Welcome to the Dr. Friday Radio Show! Dr. Friday gives all the updates on taxes, deadlines, and the following topics:
- New Tax Filing Deadline Is May 17, 2021
- Tax Extention Date Will Be Extended
- Free Unemployment For Those Making Under $75,000 Single and $150,000 Couples
- The IRS Won’t Take Taxpayers Refund Money To Pay Off Federal Debts
- If You Didn’t Recieve Stimulus 1 or 2, You Can Claim Them On 2020 Tax Return
- Do You Need Help With Tax Representation?
- The third Stimulus Coming March 15- April 15
- “I Got Custody of my Niece and Nephew, But I Never Received Stimulus Checks For Them.”
- Stimulus Check for All Dependants On Tax Return
- Can My Stimulus Money Be Applied To Debt?
and answers other caller’s questions!
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday show. If you have a question for Dr. Friday, call her now 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 the doctor is in the house and are we having another wild ride of it when it comes to tax season. People think sometimes my job is probably a little boring, all I do is taxes. But look at the last two years it has gone crazy. So just for all you that may have just tuned in, let’s remember that they have done an extension to May 17. Let’s start with that. May 17 is our new deadline for your 2020 tax filing for your tax returns on May 17, 2021. That will be an important date. Because if you have a need or something happening, then you need to make sure that you have done that which also means extensions will be extended. Right? We’ve always had April the 15th. I know last year was unique. We did it in July, this year, we’re doing it in May. And there are some really good reasons I have to give credit where credit is due. I know the American Association of CPAs, as well as the Enrolled Agents associations, have been ones that help push or encourage the IRS to take this into consideration. Because there are quite a few changes that have happened. And we need to make sure we know what’s going on. Because I know myself, I thought I was going to have to amend like 40 different tax returns. But we’re gonna talk about people that might have filed and then the changes affected them. Let’s go ahead and hit John about a loss of job unemployment limits. Hey, John.
Hey, Dr. Friday, thanks for taking my call today, I really appreciate it. I was unfortunately caught up in the COVID 19 turmoil like everybody else, and I lost my job because of that. So I’m now running a combination of like unemployment and gig work. I do realize like you just spoke about unemployment, it’s going to be treated a little bit differently because of that stimulus plan. But what’s the limit, when I have to start to be concerned about paying estimated taxes to the IRS? Is it the is worth using that standard deduction number that you get? Is there just no minimum? Or is there a maximum?
Dr. Friday 2:47
There is. It sounds like that you you work under as a musician or something along those lines, because it sounds like when you say gig work, I’m making that assumption. But anyway, so if you’re self-employed, or a combination of W2 and 1099 work, obviously all W2’s assuming that withholding is coming out, you don’t have to worry too much about those. But as subcontractors are 1099, anything over any money that we owe more than $500. So the standard deduction doesn’t come into play for our self-employment tax. So theoretically, you could have a negative or breakeven on the if you’re single, 12,800 or, or 400, or the married 24,800, you could still owe self-employment tax on less amount. So you’re supposed to make quarterly based on how much money you owe. So if you owe more than $500, you’re supposed to start making quarterly estimates, which requires a lot of times people to keep some sort of running balance on their self-employment side. Again, W2’s would not come into play because that’s already had the Social Security.
Yeah, this would be all. I’m running it through like a Subchapter S company.
Dr. Friday 3:56
Okay. Do run yourself as payroll on that?
No, no, just straight carry over, you know?
Dr. Friday 4:08
Again, you gotta wait to your back on your feet. But all corporations are supposed to have payroll because then you’re avoiding self-employment because it’s a pass through a company that doesn’t pay self-employment tax. But that’s not that part of the conversation. Your point, you just need to double-check and make sure if you can keep a running balance. If everything’s coming either through the K1 or W2 then the standard deduction is your limit to start with, right? Because if you’re single 12,400, married 24,800 anything above that will start being taxed starting at kind of progressive but the 12% tax bracket we call it and then and then you’ll need to calculate if you owe more than $500 you will need to start paying quarterlies.
Okay, $500 in tax? Okay. All right. Hey, thank you so much, Dr. Friday.
Dr. Friday 5:01
No problem. Thank you. Alrighty, let’s hit Brian. Hey, Brian, what’s happening?
Hello, I think you’re supposed to be Dwayne.
Dr. Friday 5:13
Oops, I’m so sorry, Dwayne. I’m sure I got that. Right. Okay, Dwayne, what’s happening?
I know you’ve been asked before, but I didn’t hear it. I’ve been in my 70s. I would like to protect my estate as my parents did for me. Is there still a five-year look back?
Dr. Friday 5:34
For Medicare? Yes.
Oh, a five-year look-back for taxes as well, right?
Dr. Friday 5:41
I mean, theoretically, it’s a three-year unless they find that you owe more than 25% or misrepresented your income by 25%, then it can go back further, but it’s really only a three-year on individuals, five years for Medicare.
So if I put my property in my kid’s name.
Dr. Friday 6:00
Would that be a three-year look back or a five-year look back?
Dr. Friday 6:04
Well, that would be a five-year because it’d be a Medicare thing, because as far as the IRS is concerned, assuming that that property is not worth $11 million, it would be considered gifts, and you’d file a gift tax return. But your children would have to maintain your basis where if you let them inherit, and again, there’s two different conversations I deal with the federal tax. If you let them inherit, there’s a step up in basis. So that property would have no capital gains to your children. If you give it to them while you’re alive, they’re only going to maintain your basis in that property.
Okay, all right. Thanks. I appreciate it.
Dr. Friday 6:39
No problem. Thanks. All right, you can join the show if you want at 615-737-9986. We are taking your calls talking about my favorite subject, which is taxes. We all know we’ve had quite a run for it. Again, a couple of things we need to really consider when we’re looking at all of this is. First thing, one thing I found out actually from one of my listeners, then I double-checked it on the IRS website because one of my biggest concerns is I have about 40 people I filed on around February 12. When we were able to file it, many of them had all those cases anyways, had received unemployment. In this case, let me clarify this because I found out something more about unemployment, the unemployment is tax-free $10,200 to individuals that also qualify for stimulus, which basically means individuals making less than $75,000 each married would be 150. If you make more than that, and you did get unemployed, you will still be paying tax on your unemployment. So again, let me clarify if you are receiving the stimulus or you’re in the numbers with the stimulus, which means 75,000 or less for individuals $150,000 or less for married couples, and you have received unemployment benefits, you will qualify for the $10,200. If you make more than that, you do not qualify for the waiver on the $10,200. This is one of the reasons we really needed a few more days to extend past because we’re trying to grab hold of the knowledge and share it with everyone. And it’s like it’s changing as fast as we hear things. So it’s very important that we’re able to get that information. All right before the break. Let’s hit Todd so it doesn’t have to hold through it. Hey, Todd.
I’m self-employed and because of COVID and I’ve lost some billable hours for some, probably almost a year now. So I didn’t know if there’s any type of unemployment benefits or a 1099 person rather than a W2. Right?
Dr. Friday 9:13
I don’t know. Up until recently, as far as I know, 1099 individuals still can qualify for unemployment benefits. So I don’t know if you’ve contacted the Tennessee Department of Labor or gone online to their website. I think it’s called 10, you can go online and find out if you can qualify. I believe you do have to have 1099 You can’t just be self-employed, but you actually have to have 1099 to prove your wages
1099 for the year 2020. I worked a couple months so I already got $100,000, and I haven’t worked since then. [Inaudible]
Dr. Friday 10:07
It’s a great question. I’m not absolutely sure I have had a few people that are self-employed that got unemployment, but I have had more people that are self-employed that said they weren’t able to get unemployment. So I’m not going to say I don’t know, all I know is many of the people that I dealt with run their own business, they don’t receive 1099. So that was one of the reasons they said they didn’t get it. But if your income is a lot lower than what your normal, you know, the situation is, I’m not sure if they’ll use 2019 numbers to prove that you normally make 100,000, for example, but in 2020, you only made 30, because you only had a hit and miss. I’m not sure what they’ll give you the unemployment based on unfortunately, sorry.
Okay, thank you.
Dr. Friday 10:52
No problem. Great question, though. Thank you. All right, we’re gonna see what we have going here. Again, if you want to join the show, you can call 615-737-9986. So we’ve already touched on the fact that there is an extension for taxes going to May 17. If you did get unemployment benefits, some of you or any of you may qualify for the first $10,200 to be free. That again only applies to individuals that made less than $75,000, including your unemployment, and or married couples making less than 150,000. If you happen to make more than that you will not qualify for the free unemployment. Another really good thing that came from the Internal Revenue Service says the Internal Revenue Service won’t take taxpayers’ refund money to pay off any federal debts that they owe that taxpayers claim on 2020 stimulus payments on their return according to some information from the tax collection agencies. As everyone knows, in 2020, if you never received the first or second, now keep in mind, there are three stimulus checks now. First one was 1200 for individuals, and the second one was 600 for individuals, if you did not receive those, then you can claim them on your 2020 tax return. Then, when you get done with your 2020 tax return, we’re finding is they’ll use it to pay off your debt and or back taxes is what we are seeing, but according to the Internal Revenue Service, they will not be doing that. So it looks like many of you may qualify for the stimulus refunds, even if you owe back taxes. Gonna be interesting to see because some people are counting on that to pay off their 2020 tax. If they’re giving that refund, does that mean that we’re going to have to give it back? It’s a very confusing and we’re going to find out more. All right, really quickly. Let’s hit Linda real quick. Let’s get Linda on the phone. Hey, Linda.
Hello. My question is, I’m working on tax now. And I have a rental house. I only had an income of 5950 because I did from August to the end of the year, I had $25,000 in expenses where I did total remodeling.
Dr. Friday 13:28
Okay, but you can’t take 100% of that you’re going to either have to put it over the lifetime of the house depending on the remodel or if it was like an air conditioner or something like that many of those are 15 years, but you will need to depreciate some of those repairs that sounds like.
If i’m on Turbo Tax right how do they help as far as the depreciation is concerned?
Dr. Friday 13:53
They should. My version does I use the professional version but it does and if not you can if you want it to you can either even probably Google depreciation lifetimes and I know there are several different charts out there that will give you an idea. A roof is gonna be over the lifetime of the house, you know, but painting walls carpets, floors, many of them have less lifetime.
[Inaudible] because of total storm windows.
Dr. Friday 14:30
Windows are gonna go the lifetime of the house. Most of those are going to go right along with the house which would be you know, 29 and a half or whatever but 27 and a half whatever it is for a house nowadays. But you’re just gonna have to take each one and break it down to the best of your ability. Some of it may have been basic repairs, but then the rest of it is going to be depreciated, which in the long run considering we have to do recapture. It’s going to be better to put it that way because you’ll be sell this property in the next month. You might want to recapture some of it instead of having to claim it all at one time.
Okay, thank you.
Dr. Friday 15:07
Thank you. All right, we’re gonna take a quick break when we’re done here. When we get back, we’ll get to your phone calls. You can join us here by calling 615-737-9986. We’ll be right back.
Dr. Friday 15:26
All right, we are back here live in the studio. And you can join us at 615-737-9986 is the number that we’re on the radio today with. All right, let’s take Gail and see what we have happened.
Yes, if I heard you correct earlier, that you said that if you own property, like your house and land, that you would be better off not to go ahead and put it in your children’s name? What I want to know then, would that hold true that if you own some stock, that you should just not put it in their name, and just let it play out from the will?
Dr. Friday 16:13
Gail, that is 100% correct. Because the same thing happens is that there is what’s called a step-up in basis. So if they get it through the will, at that time, they’ll get what it’s valued at the date of death, instead of what you or what you had paid for it originally, and carried it through your life or whatever. So yes, I personally think always better to let the children inherit, or whoever inherits versus I know a lot of times people, and there is two sides. This just as a caveat, I deal with taxes. I do know, there’s the Medicare and all that I don’t deal with that. But for tax purposes, definitely let the children inherit.
All right, you have been most helpful, and I appreciate it so much. Thank you.
Dr. Friday 16:59
Thank you. Bye, bye. All right, if you want to join the show, 615-737-9986. We are taking your calls, talking about taxes. I’m an enrolled agent licensed with the Internal Revenue Service through new taxes and representation, which basically means guys, I’m a wall between you and the IRS. I do not work for the IRS, I had someone call me the other day and said, “If I use your you’re gonna, you know, go right to the IRS?” I am there to represent you. But you know, when a power of attorney is filed, it is going to basically notify the IRS that we are in the process of trying to get you some resolution, which is obviously a good thing, as far as I’m concerned, can’t stay hidden forever. So we need to make sure that we have everything out there that we need to. So if you need help with that, that’s what I do. As an enrolled agent, we help people get back on their feet and move things forward and take care of things that they have going as far as you know, tax issues or anything else. So if you need help with filing back taxes or getting issues taken care of that is what I do. And I can help you as well. So you can also call the show if you’ve got questions, call 615-737-9986. Okay, let’s see if I’m sure what Phyllis is going to ask a lot of people are going to be wanting to hear. So fellas, join the show, what can I do for you?
Hi, thank you. I usually pay under $600 in income tax every year. I didn’t get my $600 stimulus check. So my question is, do I need to pay the income tax? Or if I put that on the form that I didn’t, will they just give me the difference?
Dr. Friday 18:55
You know, I am hoping that I know the answer to this because obviously we’ve been filling out tax returns now for well for 20 some years. But for this year, since you know the middle of February, we’re hoping that people are going to be allowed to apply the stimulus to their outstanding tax current year tax balances. Then if there was something remaining, because in some cases, people then that stimulus would be refunded. I will kind of keep you guys up to date and letting you know if that is the case. Because here’s the other side of that. And I know in your case it may not be but I’ll just bring it in is a lot of people are like “I don’t think I got 1200, I don’t remember ever seeing it.” They’re not absolutely sure for whatever reason that they did or didn’t get it and we’re putting it on the tax return as if they did not get it. I’m concerned that many people, the IRS may show that they did receive it and therefore it becomes a question of where is it at now. So in your case, Phyllis, I’m working with the same pretense I think that you are the IRS already has that money, let them keep that money and therefore I don’t need to write a check for the additional money due.
Okay, so if I do that, I won’t get in trouble by not sending money?
Dr. Friday 20:19
Since it’s on the return and they have it, subtracting it from open balance, I would say we have an extremely great case for arguing if they have. If they send it to us, then I would have the argument to return it to them or make them a payment, but then the late fees would not be qualified. I’m saying if they start refunding. And we’ve been filing since February, none of these individuals so far have received refunds, and they should be getting if that was the case.
Yeah. Okay. Thank you so much.
Dr. Friday 20:48
So that’s my guess. No problem. Thank you. Let’s see what Ann has. Hey, Ann.
I’m having a guy that’s disabled, he’s on disability. And I do income taxes, just basic income taxes for people that need help, free of charge. So anyway, he received a 5071 C letter. I did the free e-file thing because he did have a little job making about 6000 some odd dollars and $50 in income tax. I’ve given him a refund of 550 because of an annual income credit. But then he received that 5071 C, which is identity. So anyway, I’ve been trying to help him with that, because he doesn’t do computer. So he’s come to my house and we tried, But he doesn’t have a bank account. He doesn’t have bank loans. He doesn’t have a mortgage, he have to have a car loan, he doesn’t have any of that stuff.
Dr. Friday 22:11
You’re going to have to file a 14039 form. Have you looked that up yet?
No, I have not.
Dr. Friday 22:20
Yeah, look up a 14039. That’s the affidavit for identity theft. He’s going to probably have to file it old school. I mean, what you’ve been trying to do is perfect. But the problem is I run into that a lot of times too, which is not everybody has a credit card, not everybody has a cell phone that’s in their name. That’s what’s required when you go online to try to set up an account so that you can then prove or work your way through it. So at this point, I would just pull up the 14039, have it completed, you know, and see if that wouldn’t get you what you need, which is basically proving his identity. You can’t walk into an IRS office.
Yeah, I have another question. Now you’re talking about the $10,200 on your standard ramifications of the income limits. But I have a lady, I haven’t filed hers yet. But she is in that under that $150,000 range. But my software is not updated to take off she made about $22,000 in unemployment due to COVID.
Dr. Friday 23:36
Yes. I mean, ours just updated today. I use Intuit Pro. So if you’re using just the regular I mean, I’m assuming within the next day or so. I mean, keep in mind, what’s amazing with you and you’re in the same industry, you may not do as many but doesn’t change the fact that all of these changes just came down. the president signed it last Thursday. I mean, so it’s, it’s only been a little over a week. And you know, all these changes. So it’s gonna probably take some of the software companies a little bit more time, you know, I mean, again, I’m going to assume they’re going to be releasing that information as fast as they can.
I tried to call TurboTax but it got disconnected. So I just thought. Okay, 14039? Thank you so much for your help.
Dr. Friday 24:40
Sure. Thanks, sweetheart. All righty. We are talking about taxes. If you want to join the show, you can at 615-737-9986. Maybe you’re trying to file your own or you’re not too sure exactly how to file something. All of that is doable. All you need to do is pick up the phone and we will chitchat about the best of my ability. We’re gonna take a quick break here, get back on the clock. But you can join the show. I’m live 615-737-9986. We’ll be right back.
Dr. Friday 25:10
All right, we are back on the show. Call 615-737-9986. And it looks like line three, let’s go with line three. Joanne, what’s happening, girl?
Okay, my question is, I’ve been on Social Security for quite a while, and I’ve not filed taxes. But I would like to file for last year and try to get the stimulus checks that are going out to everybody.
Dr. Friday 25:43
Have you received none of the stimulus checks?
Correct. I have not. But my problem is I live with my sister and my brother-in-law, and they claim me as a dependent.
Dr. Friday 26:00
Right, let’s one or the other. I mean, if they claimed you as a dependent, they got credit on their tax return for you, therefore, they get $500 a year for you. So if that’s the case, then, you know, instead of the 1200, they got 500, instead of the 600, they got 500. But in 2020, they’re reconciling everything for 2020. So if they did not claim you in 2020, you can file your own tax return, and you’ll get the $1800 along with putting you on the list for the $1400 being released this year.
Well, the problem is they did for 2020. But they’re not going to for 2021. So if I go ahead and file for this coming year
Dr. Friday 26:49
Let me clarify, you can do that. But if they claimed you in 2020, you lose 1800. And then I’m not actually sure how you would or would not qualify, because we haven’t really found out how they’re going to reconcile 1400. So they’ll get the 14 because according to the current tax law, they’re getting $1400 for each person on your tax return No matter if they are dependent or not. So they will get a $1400 deposit for you for the third one, but you’ll miss out on the first and second because they took advantage of it on their own tax return. If that makes sense. Yeah, it’s a great question I am. It’s very confusing, because, you know, in theory, they got $1,000 out of 1800 that they took and then the 1400 you would get or they would get directly in their bank for their refund.
Right. Okay. Well, thank you.
Dr. Friday 27:51
Thank you. All right. Let’s hit Sheila. Hello.
Hello. I’m calling about the injured spouse. I’ve been filing injured spouse for three years. We tried to do an offer, they refused it. Then they started taking 165 a month out of my husband’s Social Security. And they started in April 2019. Then they just stopped in April 2020. They just stopped.
Dr. Friday 28:26
Everything had to stop.
I filed my taxes on April 14. They sent me a letter I think December 17. They said they had lost my injured spouse. So I sent that back. Then at the end of December, they sent me interest on my refund. But they didn’t know if they would give me a refund, and they didn’t know what they can do with it. Well, it’s time to file again. I’m just wondering, do I file an injured spouse? Again?
Dr. Friday 29:05
Absolutely. You want to file it every year because it sounds like you are not responsible for your husband’s IRS debt or whatever. So you want to consider anyone that’s listening. You know, if you married somebody or something happened and they have an IRS debt of some sort, you can file an injured spouse and what it does is preserve your portion of the IRS refund. That’s what she was talking about. Last year was just wonky. In all honesty, a lot of returns got lost. A lot of returns didn’t get processed until very late. Many people received interest. Are you saying you never did receive the refund from the 2019 tax return?
No, I’ve never received any more letters. Nothing. They’ve never gone back to taking that money out of his retirement check.
Dr. Friday 29:55
Yes, well because of the COVID they have slowed down on a lot of that collection. To be quite honest. Being closed for 90 days really messed up the and then of course, one of the first stimulus packages told them that they were not allowed to take any collections from anyone. They had to shut off all collections and automatic payments, which mess things up because a lot of us worked very hard to finally get something set up. And it didn’t seem like it ever really came back into play. So that being said, at this point, I mean, he can certainly contact them. But if you guys are on a fixed income, I’m assuming at this point, probably not wanting to volunteer, but I would definitely file my injured spouse for 2020. Definitely file your taxes. Go ahead and do what you’ve always done. Then I would probably try to follow up. You can also contact you have to Google it because I don’t have their phone number in front of me. But it’s called the Tax Advocates office. It’s a division of the IRS.
I have called those people. I guess what, I’m curious. I’ve called them several times, and you know, they say, “Oh, I can only see this part” because I said well, how long are you gonna take it? Are you gonna take it till we die?
Dr. Friday 31:15
They can only take it up to 10 years.
10 years? Well, this goes back to like 14 years.
Dr. Friday 31:27
Okay, well, you need to tell them you need your C SED report, collection status, something it’s you know. Because what that’s going to be if you can get a C SED report, it’s going to tell you when the last day of collections allowed on each year. Because if he went into non-collectible, or you said you went through an offer and compromise process that extends the clock because they freeze collection while we’re in those processes. So you need to find out so that way, you know if this was 2008, and it’s gonna fall off in October of 2028. I mean, whatever. That’s ridiculous, but you know, I’m saying, but this way you would know the dates. That way you can kind of follow-through and see what it is that would be due and how much and how long. And that way you have a better picture.
Since it’s been a whole year, could they extend it? Because the best I found out, it was going to go up in July of 2023. So could they extend it now to 2024 since I didn’t do anything for a whole year?
Dr. Friday 32:36
No because it wasn’t put on hold because of you doing something. The collection period may have extended 90 days at most, because that’s when they were not allowed to do collections, but based on the federal government.
So falling through the cracks this time is a good thing?
Dr. Friday 32:57
Exactly. Exactly. Head down mouth shut. Let’s move past. All right. Let’s hit, Jim. Hey, Jim. Number five.
You had a similar question a while ago. In 2019, my son was in college and filed as independent. So they didn’t get the stimulus in 2020. So in 2020, he was not a dependent. So we filed his 2020 return, and he recaptured and got the stimulus. Okay, now this last one that came out. When we got our we’re married filing jointly, so we got the stimulus. to base it on it. They didn’t. They didn’t take the age into consideration on this third one. Right there. We got an extra $1400.
Dr. Friday 34:00
Right, which is his theoretically.
Right, now he’s filed 2020 is not a dependent. If they were to send him 1400 we got 1400 too much. Right, exactly. How do you go about getting given it back to them?
Dr. Friday 34:18
Well, you can send it back. You can send back the money, but I wouldn’t do that until you know if he’s gonna get the $1400. Because I think what’s going to happen is because he was your dependent in 19. They’ve marked his return for 20 not to release 1400. So he recaptured the 12 and the six which he’s entitled to, because based on the current law, but the 14 and you’re right, no age does not come into the third stimulus. It’s anyone that’s dependent on your tax return. You will get 1400 for So, you know, seniors, children, whatever, but I’d be surprised to see it’d be great to know if he does or doesn’t get it because that’s going to be a huge flaw in their system, because we have a lot of kids that have gone off of their parent’s tax returns in 2020, and are now independent.
Yeah, I see. So we’re waiting to see what he if he gets it. Then we’ll cross that bridge when we get there in the bank or something and wait till we figure out how to get it back.
Dr. Friday 35:22
Exactly, exactly. Correct.
Okay. All right. Well, if that happens, I’ll let you know.
Dr. Friday 35:27
I hope you do seriously. Thanks, Jim. Thanks a lot. All right. Do we want to hit Randy? Randy, what’s happening?
Hey, Dr. Friday, how’s it going today?
Dr. Friday 35:40
Awesome. It’s an awesome day. I got a quick question about capital gains. When it comes to selling property, real estate property that is evolved long term, I guess, a year plus. Is there a rate set for a particular gain? Like, for example, I mean, I saw somewhere like there’s $80,000, you probably if your gain was 80 or less, you probably don’t own anything.
Dr. Friday 36:14
So there is to a point, if 80,000 was your only income that year and capital gains mean, you had no w twos, no other income only that 80, then we have 0% capital gains for married couples, that would be 100,000. You would have 100, subtract the 24 get you down to the 80 that is actually taxable. For most people that’s not the case. But if you have less than $100,000 income, including your gains, you will be at 0% long-term capital gains. Same thing for a single person 50, including your income and the gain would be zero. Everything above that would jump right to the 15% tax bracket. Then I think it’s about 250,000, you’d add another 3.8. And then about 470, you would go up to 23.8.
So if I’m understanding correctly, let’s just use the 80,000. Let’s say I had that in capital gains that you made 20,000 or not? [Inaudible] any capital gains, but you still, of course, would have your income. But if you sold the property for 25,000, that puts you over the 100 married filings jointly. So you do owe on the gain full 15%.
Dr. Friday 37:39
You would owe 15% on the entire gain. There’s no zero at that point.
Okay, so it’s all or nothing. The entire capital gain?
Dr. Friday 37:52
Yeah, the entire capital gain. So if it was 80, and 20, and you were at 100, you’d be at zero. But if you sell that property for 85,000, and you still earn 20, up at 105. So all 85,000 would be taxable at 15%. Because you exceeded the 0% gain. No the gain only we’re only concerned with gains.
Right. Okay, that answers the question. Thank you so much, Dr. Friday.
Dr. Friday 38:23
All right. Thank you. All right. Well, we take our last break. When we get back, we’ll have just a few minutes to take a few more calls if you want to join the show. 615-737-9986 is the Dr. Friday show and we’ll be right back.
Dr. Friday 38:43
All righty. We are back live here in the studio only a few minutes left. So why don’t we try to get to the phone lines pretty quickly here? It looks like we have Keith on the line. Hey, Keith, what’s happening?
Hey, Dr. Friday, a question regarding short-term disability income. Is that taxable, do you have to file that?
Dr. Friday 39:05
Yes. Short term is usually considered taxable income because it’s basically loss of wages. So yes.
Okay. Good deal. Thank you.
Dr. Friday 39:15
That was an easy one. Keith, he kept me on my toes there. Alright, so if you want to join the show, you can 615-737-9986. We’re getting to the end of this. I’m going to tell people, you may want to not just rush to hit the send button right this second. Keep in mind when there is a new tax law that goes into play, we’re talking about unemployment. We’re talking about some of the other taxes that may have smaller variations but may have an effect on you. If you haven’t received all your tax forms. The IRS is going to always be playing catch up just as we know with the unemployment situation, like I said, our software just came in last night. Other people are going to have others. I am going to suggest slow down, take a breath. As I said, I’m not even positive since the IRS is now saying they’re going to be refunding the money from the stimulus. How is that going to affect us? If we want to apply that money to our taxes? Are they going to be refunding and mandating us to send money? This is going to be extremely confusing, and a really hard situation. So my suggestion would be to slow down, take a breath. Don’t rush to get it done as fast as you have to do it. If you don’t need to get it there. Just you know, I mean, I know sometimes there are some other situations, but slow down and don’t rush to the finish line, because the IRS is going to have to figure out how to correct a lot of returns. Let’s hit Gina real quick. Hey, Gina, what’s happening?
I got custody of my niece and nephew in 2019. So I’ve never received any stimulus checks for them. I think they went to somebody else. So what is the recourse?
Dr. Friday 41:11
That is a great question. I have three cases in my office alone on this where the people got custody for them in the year of 19. We don’t have a perfect answer, because in one case, she even has custody the papers, but the children have already been claimed on another tax return. So we’re having a fight not only that, but custody cases as well. So my answer is to send in the information we’re sending in proof of custody date of custody. That way, then the IRS I’m hoping will be able to issue us the refund and or the stimulus money. And then they can go back against the person that illegally claimed these children when they shouldn’t have been had the entitlement. Because most of these would have been based on 19 and 20. And in this case, we have both of them. The cases I have or claimed on 19 and 20. In both years, we’ve had these issues.
Yeah, I got them in November of 2019. So they did.
Dr. Friday 42:10
Yeah, so they may or may not have been on your taxes, because theoretically, in 19, you didn’t have them for six months in a day. But I don’t know your whole situation, but they are definitely on your 2020. And this is the part of the problem. I’ve got divorce cases where the women are my case, the wives have the children and the husbands got all the stimulus money. The IRS is basically I don’t know what they’re going to do on those cases, I think they’re hoping that people will work it out. But in our case, we can’t, the parents aren’t going to give us the money for the children that these people have like you possibly they’re not going to give it so you were going to have to petition to the IRS and to have proof and then they’re going to have to go back against those people to get the money. I don’t even know what they have as an ability to do that. You know, in all honesty, this wasn’t an IRS refund. This was some sort of stimulus. So I’ll keep you informed on what success we have Gina. If you have some success in finding out away, please keep us informed because I’m sure there’s a lot of other people out there that are sitting there saying I never got the stimulus. But I have the children and the right to get it.
Dr. Friday 43:15
I’m sorry, I don’t have a perfect answer this little outside our norm, but we’ll keep you in the loop if we find a way to do it.
Okay, thank you.
Dr. Friday 43:23
Thank you. Appreciate it. All right, guys, we’re getting to the end of the show here. Sorry, if you were on hold, you’re just gonna have to try to call us Monday morning at 615-367-0819 is the number to our office. And we’ll be more than glad to do our best to help you figure out what you need to do if you need help with tax resolution or even Tax Help. Now that the date has extended, we may have some additional openings. You can call us again Monday morning 615-367-0819. Or you can email firstname.lastname@example.org. If you have absolutely no idea who I am, check me out on the web. It’s pretty easy. It’s just drfriday.com give you the information, let you know what we have and where we’re at. That way we’ll be able to get you what you need. I don’t hear the music but I think I’m down to the last few minutes. So if you need help or if you need resolution, I hope you guys have an awesome Saturday. As I always say, call you later.