Another episode of the Dr. Friday Radio Show is here, and you won’t want to miss it! In this episode, Dr. Friday talks all about taxes, new tax updates, and answers the caller’s questions:
- Tax Filing Deadline Is May 17, 2021
- Why Haven’t I Received My Tax Return?
- The SBA Has New Grants For Small Business Owners
- The PPP Is Open Until the End of May 31, 2021
- How Are Taxes Going Up?
- Who Is Going To Be Audited?
- Will There Be A Penalty For Early Withdrawal From My 401K or IRA?
- You Can E-File Tax Returns
- How To Find Your Stimulus
- Who Qualifies For A PPP Loan?
and so much more!
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 0:29
Good day, I’m Dr. Friday and I’m live here in the studio. So if you have a question, the phone lines are open at 615-737-9986. We are taking your calls talking about my favorite subject only a couple of weeks left guys. Today is May 1, and we all know the deadline is May 17. So it is time to make sure if you haven’t filed taxes file an extension. Just a reminder, extensions are not extending the amount due, it only extends the paperwork required. So if you think you’re going to owe money, and you have the ability to pay some of it, my suggestion is to send a little of it along. Also, I’ve gotten quite a few phone calls this week, so I thought I’d go ahead and start the show out. For any of you that might be still in the marketplace, you have to file the 8962. Usually, many of you may have already done that early because you filed your taxes like we did. A lot of people with unemployment, if you did pay a penalty, if your income was exceeded the apt, then you usually file the 8962 to balance that out. Then you have to pay a portion of that back, they did waive that for the year 2020. It was a part of the American RescueAct that came in March 11, or 12th, of 2021. If you did already pay or you have it in the system to make a payment the IRS will be correcting. They’re asking people not if you have unemployment, and you filed early, or if you have 8962 or the repayment of the credits, do not file amended tax returns, they will be getting those corrected.
Dr. Friday 2:24
I also want to kind of put a little ear out there. I know a lot of people are looking for their refunds or looking for their stimulus checks their website is doing I’m assuming the best that they can do. Since I’m not a programmer, I don’t know how that all works very well. I will say that it seems like sometimes it doesn’t work really very well. But that being said, it is something that if you’re on the site, the IRS is running a little slow in doing the refunds. Some people seem to get it within 10 days, other people have been out 30-35 days. Keep in mind that the IRS now has to be matching for all these other things. If you have any unemployment if you’ve been on the marketplace, and you have 1095 and if you had stimulus money that you never received, all of these things are being added to the already extremely busy season for the IRS. So they’re having to make adjustments to make sure they’re not refunding money that is not entitled to that individual.
Dr. Friday 3:23
On the other hand, also making sure you’re not paying tax or not getting the refund that you should be getting with these adjustments. So my suggestion is to just keep watching, keep following. It may take a little bit longer than the usual 21 days. But the IRS is working on them. I’ve had some that were filed back in February in the website cell says the return has been received but they’re still processing. So I’m assuming they’re trying to match up information. Also, I know another problem that we ran into is the employer had not filed the W2’s and so they weren’t able to match up the W2 information on one of my clients with the information to the Social Security Administration. So we had to submit the paperwork showing we had a W2. All of these things are happening along with a large number of people also getting letters saying that they need you to contact them to prove your identity. I’ve never seen so many of these letters in one year. I am going to assume along with everything else the IRS is trying to find a way of stopping the fraud that’s happening with tax followings filings and people using people’s identity to collect money that they’re not entitled to. But I will say it does make tax season challenging.
Dr. Friday 4:40
If you’ve got questions and want to join the show, it’s an easy thing to do pick up the phone and call 615-737-9986. We are taking your calls to live here in the studio, but so if you have already filed your taxes and you’re just waiting for the refund, you can go to IRS dot govt irs.gov, click on ‘refund,’ you can also click on the button that says ‘where’s my stimulus.’ Those are both available. If you want to make a payment versus mailing checks my personal opinion mailing a check seem especially after last year, we had a lot of issue with them receiving them on time and then proving that they were filed because a lot of people just put a stamp on them would be to obviously go back to go to irs.gov, click on payment and make your payment online to make sure it applies to the right time period for the right information that you’re doing.
Dr. Friday 5:37
So again, if you’ve got questions on that, and keep in mind for all of my entrepreneurs, small business owners, and restaurants, the SBA has a new grant coming out for small business owners. That grant is going to be for individuals that are restaurant owners, bars, anyone that has food and drinks, pretty much wines, any of those. There’s a new one that’s out there, you can have that it’s just opening up, it’s an absolute brand new situation. So if you are a person that owns a small business, small restaurant, small venue of some sort, you are going to want to make sure that you get your information together and apply because I have a feeling there’s going to be a lot of small businesses applying for the rescue situation that’s going on out there. They’re really trying to get some money out to the small business owners to help them try to reopen their businesses. Again, this is only for individuals that are in small business restaurants. Mom and pops are the number one thing they really want to try to hit but they’re also for all businesses, even franchises. So getting that information if you need to know go to SBA.gov and you can find out a little bit more about what they have as far as available for federal grants and things to help the Small Business.
Dr. Friday 5:45
The PPP, the Personal Protection Program is still open until the end of this month. So you need to if you haven’t applied for PPP one or PPP two, and some people can get both of those. Remember, those are forgivable loans, those are not even loans, those are more like a grant that if you do everything correctly, you can get forgiven. That will be something that you also need to make sure that you’re not leaving these, especially if you’re barely trying to keep your business open. You can’t keep your employees hardly paid. Or maybe you’re the only employee. This is for individuals self-employed people. You haven’t been able to do any work, especially like my musicians and people like that. There is some help out there because I know unemployment really didn’t do a whole bunch for a lot of the entrepreneurs. So if you need help with that, the best place to go is honestly sba.gov. But if you still need additional help, I’d be more than glad our phone lines are getting a little better now that we’re getting closer to the end of the tax season. But you can reach us at our office or email email@example.com and I can send you some links to help you get started in the right direction. But don’t leave these kinds of things on the table guys, we need to keep all of our small businesses open. We need to make sure that you’re keeping your money and everything flowing so that you can create more income more jobs for the people that rely on your business to keep open.
Dr. Friday 7:18
So if you want to join the show, you can at 615-737-9986. We are taking your calls. Remember that you do need to file your taxes on time or there will be a late fee and all small business owners again I keep hitting but people didn’t have to be small LLC partnership Sub S corporations, corporations remember all those were due back on March 15. The state did not extend the franchise excise to meet the standard which we thought they might but they did not. So if you haven’t filed your franchise excise yet you need to file it as soon as possible. There will be a penalty at this point for not filing it on time unless you filed an extension. So that will be something you need to address as well. Of course, you had your business license. Also, there was no extension on that both of those were due around April 15. So if you’re you’re a few days late sooner you get that filed sooner, you will have fewer penalties. These are a few of the things that are coming. It’s just been a crazy year guys this year to be quite honest with you between trying to deal with tax law changes in March, a normal tax season that we thought we were going to finally be able to get people back on track dealing with PPPcforgiveness and also access to PPP and now a new one for restaurants and just getting over the COVID relief options that are out there to try to keep small businesses owner open.
Dr. Friday 9:59
It has been a very full year, and it’s only May 1. It feels like I’ve already been doing this for a while. So, I want to make sure all my listeners at least know what options are out there and what you have to choose. Because if you’re a business owner, or if you have rental properties, and you didn’t have rental income, you have a loss of rental income, there are things that you can apply for and try to get that will help offset some of your losses that the government is trying to help you with. Not sure how we’re paying all this back, especially things that are forgiven. But we’re gonna figure that out because I’m sure our government has steps in prions for that we’ll see. Then, of course, we need to talk a little bit about maybe some of the new tax laws that are being introduced. If you’ve got questions on those, or if you’ve got an approach that you have to share, you can share that on here.
Dr. Friday 10:48
Call 615-737-9986. We are gonna talk a little bit about some of the things that are on the table, under this news, I don’t know if it’s a 1.8 trillion, or if it’s just part of that one. The way that they’re thinking about using some of our tax dollars, giving a trillion dollars to the IRS to do more audits, things like that, we’re gonna get into a little of that, see if there’s anything we should be doing so that we’re not really worried if we get audited, but what’re the options? How can we protect ourselves a little bit, along with what other things are out there that we might need to consider? Is there any way that we can shield ourselves now from some of the tax changes that will be coming down the line? If you’ve got questions, or if you’ve got something you want to share on that subject again, you can join us live here in studio 615-737-9986. Or if you’re a little shy, you can also just email me your question at firstname.lastname@example.org. We’re live right now. So I can read your emails at email@example.com.
Dr. Friday 11:59
Then we’ll take your calls, we’re going to take a quick break here in just a second. And then we’ll get to your phone calls. And we’ll come back and we’ll talk a little bit about things you don’t want to miss on your 2020 tax filing, what we might need to be starting to prep for 2021. Some of the things that are going on in the news, as far as on the tax side and what that might mean for you and me when it comes time for us to prepare for our taxes. We’re going to take a quick break, and we’ll be right back with the Dr. Friday show.
Dr. Friday 12:33
All righty, we are back live here in the studio talking about my favorite subject taxes, taxes, and taxes. Do we see taxes going up? Absolutely, wouldn’t take a genius to see that when you’re looking at what President Biden has proposed in ways to pay for his 1.8 trillion proposals. Part of it’s not such a shocker, you know, eliminating the 37% for the what they call the proposed rich, take it back up to the 39.6. But the part that’s going to be a bit scary for many of us is households making over a million, which a lot of people are saying. But keep in mind if you inherit something, and that kicks you in because grandma and grandpa were smart enough to keep the basics and keep rolling it up and you guys decide to sell. I’ve had quite a few farms and things that have sold for more than a million dollars generations later, instead of right now that being at about 23.9% or 23.8% tax, which is the maximum tax they’re wanting to take it up to 39.6 plus the 3.8, you’re talking to more than 44, almost 44% tax on capital gains. That is crazy.
Dr. Friday 13:53
I’m sorry, that is totally crazy. Right now they’re also wanting to keep the 20% capital gains tax on Investment Securities held for at least over a year. Of course then if your income over $400,000 and something that’s when the additional 20 and then the 3.8. So again, you can be up to almost 23.8. Now, that’s almost 25% of your profit on something that was held for a little over a year going to the government that at least is something you might be able to swallow. When you’re talking more than 42 or 43% tax going to the government, that I think is just crazy. I’m not too sure where they thought they took the risk to do anything but you know a family that has held on and had a family. Now I will say if it’s a family farm that is a still working family farm and or business he has put an exclusion out there for them because we also would happen family farms that actually couldn’t afford to be farmers any longer because the inheritance tax almost put them out of business. That wasn’t that long ago when the tax on inheritance was so high that you know you were basically closing down family businesses.
Dr. Friday 15:03
The biggest question is this. So the step-up in basis, which we use all the time. So let’s just say today you have a house, let’s say it’s worth $100,000, you pass away. You bought that house originally for 20,000. But you pass away and it’s worth 100,000, and your children then inherit that house at 100,000, they sell it for 100,000, there are no capital gains. Under what Biden wants to do is you bought that house for 20,000, which, of course, to be quite honest, sometimes people have homes that they’ve owned for 30-40 years, and it’s hard to find out what the original purchase price was. So when you pass away, you pay 20, the children will pay 20, and then when they sell it, they’ll have to pay tax on that $80,000 of capital gains on that house. Right now, that does not exist right now, we have what’s called a step-up basis, which is supposed to help generations accumulate assets. It’s supposed to be help values over generations to increase the family assets it does all the time. I know people that their parents purchased the home for 30,000, and now they’re selling for $200,000. The children inherit those homes for that dollar amount. And then their parents have passed on the wealth of that home to their children tax-free, which allows those children to maybe pay off their own personal homes and to do the same thing for their children and etc. That’s the way the hardworking American family is supposed to happen in America. Not 40% of it whenever it happens, or a minimum of 20% going to the government every single time. If they continue to write checks for $1.8 trillion, don’t be surprised that you’re going to lose 20, 30, 40% of everything you own going to the government because there’s no possible way that we’re going to continue to pay this debt without it.
Dr. Friday 16:52
When President Biden came in, he said, “Oh, we’re not going to affect the everyday person, we’re only going to go after the wealthy.” Well, step up in basis is going to be something that affects everybody. It’s not just a wealthy tax, this is for every single person. In fact, the wealthy do 1031 exchanges and continue to pass it on from generation to generation, it’s a little different when the only thing you inherited from your mom is a house or your dad or whatever. That was the one piece of asset that they passed on debt-free to their children. So I think that it’s more targeted towards the working class than it is wealthy in the first place. But you know, Capital Gains rates have jumped huge numbers. At one point, it was 15%, then we went up to 20. And then we add, or we actually add the 3.8, then we went up to 20. So that’s something that’s going to make a big investment for investors because they’re sitting here trying to figure out, if we sell things, we’re going to have to pay 49. Again, the wealthy are gonna probably stick to 1031 exchanges, which means I can buy and sell pretty much anytime I want. Because I don’t look to have the capital come out, I’m just reinvesting that capital into another investment and another investment. It’s when people want to get out of investing and use that money for personal use or buy a personal home, that the taxes are going to just completely shocked individuals on how much it can be.
Dr. Friday 18:21
So if you got questions, this is that right now in law, this is what has just recently in the last few days, his proposal is a $1.8 trillion proposal. In there, he’s hoping to do something for family planning, preschool for all two-year college, and paid parental leave. Again, I guess I’m probably the last person that probably should answer those particular questions, because I don’t understand why If you’re having a child, then why you can’t take care of that child. And if you’re going to college, why you can’t pay for college like all of us, other people did in our past generations. Most people have paid family leave in big companies. If you want to work for a small mom and pop, no, you’re not going to have that. But you have a choice to work for a larger company or a smaller company. Why the government is throwing trillions of dollars into something that really has absolutely nothing to do with being an American. That’s my point on that one.
Dr. Friday 19:20
Anyways, let’s get back to taxes because that is something I’m probably a little better at than anything else. Also, I wanted to say in this package, wealthy Americans and their financial planners have already been bracing for the prospect of more tax and more audits. Biden has taken a big chunk of money, a couple of billion dollars he’s sending right out to the IRS to help increase auditors for them to hire an audit more individuals. So that’s where I want to take this next part because we need to think about what can we do. I know a lot of you guys try your very best to track your information. If you’re just the W2 individual this isn’t going to have any major effect. But if you’re a person that’s buying crypto or a person that deals a lot in stocks, or maybe you buy and flip properties, or those kinds of things, there’s a lot of things that need to be tracked probably a little better than maybe what you’ve been doing. So we need to make sure that we’re addressing 1099, and all subcontractors, keeping copies of all receipts, making sure that you’re not just keeping gas receipts because gas receipts mean nothing to the IRS. What we need to make sure is we have travel logs, where when, how and what was the purpose of those trips, and keeping a calendar that has all that information on it. Travel and miles are the number one reason people usually get initially looked at once they’re looking at them, then they start looking at cost of goods, subcontractors.
Dr. Friday 20:43
I mean, a lot of people will say, “Hey, I paid $8,000 out to subcontractors,” A nice even number probably weighs a bit of a flag. But let’s say that’s a legitimate number. Did you 1099? Do you have the name, address, and social security or federal ID number of all those subcontractors? If you’re doing rental properties, remember, you’re supposed this 1099 all people your lawn man, your repair guys, that’s a business a rental property, and therefore those things need to be 1099. If you’re a flipper, and you’re doing some of the work, and you’re stopping getting a couple of guys to help you do things, and you’re paying them cash. If you’re writing that cash off as a tax deduction, those individuals need to complete W9’s and you need to 1099 if you paid them more than $600. This the kind of stuff that’s gonna get more specific if they’re going to have a lot more audits.
Dr. Friday 21:33
I mean, a lot of people think that the wealthy of the top tax brackets are the only people that are going to get audited. Again, keep in mind, the top tax brackets in hiring the lawyers, the CPAs, the as all of us can work, and they’re going to have a little bit more of a shield than the everyday working guy that’s just trying to make enough to keep his family, keep his house, and to keep making enough to keep going get their kids through school. That person, come down with an audit, $10,000 is a huge dollar amount to have to deal with, besides penalties, failure to pay for the PI file, all these other things that are going to come in. So you need to make sure that you have put together you know, make that kind of a late New Year’s resolution with this kind of information, you need to be getting into a software of some sort. It can be Excel, I don’t care if it’s paper or not. But you need to be tracking all the essential information. So at the end of the year, you can actually provide somebody, everything that’s on that tax return, every receipt that justifies it actually, that way, then you are able to put that one to bed and start a new year and not worry so much.
Dr. Friday 22:37
So if you need help with that, obviously, our firm does do bookkeeping. So it helps you track some of it. We also probably need to do some more face-to-face with some of our clients to make sure that information is being tracked properly. If you want to join the show, you can at 615-737-9986. We’re gonna take a quick break, when we come back, we’re gonna take some of your emails that have come through, and if again, if you want to join the show, you can call 615-737-9986. We’ll be right back.
Dr. Friday 23:18
All righty, we are here back live in the studio, if you want to join the show I have to do is pick up the phone and call 615-737-9986, we are taking your calls. So you can get through the lines. So we’ve been talking about taxes, what we might be expecting in 2021. If you haven’t filed your 2020 taxes, I would suggest at least getting your extension put in but keep in mind, extensions do not extend the tax bill. So if you have a balanced do or you’re not too sure you should probably try your best to calculate as close as you can. So you can make it work for you, and take it from there. All right. Looks like we got our caller. Is it Deltron? Hello.
Hi Dr. Fridya. I appreciate you. You and I know each other. I just wanted to say that. I’ve been using your services for five years and I couldn’t recommend a better tax person and knowledgeable. You’re always prompt and answering questions. I just wanted your audience to know that they can’t go wrong dealing with Dr. Friday.
Dr. Friday 24:35
Oh, well. Dalton, thank you very much. I’m blushing over here. You can’t see me. Thank God it’s the radio because it’s getting hot in here for all those compliments. Thank you so much, sweetheart. I do appreciate that.
Dr. Friday 24:45
Have a safe day. Bye. All right, let’s talk to Sherry. Let’s see what Sherry has to say.
Yes, this is Sherry Mosley. Is there a tax break for people that took money out of their 401k, in 2020, during the COVID-19, if their age 70?
Dr. Friday 25:10
Well, there’s a break for anyone that took money out the age doesn’t make a difference, you can spread that deduction from your 401k or IRA over a three year tax period instead of one or even re-contribute the money back in some cases, and refund that money back that you may have paid tax on.
Okay, thank you.
Dr. Friday 25:30
Thank you for the question. Appreciate it. People are thinking about their taxes. That’s a good thing. So again, what Sherry was talking about, just in case people weren’t fully following that question was that, if during COVID, had to take out up to $100,000, from your 401k, or IRA, there is no early withdrawal penalty, and they’re allowing us to spread that over a three year tax period. In some cases, if you recuperate and you want to replace some of it, if you replace it, you can amend that tax that you paid some of the taxes on, and actually get a refund back from it. So there are some pretty nice little caveats on that particular situation. But it is something to consider or whatever, but it was something that only happened in 2020, it’s not available now in 2021, just want to reiterate that for anyone that might be looking at thinking about taking money out.
Dr. Friday 26:33
I know a lot of people because of these tax changes that we’re talking about, and things that you’re hearing in the news and everything else. One of the biggest things that people are afraid of, saying, “Hey, I’m gonna go ahead and pay all my taxes now. So all my cash is already pre-tax at this rate.” Keep in mind, we don’t really know, I am giving this information to you. But there isn’t anything that says making any of these tax changes back effective as of January first, 2021. I think it would be a difficult situation, I would think if he’s actually going to try to pass this kind of tax law. They physically could do it as of the date, I suppose. But normally, they tried to make it at the beginning of a tax year. So I’m going to assume they’re going to give a heads up and make it retro make it active as of January 1, 2022. Don’t hold me to that, because I’ve been shocked more than once where they’re changing tax laws in the middle of tax seasons. So it is a possibility. There’s nothing in the law that stops them. I’m being told here, from what I’m seeing that doesn’t stop them from making this tax law that we’re talking about the Biden’s trying to get through, make it retroactive. There’s nothing that says that he cannot make it retroactive. Alright, let’s go back to let’s go to Keith. Hey, Keith, what’s happening?
Oh, just a beautiful day, Dr. Friday. So last year, I filed my taxes by mail. I did pay in. But I got, I got the first stimulus payment. But it was mailed to my son’s house, which we have never named, and which really was odd. We didn’t get any other stimulus payments, which doesn’t surprise me. But I did look into my own IRS account. And I see where the payment was applied, but it shows that there’s no record of the filing.
Dr. Friday 28:35
I will tell you right now if you have the ability to either e-file, e file was closed back in November and reopened in February of this year. If you have the ability to go back and E file your 2019 taxes and or if not, resubmit them. I’m on a third submission for paper one that I cannot e-file. And they’re still not showing posted as of the other day. So my suggestion would be to resubmit 2019. If possible to do it electronically, if it’s at all, you know, in your wheelhouse to do if not then to go and at least certify another copy and send it. If you wait 30 days, you should be good on to the IRS website and where you check your refund. If you go down a little bit it will show amended returns click on that and you should be able to see them, yours is an amended sorry. You’d have to go onto the IRS website and look under “transcripts” to see if they’ve actually shown it posted. But if it’s not, I mean seriously, I would just put on the top second copy third copy because they’re taking forever to process hand ones.
So I did my taxes through an online system but I didn’t file them electronically. I just printed a simple check with the printed copy and when I do go to the transcript, it says that there’s no record of filing, it does show a credit.
Dr. Friday 30:06
So they’ve got your check-in there, they just never posted your taxes in there. You can try to resubmit it again. But that the reason you haven’t gotten the second or the third is that 19 is required to get those.
Well, thank you very much.
Dr. Friday 30:26
Hey, no worries. Thanks for the call. I appreciate it. All right, let’s see Margaret.
Yes, ma’am. I filed my taxes on March the 22nd. I guess my preparer did the actual filing on the 23rd of March, I was supposed to have a refund of around $2,000, which included the missed stimulus payment for last fall. I’ve not received anything, nor have I received the stimulus payment for this year. Is there a number I can call at IRS to find out? The website where it says to get my payment or find my payment or find my refund doesn’t give me any information.
Dr. Friday 31:16
No, the phone numbers are not working. As far as I’m concerned. If there is anyone listening from the IRS, it would be nice if you could give us a phone number cuz I’ve tried calling a couple of times yesterday and I was on call one time for three hours, and then the phone hung up. It was a bit frustrating. I will tell you this, the IRS is having to match up all of the stimulus checks sent out or direct deposits or whatever because it sounds like you received the first one? Did you receive 1200? But not the 600?
I got the first stimulus payment in 2020. Yes.
Dr. Friday 31:49
So that one came through either by check or whatever. So the government had your information out? What happened? Why didn’t you get the second? I don’t know the answer. I’ve got 1000s of people that are probably all sitting there saying the exact same thing. And until 1400, the one that came out in March would have no nothing to do with the second one. But the problem is the IRS is trying to match up all that information. I don’t know what kind of system they have that’s actually doing that, I’m hoping it’s not by hand because they are running very, very slow. I think that’s what’s holding up a lot of the refunds are people were trying to get their stimulus money, you know, as part of their refunds. All those are, I think, are having to be either hand or set aside for review before the refund is issued at all. But it shouldn’t have stopped your 14 $100 one to be quite honest, I’ve had quite a few people that have gotten the first and the third. And the second one, for whatever reason just didn’t come through. I don’t know what the reason was, but all I can tell you at this point is there’s no phone number and they basically are just dragging their feet. So you’re just gonna have to hold on and hope that we can actually get your refund. Then once that refund comes through, hopefully, they’re going to resubmit a lot of the $1400 ones when people have updated addresses. I mean, I’m assuming you haven’t moved or anything right sweet?
Dr. Friday 33:23
I’m very helpless on that matter. I have a lot of people in the same boat you are. But all we can do is and from the tax preparer side, all we can tell you is the taxes have been accepted. We get we don’t have any other hotline or anything to get in and say “Hey, why is it a delay on this one?” You know, just something if it said, “Hey, we’re working on matching up or this or that.” We don’t have anything more than an acceptance letter. So sorry, Margaret, I’m not helping a whole bunch.
Well, you’re telling me what my tax preparer told me.
Dr. Friday 33:56
We’re on the same boat, unfortunately, and I know that person’s probably as frustrated because we want our people to get their refunds. In the past, it’s always been less than 21 days people have gotten them, you know, 10, 12, 14 days, their refunds are right in their banks or checks were in the mail. These last two years have made it very hard for people to really kind of trust that. So just hold on and if I get any more information, I’ll share it with all of you guys. Okay?
Oh, okay. Thank you so much. Have a great day.
Dr. Friday 34:27
Hey, you too. Thank you. So we’ll go ahead and take a break here in a second. Again, if you want to join the show, there’ll be a few minutes here. We’re getting down to the last. Oh, I don’t know 8-10 minutes. You can join the show. at 615-737-9986 or you can email the show firstname.lastname@example.org. We are taking your calls, talking about my favorite subject at least, which is taxes, and we’re gonna be right back after this break.
Dr. Friday 35:12
All righty, we are back here live in-studio for the last though I don’t know, seven or eight minutes. We’ve got Deb on the line. So let’s hit Deb first. Hey, Deb.
Hi. Thank you for your show. Anyway, it’s the second time I’ve called in. I lost my 2019 tax return. I don’t know where it is. I called the nonprofit, and they said, they don’t have them. How long does a nonprofit that does it for low-income people and the elderly? I’m only 55. But how long do they have to keep the records?
Dr. Friday 35:51
As an Enrolled Agent, we have to keep them a minimum of three years. But to be quite honest, I think I probably have my clients going back 10 years in many of the cases because, you know, been in business 25 years. Ever since we’ve been able to PDF them, you know, whatever they’ve they’ve been basically going into our archives. Now, I would say your best bet is to call the IRS and ask them for a copy. You can usually call the 1-800-829-1040 number, assuming that someone answers that one that’s not the collections or anything, so it’s not usually as bad. Call that number or, and see if they can’t send you a copy of your tax transcripts.
Thank you so much.
Dr. Friday 36:38
No problem. Thanks for calling here. Bye, bye. All right, let’s get Mike. What’s happened to Mike?
I know that you can get your second stimulus by filing the 2020 tax return. Can you also get the third stimulus if you didn’t receive it by following your 2020 tax return?
Dr. Friday 36:58
Nope, only the first and second. So the 1200 and the 600, and or if you have children or whatever, those two are in 2020. The other one I’m going to make a wild guess is going to end up in 2021 since it was a march distribution.
Okay, so they haven’t said if there’s going to be any other mechanism to get it any sooner than February of next year?
Dr. Friday 37:20
They have not, they haven’t even said it’s going to be on the 2021 return. So I’m going to make a guess they’re going to have to do something like that. But yes, there’s not been any communication on either a second mailing a website where people can go in and confirm that their stimulus money still available, nothing has come out. But they may be waiting until after 2020 is processed to make sure that all somehow the information that they have is up to date with current filing addresses and all that. That’s a guess.
So okay, I understand. If they were to do something like that, would that be based on a 2019 filing or a 2020 filing or one of one the two?
Dr. Friday 38:05
I’m going to assume it’s 2020 filing since they’re reconciling the first two on 2020? They’re going to require those people to file 2020 to be able to get an update on 1400 due to you in 2021. Again, they were sending money out to people that were dependent on one side and the not. So it seems like it’s a hit and miss on that conversation and how it’s going to actually work. It seems to me it would be a lot easier if people had to file each year and just claim it on that, but they’re trying to get the money out earlier not later. So by doing that, this last one, the nice thing is, it’s for everybody on the tax return no matter what age. The last two are a bit confusing. So this one is 1400 for each person, but there is nothing out there. You can try using irs.gov I’m sure you’ve already done that. Pretty unhelpful. That’s about the only thing they have out there for us to use right now for stimulus for the third one.
Thank you so much, Dr. Friday.
Dr. Friday 39:06
Thank you appreciate your call. Alrighty, this has been an awesome Saturday, guys. I mean, look at the weather, it’s a beautiful day, hopefully, everyone will get a little time to go outside and maybe not stress quite so much about taxes or dollars. Let Leave that to me. I’ll be working all weekend. But for all of you that maybe have already filed your taxes or just waiting for your refund. Again, I guess the main message I’m going to put out there is patience. And I realized that’s easy for me to say I’m not the one sitting there hoping and praying for the money to come in so you can actually pay your rent or something else. That’s vitally important. But at the moment, everything’s just moving a lot slower than we had wished for. So we’re just trying to get that all up to date moving in the right direction. If there’s some assistance that we can help you do as far as filing taxes or extensions at this point. We will be continuing to work all the way through obviously the year we do taxes and offering compromises and all that throughout the entire year. But if you need help with all that, then we can help you do that by just calling us at 615-367-0819.
Dr. Friday 40:20
Keep in mind that when we’re filing taxes and doing all of the information that we need to do, I’m gonna get a little echo going on the background here, sorry, guys, that puppy dogs are at the studio. That we basically have the ability to make sure you file your taxes on time because if you haven’t received the second stimulus, the $600, one of the smaller ones, I would definitely guess, or make sure that 2019 was definitely filed and received because they used 18. For 1200, my understanding is the kind of use that was filed on 19 for the $600. And then they’re using 19 and or 20 for the $1400. Again, no perfect science here. I’ve had some people that haven’t filed 19 or 20. And they’ve gotten all three of them. I’ve got people that have filed 18, 19, and 20 and not received any of them.
Dr. Friday 41:16
So there’s not that this isn’t going to be perfect. Oh, this is what happens. Everybody’s going to be a little different. But I’m going to tell you filing your taxes, getting yourself caught up making a deal with the government, right now’s the time to be doing that before the IRS gets another couple billion dollars to look. So the deals are going to be harder to make and harder to deal with. They’re going to probably be making fewer deals when it comes to offering compromises. So much for the Fresh Start program may actually not actually even exist by the time they get done with this, because we don’t know that. I mean, obviously, the fact is, the government was supposed to be founded on the idea of helping people get back out, get it started doing the things they need to do, but it doesn’t mean it’s always going to work.
Dr. Friday 42:06
So if you’ve got IRS love letters, you’ve got the ability right now you’re not making the money you were making, you don’t have the equity in your home, you don’t have a 401k that’s big enough to pay off the IRS, these the kinds of things when you hear those ads that say, “Oh, we settled that 10 cents on the dollar.” That’s because the people that they settled the debt on did not have a home with equity in it, they did not have a 401k with equity in it, they did not have anything that was a value, then you can make that kind of deal. But there are still good deals out there. There’s the ability to negotiate with the IRS, either a payment plan or maybe you’re at that point, maybe you’ve already gone through you’ve lost everything pretty much. Now’s the time to get the IRS settled, move forward. That way when you rebuild your wealth in your situation, you don’t have to worry about liens, levies, or them taking on something that you don’t want to worry about.
Dr. Friday 42:57
Because the scariest thing is getting that certified letter that says, “We intend to Levi.” I had to deal with one of my clients where they are the person buying their home, basically turned around and had to back out because they found out when they went in to get a mortgage that they actually had a lien against their credit. And yes, the IRS will put liens against your credit, which means if you go try to buy a house with a lien against your credit, guess what the IRS will put a lien against that house, and no lender wants to lend money to anyone that has IRS issues. So it’s one of those deals, you have to make sure you understand exactly what the situation is and how to deal with it. That’s what I am I’m an enrolled agent licensed with the Internal Revenue Service to do taxes and representation. It’s really all I do 24 hours a day It feels like 365 days a year? Maybe not quite, I do take a couple of vacations, but you know what I mean, guys. It is something that I’m good at. It’s something I’ve been doing for 20 plus years, but you need to understand how the game is played.
Dr. Friday 43:16
If you are even in the game, or if it’s something that you need to talk more about payment plans or if we need to talk more about how are we going to get you from where you are today with whatever your tax issue is so that you know at some point there is going to be an end to the whole situation. The IRS has certain limitations, but those limitations can be stalled and delayed. So you need to know hey today, this is what I owe the IRS. This is what your plan is to pay that off. And most importantly, for all my entrepreneurs the number one most important thing is paying forward. If you start today and you start making your quarterly estimated payments for the current year your in which is 2021. First Quarter already done right April 15 was still the first quarter for estimated payments second quarter, June 15. That’s the second-quarter estimate. You need to be paying all those. A lot of my clients I even have them pay monthly because once you get used to giving the government their share of whatever you’re earning, then it’s just a matter of taking care of the past but you can’t negotiate with the government saying “Hey, every year I’m going to add to this because I’m never fixing my problem in the first place.”
Dr. Friday 45:01
We have to make sure that we have all of that altogether, we have to have a plan that’s in compensating where you are today, paying your future taxes, and then what’s left looking at if there’s the ability to even pay past taxes. The government wants to make sure that you’re taking care of what you have and where you’re at. Alright, so if you want to reach me, you can at 615-367-0819. Monday morning 615-367-0819 check me out on the web at drfriday.com, or you can also email email@example.com I hope you guys have an awesome Saturday.