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Welcome to the Dr. Friday Radio Show recap for March 8, 2025! Dr. Friday, a financial counselor and tax consultant, discussed crucial tax topics, business regulations, and answered live caller questions. If you’re navigating tax season or dealing with financial concerns, this episode provided valuable insights and updates to keep you informed and compliant.
Key Topics Covered:
- Beneficial Ownership Information (BOI) Filing:
- Deadline approaching (March 21, 2025) for businesses registered with the state.
- Applies to LLCs, S-corps, C-corps, partnerships, and other entities.
- Failure to file results in penalties of $592 per day.
- BOI is required for transparency in ownership to prevent money laundering.
- Tax Filing & Extensions:
- Corporate tax returns (Forms 1065, 1120S) due March 15, 2025.
- Importance of filing an extension to avoid penalties.
- Individual tax deadline and when to consider filing an extension.
- Handling Missing Tax Documents:
- What to do if you haven’t received all necessary forms.
- The importance of estimating income to avoid penalties.
- Job Changes & Tax Implications:
- W-4 form adjustments when switching jobs.
- Checking the right boxes to prevent under-withholding.
- Married couples and how incorrect W-4s can lead to unexpected tax bills.
- Gifting & Tax Consequences:
- Gift tax exemption limits ($18,000 per person in 2025).
- Gifting real estate and how the recipient’s cost basis is determined.
- Potential tax liabilities when selling gifted property.
- Charitable Contributions & Deductions:
- Standard deduction vs. itemizing for tax benefits.
- How to maximize tax savings through direct IRA charitable contributions.
- Donating vehicles: necessary documentation and valuation.
- Capital Gains & Roth Conversions:
- Long-term capital gains tax brackets.
- Strategic Roth conversions to minimize tax burden.
- Tax-efficient ways to manage stock and investment assets.
- Upcoming Tax Code Changes in 2026:
- Expiration of the current tax brackets.
- Potential increases across income levels.
- Implications for long-term tax planning.
Transcript
She’s not a medical doctor, but she can sure cure your tax problems or your financial woes.
She’s the how-to girl. It’s the Dr. Friday Show.
If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986.
So here’s your host, financial counselor and tax consultant, Dr. Friday.
Hey, I’m Dr. Friday and the doctor is in the house.
And we’ll be able to take your calls live today at 615-737-9986.
615-737-9986 is the number here in the studio.
So if you’d like to reach us, you can give us a call.
We’re working on taxes ourselves here in the office.
So if you have a question on preparing your tax return, maybe you’re dealing with something else, as far as maybe something came up in 2025.
Usually we have a lot of people that are either selling homes or inheriting property, and they’re not always sure how that’s going to affect the taxes.
Maybe you’re working on a conversion.
All of those come into play, to be quite honest, as we get going here in the real world.
So if you have a question on that, don’t hesitate to give us a call here at 615-737-9986.
615-737-9986.
We’ll take your calls, taking things.
I do want to start out the day or at least start.
We may have probably covered this a couple different times.
Beneficial ownership information, BOI.
We talked a lot about this last year.
And then we said, wait, you didn’t have to do anything with it because, you know, it came back and they said, oh, we’re going to take it to court and we’re not going to be dealing with this.
And then boom, guess what?
They’re dealing with it.
So this is something that’s very important that you need to make sure that if you are any entity that’s registered with the state, so that would be single member LLCs, sub-S corporations, C corporations, partnerships, any of them that are registered with the state, the BOI is filed through the foreign banking.
That’s what it has to do with FinCEN.
And the purpose is to be able to share your business information with the government, basically, to make sure that foreign investors or anyone is in there, that that is being provided to them, basically for money laundering.
It says the purpose behind this is to prevent money laundering and other federal crimes, improve corporate accountability, and asset law enforcement in investigation, and assist lawyers, laws in investigation.
Sorry.
That’s what they’re basically saying to us.
So I’m just passing.
The most important part of this is we did talk before about how the penalty, it does say that the penalty will be $500 a day if you don’t comply.
So this was as of February 27th, this new update you have until March 21st, 2025.
And now they’re saying, I’m sorry, the results of the penalty will be $592 per a day if you do not comply.
So again, this isn’t something we want to play with.
It’s not a tax situation.
So don’t think that your tax person’s really going to be dealing directly with that for you because it’s nothing to do with actually taxes.
You have to upload your driver’s license and or passport for all members that own more than, I believe, 10%.
So very, very important meeting that deadline.
If you have started a new business, let’s say the first day of January, then you need to be doing it within 90 days.
So again, you need to make sure this is something that you are on top of.
If you have someone that’s helping you with setting up a company or dealing with that, it does need to be dealt with on the level of what you have.
So again, corporations, LLC, similar entities.
This basically includes registration before January 1st, 2024, which was submitted by January 1st, 2025.
Entities registered on or after January 1st, 2024 only had 30 days of this registration.
All owners that are 25% or more.
Okay.
So we got that straight now.
25% or more beneficials as an individual who meets one or more of the following.
They are controlling exercise, substantial control of a company, or they own 25% or more.
There is an exemption.
Over 5 million is an annual revenue.
So if you have more than 5 million, you’re exempt.
More than 20 full-time employees in the U.S. operating under the United States.
Publicly traded companies are some of the excludable situations.
So again, if you have a larger company, more than 20 full-time employees, you are meeting and complying through probably labor laws.
So you’re probably meeting that expectation.
So hopefully that will help you because I want to make sure.
I mean, that’s going to be, what, another week or so away.
And if we don’t do it, and then if you’ve started a new company as of the 1st of 2024, you need to be doing it now.
I have not yet seen any kind of penalty letters or anything, to be quite honest with you at this point.
But I think in the big picture, it’s just a matter of time before those will start coming in.
I think they’ve had a few starts and stops on doing it.
And you can go right on to the B-O-I-R dot gov.
It’s basically the fitness and website that you can do.
And it’s free.
There are some websites you can do and they’ll pay and help you with it.
But I do suggest not to ignore that if you’re a business owner.
So if you’ve got a question, that’s great.
We can deal with that as you go.
Again, the phone number here in the studio, 615-737-9986.
615-737-9986.
Taking your calls, talking about my favorite subject, which is taxes.
So if you have something you want to deal with or do, that’s perfect.
Send those over or just text or email.
We’re also looking at those to make sure we have everything going on.
There is some basic questions.
I mean, obviously, I’m going to tell you right now, if you haven’t received all of your tax documents, I have a person that says, what if I haven’t received everything yet?
I would say at this point, you might want to consider an extension.
You don’t have to.
You still have about 30 days before.
But in my opinion, again, it’s not so much that you don’t have the ability to file on time.
My bigger concern is either rushing through and making sure you’ve got it versus just taking the time.
That being said, I am an avid believer that you do need to make sure that you have filed some taxes.
So if you already know with what you have, even if you’re missing something and you make an educated guess and you say, hey, I’ve got another $20,000.
Maybe I haven’t received my stock portfolio or something because of some delay.
Then you can turn around and say, OK, that’s great.
So let me go ahead and estimate if I have this.
This is what I think is going to be due.
And then that will be a lot easier for us to deal with.
So just just putting that out there.
Always better to preempt, especially this close to making your first quarter estimate.
If you have to make them anyways.
In my world, I mean, if I almost always try to overpay because I need to roll that into the next year anyways, and I’m estimating because I haven’t finished the 2024, for example, my first quarterly estimate is April of 2025.
Well, if I haven’t finished 24, I’m really using 23’s number to estimate.
So if I’ve overpaid, assuming that I’ve made more money this year than I did the year before, then I need to go ahead and just add more to it to just keep it rolling.
So that’s that’s the important part of that conversation.
I know a lot of times I’m not a big fan and you guys all know this.
I’m not a fan of receiving huge refunds.
I’m not.
It’s not necessary.
I have sometimes people that will get 10, $12,000 every year because they just they just want to make sure that they have overpaid.
And sometime in the past, they underpaid.
And when they did that, it became a problem.
So it’s just important that they basically feel like that.
But in my opinion, I much rather make sure I pay 110% of the year before and then let the money grow, put it in a CD or savings.
Maybe you will owe that money.
But, you know, it you know, why give it in advance?
They’re not paying you interest.
There’s no advantage to any of that.
So just just my personal opinion.
There’s no reason for us to do that.
So that’s my two cents.
I’m going to move on now.
Next thing where I’ll talk about a little bit is getting your tax forms together again.
If you have the best way to know if you’ve got everything is look at the year before.
Right.
That’s at least our first thing.
And then if you know, I changed jobs this year.
Oh, let’s talk about changing jobs.
Two or three of my clients.
Thank goodness they changed jobs up, you know, went to a better job.
That’s wonderful.
But almost every single one of them, in fact, every single one of them have owed money this year, because whenever you change jobs on the W-4 form, when you fill it out, it says, do you have does your spouse have a job?
Something like this.
I’m paraphrasing.
But does your spouse have a job or do you have a second job?
If you don’t check that box when you’ve come from one job going to another job, it is going to take too little of taxes out because it starts the tax code all over again.
Thank you for one of my clients.
We were doing a bit of a study on it and we figured out that that was very, very important to make sure that box was checked because when we didn’t check it, it became a lot.
He had a lot less coming out of his or a lot.
Yeah, he was paying a lot less out of his check.
So we figured out that that’s where the problem was, because when you’ve already earned maybe 40, 50 grand or 100 grand at one company and now you’re starting halfway through the year at another company, the last thing you want to do is restart the tax code.
That’s going to be a problem because, you know, they’re going to basically take half the taxes out and then I’m going to wave on and have to tell you, unfortunately, you owe Uncle Sam and that’s never something you want to hear.
I’m just saying no one ever lines up and says, yay, Friday, that’s so awesome.
No, never.
So just putting that out there, making sure we’re on the same page.
And then, of course, we have the situation with making sure that if you are starting a job and you’re married, you know, and you guys are making more than 150 combined, you may want to either go to box four on the W4 and have some extra withholding coming out to compensate for the fact that, again, especially with that box not checked, we found this on a married couple.
Both of them make around $95,000, $100,000.
And this year, for some reason, a lot of people updated their W4s, right?
Because you’re supposed to do it every year, but some employers don’t.
But they did.
And so they went in, they checked single or married, excuse me, and then they put in, maybe they have each, maybe they have one child, but they each put in that $2,000 because they’re married with one child, right?
Again, if you’re married with one child, both of you should not be claiming that child because, well, there’s only one child.
And the other side of that is if you’re married and you don’t check that box, that’s telling the government that you are supporting a spouse and a child.
And in most cases, both of you are working.
You’re not supporting each other.
So either go single so you have the more money coming out, especially if you’re running into tax issues, always better to always go single and zero.
I had a client say, I can’t claim single because I’m married.
The tax code doesn’t have anything to do.
That’s how much money’s coming out.
Or go to box four and figure out, hey, I was short $3,000.
Multiply that by the number of paychecks you have left and have that extra money coming out because you do not want to have to deal with that later, right?
Okay, we’re getting ready for our first break.
So when we come back, we can get to your phone call, 615-737-9986.
615-737-9986.
We’ll be right back.
All righty.
We are back live in studio.
You can reach me here live.
615-737-9986.
615-737-9986 is the number here.
And again, if you have any questions, maybe you’re dealing with taxes now or taxes for 2025.
Both are good ones to deal with.
So feel free to just let me know if I can help on that.
We have been working a lot on, obviously, corporations are due on 315.
That’s next week.
So if you have not filed your corporation yet or your 1065, 1120, 1120s or 1120s can be actually April.
So 1120s and 1065s are the main ones.
And if you haven’t filed those, you need to make sure you filed an extension because they’re due next week.
And then we can circle back around and take care of them.
But again, extensions or file your business tax returns that don’t fall on your personal return by next week.
We have Brandon in Murfreesboro.
Let’s get him on the line, please.
Hi.
How are you doing, Dr. Friday?
I’m doing great.
What can I do for you, Swinny?
My question was, we plan on getting my 15-year-old son a car this year.
And I was wondering, do I need to, or is there any advantage, I guess, to claiming that on my taxes?
Or should I just buy him a car?
Well, you might be able to claim, depending if you’re itemizing, the additional sales tax that you pay will be something that you can actually use if you itemize.
Otherwise, there’s no place on the tax return to put it.
Okay.
I guess I was wondering about, like, as far as, like, gifting, you know.
Good question.
Now, for the children, we don’t really get into that.
But theoretically, the parents can give him a $36,000.
So, if the car is worth more than that, I need to move into your house.
No, I’m just joking.
Brandon, but, yeah, if the car is more than $36,000, in theory, but is it going to be titled to your child’s name?
Or is it still going to be titled to your guys’ name?
Just curious.
I mean, I guess it’d have to be titled under my name since he’s underage.
That’s what I was thinking.
At least at this point.
So that’s just for adults.
Yeah.
Giving to adult children.
And you’ll cover it with your insurance and everything until he gets to the age where he can switch it over.
At that point, you could gift it to him without a problem.
But if the car does have a street value more than $36,000, then you would actually just need to do a gift tax return.
It wouldn’t really cost anything, but you do need to do that.
Okay?
Right.
All righty.
Thank you.
Hey, great question.
Thanks, Brandon.
All right.
So if you have a question, I like it when people are preempting their thoughts because that way we can make sure we’re hopefully working in the right direction.
Not always, but sometimes.
Sometimes we’re not always working in the exact same position that we would normally.
But if you have a question or you have something you want to deal with, give me a heads up and I will try my best.
If I don’t know the answer, I will definitely get someone that is an expert in that section and try to help you out to do what we need to do.
So if there is any kind of situation where maybe you have sold some property and you don’t know the basis, the IRS has, they have kind of come up with their own concept on this.
I shouldn’t say their own concept.
It’s black and white.
If you don’t know how much was paid for the, if you inherited it, then there’s a step up in basis, right?
That’s pretty easy.
You can get someone to give you a value of the property at the time of the passing of the individual you inherited from.
But I have run into a number of situations where the grandparents or the parents have just signed title over to a child, a grandchild.
In doing that, keep in mind that you need to know how much was paid for that property at the time.
Otherwise, you know, you will have a situation where they’re basically to say your basis is zero.
So if grandma has a piece of property and she brought it 40 years ago and maybe they brought it for $5,000 and now she’s, uh, she gifted it to you.
And now you’ve either sold it or built onto it.
Your value would only be the 5,000.
It is not the step up in value that people get when you inherit.
There’s a big misconception out there on that.
So a lot of times people think, well, um, she just signed it over to me and it was valued at 500,000.
So that’s my value.
No, that is not your value because you did not inherit.
She gifted it to you.
So very important to understand that, to be quite honest, because I’ve had a couple of cases where people were under this, this concept that they didn’t think they were have to pay any tax on something that they were gifted.
So again, um, very important to understand how that works and where you’re going to get it because gifting is never the best idea.
I mean, sure.
When mom and dad buy a car and then maybe when you, you turn 21, they gift it over to you.
That that’s a pretty straightforward and that’s street value.
And it’s, it’s not the same thing at all.
Um, but when you’re actually talking about, well, I shouldn’t say that.
I mean, if it’s a Maserati or something that’s collectible, then there would be a situation under the same situation, whatever the parents paid for that at the time they paid for it would be the value.
And if it’s appreciated, there are cars that do, um, then you would, and you sell it, you would have a taxable situation.
Um, but up until that time, basically in most cases, that’s not a big difference.
So I just want to make sure we’re all on the same page when it comes to, if somebody gives you something, um, and you have a value to it and you turn around and sell that thing.
And it’s worth a lot more than what they paid for it.
Not what they gifted it or whatever, what they paid for it.
Then you need to make sure you’ve got that covered.
So, um, cause again, I’ve got to, I just saying that because I’ve got a number of cases that have come in the door, uh, recently that have basically been where they thought they were paying zero tax until, well, until they woke up and realized that’s not the way this works.
So, um, okay.
You can join the show.
615-737-9986.
615-737-9986.
Have had a couple of people.
Cause they’re not sure exactly what’s going to happen, um, in the stock market.
And guys, we’ve been doing this show for over 15 years and we’ve had ups, downs.
Um, and we all know that, you know, yes, sometimes things that happen in politics do affect the stock market for small period of time.
Um, I, I don’t think, and I’m not a financial planner.
Let me throw this out there right now.
I’m not a financial planner.
I do taxes, but I think you need to talk to a financial planner before you decide that you’re going to just take all this money and, and take it out of your retirement or something.
Cause you’re afraid of losing it.
You don’t have to take it out.
You could put it into, I suppose, savings bonds or a money market, something where maybe it’s at least getting interest, but you’re not cashing it out.
Because I do think that that’s a problem.
Um, because now you’re causing yourself a huge tax situation.
In my opinion, again, guys, um, that you don’t need to have.
I get it.
Nobody wants to have a mortgage when they’re thinking about retirement, for example.
But if your mortgage interest is 3% and you’re averaging 4% or 5%, why not have a mortgage?
Because you’re earning money on that money.
So you’re, you know, making 5% and I’m giving someone else three.
I’m still making 1% to 2% on someone else’s money.
If I took it all out and paid off the mortgage, I wouldn’t be making that 1% to 2%, right?
So it’s important to understand how that works and what you want to do with it.
That’s all I’m saying.
Don’t just jump to the conclusion and don’t, don’t run scared.
Talk to a financial person.
Um, I will also say that, um, a lot of people I talk to, cause I often talk to individuals that we, uh, deal with things.
You’re not really preparing for the estate planning, right?
I mean, you do need to make sure that you’re dealing with that as well.
Um, but let’s, before we hit the break, let’s go ahead and get Alan on from Franklin just so he doesn’t have to wait through the break.
Hey, Alan.
Uh, I want to ask you about some, a couple of gifting questions.
Sure.
Uh, if I understand it right, I can gift $18,000 to my children.
Anyone.
Okay.
Anyone.
And they don’t have a, they don’t have a tax burden on that.
They don’t always, no matter how much is gifted.
Alan, that’s a great question.
I didn’t say that, but it’s the giver that always pays the tax.
So if I’m going to give you 18,000, I would have had to pay the tax or will have to pay the tax, uh, before, but the receiver never pays.
Okay.
Okay.
All right.
If I gift my children real estate, uh, and later they sell it and, you know, probably would someday.
What happens then about taxes?
Then you’re gifting it at whatever you paid for it.
So you’re gifting it at, let’s just say you paid today, $200,000.
So you’re gifting the value of that to them at the value of yours.
And then when they sell it, they’re going to pay tax on the difference between what you gifted the value at and what it was for.
And that’s why I don’t like quick claims because a lot of times people will quick claim something for a dollar, even though they have more invested in that property when they quick claim it.
We’ve had cases where the IRS has only allowed the people a dollar for that quick claim.
Uh, so again, I would, yeah, I would always, if quick claiming is something anyone’s thinking of, if you have 200,000 invested, the reason people do it is because the title of the, was at the county clerk’s office where you register, they’ll, you’ll have to pay a tax on it at whatever dollar amount you, I know that because I do some quick claiming with properties.
When I buy them from the individual, I’d rather pay that $600.
It’s never very much, you know, a few dollars.
And then that way you’ve preserved your investments to your child or whoever you’re gifting it to.
It’s worth the few pennies versus the dollar that quick claims it, unless you’ve got a HUD or something that could prove how much you paid for it.
You probably could back it up that way, but people lose documents.
Okay.
I have quick claimed some property before myself.
So I need to remember that.
Yes.
And if, I mean, and if the property is still with that person, you’ve quick claimed it.
I might suggest if you have any kind of additional paperwork you can provide to them, you know, later the, they’re going to need that possibly.
I mean, obviously they may be able to get away with it and not, but I, while you’re still here and have the evidence, it would be a lot easier on them as my two cents on that.
Okay.
All right.
All right.
Okay.
Thank you.
Thank you very much.
Thank you, sir.
I appreciate the call very much.
All right, guys, we’re going to get ready to take our last, our last break, our second break.
We’re only halfway through the show.
Look at me.
And if you have a question, great question from Alan and from our prior caller.
615-737-9986 is the number here in the studio.
615-737-9986.
And when we get back from this break, we’ll take some of your phone calls.
We’re also going to talk about some of the upcoming things that will be changing in 2025, potentially.
Assuming that, keep in mind, the tax law we’re operating under today is set to expire on December 31st.
Kind of important question or information we have there.
So just want to make sure we’re all on the same page.
All right.
We’re going to get ready to take our second break.
You can give us a call back here in the studio.
615-737-9986.
We’ll be right back.
All right.
We are back live in studio.
Is there anyone on line one?
I don’t think so.
I think it’s just lit up.
You can reach us here in studio at 615-737-9986.
615-737-9986.
Again, talking about taxes.
If the 2025 tax season, or what I’m considering 2025, the tax season ends, when we file in 2026, that will be the end of the tax code we know today.
It expires as of December 31st, 2025.
We will then go back up to 10%, 15%, 25%, 28%, 33%, and 25.
The highest bracket will be now 39.7, where right now it’s 37.
So we’re going to go up every class.
So they always say these are really helping the rich, and that’s baloney.
But anyways, it’s going to hurt the middle class the most because the individuals that are now in the 0% to 12% will be 3% higher because you’re all being 15.
And then people in the 22 will actually have to be 25.
So that’s like a 6% increase on the normal individual people that were between 25 and then another two more for 28.
All right.
I see my boy is typing away, and this is so awesome.
Let’s go to the line.
It looks like Susan in Hendersonville will be first, and then we’ll go to Chris.
Hey, Susan, how can I help you?
Yes, ma’am.
I’ve heard two different opinions on this, and I want to find out the right one.
What it amounts to, I use the short form.
I have someone do it for me through the computer.
But this past year, I’ve made sizable donations to nonprofits through my choice.
And also, I donated a car to one of these organizations that was valued at $5,000.
My donations probably come to a couple thousand.
I was told by someone that even though I do the non-itemizing, that I can count that off even though I get the standard deduction of whatever it is, $14,000 or whatever.
I’ve been told, yes, I can.
No, I can’t.
What is the right answer?
The answer is no.
You have to exceed the $14,600 or if you’re over age 65, another $1,500 above that, which is like $16,100.
And if you don’t have, and again, this would be made up of your sales tax, your property tax, mortgage interest, charitable contribution, and possible medical.
If all of that exceeds the $14,600, sure, the charity will work.
Also, you have to understand on the car, if they did not sell that car yet, or if they haven’t given you a sheet of paper, we can no longer just use blue book.
We have to have a letter from the nonprofit you gave it to saying this is what they received for that vehicle.
If they haven’t sold it yet, you cannot claim it.
We can’t put it on the books unless you have a secondary letter saying this is the value.
Maybe you do.
I’m doing that more for the whole listening audience.
Giving a car away is no longer quite as simple as it used to be where we could just take blue book value, put it in there, and show that we gave it to some organization.
Excuse me.
They’re not selling this car.
I’m giving it to the views in the organization.
They’re not going to sell it.
And they have to make sure they sent you a letter saying the organization has valued this car at this dollar amount.
Otherwise, what you say the value is doesn’t hold.
They have to give it to you on a letter.
Okay.
I do have that.
Okay.
Perfect.
So, yeah.
So, if you’ve got $5,000 plus another, so you’ve got like $7,000 or $8,000 in charity, so you still need another $7,000 almost to itemize.
So, do you have a mortgage and property tax?
No mortgage?
Yes, no.
My home is paid for, but I do have property taxes in the county and the city, which comes to about $2,000.
All right.
So, that gets us to $10,000.
And then you will have some sales tax depending on your income and or what you can put in.
Even if we say it’s another $2,000, I don’t believe you’re going to be hitting itemizing because we have to be $14,600.
And if you’re over $65,000, $16,000.
But, in other words, if I don’t itemize, I cannot count these donations.
You don’t get to deduct it.
No.
Okay.
Okay.
Well, I just wanted to make sure that I was being told the truth.
Sure.
Thank you so much, man.
I’m glad you asked that question.
Thank you so much.
All right.
That was a great question.
And I will add a little caveat to that.
If you are a person that is 70 and a half and older, you do have a IRA.
I know you’re going to say, hey, I don’t have to take my required minimum distributions till 73, but you can start at 70 and a half out of your IRA.
You can take a qualified charitable deduction.
Take the money basically out of your IRA.
And you don’t do this.
You do this through the custodial.
You’ll tell them, hey, I want to give this to St. Andrews or whoever you might want to give the money to, whatever qualified nonprofit.
They’ll give you a check.
And then that is a dollar for dollar deduction.
You do have to report it.
You have to put it on there and it has to track through.
You need to get a letter again.
Normally, we can get that directly from the custodian saying this.
And then normally, we’ll get one from the organization as well.
But again, just that is the only people that can write off charity that if it’s done correctly, right through the custodial and out of your RMD, then you can write it off and you do not need to itemize.
This will be something outside of that.
Otherwise, you can only itemize charity in the year of 2024 at that time.
Now, again, back in 20 and 21, we all know there was like a $300 or a $600, depending on the year, where we are a love above the line standard deduction.
But that is not on the books any longer.
So you won’t have that as an option.
So anyway, so hopefully that will help anyone that is thinking about giving.
And like I said, nothing wrong with giving a car or anything else.
Cars are a little tricky, like I said, because you do have to.
It sounds like she did it 100% correct.
But you do have to get a letter from the organization basically saying what the car was valued at if they were not going to be selling the car.
Then that was an important thing.
I will also say something.
I had a conversation with one of my clients and we got into talking about charity and how they’ve always given quite a bit of money charity.
And I’m asking them because they’ve got also a large amount of stock.
And I said, have you ever thought about giving the stock to your church that you normally give and let them sell it?
And that way you would get the sale price as a deduction.
Yet you don’t have to pay the capital gains on that stock.
Same thing as if you have a piece of land that you want to sell.
And maybe you would then turn around and give that money to a charity anyways.
Give the land to the charity.
Let the land be sold through the charity.
You would get the value of the current, not what you pay, but what it’s worth on your tax return as a charitable deduction.
They then would have it and you would not have to pay the capital gains.
There are some of those kinds of things out there available for us.
But, you know, again, not always is that ever marketed very often.
So just want to make sure that you have that information on your books just so you can, you know, I mean, if you have something and especially when you’re looking at your estate planning or other situations.
Again, another thing, if you have a trust and you guys know, I believe we were going to talk before the last break about having a will or trust.
I’m not an attorney.
I’m not an estate planner.
I am a tax person.
But all of that feeds back through my world because whatever you do, a lot of times, either the people inheriting or the estate itself will have to deal with some tax issues.
And there are ways of making it less painful.
One thing would be is instead of having a trust inherit your IRA, which has limitations, especially under the current tax law where a trust has to distribute within five years, at least an individual can roll it into an inherited IRA.
And they’ve got 10 years.
So if you’ve got four or five people that are inheriting, split the IRA up between them directly through the custodial.
So at time of death, paid on death, I believe is what they call it.
Have the IRA split to them.
That person can individually decide if they want to cash it out all at one time or if they want to do that over a period of time.
Because otherwise, it’s going to be taxed at a higher rate through the trust and also limited time to do things.
So if you have an estate situation, you want to go over all of that with a good estate attorney, a good financial planner, and your tax person.
Make sure they’re all on the same page so that you can make sure that you have what you need when you need it.
And let’s be honest, once we’re not here, it’s not probably going to make a huge difference on all that.
But it is going to affect the people you really worked hard to put the money in their pocket.
You worked hard for them to inherit it.
And then you turn around and find out that it was, well, just not as good on that situation as we would have liked.
So we just want to follow up on that.
Make sure we have all of those in the right place.
If you’ve got questions, again, you can join the show, 615-737-9986.
615-737-9986.
Taking your calls, talking about my favorite subject.
What’s going to happen at the end of 2025?
How is that going to potentially affect us?
The potential sunset of the current tax rolls?
And what do we need to probably be considering?
And we’ll be talking more and more about that.
And then also the BOI, the business owner’s information.
I’m going to be pushing that hard since we only have about a week.
And also if you have a corporation or a 1065 that has a March 15th filing deadline, make sure an extension has been filed.
I know our staff, we’ve been working on them and we’re going to be finishing all of the ones we usually file here.
What that’s going to be.
But make sure, confirm, make sure you’ve got an extension filed.
The penalties can be quite heavy for not filing an extension.
And you just want to make sure that that’s going to be available.
We’re going to be ready to take our last break here for the show.
So if you’ve been waiting, you’re like, oh my gosh, I want to really have a question.
But I didn’t know if it’s, you know, for one, there is really no silly questions.
There’s no stupid questions.
We’re all trying to figure out how to do things in life.
And, you know, I’ve been lucky enough to be doing this for about 30 years as an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.
So that’s what I do.
But you don’t want me fixing your kitchen sink or probably doing anything along with the mechanical side of things.
So if you have a question that maybe I can help with, that’s what this show is here for, to get people thinking and also just to kind of preempt.
And then you can go get the advice from your personal tax person, see how it applies to you.
But at least make you think about how it’s going to work.
So that way you don’t go do something and then have to go backwards.
Because most of the time in taxes, you can’t go backwards.
All right.
So if you want to join the show, 615-737-9986.
We’ll be right back with the Dr. Friday Show.
All righty.
We’re back here live in studio.
And we will take any calls at 615-737-9986.
615-737-9986.
Taking your calls, talking about all the good things.
And then if we have any, if you want to, you can also email Friday at drfriday.com.
Or you can check us out on the web at drfriday.com.
So that way we make sure that we have everything the way we should.
And again, if you have tax questions or maybe you’re working on what you need to get your taxes done, then, you know, hopefully if you have a question doing that, I’ll be more than glad to at least lead you in the right direction.
Help you figure out what that’s going to be or where we’re going to be at.
So that way we can, you know, just make sure everything is moving around the way you want it to and that you’re not going to get yourself into any kind of situation or what kind of tax documents you might need to make it work good for you.
So if you have any questions, again, you can call the studio at 615-737-9986.
And it looks like we got Brian on the line.
Let’s get Brian to join the show.
Hey, Brian, what can I do for you?
Hello, hello.
Last year, I did not have to file.
This year, I have made the same amount of money from the same sources, maybe a couple hundred dollars more.
Has there been any rule changes where I would have to file?
No.
In fact, there would have been probably an increase in your standard deduction, which is what we use partly to figure out if you have to file or not.
So if it’s only a couple hundred increase, then I think we had a $600 adjustment.
So most likely no change at all, Brian.
Wonderful.
Great news.
Thank you very much.
No problem, sweetie.
Thanks.
So, and that’s always nice.
It doesn’t happen too often in most of our lives, but it’s always nice when we can actually say that we don’t have to file anymore.
Again, not something I expect that many of us will have, but when it happens, it’s a nice thing to have happen.
And, you know, again, way to figure that out is taking half of your social security, adding that to your other income.
And if everything, if that half plus that adds up to less than $25,000, you’re pretty safe for a single person.
But you should always double check that with a tax person just to make sure, you know, nothing’s changed or what you think is income and what the government has maybe submitted is a little different.
I’ve had a couple of times when people have thought they weren’t going to have to file, but then they didn’t realize that they had some capital gains and the capital gains may have been zero tax, but without reporting the basis, the government didn’t know what it was.
So, or if you have a home sale, and even though you might not qualify for having to pay taxes, you may need to file those taxes to make sure it works, you know, so that the government doesn’t come back and say, hey, you have a home sale and you didn’t tell us about it.
So, you know, that is, you know, on you.
And so you’ve got to prove this to us or whatever.
So just making sure that we have the right information and everything is going to be there and moving forward.
So if you do have someone that maybe hasn’t filed taxes in the last number of years, or maybe you’re getting a lot of love letters, you know, it’s very important to deal with those, right?
I mean, you don’t want to just be throwing them in a drawer or using them as fire status.
At some point.
And the funny thing is, at some point when you are down and you let’s say you you’re sitting there going, I’m barely making it.
I can’t even keep the doors hardly, you know, or the roof over my head or anything like that.
You need to make sure that you’re dealing with those letters because sometimes there are deals.
There are there are abilities out there to make a deal with the government.
I will tell you this, though.
When you’re hearing on this station and other stations something to do with, you know, basically, you know, 15 cents on the dollar or 10 cents on the dollar.
Those are for individuals that don’t really have a lot of assets.
They don’t own a home.
They don’t have a 401k.
They don’t have a savings account.
Then, yes, those deals can be made.
But if you have those, there is deals, but sometimes not quite straightforward.
All right.
We only got a few minutes.
Mike in Nashville.
Let’s get you on the line.
Hopefully I can help you out.
Hey, Mike.
I’ve got a question.
Yes, I’ve got a question for you.
Right now, I’m doing some Roth conversions every year.
Yeah.
Yep.
And I’m about I’m 67.
So I’m planning on doing Roth conversions for several years.
Sure.
But the question I’ve got is, would it be beneficial for me, say, every three or four years to take my long term capital?
I’m going to do the Roth conversion.
I’m going to do the Roth conversion.
I’m going to do the Roth conversion.
I’m going to do the Roth conversion.
So that’s probably a financial planning question.
I know what you’re thinking, though.
I’m going to cut just really quick just because for other listeners.
He’s thinking that long term capital gains, for one, you might not actually have any taxable income if you can do it right.
Is that what you’re thinking, Mike?
Yes.
OK, because long term capital gains rates, if he’s single, as long as he keeps his income under about fifty five thousand and married under about one hundred and ten.
And that’s estimate.
There is no capital gain.
So I think if he harvests that and then turns that back into an after tax investment.
But the problem is the nice thing about the Roth, Mike, is it grows tax free.
You may never even need it.
And then someone inherits it tax free where the capital gains does get a step up in basis when you pass away.
But if you harvest it now, you’re going to have to reinvest it into stock anyways.
Most likely.
Again, I’m not a financial planner, but it will always require you to cash out to pay taxes.
Right.
You can’t get it to grow tax free like you will with your Roth.
That’s my answer, I think.
OK.
Does that make sense?
All right.
Kind of.
Yeah, it does.
Thank you.
OK, thanks, Mike.
I appreciate that question.
Probably double check a little of that with your financial planner.
But that’s my the nice thing about having it in a after tax stock account.
In my opinion, it will keep growing.
You could take a little out every year at the lower tax bracket, potentially not knowing Mike’s situation.
And then if for something happens to him, whoever inherits that account will get a step up in basis in the stock.
So they’ll never pay the capital gains.
So in essence, if you have money in an after tax and a non-qualified and it’s growing, people inherit almost tax free.
And most things unless it’s an annuity or something.
And then you also have the Roth that people are growing and they will inherit that at tax free and it keeps growing tax free.
So sounds like he’s making some good plans to grow and move things that direction.
All right.
So hopefully that answers most of your question on this beautiful Saturday.
Again, let’s just remind people, if you’re a business owner and you have an LLC or a corporation, even single members, if you are registered with the state, you are required to file the business owner’s information on FinCEN.
That’s F-I-N-C-E-N.
You can also Google B-O-I-R, I believe is what most of them business owners, business owners, informational reporting.
And you want to do that because the penalties are ridiculous.
So if you’ve got a company, you started in 2024 and you haven’t done it, you need to do it ASAP because they pretty much want it done all the time.
If you’ve had an older company, you have until pretty much March 21st, I think, to get it done.
Both very, very important.
If you want to get some help with taxes or you need some assistance in answering some questions, we’ll do our best.
We’ll do our best to get to those as fast as we can.
I will tell you the next 30 days are a bit crazy in this office.
If you need more assistance, you can certainly call our office Monday through Friday at 615-367-0819.
615-367-0819.
If you need an appointment, you can go to drfriday.com, click on appointments.
I’m sure Chris probably has some openings.
He’s great and he’s also an enrolled agent, so he can certainly help you with your taxes.
And we’d love the opportunity to get you on our books.
Again, at drfriday.com, click the calendar or schedule, and you can make an appointment at that time.
If you have questions that you, you know, again, emails are probably going to take us a little longer to get to than normal.
You can also give our office a call and see if we can’t give you a heads up.
Again, that phone number is 615-367-0819.
I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.
So if you haven’t filed taxes in a number of years, we’re the people that can help you.
If you owe money to the IRS, we deal with that.
Or if you just need help filing taxes, that’s what we do.
That’s the difference between us and many CPAs or attorneys is that we are basically only doing taxes.
It’s that simple.
We don’t have to worry about anything else, just taxes.
So again, 615-367-0819.
I hope you guys have an awesome Saturday.
Cop.
You later.