Another episode of the Dr. Friday Radio Show is HERE! This week, Dr. Friday gives you the latest updates on any tax information questions you might have as well as:
- The New Tax Exception Date
- Advantages For Small Business Owners
- Should You File Your Taxes Now?
- What To Do If You Can’t Pay Your Mortgage
- Difference Between Furlough and Lay-off
- Is The Government Issuing Checks?
- Best Tax Form For Small Business
- Is Now The Time to Invest In Stocks?
Transcript
Announcer 0:01
No, no, no, she’s not a medical doctor, but she can share 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. 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 the doctor is… I can’t really say in the house, I guess live on Skype. This is a new experience for the radio for Friday. So after 10 years, I guess it’s good to have new experiences. So if you want to join the show, you can 615-737-9986. Okay, so we have a lot of new things to talk about.
Probably the number one thing people are asking about, and I can’t say I got less than 100 phone calls yesterday, as did the tax extension deadline get moved? The answer is yes. New tax date as of the 21st, which was I guess today they actually posted this is July 15th. You can get that information right at irs.gov but July 15. So April 15, is no longer so if you can’t get to your tax person, you’ve had to reschedule. They basically have pushed everything. So if you owe money on or before normally April 15, right, we have to play well, now it is July 15. I will tell you that many people that were in the tornado area, you already had this extension, but now the entire state of Tennessee or basically all of the United States to my knowledge has the same extension date. So we are extending to July 15th. That would be if you own less than a million dollars as an individual if you owe more than a million dollars, and I did get a question on this, you want to pay it down. So they will waive the penalties and interest up to $1 million as of July 15th. So if you pay it down, then you don’t owe that much, and you will actually still be within compliance. So you just want to make sure you’re meeting those criteria. I have in many cases in our office because we had no idea where this was going to go what kind of people were going to turn up or not turn up. We’ve been in the office the whole time. You know, people have to take their own situation on it. I will say that in this situation, rescheduling. We’re not even sure when to reschedule so in many cases we’re kind of just putting it on hold till we have a better idea of when the extension and deadlines are going to be. If you if you’re going to get a refund. Keep in mind this is really for people that owe money. Because if you don’t owe money, an extension makes no difference. It’s only for individuals that owe money that we fall extensions for. It’s not to extend the money but a lot of times it’s because they basically don’t have the paperwork to finish their taxes as well. So we make an estimated payment in hopes that we’re covering the total tax bill. If you have a refund, feel free to go ahead and file at your own time. Many of you file if you file from home, I am working myself this weekend and a lot of people have emailed their information to me so I’m sure other tax people are working very similar to me. If you’re needing help or doing that.
I can’t tell if anyone’s calling in so I’m not sure if we can get a count or not. I think we should be able to but if no one has, that’s great. If you want to join the show at 615-737-9986, and we’ll try to get you on the phone. I think I’m supposed to be able to see the boards but I can’t. Then the next thing is for all of my small business owners. Let’s talk a little bit about SBA and what’s going to happen here because this is huge. Because small and medium-sized employers can take advantage of some really new refundable payroll tax credits designed to immediately, fully update your information dollar for dollar cost provided for the leave of absence. Which would also include health insurance, employers face no payroll tax liabilities during this point, and self-employed individuals can receive equivalent credits. I will tell you, we are reading these mathletes as fast as they’re putting them out to try to help our personal clients to figure out what we have but paid sickly promptly pain and dealing with the IRS is a bottom-line saying is, “If you’re going to keep your employees on, they’re going to give us credits.” Now, that may or may not make it easy. We’ll have to find out exactly how the credit applies, and then there’s also SBA that’s coming out with some pretty fascinating ones as well. So let’s go right to the phone line and see if we can get think it’s Kyle. Kyle, thanks for calling.
Caller 5:15
How are you doing today?
Dr. Friday 5:17
I’m doing awesome. Thank you.
Caller 5:20
Got a question. So we did our taxes we filed and everything and actually got the refund back. Then in the mail came another W2. Just curious what I need to do if I’m gonna have to pay a penalty. I’ve never had that happen before.
Dr. Friday 5:42
It does more times than I like to tell you and the simple answer is my personal opinion if you have you did your own. So in the TOC software, there should have been a form called a 1040x like in Xerox. A 1040 X and I would create the 1040 X, add the W2. If there’s money do, send it. Because what would happen is the IRS may not find this or match this up for a year or two. At that point, what might have been a very small amount to or even the possibility of a refund back to you. It is now going to create penalties and interest if there’s money due. Not so much money coming back, but if there’s money due. So, again, my suggestion would be is to just file a 1040 X, you’ve got a little time on it, but you really would prefer to catch that before the IRS catches it. They do do a match of W2’s turned in on you versus what you filed.
Caller 6:38
Okay, awesome. Thank you.
Dr. Friday 6:40
No worries. Thanks for calling. So again, if you want to join the show, if you’ve got a question 615-737-9986. Again, Washington has passed and these are recent. This one was done yesterday. I believe this was right after Trump signed on March 18, the first Buyers Response Act Bill. It basically comes out and specifically says that employers received 100% reimbursement for paid leave pursuant of this Act. That’s supposed to be health insurance, employers facing no tax liabilities, and this also applies to entrepreneurs self-employed equivalent credits. So we’re looking at those we don’t know precisely what it is, most of these small businesses are going to be businesses with 50 or fewer employees. You have to have provided leave to care for child who are in school closings or children or childcare is not available in many of these cases. You basically have to provide some information to prove that you’ve done this right. So you need to be living up to that. We do want to make sure that we have that again, I can’t say it enough, because obviously people are hearing this information sometimes for the first time. July 15 is our new tax deadline date. What I can tell you and looking right now online as well the state of Tennessee, to my knowledge unless someone sees something that’s not on the website and I did an email on Friday, there has been no extension for filing the franchise, excise business licenses, sales tax, etc. to the state of Tennessee late. Sales tax should have been filed on Friday. All of our clients did. Annual Reports businesses license due our April 15. On or before I think some are April 1 or some is April 15. Those to my knowledge and what I was told by the state on Friday are still due. So do not think that because the federal government has extended something that the state is going to follow through. So if you are going to extend your business past the March 15, If you were a 1065 or 1120, you probably still have leniency on the Fed. But the state franchise excise is due April 15. The only way to really extend it is to pay the tax bill. They want the minimum to do either what you owe the year before or what you owe this year and an extension. So that is the way they do it. There is an extension for that you want to make sure you file it. Because at this point, we really do not know when some of these reports are going to be filed. Everyone hopes that in the next week or so this is all going to start reverting back to our normal way. But obviously we don’t know that for a fact. So we kind of hunkering down right this second. But what we don’t want is when we come back out, we find out that there are going to be penalties because we didn’t file something that we thought we had an extension on. So if you haven’t filed your taxes at this point, and you are just sitting back and you’re just an ordinary business, I’m an ordinary individual 1040 with your schedules, you are fine, you don’t have to worry about extensions. You don’t have to worry about anything at least right this second pass the July 15, that would be a different conversation. But business owners, please make sure you’re still paying your sales tax we had. On Friday, we had a bunch of people calling, thinking that they may not have to file any of those additional taxes. And that is not the case. So just want to keep that online, that there is. Now I’m sure there are some hardship files out there for individuals that may have been hit directly with the tornado and things like that. I know we’re dealing with a couple of those. The state does have some situations for that. But individuals that are just right now, business is slower. You know, sales tax was for February that we’re paying in March. So at this point, that money should have been set aside is what the state is thinking.
So if you’ve got questions, feel free to join the show, 615-737-9986. Looks I’ve got time for one more question. I just pulled up my email. One of the questions I had was, “What if I can’t pay my mortgage? Am I going to get a waiver?” And I’m going to tell you, I’m a tax expert, right. But I have had a friend of mine who actually had that situation. He pacifically called his mortgage company, his credit card companies, his car payments, because he’s right now on a very low salary because he’s not making his normal income. Every one of them gave him a 90-day reprieve. So my suggestion is, if you’re on an IRS payment plan, call them at 1-800-829-1040. They are still working people, not necessarily today. They may be open on Saturday, but give them a call. If you’re on a payment plan, you will be able to probably almost guarantee you could get a delay if you are on furlough right now. Same thing with individuals that are not working. Call your mortgage company, call your car payment, don’t just assume or don’t pay. It’s much better if you can do it the other way. So that would be my quick answer. I’m hoping I can go ahead and get to this caller really quickly. Mark on line one.
Caller 12:18
How are you doing?
Dr. Friday 12:19
Hey, Mark, I am doing awesome. What can I do for you?
Caller 12:24
Well, I had a question. There was talk that the government may be issuing some checks to the citizens to help with the circumstances that are going on. What address will those checks be mailed to? We’ve moved recently, in the last couple of years and my license may not be up to date versus where our taxes go. Do you happen to know where they would draw your address from to mail those checks?”
Dr. Friday 12:52
They would draw it off the last tax return filed or the most up to date filing that you issued to them prior to that. So in most cases, the only time people give anything to the government would be their tax returns. So I will say that as of right now, I have heard about it, I have not seen anything other than up to 39 minutes ago where Donald Trump spoke or whatever, all about the extension and the deadline. I haven’t seen where they’ve agreed to send any actual checks to individuals just to let you know, there’s actually nothing out there yet. But there’s a lot of interesting conversation about it, but nothing that’s actually been put in any bills.
Caller 13:39
Okay, and then if you use like we use a company to do our taxes, would that then come to them as a company to or where are the addresses linked to that?
Dr. Friday 13:50
No, your address on the tax return would not be the tax address. I mean, that would not be there. So it would come directly to whatever address. And there is if you want to know the form number, I think it’s an 8000 form. But there is an address change form if you want to give one to the IRS, if you’ve moved recently, they do require you to send one in. But that would give you something so you’re up to date with them in case you’re concerned. It’s certainly possible. We have had checks issued to the individuals in the past.
Caller 14:19
Thank you so much.
Dr. Friday 14:20
Thank you so much. Appreciate it. Thanks. All right. We’re gonna take our first break. If you want to join us here in the show, all you have to do is call 615-737-9986. We’re gonna be right back with the Dr. Friday show.
All righty. We are back live in the studio. I’m Dr. Friday and enrolled agent licensed with the Internal Revenue Service to do taxes and representation. Basically, that’s what I do all the time, guys. So if you haven’t filed taxes for a number of years, if you’re looking to get maybe back on your feet, try to figure out a way of getting your self where you can maybe go buy a house, get married, I will tell you, I’ve had more than one couple wait till we’ve got the offer and compromise and everything done. You know, saving 50-60 $70,000 by marrying somebody that does not owe IRS taxes versus the other way around, might be a very good idea. So put that in the pocket there something to think about. So again, I have received several texts and emails actually, during the break and several people are saying that there is a $1,200 dollar check based on your 2018. But I will tell you, there is nothing on the IRS website saying that there is any kind of check coming at this point. I have seen where it’s on the internet, I’m just saying right now we don’t have any idea of when, where, why, what or who. It makes sense that they’re gonna base it on 18 since a lot of people haven’t filed their 19th. But just like that young man that called it said he was in college and he was 20 years old theoretically, if his parents make a certain dollar amount he doesn’t qualify, possibly because he’s still considered a dependent of theirs at that age. So that’s an assessment. I do not again, repeat do not have anything in front of me that tells me exactly who’s getting what and why. So, one of them said 99,000 or less so, I wonder if that’s for single married, who knows? So doesn’t sound like I’ll be getting one.
Either way, if you have questions on taxes, again, we are still going to have to file our taxes, we’re still going to have to make sure that everything’s in line and you know what? This is going to be the first probably more relaxed taxes in some ways because people aren’t going to be rushing to that last minute, My suggestion people is don’t use the July 15th as you’ve always used your April 15 deadline. Take the time to go ahead and get your taxes prepared, get the information. If you have a refund, hit the send button and get the money. If you owe money, now you’ve got a couple more months to put the information together, make sure you’ve got it right. And then figure out how you’re going to pay it. They have payment plans, they have non-collectible, they have offering compromises. Remember, you have to be in compliance to make any of these work. So when I say compliance, I basically mean you have to be up to date, right? If you have to file your taxes by the due date, let’s say it’s July 15, then you need to file your 2019 by that date or have an extension that will extend you out to October. Extensions never extend money, okay? So this is a totally unique situation where they’ve pushed the entire thing instead of April to July. That being said, still, after July 15, if you have an extension, many of myself included will extend out October like we always do. Our money is still due by that July 15 deadline or there will be additional penalties and interest. So if you need to understand how that’s going to work, and what you’re going to be able to do to move forward ask questions. Again, as an enrolled agent, what I do is representation and taxation. So many questions that you might have in preparing your taxes, maybe you’re thinking about starting a business. I get it right now it’s a really, really crazy time. But it’s gonna come down to what we need to do and how we’re going to work it out. So we’ll figure out how that’s gonna work. All right, it looks like we have a caller on the lines. Maybe Duane?
Caller 18:47
Yes, ma’am. I appreciate your information. My son had $10,000 put aside for a rainy day whatever investments. He’s looking at some of these historically low now, a stock process in some of the SP and some of the entertainment in some of the hotels and stuff like this. If he was to purchase those and carry those more than a year, I think there’s a different tax basis is for more in less than a year. Is that correct?
Dr. Friday 19:23
You’re 100% Correct. So short term capital gains is less than a year and is taxed at ordinary income rates. So if he’s a young kid, depending on how old when you know if he’s still dependent, he could end up with the kiddie tax. Is he a child or is he actually on his own?
Caller 19:42
No, ma’am. He’s 25 and he’s out on his won. He’s got some money put aside he’s looking at this as maybe he’s young enough to come out on it if he was to hold it for a few years if he had to or if he wanted to sell it for less than a year later, which is better for him? The tax rate is somewhere in the 18% rate.
Dr. Friday 20:05
Okay, so if he’s making if he’s single, and he’s making less than 50,000, including the capital gains short term would be 12%. Okay, we’re long term will be zero percent. So if he holds it for more than a year and he doesn’t make enough to kick him over the 12% tax bracket, he would actually pay zero capital gains tax on it. So depending on how he wants to buy and sell it, and I will tell you, I’m not a financial planner, but I do think this is the time for people to consider. I don’t know if we’ve hit our all-time low. Again, I’m not an expert, but I think he’s right. I think it’s not a bad time to consider investing in the market. You know, I think it’s a good time to get in there. When it’s low. These companies will come back.
Caller 20:50
Yeah, some of these cruise companies and some of these other things that have been pretty much stock out right now. You know, they’re not, they’re not letting them have a single person on a boat. Those things are down in the $8-$9 range. And historically, they’re in the 50s and 70s.
Dr. Friday 21:07
Yeah, absolutely. And if he’s young, wait it out 5-10 years. I mean, we all know it’s gonna recoup at some point. So, If he buys it at eight magic will happen when he says it long term at 50. You know, I mean, it’s a sweet deal. If he decides he wants to do a little bit of day trading, he’ll be at ordinary income rates, meaning less than a year, but if he decides he’s going to find a couple of them and just hold on to them for the next few years and see what happens, then it’ll be at the long term and theoretically, depending on where he’s at in his income at that point, he’ll either be at 15% most likely or zero, depending again, at how much his capital gains and how fast he sells it off.
Caller 21:48
Yes. Specifically, though, there’s no advantage in less than one year, unless you’re just willing to get out of it in that one year, right?
Dr. Friday 21:58
That’s correct.
Caller 21:59
Okay, well, thank you for your information. We love your show. No problem.
Dr. Friday 22:02
No problem. Thank you I appreciate the call. So that’s great. I’ve had a lot of people calling me saying the same thing. I mean, I’m sure many of you listening right now have looked at, well, maybe you haven’t the best thing maybe not to do is have looked at your portfolios. Many of us are way down from what they were prior to. And what’s sort of sad is I have a lot of people coming in and had very successful years last year, so we’re paying tax on capital gains and interest and dividends and qualified dividends on a year that we now have pretty much lost most of that. So 20 2020 is going to be interesting for the taxes to see if we’re going to be down or up still way too early to know how that’s going to play out. But if you do have some disposable income again, I’m not a financial planner, and I’m sure that many of them that are financial planners would say don’t go out and buy you know, individual stocks too risky this or that, but I think many of us use certain stocks and know certain companies and right now many of those are, down. And so now is the time to consider may be putting a few pennies in there and see what happens. You know, what’s the worst. Don’t invest something you can’t afford to lose. On the other hand, you’re not earning any money in the bank. So put that as a thought of what you want to do or how you want to do it. If you want to join the show, oh 615-737-9986 for all of you that may have been in the tornado area where we had the tornado hit down in Putnam in near Mount Juliet and in Cookeville. Keep in mind that there is casualty loss that we can also claim on your tax returns if you don’t have insurance, or if it’s not going to cover all of the returned to fix the house or whatever might have happened. You are in a federal disaster area. So we do have the ability to claim federal losses on that. So it may be like in the year 2000 I think it was when we had the big flood here. You know, many people had to take losses. So keep your receipts, keeping your information, getting yourself back on your feet and making sure that you can report those additional losses that you might have to have to move forward. All right, when we go to Kim real quick. Kim, what can I do for you?
Caller 24:21
Yeah, hi, thanks so much for taking my call. My son’s getting ready to do his taxes. He cashed in some savings bonds in 2019 to help pay for his expenses. I typically put him under my return and just because there’s more than $5,000, he has to do that on his own return he only made $700 otherwise.
Dr. Friday 24:46
How old is he?
Caller 24:48
22.
Dr. Friday 24:49
Okay. So I mean, it would be non-taxable income if he only made $700 unless there’s something inbox two including the additional five in interest. If it was savings bonds, then he wouldn’t have to pay the [inaudible]. So he should be good either way you look at it. It would be a zero tax. He doesn’t really have to file unless he wants to.
Caller 25:09
Okay, that sounds great. Thank you, ma’am.
Dr. Friday 25:12
No worries. Thanks. All right before the break when we go ahead and hit Tim. Tim, what can I do from you? For you, not from you?
Caller 25:21
This is Kim Mouse.
Dr. Friday 25:24
Oh, Kim, I’m sorry. What can I do for you?
Caller 25:28
That’s okay. I just turned 62. I went through cardio school five, six years ago, I couldn’t get a job. I don’t really know exactly what reason for that was. But anyway, I have a student loan that’s $10,000 that I paid on for five years that I still owe $10,000 on the student loan. Can you give me any information about interest and what to do with that within this next year?
Dr. Friday 26:00
Well, have you contacted them to see if there is any way of negotiating anything with them? Or are they pretty much saying pay us or else?
Caller 26:08
Well, no, I have not contacted them. I have had a number of different things through the email that I don’t know if they’re good or not. What I’m understanding is that our interest will be waived for the next year through President Trump for student loans. I don’t know if that’s the truth or not.
Dr. Friday 26:37
I said that is interesting. Again, not one that I had been asked about. So I’m not absolutely sure if student loan interest will be waived because of this as well. But your loan is prior to this. So I mean, you’ve had this loan for a while, right? You said you were 62?
Caller 26:56
Yes.
Dr. Friday 26:59
Oh, okay. So you went back for a change of career at some point here, and then it didn’t actually work out or whatever. But, obviously, my concern is this and this is not an estate tax question. But my concern will be, you’re only five years or so away from Social Security and I have people to this day have to have the student loan companies drafting from their social security because the IRS will collect on their behalf. So what you don’t want to do is take it into your retirement. So if there’s any way at all that you can either negotiate, make a deal, work something out to pay that or make a partial payment, you know, that would be the direction. If you’re in hardship because you can’t afford to pay the minimum or whatever it is, then I would think that would give you some grounds to possibly eliminate that loan at some point here. So, you know, that’s my concern is that it can become an IRS issue because they can actually take it from your social security of minimum payment.
Caller 28:01
Okay, sounds good. I appreciate it.
Dr. Friday 28:06
All right, why don’t we take a quick break here and we get back we’ll take the last part of our call 615-737-9986 and we’ll be right back.
We are back in the studio. So, if you have questions 615-737-9986 and we’re gonna go right to the phone lines, Doug was good enough to call. Hey, Doug, what can I do for you?
Caller 28:52
I’d like to know the definition difference between a furlough and a layoff is.
Dr. Friday 29:01
Well, a furlough is normally mandatory suspensions. I mean, that’s what I think of a furlough is usually something that your boss says you’re going to be taking a furlough. My, one of my sibling’s works for corporate America and large banking and some of them were put on to a mandatory two-week furlough, they had to take some of their own sick time where a layoff is where you often are going to go collect unemployment, you’re not absolutely guaranteed the jobs going to open and when it is. A furlough, usually as a period of time, two weeks whatever. Versus a layoff, theoretically, you don’t know when you’re going to go back to work.
Caller 29:40
So who pays like your insurance benefits while you’re on furlough?
Dr. Friday 29:47
Well, if you’re on furlough, normally you’re going to get paid by your boss still. Again, I am sure this is going to be based on whatever agreement was made when you were hired. Some businesses some are unionized, like some of the auto industries and they’re going to be paid. Versus in the case of my sibling, since the money comes out of their paycheck, it’s going to still come out of their paycheck, so their boss only pays a small portion, and then she pays the other part. So it’s still coming out of the check that she would be getting. It’s on a smaller salary that she has right this second.
Caller 30:24
Okay.
Dr. Friday 30:27
Yeah, well jump in there and just say that, that Trump has passed something that’s basically telling the bosses to pay for full health care and to keep people on full salary because we’re going to help you fund it 100%. Now, I don’t know exactly how that’s going to happen. You know, I don’t have the exact numbers, but that’s what President Trump is trying to get employers to do. But the problem with that conversation is if the employer doesn’t have the money right now, how did they do that even if there’s Credit later to help them pay for it.
Caller 31:03
Right. So what if you don’t really have a salary and you don’t have an hourly wage. You just work off a tip.
Dr. Friday 31:12
Yeah, those are the hardest in my opinion. I had a big conversation with one of my brothers who owns about 12 franchises and stuff. That was one of the biggest questions is like, well, how much are we supposed to be paying? Then we’re supposed to be paying them a livable wage? A percentage of what they normally make through tips, what is theirs? Because theoretically, in Tennessee, a waiter’s salary is 2.35 or something like that, before tips, right and then averages out. That’s going to be interesting. I don’t know the answer to that either. Everything’s happening so fast. I’ll be honest, I haven’t seen what it is. I do know that unemployment is available for any person that has been laid off. I mean, they can go and go ahead and start collecting unemployment again. How much is unemployment on someone that’s minimum paychecks are based on tips? I don’t know. I’m sorry, I’m not a lot of help. I wish I had more and I will bring more and more of that on the show as information is provided to us out here.
Caller 32:15
Well, I thank you for your time.
Dr. Friday 32:17
Thank you, Doug. I appreciate you calling. That was a great question. Why don’t we go ahead and head on to I think it’s Asman in Nashville.
Caller 32:28
Hi. Good afternoon. Yes, I’m 21 years old. I’m a college student. My parent doesn’t qualify for this check. They are in a higher income bracket, but my income coming from mutual fund investment that my parents did it, it’s around 15 to 20,000 for last year. So am I qualified to get that rebate check. Or because we come on because there and I’ve filed separately. I’m a 21-year-old, I file my own taxes.
Dr. Friday 33:04
It’s a great question. I don’t know, because I haven’t seen anything yet from the IRS telling us the stipulation of who’s going to qualify or not. Right now, the last thing that’s actually been put on the IRS website or anything I can find on a reputable site. I have not seen the dollar amount nor who’s going to qualify. Last I heard was something just on someone repeating something saying that they’re going to be mailing out a check to every household so much for every person. I don’t know. Does that person have to be a taxpayer? Is there going to be a minimum income? All that I don’t have the answer. I’m sorry. I don’t even see where they’ve actually even started that process yet.
Caller 33:49
Okay. All right. Sound good.
Dr. Friday 33:51
Great question. Thank you so much.
Great questions, guys. I kind of feel like I’m dropping the ball just a little bit here because I don’t have any more information than many of you probably have as well. Just going on to the IRS website. IRS, I don’t believe is going to be the responsible party for issuing the refunds. Now in the past, some of them have, but my understanding was they were talking about possibly using anything from the unemployment offices to have a completely separate situation in there. One of my friends here just sent over saying something that has been out there that anyone with an income of 99K or under is supposed to get around 1200 dollars. Again, I have a feeling that is more of just a first estimate or something that somebody might have said was a good plan. Not too sure how that would know. Is it earned income is an investment income of 99? Where exactly does that start or are in? So we’re gonna have to wait until we get a little bit more information on that to make sure that we’re all on the same page of that based on 2018. Really? Okay, I’ll take your word on that one. 2018 was a good year for a lot of people for taxes. 2019 wasn’t too bad either. I feel like I’m having a conversation with myself even though I am actually talking somewhat to somebody.
Anyways, that being said, that would be great if there could be a way of getting money. I’m just curious if it’s gonna be too little too late. How long do we expect this? I mean, the government issues the checks today, you’re looking at least two weeks from today. How far out are people going to have to survive until something happens? I was this morning actually was out with Well-outreach in Spring Hill. They give food and assistance to individuals in this area. We gave out I think it was like 160 cars came through and we help load the cars up with food, fresh fruit and all that to help people try to make it through this difficult time. That’s my concern is most people are going to be on the other side of this by the time a check or stimulus check is received by the individuals. Anything could help. I know that no matter how you look at it guys, this is a tough time. I’m not sure exactly what we’re going to do as far as doing. But the one thing I do and do very well is taxes and I can tell you if you have a refund, file your taxes because then they refund will be back in your bank within 21 days possibly earlier and that could give you a little bit of relief versus just kind of standing still and not knowing what to do at this moment. Because I get it there are not a lot of things we can control and this is definitely something we did not have a plan for. So if you’re having to pay for extra childcare, these different things they are saying there is gold to be, again, SBA is going to help out a lot of small business owners, there are several grants out there, already getting ready to come out, they’re going to be giving some recovery costs provided to the middle and small business owners. Again, there’s nothing in here telling us exactly what form do we need to file and how can we go ahead and get it started so that we can start finding the mone. When it comes down to it, if we don’t have the money to pay our employees, how do we keep our employees on the paychecks? I mean, that’s the problem for all of us, small business owners. Some of us, we’re fortunate enough where maybe we have a big enough to last a couple of months and keep everything alive. But how long is this going to last, and how far. Some business owners aren’t quite as fortunate. So we just need to make sure we stick together and figure out what’s going to be the best way to make this work and what’s going to be the harder way.
So if you’re trying, I mean right now might be a great time to go ahead and work up your taxes. You’re home, the kids are home, not a whole bunch to do at the moment, pull out all those receipts, figure out what we’ve got going for taxes and go ahead and start working on doing those. If you’ve got questions, if you’re trying to figure out what’s the best way to file, who’s the best person to file for, etc, then you need to do that. 615-737-9986 is the number here in the studio. I can’t say it enough, and I will because I know some people just tune in and out. Remember, the new date for filing your 2019 tax returns is going to be July 15. So stay calm, don’t stress it. You can’t make your payment because right now you don’t have any money you’re worried about it. This is one less thing you have to worry about. Okay, I know there’s a lot of other things but this will be one less than you have while we go ahead and take a quick break and we come back we’ll hit Tom and any of the other callers that come on that you get. If you want to join the show 615-737-9986 and we’re gonna be right back with the Dr. Friday show.
Let’s try that again. All right. Back live here. If you want to join the show 615-737-9986. I do want to address something really quick from the last caller. He is correct. According to Donald Trump, he did help all students and their families by waiving interest on student loans held by all federal government agencies. So if your loan is not a federally held one, then that will not be. It actually has put it down to zero until further notice. According to the educational department, all college people anyone will have, they will not be accruing interest. Any payments you make right now will go directly to the principal of the loan. So that is kind of interesting or great news for many people I know. So might now be a time to really, if you have the ability to make some of the payments so you can really get down onto the principal instead of all that interest that just keeps accumulating. All right, let’s go right to the phone lines. And I think Jodi is first. Jodi, how can I help you?
Caller 40:18
Yeah, so I was doing my schedule-e on a real estate property that has, a rental property. So I have really negative 15,000. But it’s only let me write off 900. So I don’t understand that.
Dr. Friday 40:36
Well, and we don’t know each other, Jodi, but I’m going to assume that your income is over 100,000.
Caller 40:44
Yes, ma’am. That’s like 150,000.
Dr. Friday 40:47
Okay, so they mean test. They have certain limitations that they’re allowed. Now you will have a carryover to the next year in which you either sell the property and or your income drops down. And then you’ll be able to take that but it will roll for but there are limitations based on income, and how much losses we can take on our rentals.
Caller 41:08
So it’s not good to have rental property anymore.
Dr. Friday 41:13
Well, it’s been along for a long time. So I’m going to either assume that you haven’t always lost large amounts on your rentals or your income has increased over the years, because this has been on the books for a while, and it doesn’t hurt because when you sell them, you reduce the capital gains. So I have them and never can take my losses, but it’s still a good investment, my personal opinion, but I’m not an investment advisor, but that’s what you’re running into Jodi. That’s the problem.
Caller 41:39
Okay, okay. Well, thank you very much. Appreciate it.
Dr. Friday 41:43
Thanks. All right. It looks like we’ve got Terry from Nashville. Terry, what can I do for you?
Caller 41:50
Always enjoy the show. Does the new tax ruling affect payment of the first quarter the first pay estimated taxes First Quarter estimate on April 15?
Dr. Friday 42:04
It affects first and second, because as you know, April 15, and June 15, would be our normal quarterly estimates and not having our taxes completed. I am working with the idea that it’s going to affect those dates now, meaning that we don’t have to actually make them at that time. They have again, I haven’t seen anything that says what my 2020 estimates when you print them out of the tax software, it’s still saying our usual dates. It does say that there has been tax relief for those. My concern is if I have to make a double whammy on July 15, along with paying my taxes if you know if I wait to that point. I’m still paying mine and answer your question. I’m paying mine on the usual due dates. If you have the money if you don’t, there’ll be no penalty for not making either of those on time as far as I can tell.
Caller 42:58
Okay, thank you very much. Okay.
Dr. Friday 43:00
Thank you, sir, bye. I really need to get more information. I wish I had a direct hotline to whoever’s writing these laws for us to get all my people taken care of here. Hey, Jason, what can I do for you?
Caller 43:14
Yeah, thank you for taking my call. My wife and I just bought a farm in Sumner County, 20 acres. We plan to have some chickens, beef, pigs just a couple of them and we’ve got three cattle right now. As far as starting the business, do you recommend starting it as a sole proprietorship until a certain level of income is generated the warrant? [inaudible]
Dr. Friday 43:45
I do it as a schedule-f keep it simple, until you actually generate something that’s going to make money because there’s a lot of exclusions for no sales tax on anything you sell, certain advantages to writing off portions of the property, staying in the Greenbelt, etc. I would keep it simple at this point, then you can go from there as far as if it becomes an actual business where you’re generating some sort of product from your other than egg sales or something, then you might want to consider, protecting or having an additional liability of some sort, but I would not rush out to do that off-farm. No.
Caller 44:27
All right. Then we just go as a sole proprietorship until schedule-f, you said?
Dr. Friday 44:33
Yeah, you’ll do a schedule-F on your personal tax return. Just keep track of all the fuel you put into your tractors and whatever you’re paying for your animals and feed and farriers or whatever you have to do.
Caller 44:47
Yes. Thank you. Appreciate it.
Dr. Friday 44:49
No worries. Thank you very much. I appreciate the call. Again, this is the Dr. Friday show. Looking on the IRS website just for the gentlemen that had called about the extensions they have not shown any change the extension dates. Just to let you know it says “postponement is due to the federal income payments for April 20 to July periods beginning on April 20 ending in July will be disregarded as calculating for penalties and interest.” So they’re looking at estimated payments as well as final payments. So if you want to hold on to your own money and make everything honor, before that due date, you will be perfectly fine, there will be no penalties. But you will have from my calculation, you will have to have the payments that will fall within that time period. So we just have to be careful that we’re not calling ourselves short. And of course, I do realize many people that are entrepreneurs in right this second, their businesses are not even open so the first two quarters, even though we’re supposed to make for equal payments, the first two quarters of 2020 are going to be completely different than what they would have been making on a normal tax year, so we may be making adjustments. Once we have an idea of when we’re back open and what we’re going to have to go on and how we’re going to make that work.
My suggestion is to do your best to keep track of as you always have all of your expenses, any additional costs that this has cost you too, to keep things going. Again, landlords for commercial buildings, things like that are when there are SBA loans now out there, go to the sba.gov website you will find which might be a way for us to be able to move forward and do something as far as making everything work. Alright, so I hope you guys had a great show. If you have any questions you can call me directly at 615-367-0819 on Monday morning. You can also email Friday@drfriday.com. If you want to check out who I am or what I am about, it’s easy. Go to the web. drfriday.com. So if you have any questions, just relax, don’t stress out. If you’ve got student loans, it looks like you’re going to be in good shape. If you have IRS issues, we’ll be able to keep moving forward and dealing with them. I will tell you we’re having a little bit of a slow back on some of that but not a whole bunch of revenue officers are working at this time. IRS is still open, it will take you a couple of hours to get through the phone lines if you want to do anything about that. So if you’ve got any questions one more time 615-367-0819. I hope you guys have an absolutely fabulous, fabulous day.