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Dr. Friday opens this episode with one more reminder that the Tennessee disaster-related June 8 deadline is about filing extensions, making payments, and avoiding avoidable penalties. She explains how missing or undocumented extensions can turn into failure-to-file problems, then walks through IRS notices, abatement, and why real human resolution still matters. Later, she covers gifting after estates or lottery wins, mortgage payoff choices, where retirees might park cash, extension filing questions, and home-office rules for young earners and W-2 employees.
Summary Points
- June 8 disaster deadline: Dr. Friday reminds listeners in affected Tennessee counties to file, pay, or document an extension before the deadline, especially if they cannot finish the return.
- Extension documentation: She discusses Form 4868, certified or tracked mailing, federal disaster notation, and why e-filing an extension may not work after the normal April deadline.
- IRS notices and abatement: The episode covers missing-return letters, first-time abatement limits, duplicate 1099-S home-sale reporting, and the frustration of trying to resolve clear IRS matching errors.
- Estate and lottery gifting: Dr. Friday explains why taxes should be handled before gifting estate proceeds or lottery winnings, especially when withholding, Medicare IRMA, or other income can change the final bill.
- Mortgage and retirement cash planning: Caller topics include whether to pay off a low-rate mortgage, whether the mortgage interest is really helping on taxes, and how retirees might think about CDs, bonds, annuities, and liquidity.
- Business and home-office deductions: She touches on small farms, LLC or S-corp questions, young gamers or influencers earning money, and why W-2 employees generally cannot deduct a home office.
Episode FAQ
Q: If I missed the April 15 extension deadline but qualify for the disaster extension, what should I do? A: Dr. Friday says to mail Form 4868 with tracking and the federal disaster information by June 8 rather than assuming a late e-filed extension will work.
Q: Should I give away lottery winnings or estate money before filing the tax return? A: She cautions against it because withholding or estimated payments may not cover the final tax, and Medicare IRMA or other income effects can also change the outcome.
Q: Is it better to pay off a 4% mortgage or keep the money invested? A: Dr. Friday says the math may favor keeping a low-rate mortgage if safe returns are similar, but paying it off can still make sense for peace of mind.
Transcript
She’ll 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. 737-9986. So here’s your host, financial counselor, and tax consultant, Dr. Friday. G’day, I’m Dr. Friday, and the doctor is in the house. Um, and it’s gonna be a an interesting show, I think. For one thing, Monday is our big deadline for anyone that may have been in the 23 counties, which is almost everything around us, Davidson, Rutherford, Murray, um, you know. um Hickman, all of them um are under this major disaster um deadline that extended first to May 22nd then on April 15th, they extend it to June 8th. So all of us need to make sure that they’re filed and paid and dealt with. Um, at least, you know, even if you haven’t filed your taxes, if you’ve made the payment so that your taxes are paid in full or as close as you can estimate, because sometimes I’ve got a number of clients that are still waiting for K1s So it’s not like we can complete all returns, but we have the ability to complete as many as we can or make payments by by Monday so that we keep all of our penalties down.
We don’t mind not paying the government, but if we have to pay them, we don’t want to pay them with penalties and interest. So I had an interesting situation this week. Um pretty much I find it interesting Interesting, everyone else may or may not. Um, I found that we had a situation where a tax player had it paid um that they they came back, the IRS came back and said, you haven’t filed your 2022 tax return. And we’re sitting there going, okay, um, we show we filed it. We, you know, made all the payments, everything was done. We even sent in the payment with the last, with the filing. And so we’re waiting to find out. But then we um During that same time, the taxpayers had some issues in the past. So not knowing that, we just tried to put a waiver in first-time abatement. It’s an easy waiver and it makes things easy. And then we got on the phone with the IRS and the lady turns around and says, Well, you’re not going to qualify for first-time abatement because you’ve already had abatements in the past. Now we’re talking $46,000 abatement we’re working on here. So this isn’t, you know, a petty cash situation. Um, and and it’s basically coming failure to file the tax return. And so we’re we’re working on that and we have documentation and we’re showing.
But it’s uh it’s gonna be interesting. And then in the last week or two, I’ve seen Several well probably about four people that have received a notice on 2014 or 2024, 2023, 2022, and says they have not filed those tax returns. returns yet they know they filed them. They even have proof because a lot of them are e-filed. Um but the government’s saying hey EFU filed, you’ve got to resend a copy of that tax return and you need to sign it So you can submit it. But what you have to make sure is is that A, that you show payment in full. This couple did pay everything in full by the uh due date. Question is um The the biggest question that we have to find out is was there an extension file? Because then they were filing late and there was no extension. Always file your extension is what I’m trying to say. So if you have not completed your taxes yet. and you have a situation where you may not be able to file them by Monday, make sure you have filed an extension. And to do that, you have to certify one in. You cannot e-file an extension at this point. The IRS basically looks at extension due date as April 15th. But because of the federal disaster we’re under, you will qualify.
for an extension, but you have to document it, right? So you need to make sure you send in a certified copy along with on the IRS website they have the federal disaster extension. So you can actually put in the federal disaster or FEMA number that you can use for for your extension. But it’s very important because if you have not filed and you You know, may not be able to. And I know sometimes people listening, you don’t file because you don’t have the money. And it’s not necessarily the best plan, but I get it. Sometimes, you know, you’re just thinking, what can I do to survive? And sometimes surviving is I’m not going to uh file. But Your best bet is always file an extension if you’re one of those individuals. So that gives you until October. And then take that time and try your best to file the paperwork, even if you cannot afford to pay it because then you don’t get hit with failure to file, right? Failure to file just means you didn’t do the documentation. Now if you didn’t file an extension and you filed it in October, that’s failure to file because there was no extension on file. These are the kinds of things you have to make sure. And no matter if you have a tax person or not, you need to make sure that those extensions have been filed.
We do a lot of tax returns in our office and we do our very best to make sure everybody that we had the year before have been extended and we do it pretty early for probably some tax offices may not do what we do Because of the fact that I’m always afraid I’m a small office. And if something happens to me during the months that taxes are needing to be done, Then my clients could be out for a period of time, or you know, I’m not able to get them done as fast or whatever. And that’s very important to me that they’re covered at least If they have an extension on filed, they’re not going to get hit failure to file. They could still get hit with failure to not make proper estimate takes me. They could still get hit with uh not making proper payments. But the failure to file would not happen because the extension was on in play, right? Unless you wait till after the due date. And then, well, there is no extension after October 15th, unless you’re under a federal disaster extension. It’s that simple. So you just need to make sure that right now, if it’s the weekend, and so if you have not filed um your taxes and you don’t know if an extension’s been filed and you can’t reach your tax person on the weekend and You don’t want to wait till Monday.
Pull up a 4868 right on the IRS website. Pull up the extension um information, put it right at the very top. 4868 is about the easiest form in the world to prepare. It’s got your name, your social security number, your address. Um, and then it’s got like how much money do you think you paid in, how much money do you think you owe? Um, but you know, if those numbers are zeros, that’s still accepted by the IRS. If you don’t know those numbers, you don’t have to fill them in So bottom line, file that form, go to the post office, use priority mail, or go to FedEx or go to wherever you want to go. Make sure you have tracking. That’s all I’m going to say on that subject Because tracking is so very important, especially in these kind of scenarios, because the government um pretty much assumes that we’re all guilty, that we’re we’re doing our best to And it’s probably because it’s no different than if you probably have a policeman that’s a friend of yours or anything and they see the world a little different. My sister’s uh daughter married a police officer. And uh he’s an awesome guy. Love him. But he always sees the world as something.
Um, you know, he sees the negative where it’s not always that negative. So um and that’s because he sees the worst of the worst. I mean the things he could tell you. Um are that way. And that’s the way the IRS. They um most people that are calling or dealing. And I’m probably one of the few people in the world that’s like, we need more people to work for the IRS. And I know people are right this second driving your car or you’re in your house and you’re like, oh my God, this lady is a lunatic. Why in the world would we want more IRS? Because we need resolution officers, people. A lot of my cases could be resolved simply if we actually had a qualified resolution individual that could actually take the phone call and do something It’s hard to get a hold of a revenue officer. It’s hard to get a hold because they’re handling 30, 40, 50 cases. I mean, their table load is amazing. I mean And they immediately pretty much, if they don’t hear from somebody, if they don’t have something, that can go immediately back to the queue and they can get it off their desk. And in trying to call or resolve, the only way um if you cannot do it over the phone with a collection, because that’s usually who you end up with, is collections. And so, and their job, keep in mind, their job for the collection division of the IRS, basically all of the IRS, their job is to collect money.
Right? They’re a collection agency, a massively huge, huge um collection agency. But that agency is going to have situations where people amended tax returns. People had, I had one, it was kind of a crazy situation, but actually it’s happened twice. Um, and we have one both times, but it’s it should be such a simple fix They sold a house and somehow the closing agent as well as their own uh the buyer’s agent both sent 1099s on the sale. So they got two 1099 S’s Same house, same address, same date of closing, yet the IRS got two of them. So what do they do? They’ve changed the tax return saying you have not reported all your sales uh you missed your your sale of your home and that you um now owe hundreds of thousands of dollars. Um the clients freaking out because they’re like I only sold one home. Why would they think I sold it twice But again, most of the time you’re receiving information from the IRS is from a computer. A computer is generating the responses. I’m not sure how AI it is, but it’s definitely a machine that basically says, okay, there’s a collection issue.
We’re doing matching. If this match doesn’t happen, we’re changing the tax return, sending out the letter that says, oh, we’ve changed this tax return you need to respond by blah blah blah um and so in this situation it took us a year and a half to finally get through the tax advocate office, may I point out, that this was such a simple fix. And if they had had basic normal resolution people that could easily look in See the two 1099s, see the date of closing, see the business, uh the address of the closing, and then look at the forms that we uploaded, which was the sales documents This would have been a two-minute fix a year and a half later, besides seeing love letters from the IRS that keep saying that they owe more and more money. And you know, people kind of freak out over that. So it is one of those things you just You need to stay on top of, but it would be nice if Uncle Sam could put a few dollars and do not tell me we’re gonna go AI, people I’m not opposed to AI. I find it has its uses, but when I have a problem, I have an issue. With a business, it doesn’t make a difference if it’s just customer service.
I want to return a product, whatever. And I have to go through 20 minutes of some computer named Al um that is trying to help me resolve my issue, it’s just very frustrating. Maybe it’s my age, maybe it’s just the way I speak, because apparently it sometimes it doesn’t understand me. But it is very frustrating when you’re doing that. I had an auditor that to get to the auditor, it was a 26-minute AI meeting, I guess you would say, where I had to keep going through this this uh AI answering service to get to this person. I had their extension. All I needed to do was tell them one or two things. Meanwhile, I finally hung up to be quite honest. And I decided to go directly to the emails, right? Which is probably what most people would have done. But sometimes it’s just easier to talk. You know, I love to talk. All right, we’re going to take our first break.
You guys can’t join the show. We are live today, 615-737-9986. 615-737-9986. We’ll be right back.
Alrighty, we are back here live in studio with the Doctor Friday show. And I guess I need to go ahead and start saying that I am Going to after 17 years, uh Dr. Dr. Friday show is going to move to the internet. Yes, um, we just had a lot of people people that want to be able to do more that direction. So we only have a one or two shows left and then we’ll be going 100% through you guys will see a YouTube stations and we’re going to do a few more things like uh bring it more directly to you guys, but this radio show has been absolutely awesome. And uh I always hope that all you guys that are listening will just go to the drfriday.com and um follow us there. Just put your name out there, sign up so you can find out how you can uh keep giving me uh this kind of information as well as keep the education, but there’ll be a lot more documentation where you can search and find out more topics As you guys know, I love doing the radio and gosh knows I never like to stop talking. So can’t see that happening anytime soon. But if you want to join the show today, you can 615-737-9986-615-737-9986. We’ll take your calls talking about taxes.
So I did have um a gentleman come in this last week that had um I don’t know if it’s interesting, it’s probably more normal than most. His uh mother passed away, which unfortunately we all uh are gonna have a time clock on us, right? So his mom passed away. She had a will, but the will was older and he he had been taking care of his mom and she had wanted him to make sure everything was um split evenly between his sister and um and him. Basically it’s just the two of them. But you know the the at the time the will was written, the daughter and the mother were having issues um and uh she never updated the will. So in theory, he is the only beneficiary of everything that mom left. And there wasn’t It wasn’t a multi-trillion or billion dollar or even millions of dollars. It was a nice estate. And he was trying to figure out what he could do because the PODs, the paid on death and everything is going to go to him because that’s what the will says. And so he’s trying to figure out how can he make mom’s wishes that he knows what mom wants. But still the courts and and everything are saying that he’s the only beneficiary, can’t do anything.
And that’s the beautiful thing of what we call gifting. So what he’s going to do is make sure everything has been cashed out or rolled over. And then he is going to take 50% of the estate and gift it to his sister. Now, I know there’s a lot of people out there that have family issues that I’ll be honest I can’t totally relate to because I have very fortunate to have um At least six of the seven siblings. There’s seven siblings older than me, but six of them are my absolute best friends. So I can relate to this gentleman. You know, we’ve all had our years of fighting. We’ve all had our years of being um ounts, I guess you would say, with the family. But as you grow older and as you grow maybe mature a little bit It’s nice. So you’re able to move on and you know forgive. Now we all take big family vacations, which I looked forward to. And Their children now are getting ready to have children. So that’s another change in life that we all deal with. Um but in this gentleman’s case, I think it’s It’s admirable, to be honest, because I’ve had in the 33 years, 33 plus years I’ve been doing um taxes and accounting here in the Brentwood Nashville area.
Um it is um I’ve had a number of people that if they were the only beneficiary no matter what Um, especially when you know we’re talking, you know, probably about six, seven hundred thousand dollars that would be going to the sister, it’s a a very healthy amount to give. And, you know, if I guess, you know, sometimes you just have to look at your life. You have to look at what what’s the big picture, in my opinion. This guy had the perfect attitude. He he he and his sister really don’t get along. That’s the funny part. It wasn’t something, you know, I mean, it’s not like they’re best buddies and he’s just doing this because he knew No, mom wanted him to do it. Him and his sister haven’t spoken to, I I don’t know if I said this or not, but haven’t spoken to each other for about four years So whenever um whatever forgiveness that was given by mom, not necessarily by this guy. And and he doesn’t care to necessarily open that, but he wants to make sure what mom wanted is being done. And I’m just saying, you know, sometimes people get so hooked into the mighty dollar. And I’m not saying all of us work hard. We need enough.
But sometimes Sometimes you see some really cool people, and that’s why I love my job, to be honest, um that have given people, individuals on the street. I’ve had people, you know, give tens of thousands of dollars to help individuals that they’ve seen that have gone through hard times, that are going through different types of situations. And like this gentleman, you know, when his mom passed, knowing what she wanted, gifting his sister after IRS gets paid Um, so it doesn’t cost him anything, but dividing the estate at that point is I think a huge, huge thing to do. Um, and I think personally, you know, you do good things, good things will come to you Um, but may not, I mean everyone knows you have to do what you have to do, but um when you’re dealing with taxes in this situation, he had several taxable accounts. So the thing you don’t want to do is split the account before you’ve paid your taxes. He’s the liable person. He has to pay the tax He then can gift it to her, but her her share will not be taxed. Gifting means the person giving the gift has to pay the tax. The person receiving the gift does not pay any taxes. So in this case, he’ll pay all the taxes, then whatever is left, he’ll do his split based on that information.
And that’s all I was gonna say is that a lot of times people gift things. I had a person win the lottery last year. Million dollars. He was so excited. And unfortunately, he wasn’t one of my usual clients. He had heard me on the radio. And um, so he went to a I think HR block or something And um and he’s like, oh my god, I owe $175,000. And when you win the lottery at that dollar amount, they will take some money out Withholdings based on whatever you tell them. I don’t know what he told him, but they were short. And meanwhile, this was a very happy grandpa that decided to give away all but about a hundred thousand dollars. He gave it to his grandchildren, his children. This was his way of just, again, a wonderful gift. But in this case, he gave before he paid Uncle Sam. Now, this is not a good thing, people. You do not, because he can’t, he, he could, I mean, obviously he could have gone back to his family and said, hey, what can I do? But what we ended up doing, this is the the sad side to this. So this gentleman went out, brought a lottery ticket, won a million dollars.
Um, I think they withheld like 150, still owed like 175. Maybe it wasn’t quite that bad, because he also earned a decent living. Um, and so he had to get a second on his house. Yes, he actually went and got a mortgage to pay the IRS and then he was going to continue to pay that off versus Going back to his kids and his grandchildren and saying, hey, um, I shouldn’t have you know paid all that to you. Can you each give me 10% back or whatever it was that he needed? So, lesson in that one is do not give away anything if Uncle Sam is in any way tied to it until you have filed, physically filed your taxes. People will say, hey, they took out the money from my IRAs or whatever. But you know, when you combine that with other income, sometimes you owe more money And you know, sometimes your Irma can get messed up. All kinds of things can change in these scenarios. And if you don’t do it the right direction, you’re in trouble. It’s just that big, you know, and this gentleman was fortunate enough He still worked. He still had a good job. He was able to go get a mortgage. Um, I think it was a line of credit. But either way, he went and got a second on his house, paid the IRS.
Now he’s gotta pay off his house again. But it’s a gift that he didn’t want to taint, I guess you would say. So my you know advice is if you happen to win the lottery, before you even pick up the check Talk to your tax person. If you don’t have one, find one because this is going to create a taxable situation. And many of you that play the lottery, some are on older, younger, but if you’re over the age of 65, that winning can mess up your Irma. And that’s what happened also with this gentleman. He was over the age of 65 on on Medicare. Um, and he, you know, winning a million dollars kind of messes up your um your Irma. So, and that’s your Medicare, what you pay for Medicare. So again, so if you want to join the show today, guys, you can 615-737-9986. 615-737-9986. It’s an absolute beautiful day. So I know a lot of you guys are out. doing things and I believe there’s a big thing going on downtown. So the big country people and everyone’s in town. So many of you guys are either working and or attending and enjoying that I know I was out dealing with my bees, pulled a good 20 pounds worth of honey.
So very excited about that. So always love my honey pulls. But If you have a question, you maybe you’re starting a small business, maybe you have a small farm and you’re not too sure. I had a lady come in, she did not know that by all keeping all of her goats and her chickens, and she actually sold goat milk and eggs. that she could actually be showing that as a farm. There are certain things you need to be doing. There are certain criteria you need to follow up on. Treat a business like a business is probably the motto. But, you know, she was probably missing out on some serious tax deductions considering that she had to build chicken coops and she had to bush hog and buy the tractor and the the brush hog and everything. So all of those things come into play and those are tax deductions when it comes to maintaining a working font. So if you’ve got questions on that, or you have questions on just, hey, you know what, I’m going to start a business. Everyone keeps telling me, should I be a sub-es corporation? Should I be an LLC? Should I just be a sole proprietorship? How do I know what’s best for me? Well, there are answers to that and you can ask on the show if you want. Six one five seven three seven nine nine eight six. We’re gonna take a quick break.
When we get back, we’ll get to some more questions. You can also email Friday at drfriday.com. We’ll be right back.
Alrighty, we’re back here live in studio If you want to join the show, you can 615-737-9986. 615-737-9986. And we have Dave on the phone. And let’s see if I can help Dave. Hey, Dave. Hello, how are you? I am good, sir. How about yourself? Great, great. Just have a quick question for you. I have a house that I bought. I owe about a hundred and twenty thousand on it and I have uh probably double that in savings in the bank and I’m just wondering if there’s any advantage to paying it off, which I could do. And what’s your interest rate possibly uh four Four percent. Yeah. I mean my answer would be if you put that in any kind the money you have that’s just cash into a CD, you should be able to make four percent still. even now. Right. Um, and that means you’re basically operating off free money. It’s not costing you anything to have that low You know, and if you can make four and a half, well then you’re actually making money on someone else’s money. You know what I mean? So unless you’re only making two or three percent, which does happen sometimes. But if as long as you’re making four to four and a half, then you’re basically not costing you anything to have that mortgage.
Okay, okay. And is there any advantage though to keeping it as a ta uh do I use it as a as a tax deduction? Not really, because it’s probably not high enough when you’re talking about four percent on a hundred and twenty thousand. That’s probably gonna be six six yeah, I mean that’s the good news. Um So it’s probably not really saving you any tax dollars, to be honest. You’re probably not itemizing unless you have big property taxes or or nice size charitable contributions. Right. I don’t the taxes are exactly. Well that’s what we kinda like, even if you’re in Franklin, I mean, they’re not cheap, but they’re Not enough to get if you’re single and if you’re married, gosh forbid, because now you got more than thirty-two thousand dollars, but single at least is sixteen and a half or thereabouts. Right, right, right. Okay. Well that’s that was curious because I I don’t know, you know, my wife thinks that well if we pay it off at least we own it and all we gotta pay is the insurance You know, but so I think it’s a good thing. And depending as we um get closer and closer to the the date of retirement, if that even exists for some people, hopefully it never happens for me. But Um but you know, that’s the way we all deliver like so you’re probably at that point where it’s like, you know what?
We don’t I mean we don’t have to worry if we just go pay it. Right. I mean I’m saying it’s more peace of mind. It’s not necessarily mathematically the the biggest or you know the strongest thing to do, but there’s nothing wrong with doing I mean seriously. There’s nothing that be bad and you know in some ways you can’t write off the interest, but you have to pay tax on the interest. So maybe costing you that way Um, if I, you know, I’m just trying to look at the cup half full. I do like your wife’s theory there. So, you know, maybe just no the cash flows out. Yes, you don’t have as much in the bank today, but you don’t have to worry about paying tax on that interest And you still you’re not taking you guys down to where you’re not going to have enough money to live. You know, it sounds like you have plenty of of savings. You’ve done a good job. So maybe just paying it off will give her peace of mind And that’s a big thing. You know, there’s some value to that for you, I’m pretty sure. Um my side of it is that that takes away uh ready cash that’s tied up in equity then and that means we don’t really have access to it anymore, you know? Well, that’s always what most of us you know, a lot of us on this side our thinking, but the fact is if you still have a hundred grand in savings and your cost of living is and you still get your social security or whatever your pensions, all that’s still coming in.
You know, what’s the odds of you needing more money in the bank because if you’re going to reduce now you don’t even have the mortgage payment anymore? You know I’m saying it’s probably not I mean it’s more the security blanket that all of us like to have. I mean when I was a kid I always thought if I had three or four grand in the bank I would have been So awesome, you know, it’s just enough to take the the stress, and then as you get older, you’re like 30 or 40, and then next is 300 or 400. Um, so you know, it you know, it just changes as we get older and realize that, you know, for one, now that you’re retired, you’re less likely to ever take another mortgage. I mean that’s just the truth. Unless you guys have to do that, you can’t do that. Yeah, that’s not in the car. But can I ask you one more question then? Sure. Um really quick. What would I what would be the best place to park the rest of our money? It’s sitting in the bank. I sold off some property stuff and have the money sitting there. Um but what would what would be the best place to put it because I’m only making nothing having it sitting in the bank account, you know. Yeah, you need to um Yeah, you you need to probably talk to and you may have one, but you need to take an it needs to be invested in the market in deferred bonds. It needs to be in, you know, uh mutual fund. I mean it needs to be some, not where you can lose it.
I know at this point we don’t want to go backwards ever. Maybe a small portion could be put into the market just to help keep up with inflation But you know, there are bonds, there are annuities. Not uh not everyone likes the word, but there are some good annuities out there that you don’t have to stay into for 20 years. But I would definitely say insurance products and bonds will keep it safe because that you’ll never lose the principal. But you may not have direct access to all of it today. If it goes into an annuity, sometimes you only have once a year, you can take it out. But Again, it sounds like a lot of the money you have in savings. I mean, you you probably are living off of your normal income Other than if there was like a catastrophe. You know what I mean? And we now know that’s why you have it. But I mean it just doesn’t sound like you have a major issue with the rest of it So it sounds like to me you pretty much need to put that money somewhere where it could keep growing. God forbid something happens to you. Um, that you’re able to um go on and do something new, you know, with Um with with you know, so your wife would have easy access, be able to continue the life she lives, because once one of you passed away, sometimes The Social Security gets cut in half, basically the only one person.
And then depending on if were the pensions or IRAs or whatever, sometimes that also reduces. So You know, they may need more money because the lifestyle doesn’t change just because there’s one person in that house costs the same, you know? Yeah, and my my fear is I I’m seventy now, I’m only gonna make it ’til about seventy five, but you know, five years from now. My wife’s family, they live the the women live till their late eighties and she’s gonna need the money, you know, at some point to live on. Sure. And that means she may end up in a nursing home and so she may need to have some sort of monthly allowance because depending if there’s children, I mean there’s all kinds of things that It could be, but having that plan and also I will suggest, depending on your situation, make sure you have a goodwill or trust. I you know I’m not an expert expert, but I’m not sure if you’re not taken care of. Yeah. Oh good, good. Because, you know, again, my family’s like yours. We haven’t had in three generations any of us make it to eighty. Um, but you know, my brothers have married girls that they’re Their moms are now ninety-five and still going strong. You know, I mean so it is one of those things. I just want to I just want to plan ahead, you know. I like it. I I’m glad you’re thinking about it. I know, I know.
People get people look at me, but it’s like it’s for you, it’s not for me. I’m you know I’m trying anyway. But thank you. No problem with that now. Thanks for listening. Okay. Appreciate you. Thanks All right, let’s hit Will before the break, if we can. Hey Will, what’s happening? Hey, uh, Dr. Friday, I appreciate you taking my call. Hey, uh, I’m going to talk about the extension, file an extension it You said you you need to mail something? ‘Cause I’ve done it online before. Yep But if you haven’t filed it by no, um so let me clarify. If you filed it back in before April 15th and you filed your normal extension, you’re fine. You don’t need to do anything. But some people did not file by April 15th that are listening. And I don’t want them to get hit with failure to file. And if they haven’t, because of the federal disaster extension we’re under They can still file an extension up until Monday. Those people. You may have already done one. No, I have not filed and I was gonna file the extension. This afternoon, tell you true. Okay.
Yeah, not I need to mail it. Right. My system will not I mean like my e filing system says because the fact that we’re out that my tax software doesn’t take in account that there’s a federal disaster in Tennessee. So it just looks at the normal clock. So I think you’ll run in. Now I haven’t tried anything on the IRS website. I’ll be honest. I’m just using my own tax software, but my tax software says we have to mail it with uh the top has to say federal disaster um you know Tennessee blah blah blah so that way it will qualify and what county are you in Will Um well for Okay, you were under it. So yeah, you’re good. As long as you get it sent out by Monday, you will be good until October fifteenth. Yeah, uh I had uh file uh two years ago. My uh CPA uh got overwhelmed and didn’t do mine So he told me to finally got a hold of him and he said go online and file it. So that’s what I did. I re uh found another CPA last year and that didn’t work out. So this year Um need to find another one so I’m uh going to file extension and get that done later this summer. So Well, give me a holler, but I’m a little far away.
But yeah, so clarify and and if for some reason I’m gonna try the IRS website just to see if you can file on that one. without having um, you know, because we’re outside of the thing. But again, my software tells me I have to send the extension. Um You know, via mail. Okay. Yeah. Okay. Oh, I appreciate them. So thank you very much. No problem. Thanks for listening. All right, guys, we have a few more minutes before we go into the last break. So if you have a question, you can certainly join. I always appreciate phone calls, 615-737. 9986-615-737-9986 taking your calls talking about my favorite. subject, which is taxes. But it’s amazing how taxes feeds into so many different things within our life because taxes is basically money. And if we can save money, what we can do with it, or if it’s going to cost us money Um, I deal with a lot of financial planners. One of my my best friends, Hank Parrot, is uh is a financial guy with Estate and Financial Strategies. He’s the owner. We’ve known each other for goodness 30 plus years. Um, and so he often brings in his clients and we do what we call scenarios, right? So what if I convert?
What if I retire today? What if I wait a year and I retire? What if I go to part-time So you need to make sure, whoever’s dealing with your money, however you’re dealing with your money, that you have somebody that’s giving you that tool because we find it to be so helpful in making those major life decisions. What’s going to happen, how it’s going to happen. Because you know what? We never know what the the final day is, but we want to be prepared. All right, we’re gonna take our last break.
This is the Dr. Friday show. We’ll be right back.
Alrighty, we are back here live in studio for the last bit of the show and I was trying to just see if you could file. Unfortunately you have to file um when you’re doing this, you know, um Filing an extension online. You guys have no idea what I’m doing because I’m on the radio and there’s no picture. So trying to file something online, trying to see if they will let you do it. It doesn’t look like it. I’m trying 1040.com, which is a free filing system that they have out here, and I’m just trying to see if they will allow me to File this form for free without an issue and you know make things work for us, but I don’t know. I don’t think it’s gonna happen. Anyway, so If you guys are not uh if you’ve already filed your taxes, no big deal. If you haven’t filed your taxes, then obviously you need to make sure you have filed the extension or just make sure your tax person has. It is not a big deal. If you have to file an extension, I’ll be honest. I file extensions just about every year. Very rarely have I ever been able to get to my taxes, and I don’t even do my own taxes, um, before um you know, before October.
It just isn’t something I do. It doesn’t happen too often. But some people are very Particular, wanting to make sure that um, you know, that you, you know, they get everything done and they’re making in the right place. And Everything’s going the way you want. So, you know, just making sure all that’s there. So if you have questions, you need to understand your tax situation because you know, on the radio we try to talk about what we can do, what we’re gonna do, how we’re gonna do it. Um that’s interesting. You guys again, it’d be nice when there’s a camera in here when I’m talking because sometimes you guys could see some of the things I’m seeing when I’m looking them up. But I’m on 1040.com and it’s asking me about a state tax return. Does anyone know the answer to that? If you don’t, you probably haven’t lived in Tennessee very long. We do not have a state income tax any longer. We used to have the Hall’s income tax Um, wasn’t really income based. It was more investment based, but we called it the income tax. But we no longer have. And they are saying, well, you know what? There’s a fee for that. So they’re already hitting me with fees and all it was trying to do was a negative extension. So that way I can try to figure out what’s going on and where we’re going for the next situation. But If you have questions, you need to be able to get answers.
That’s what we’re hoping to do, hoping to guide, hoping to at least get you thinking about taxes, right? Because no matter your age, Really, no matter your age. So you’re a 13 or 14 year old, but you are a gun-ho. You have already been on the internet playing games And actually making money. I’ve got some gamers that I could tell you I don’t understand a thing they do. I’m almost 60 and that the age doesn’t necessarily mean anything, but I’m still into Pac-Man. Okay, so then what they do and how they play and then how they actually make videos of how they play and then how they get followers, all of that is fascinating to me Um, and of course, you know, if they get you know tens of thousands of followers, they’re actually making money. And then the parents are like, well, it’s okay for them to be gaming, even though let’s be honest. I don’t care if you’re a 14-year-old and you’re making $1,000 a week gaming, that might sound good, but in all reality, What are you doing besides gaming? I mean, you know, I mean, you need a life. I’m sorry. You need to be able to have an actual life. You need to go to school. You need to learn about other things other than playing a game. Because in reality, every person, I mean, no matter what, if you were um in my day, a lot of us wanted to be rock and roll stars or we wanted to do different things. And I’m a tax person.
I even went all the way through college, have a PhD in economics. I’m your tax person, right? We all make choices, we all think there’s different things, but without the education You can’t do anything else. So I just want to make sure, you know, I have um a young man that at 18 he had to be emancipated because he actually signed a contract for several million dollars to play golf. He had the opportunity to go to a very nice college and play golf, but the parents felt that that wasn’t going to be his strong suit. I don’t, it’s not my child. I have no idea what the answer is, and I don’t ever want to be someone’s uh, I mean, I’m I’m never going to be someone’s parents. Uh so there you go. And I just want to make sure that we have, you know, what we need. So um, but parenting is hard, I get it. And now with all of this new technology where you’re an influencer or you’re a gamer or you know you you are um there’s several young people out there most of the ones i follow um great cooks But they have some unique approaches to cooking. Um, I am not creative. I mean, obviously I’m a tax person. There’s not a lot of room for creativity. It’s more about knowing what you need to do and how you’re supposed to do it than the other way. So um You know, just making sure that you know what you’re doing and how you’re going to do it.
And then, you know, you can you can make things work. It’s it’s not that hard. But that being said, you need to Make sure you’re doing everything you can to save taxes. So if you have a child that’s gaming, you know, um, and if they have had to spend money to do things then they need to do that if they’re having to pay for uh video time or cameras or you know even a percentage of the house used for um you know, for their business. Now, if it’s in their bedroom and they’re playing games, that is not a home office, people. I can’t tell you how many times people tell me I live in a one-bedroom apartment. And and half of the apartment is for business. And you’re sitting there going, well, how can half the apartment? I mean, said so, do you have a, you know, like a temporary wall you’ve put up and you’ve kind of set up a whole office such You know, well no, I just set up in the front room, front room, on the sofa with the edge table and the big screen TV IRS is probably hearing this and saying that is not a home office. And they are right. That is not a home office. And a lot of these people nowadays, a lot of you guys can do work from home Now, if you’re a W-2 employee, let’s keep in mind a W-2 employee cannot deduct a home office, even if you work from home And I know I get this question almost every week from somebody, so I might as well go ahead and give it to you.
The reason for that is the IRS says you’re not putting wear and tear on your call. So you are going to have to or you should get the use of your home. So you can’t can’t pay for commuting, right? When you go to work, no one gives you extra gas money because you’re actually showing up at work, you know, driving. And that’s the same way if you have a home office, same exact thing. So just making sure that you have that information and that you’re doing it the right way Um, so we can try to go through there. If we have someone on, let’s go ahead and grab him really quick. Just put him on the line because we only have about two minutes. Sterling, let’s see if I can get Sterling in Spring Hill. He’s in my town. Hey Sterling Yes, I’m uh I’m seventy-nine years old, single, just divorced the first of January. I have a total I work for the IRS for two years, by the way I have um basically an income of a pension from Ford credit for eleven thousand dollars $26,000 in Social Security benefits. I have a 401k that I’ve built up but I don’t use, which is $20,000. I I I tap it every once in a while.
I won’t own the house completely clear. Uh-huh. I have um my question is very simple Uh unfortunately I when I got my divorce, my wife didn’t want to get a divorce last year and I ended up having to file marriage files separately, which was horrible Yeah. But what I wanted to know is what are the if in terms of my income, what would I be able to do? I’m married, fouling single, no dependence Right. That’s basically my income I just gave you in the last minute. So half of your social security is a good one. You could do that. It would not be tax free. I would suggest spreading it over two years. Right. Right. But it’s actually. And also do they still have the six thousand dollar deduction for singles? Yes, sir. About twenty-three What’s twenty three plus six? Twenty twenty-nine. How much income do I have in the high Total income do I have taxable.
You said you had twenty six thousand, eighty-five percent of that’s roughly twenty-three, twenty-three, four. Not eighty-five percent. I’m a single Over sixty-five and seventy-nine years old. It should be fifty percent. So security, social security, you would have fifty percent. Did he make it? No, the maximum is eighty-five I thought it was fifty percent under the new Trump plan. No, sir. If it’s eighty five percent, what is what is my adjustable gross income? Right. So I think you basically be very close if you but if you’re adding the additional twenty thousand you’re gonna end up with some taxable income Um but what would what would my taxable income be if I drew it on an income of fifty or seventy thousand? I would be paying twenty percent on it. I pay no it it would only be a good thing. I paid when I was at work I’ve I’ve already done that. It’s a 401k, so I’ve got basically w it’s based on whatever my taxable income is now, is that correct Yeah, your tax rate would be twelve percent if you took it out. But I’m saying if you spread it between two years you probably could get it almost for nothing. But I would have to look. But we’re winding down the show. I’m sorry.
We’re gonna be four seconds and I have to be off So um if you want, call the office. The phone number is 615-367-0819. And this is the Dr. Friday Show. Call you later.