it. That was a great question. We seriously get a lot of those in the office because up and through 2017 we at least had 2106. Now I don’t know for sure under the case that his children or his son are not a homeowner, they may still not be able to itemize. But keep in mind back then itemizing was only $12,000 and now it’s 24 or 28 so it’s going up. So, therefore, it may have been impossible for them to qualify anyways because the standard deduction is twice as high as it used to be. So they’re probably still getting a fairly decent advantage. But this is causing a lot of people to reevaluate their workspace and in their case, they’re actually having to upsize possibly because they’re getting married, but also get two teachers in one house. You kind of need to have room to be able to do things. So all right, let’s go to the phones we got Robert. Hey, Robert.
Yeah, I just got a question. I filed my tax return and I had to use a paper form because the electronic form wasn’t working and so I put the paper in on March the 11th. I have confirmation that they received it. And I still haven’t gotten the refund back and I’ve gone online to the IRS status check. It just keeps coming up with a screen that says that they can’t provide me with any information at this time. So I don’t know what I’m supposed to do.
Dr. Friday 9:21
Yeah. And it’s a great question. Seriously, Robert, the fact you have confirmation that they have it, what you might want to do and it’s going to be somewhat painful is you’re going to need to pick up the phone and call them to find out. Because if it’s not showing in the system, here’s my concern, basically, sometime between the end of March and most of the month of April or whatever, the IRS was basically closed. So they were only doing essential jobs, that kind of thing. So I don’t know what happened to all of our returns that we did through the mail. Normally, in a normal year, it would take 90 days from the date we mail it to the date of people getting their refunds, right? It just takes a lot longer on the paper side than it does 21 days with electronic. So you haven’t hit the 90 but I would say it should be showing up in the system at least saying, “We’ve received your return, your refunds expected to be mailed or direct deposit at this time.” If it’s not there, I would call the 800 number it is working now. It will probably take you a couple of hours. Just be prepared. It’s painful.
Okay. So yeah, the website just kept saying, “Verify your filing date and check with your tax preparer.”
Dr. Friday 10:36
Yeah, which you already know those two things. So the biggest thing is but you mean even though you have documentation showing they’ve received it, it doesn’t mean that it’s actually made it off someone’s desk is my concern. So you might want to just try to make that call. I think they’re open. They used to be open on Saturdays. You could try calling today if not, I would suggest calling. They open from seven to seven normally so call early in the morning or a little later than the normal nine to five. Sometimes works.
it’s a one 800 number?
Dr. Friday 11:04
Yes, its 1-800-829-1040 give that that’s the just the regular service number and give that a call and see if they can’t track down at least let you know that it’s in the system. They may not be able to tell you when the refund will come but make sure they actually have it in the system.
Right. I’m sure if I owed them money would already be in the system.
Dr. Friday 11:28
Exactly. That’s a whole different conversation, Robert than the bill would already be on your desk even though they haven’t processed it. No, just joking.
Oh, thank you so much. Appreciate it. No worries.
Dr. Friday 11:37
Thanks, man. All right, thanks. So if you want to join this show, you can 615-737-9986. We’re taking your call and I’m talking about taxes as an enrolled agent. I’m licensed by the Internal Revenue Service to do taxes and representation which basically means guys, this is all I do. Kind of a very simple system here. So if you’ve got questions about filing taxes maybe have filed for a number of years or maybe you’re dealing with something outside and you’re like, “Okay, I don’t want to file with my husband or I’m getting divorced, what does that really mean? Or getting married?” All those kinds of things actually have big effects on your taxes, or at least they can affect your taxes. So if you’ve got questions on those things, you can do the call the show or set up an appointment at Drfriday.com. All right, we’re gonna take our first break and we come back. We’ll take some more your phone calls from 615-737-9986. We’ll be right back with the Dr. Friday show.
Dr. Friday 12:47
All righty. We are back in the studio. Well, the new studio I guess you’d call the Skype studio. We are here live and we’ve got two people we got Bruce and Mike and it looks like Bruce called first so Bruce, let’s go to you first? Hey Bruce, what can I do for you?
Yeah, I was wondering if you know anything about the stimulus checks that we’re supposed to receive?
Dr. Friday 13:10
Are you talking about the ones that were started to be issued back in April? The $1,200 one?
Dr. Friday 13:16
Have you not received yours yet?
I have not. I filed my taxes, I did it through the paper. Mailed back to me and I haven’t got those either. I did it in March.
Dr. Friday 13:29
Well, we know from our previous call, that’s always a delay, but did you fall 2018 taxes as well?
Dr. Friday 13:36
Okay. And just out of curiosity, it sounds like you didn’t move at all right.
No. They will mail it, I guess to me.
Dr. Friday 13:48
Yes. Unless you had a refund in 2018 and you had put your banking information in. They’re going to be doing a mail to you. Yes, sir.
Yeah, I haven’t given them any bank information.
Dr. Friday 14:01
Okay, so shoot me in the mail. Now, I will tell you, you’re getting yours later than all the people that got them through direct deposit, right? And they just started about two, maybe two and a half weeks ago giving people and starting to get other people other than taxpayers their money. But statistically, I will tell you 5 million a week are going out and they’ll be going out all the way until September. There’s like 200 million or 180 million people getting checks or something like that. So it should be coming to you that is all I can tell you. If for some reason it doesn’t arrive, when you file your 2020 you would get it but I would not think it’s not going to arrive. It should become. Have you checked the IRS website to see where it might be? I mean, is there anything in there?
Yes and that always says that there’s not enough information.
Dr. Friday 14:47
Gotcha. Yeah, there is a new phone number out there. I’ll try to find it here and put it out there for people that want to call on the stimulus. But Bruce, all I can tell you right this second is that it should be coming to you don’t give up on it. Okay?
Okay. Thank you.
Dr. Friday 15:02
Sorry. Thanks, sweetie. Bye. All right, let’s go to Mike. Hey, Mike, what can I do for you?
I’m a good afternoon. How are you? I have for the past two or three years I have owed taxes. And like Bruce, I have also filed my taxes my 2019 return. But I owe $1,342 for this year. So imagine my surprise last week where I went to the mailbox and I have a check for $2,400 on a stimulus. Now, I don’t believe in free money. This isn’t my first rodeo. So I don’t trust the government as far as them saying in the future, “Hey, you owe money on this $2400. Have you heard anything like that? It’s going to be taxable?
Dr. Friday 15:57
the law passed that they cannot make it taxable it cannot become taxable money. And if you owe the IRS, I don’t not saying you know, it sounds like you owe them every year. But if you have a back debt or something with it, they cannot keep the money. So, in this case, this money is truly tax-free. Now, I think in the long run, we’re all going to pay for this money, at least all the taxpayers, some people. But if you’re paying taxes, sooner or later, they’re going to have to either increase taxes, I mean, somehow we have to pay back 2 trillion or more dollars, nothing comes free. But the money that you’re putting in your pocket to help you right now is not going to be taxable next year or anytime soon.
So I can just take this $2,400 check and pay this year’s taxes and bank the rest?
Dr. Friday 16:47
Exactly what you can do. Yes, me at least that way. It takes the pressure off trying to come up with the money for the taxes. You got it, Mike.
Okay, thank you very much. You have a great day.
Dr. Friday 16:57
YouTube. Thank you very much. All righty, let’s take Corey
Yes ma’am. I have a question about injured spouse allocation. How has the corona situation affected that? I had to file it last year and it took 11 or 12 weeks, but it did come back and this year, we filed in early February and still haven’t got any money back. The website does say that it’s being processed.
Dr. Friday 17:42
you’re right, unfortunately, injured spouse are hand process, as you probably have already figured out at this point. It is taking them longer. I’ll just be honest, normally I would tell you even with paper ones, I mean Normally, you know, 90 days and you guys are all getting close if you’ve done them in March, you got April, May, we’re in June now. So you should be or have been seen letters or something saying if normally if the IRS got something for more than about 60 days, there’s a letter saying, “We’re still working on your return or we need additional information.” They are just taking longer these years all I can tell you, Cory, you know, they are just taking Do they have your banking? Are you waiting for a check back?
Oh, they have my banking.
Dr. Friday 18:30
Okay, so there’s a hope that they’ll actually do a direct deposit when it’s done. In the cases of paper returns, I’ve not had a lot of luck, I guess is a better term with them. Actually, sending it back through the electronic. It seems like they always end up sending it by mail. But that’s more my experience, but at least you know they have it. So in your case, unlike the earlier gentlemen, it may be just a matter of just keep watching the website because it should be telling you fairly soon either that it should be directly deposited on this day or that the checks been issued. If they’ve already got it in the system, it shouldn’t take too much longer. Sorry.
Okay, I’m gonna stay hopeful. Thank you.
Dr. Friday 19:12
You got it, buddy. Thank you. All right. See you later. All right, let’s just go right to Chris. You doing awesome. Hey Chris.
Hey, how are you? The reason for the call is on April 9, my wife and I did our IRS taxes. It’s still showing that it’s not being processed yet and we don’t understand why. We e-filed with the professional. We’re just wondering what’s taking so long.
Dr. Friday 19:46
So if you filed with a professional and it was filed on April 9, it can take I mean, be honest with you, it can take a few weeks. Did they send you confirmation of e-file for that day?
Dr. Friday 20:05
Was it me? No. [laughter] Whoever if they have sent you a confirmation, then most likely the IRS is actually looking at the return. So they haven’t posted it yet, which may mean that they’re doing a paper audit, in essence, nothing to be scared about, because a lot of times, they’re just matching up W2’s and 1099. Just to make sure what you reported is correct. But it does delay the process, within 21 days from the date that you file, it should be in the system that that’s the usual statistics that they always give us. And then within that time, another 21 days it usually will actually be in your bank, if it’s a refund. You’re already at 30 days almost on filing it. You said April, so we’re through May, and we’re in June now. So I would I mean, you could certainly call the 1-800-829-1040 again, prepare that it’s not going to be the fastest phone call you’ve ever made. It wouldn’t be able to tell you if they were looking at it or maybe that they’re not showing it in their system. In the past, we have had confirmation of the file, but yet not actually have it with the IRS saying they’ve never received it, right? So that would be my suggestion would probably be at this late date, you’re way outside of that information. If it’s not showing up, I call the one 1-800-829-1040 and just see what you have for options. Because it sort of sounds like they haven’t received it, even though they’ve got proof that it went through is what I’m guessing, Chris.
So instead of calling the professional I should just call that number and ask?
Dr. Friday 21:42
Right. I mean, if my office or whatever, we would normally then be able to track it. We have the ability to go online to actually get a person through e-services that would be able to track to see if the document is actually in there. By calling them they could do that. Or you can call the IRS direct and find out whichever way someone needs to do one of those two services.
Okay, sounds great. I appreciate your help.
Dr. Friday 22:07
Okay. No problem. Thanks. All right. This is the Dr. Friday show. I want to put out there for a couple of people that I think we only have one call today about the stimulus 1-800-919-9835, that is a phone number you can call that will tell you just about the stimulus checks. If you haven’t received it yet and you need to know more about what’s going on. Are you going to be qualified? Or is there something you need to be doing? Have they sent it to an address that’s no longer there? I will tell you if a child on your tax return was missed, they will not be issuing you another check. So if you had a baby in 2019, and they’ve already sent you the stimulus, you’re going to get it in 2020 when you file your taxes. Sometimes tax years they give them to his or her even odds in those situations. If the person that claimed the kids in 18 got the money even though 19 was your year, you know that’s going to be something that you and your spouse is going or ex-spouse is going to have to deal with the IRS has come pretty much out and said we are not going to be dealing with this. So just putting out there that this is not something that the IRS is going to get between or deal with any of those particular issues.
Dr. Friday 23:31
If you’ve got questions, anyone joins the show, you can 615-737-9986, we’re taking your phone call talking about my favorite subjects, taxes. As an enrolled agent. That’s what we do, guys, we help you get your taxes in line. Maybe you need help getting organized. Maybe you need help dealing with the IRS because you can’t really get out there and rebuild your life if the IRS is constantly hanging over your shoulder. So we’re going to take a quick break here and then I’ll let the big guy here answer some of those phone calls. But let’s go ahead and take a quick break and we’re going to be right back with the Dr. Friday show.
Dr. Friday 24:25
Live in-studio so if you’ve got some questions or if you need some help 615-737-9986 is the number here in the studio. Why don’t we go to Barry and Lawrence? Hey Bear.
Hey, how’s it going today guys?
Dr. Friday 24:45
Going awesome. What can I do for you?
Okay, thank you for taking my call, first of all, and I have a question that maybe you can help me with. I’m a small business owner. When this first happened, I applied for both the SBA and the PPP and I was denied the SBA due to medical bills from like seven or eight years ago, didn’t have insurance at the time I do now. So that fell through and the PPP, the lenders said that they wouldn’t know anything It would don’t they would contact me that someone in the government or something would contact me. So basically just sitting here you know, haven’t gotten anything from anybody, you know, and, and that’s fine, but I’m just trying to figure out the system so people can figure out what to do. Because there’s really no answers out there for people.
Dr. Friday 25:34
No, let’s be honest, PPP is something none of us have had any kind of past history or even dealing with SBA for most of us small business owners unless you’re buying franchises or into certain elements of the business world you deal with it but not on a normal basis. Most of my clients and individuals don’t really get a whole bunch into you know, these kinds of, of loaning or situations. I will tell you, we have done a ton and anyone listening we have done a ton of these and we have found Blue Vine is still accepting PPP papers. So at least as of earlier this week so it’s just called Bluevine.com.
Okay, another problem I found. If you don’t have an account with them they turn you away like SunTrust, Bank of America, big ones that if you don’t have a business account they turn you away and I even had to check accounts at SunTrust and they said: “Well, if you don’t have a business account here we can’t help you.”
Dr. Friday 26:36
Yeah, that’s irritating because I know myself I’m I have been only with SunTrust, and a lot of the other banks like First Tennessee some of the other ones were actually doing loans a lot faster and a lot. There’s only so much money, right? So we’re all sitting there going, “Oh my gosh, I’m not gonna be able to get PPP, which we need to help keep the jobs whatever.” That’s why I’m not promoting a bank, to be honest. Because with Blue Vine, you put in whatever bank you’re with, it goes through and directly goes into that bank. You don’t have to be with that bank to do anything with them. I don’t know how all the other people but that’s the only one but I will tell you, I would get on there Barry and just try again with the PPP. I understand with the SBA, that’s just life and unfortunately, we all live in things happen. But least get something from the PPP, either through payroll or now, of course, the nice thing they did open up with the Schedule C for individuals that are just self-employed and paid themselves.
Yeah, I just got to the point where I just kind of gave up. I’m just out here working, you know, trying to take precautions not to get COVID and just kind of threw my hands up in the air.
Dr. Friday 27:52
Stay strong, buddy. Seriously. Not to give up. All right, buddy. Thanks.
All right. God bless.
Dr. Friday 27:59
All right. Let’s go to Stuart. Hello, Stuart.
Hey, Dr. Friday, how are you?
Dr. Friday 28:05
I am doing awesome.
Excellent. I have a stimulus check question. My daughter was dependent on my 2018 return. And I don’t qualify for a stimulus check, but she would. Neither one of us had filed our 2019 return yet. But my question is when we do will she be issued a stimulus check at that point?
Dr. Friday 28:27
Yes. A lot of people are rethinking who might be considered a stimulus or not. But yes, I would suggest not so much your Stewart because you’re in my boat. As far as your daughter, I would try to go ahead and get her as filed, get her on the list. And then she’ll get that additional $1200 to help her you know, continue on or whatever. But yes, she will qualify, assuming that she did work something in 2019.
She did, she was a flight attendant for Delta, which, by the way, is a great company. Great experience with them. Okay, and so the IRS won’t wait to see my return to compare the two to make sure. Okay, wonderful. Well, thank you.
Dr. Friday 29:10
Appreciate you. Alright, thanks for listening. If you have questions you can at 615-737-9986. So again, if you’re a small business owner, if you’re having a difficult time trying to make it, there are some ways of trying to get some money out there. I will talk about these other two, which really doesn’t help the small small business owner. It has to be someone that has employees. So some self-employed individuals are truly just paying themselves and they don’t pay into the W2 or do payroll. But if you do have payroll, there are two things that you can do. Maybe you didn’t get PPP, maybe you don’t have this but if you’ve got employees, you can defer payroll taxes for the rest of the calendar year. Is the employer portion, it doesn’t mean that you get out of it, it just got to be pushed out. So they’ll put whatever you defer, they’ll do 50% by 2021 50% by 2022. But it will take a little bit. So it’s normal your liability for payroll taxes for the period. Social Security taxes in my understanding.
Dr. Friday 30:19
Then you have employee retention. So if you were able to keep people on from March 12, through January 1 of 2021, there will be a maximum credit of $5,000 per person 50%. So basically $10,000 or more, if you’re paying them, you don’t get 50%, the maximum credit per employee is $5,000. But these are some additional credits that you’re going to be able to take advantage of to help with keeping the cash flow going, right? Because that’s really the important part of this whole conversation. What we want to do is keep cash flow, we want to be able to sit there and say “Hey, tomorrow, we got the rent paid, we get the utilities paid, we get the people paid.” These are the things that we have to do to try to keep these jobs open. Until they really open up and allow people to go out and do what we do. It’s going to be very difficult for people that are in the entertainment business, in the bars, and even restaurants, many of them have found some pretty unique ways to keep us all fed. But you know, it’s still not enough to cover the entire cost of these businesses. And so it’s really hurting all those businesses and I will tell I know there’s a lot of things but you know, going out to eat and getting food if it’s to-go is a great way to help the community because you’re keeping small businesses open while we’re all doing this. I know a lot of people are saying, financially, you don’t have the money and obviously I’m not saying to go in debt to go out. A lot of people are like, “Well, you keep saying we need to eat out but we don’t have any paychecks.” I get it, but I really don’t say it that often. I think that if there are a lot of people that are still working, still getting the regular paychecks and just want to stay safe, right? You just want to be able to not put anybody in jeopardy. But we really do need to get out there and start. Home Depot Walmart seems to be very, very busy. And people can put on a mask and you know just do things that are going to keep you smart. I wish I had known but prior to this maybe get into Plexiglas because I will tell you everywhere we go including my own office, Plexiglas has been ordered. So it would have been a nice stock to have gotten into if there was a company that did that.
Dr. Friday 32:39
If you want or need help doing your tax preparation, that is what we do. My calendar is open, you can go to Drfriday.com, click on “schedule” and you can go ahead and book what times you have will be opening up more and more days as we get going through here but we’re getting close to it guys. It’s already what the sixth of June. We only have less than a little over 30 days I guess to finish up all of the taxes. So we need to make sure that you get your taxes or your extension filed so that way you get everything covered that you need. If you’re a small business owner and you need help maybe with your paperwork or your payroll or just doing basic accounting and services, we have a bookkeeping firm that’s associated with us that we do all the time my brother runs it and so if you need help with that, give us a call.
Dr. Friday 33:50
Alrighty, we are back. Sorry about that. My boy Taylor was awesome. So all right, we are back live in-studio here for the last segment of the show. So if you’ve been holding your breath and you’re like,” I need to ask a question, but I’m just a little scared.” Feel free to ask and remember when you’re asking questions, there is really no dumb questions. If you don’t ask, that’s probably the dumbest thing because not everyone knows everything. Sometimes it’s just easier to get a second opinion sometimes more than anything else on what you’re going to do. So if you have a question 615-737-9986 is the number here in the studio. We’re taking your calls, talking about my favorite subject, which is taxes, obviously, as an enrolled agent is what I do. So if you have questions about taxes, or maybe should I file, I don’t need to file, or is it better not to have my college student or 19 years old 2021 year old on my tax return? It’s definitely saved in 2020 or 2019 or 2020 tax season. We’re not going to be claiming as many children, and sometimes it really is a catch 22. So if your child’s in college and you’re able to qualify for college credits, you would get the $500 plus the college credit, offsetting the$ 1200 that they would get if they had the other way. But if your child is working, and they’re not going to college, you have $500 credit, they on their own may qualify for $1200 dollars credit. So it really comes down to which is the smarter move to make and who’s the best person? It’s different for everybody guys. So it’s no easy way for me to say, “Oh, everyone should do this, or everyone should do that.” Taxes don’t quite work that way. So you really do need to make sure if nothing else, when big decisions come along, you’re going to sell a piece of property or you’re going to inherit something. Not so much the purchasing is usually the selling from the tax standpoint. We really need to make sure before you do it before you sign on that dotted line. What is it going to cost you in tax dollars because that is essential? If you sell something, what if you purchased it this year and sell it this year, and you’re on the long term. You’re at ordinary income rates because that’s a short term capital gain. How much would have you saved if you waited just a little bit longer to actually file the long term? I mean, in some cases, it’s not a big difference. 12% is ordinary income tax for some individuals, and 15% is the normal or short term or long term capital gains. So if your long term capital gains are higher than your ordinary income, that’s a no brainer. Also if you’re in the 12% tax bracket, you would have zero percent capital gains because we still have long term capital gains as zero, right?
Dr. Friday 36:53
So if you have a situation where you’re doing something, you need to have someone get you a second opinion, unless you’re very good at your own taxes. because you need to find out what AMT kick in which is Alternative Minimum Tax. What other kinds of tax we have the Medicare tax at .9% that comes in if you make a certain dollar amount we have capital gains additional tax of 3.8% that comes in if you have a higher percentage of tax. As you sell something in I mean, I’ve had more than one person that basically never paid a lot of taxes but then they sold something made a couple hundred thousand did not realize exactly how much money people when they’re making that kind of income, have to pay in taxes. So even with the capital gains rates and things that you have, it’s very important that you look at the situation and know what you’re going to have. Because once you do it, it’s not something that can really be done. You know, it can’t fix, right. So maybe you should have done a 1031 exchange. I talk a lot about those with my clients because sometimes it’s not for everybody. Let me put that right now, and I’m not an attorney. But from the tax standpoint, sometimes keeping the money in an investment, rolling that investment into another investment, Instead of paying the taxes just like you would do with any kind of retirement account, continuously grow it tax-free. In essence, that is the kind of situation you want to do. So make sure before you go out and getting married, getting divorced, I know I say all these things, but marriage tax can have a huge difference. If you’re single and you have a child and you’re making less than $45,000, you probably have fairly decent credit, especially if your child’s under the age of 16. You might actually get a refund every year then you go and marry somebody that’s also making that same $40,000 and next thing you know that you’re getting kicked out, there’s no earned income credit, the child credit would stay the same, but the tax brackets are pretty fair at that point. But if you get into the second and third the 22 or 24, and then the 28 percent tax brackets, all of those become a whole different scenario, because there is a marriage penalty when it comes to that. So, getting married, not always for the tax standpoint otherwise is a great thing, but not for the tax standpoint. Sometimes getting married can cost you money. When it comes to taxes. I can’t tell you how many times people turn around and say to me, “Well, you know, I used to always get refunds. Now I’m not getting I don’t understand.” And the understanding is it doesn’t always happen for everybody. So it’s just a matter that it comes up into that situation. All right, let’s hit Larry, real quick before the show’s over. Hey, Larry, what can I do for you?
Hey, Dr. Friday. I left you a message the other day, I hope we got it. We did get our stimulus. I talked to you about it. And I’m wondering if they’re gonna be able to pan out another one from all that stuff?
Dr. Friday 39:51
Well, the Heroes Act moved into the Senate. I can guarantee you it’s not going to be a major priority. The President everyone seems to have had a different opinion on what the stimulus should have done, should be doing, or where they’d like to see the money going. To be honest with you, not everyone’s received their stimulus. I mean, there are still people receiving it. So I don’t I honestly don’t think anything’s gonna happen until probably August or September. The President said he wouldn’t even consider a second one until after the end of July. But I think it’s good a little further in that.
Okay, well, we got outs finally so I just wanted to let you know.
Dr. Friday 40:31
I’m glad, that’s really good. Thanks, Larry. I appreciate the phone call.
All right, have a good day.
Dr. Friday 40:38
Thanks, sir. It’s always nice when people actually do get the money because you keep hearing people say “Oh, everybody’s getting their money, everyone’s gotten it.” And then you don’t have and you’re wondering what did I do wrong? Should I have done something?” I do want to put out there too. We’re running into a bit of a problem in our office too. Somewhere when the IRS and not The stimulus and they say go on to the website and if you don’t haven’t filed or whatever, do a nonfiler there seem to be an interpretation. If you filed, if you went in there and did a non-filing, to find out or try to get your stimulus, whatever, I don’t know exactly how it worked. And you go in and you try to file your taxes, you can’t e-file you will have to paper file your return, which obviously, as you’ve heard today, is not a fast process. In fact, it’s extremely slow and painful. I had had one where apparently his wife went in there and filed them as nonfilers or something because, well, his ex-wife. Anyways, it didn’t work out very well. Now, he had to file his bi-paper, which is now going to go into that big old tub where these other individuals have theirs sitting and it’s going to be interesting to see what happens. How long it takes to get paper returns.
Dr. Friday 42:00
I’ve been in business for more than 20, but at least 10 years ago, we didn’t think anything about filing taxes by paper, I mean, that’s the way everyone filed them. And then now, you know, filing by the paper is extremely painful. It’s like calling the IRS it’s easier if you can do electronically. But if you did go on to the website, I’ve had a couple of people that apparently go get their transcripts, and they see that there’s like $1 in there. So it’s not that someone took their identity, it is somehow their information ended up into this nonfiler thing and ended up getting a tax return file for them. So if you’re having that problem, I’m not gonna say it is an identity for you. But I’m saying get your transcripts and find out because if they’re not accepting your E file, it could be because they already have a return file under you. And that’s because, under that particular button, people have pushed it to do that. So if you’ve got questions if you need help, doing back taxes, dealing with the IRS because even though right now not a whole bunch of things for some people, you may have a legitimate ability to put a hold or a non-collection out, it might be the time to think about it. If you’re living off of half the income in the household, maybe one spouse is working, the other one is not maybe not able to collect full unemployment.
Dr. Friday 43:15
You might want to think about just getting the IRS onto some sort of payments or reduce your payments, slow down your payments, you’ve got other options. And these are the options you want to be able to go with. So if you need help with that, all you have to do is give me a call. My direct number at the office is 615-367-0819., you can reach me on Monday. You can also check out our website. We’ve had it updated recently got some pretty cool articles, we’re having these radio shows blogged on there. So we have all of that information. So if you’ve missed something or you want to hear it or tell somebody about the show, which is awesome when you guys do that, you can catch it on our blogs. So that way you’re able to move forward and get what you need off of it if that’s possible. So again, you can reach me at 615-367-0819, you can actually go right to the website, and you can also book your tax appointment. So our calendar is on there under schedule, you can just click on the button and find out what you need. But you need to get your tax appointment and you need to get your taxes done. Don’t delay, don’t wait till the last minute and then find out that is or isn’t going to happen. You need to do it now make it work. So you can go on there and do it. I know a lot of people say, “I don’t have the ability and I don’t know what I’m doing.” But now’s the time to also consider making a deal with the IRS. The fact is, you’re not at your highest point, you may have a better ability to prove that your income isn’t what it was. Now, of course, they’re going to look at your history. So right now you’re not working isn’t probably going to be a good excuse. But you know if you’re gonna have to take a job cut or pay cut. Those are the kinds of things that you can actually look at and do things with, right?
Dr. Friday 45:04
So again, if you’re dealing with IRS issues, you’re getting love letters, there may be a way of us helping you not have to deal with that if you’re self-employed or a small business owner, go ahead and look at other sources. There are still SBA loans. I’m looking here, it looks like there are still some SBA. Also, PPP money is still out there. Not a lot. Not everyone’s going to qualify. I would use and again, I’m not paid to do this, but Blue Vine has been a good resource for us to try to get people’s information into the system to see if they qualify for any of the money, and then you can move forward with that as well. Whatever you need help trying to do that. If you need help with bookkeeping or payroll services, you can give us a call again on Monday morning or email us at firstname.lastname@example.org. If you have a question, I have always said this for the last 10 plus years, we’ve been on the radio. I’d much rather you guys ask the question now and see if I could help you versus after the fact if you do it after the fact that I can’t do much to help you do anything, right? I mean, if you’ve already made the decision, I can’t correct and say, “Oh, you know what, if you’ve done this, you could’ve done this.” So if you’ve got a question, feel free to email email@example.com. I’ll be more than glad to at least advise you or set up a text appointment if we need one. But if it’s a simple question, maybe you’d be able to get what you need and move forward with the information that you have or how you’re going to do it. So if you have back taxes, you have taxes for the current year. Also, if you have issues with the IRS, this is the number you want to call: 615-367-0819. That’s my direct line. We can set up a free consult and that way then we can help you do what you need to do.