Welcome to another episode of the Dr. Friday show! In this episode, Dr. Friday answered all the caller’s questions about taxes, stimulus checks, and the following topics:
- I’m On Social Security and I haven’t Gotten My Stimulus Check. Why?
- Will I Get The Stimulus Check If I Owe The IRS Money?
- Reasons Why Some People Won’t Get The Stimulus Check
- Are Medical Bills For A Dependant Deductable?
- What Part Of Unemployment Is Going To Be Taxable?
- When Are Estimated Tax Payments Due?
- Do I Have To Pay Back The Stimulus/ Pay Taxes On It?
- Does My Child Qualify For The Stimulus Check If They Have A Job?
No, no, no, she’s not a medical doctor, but she can share cure your 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. Hopefully, you guys can hear me. I am ready to go. We got some conversation to go after. We’re going to be talking about the stimulus check because that is on everyone’s mind about where your refunds might be. If you have some issues with the IRS which direction we need to go. If you want to join the show, you can at 615-737-9986. Why don’t we go ahead and go right to the phones, we’ve got Tony that’s called before the show started. So let’s start with Tony.
Dr. Friday, you stated my call. I’m on Social Security, don’t file income tax, I get direct deposit for my Social Security. I haven’t seen any money. I went online, and they say there’s not enough information about me. Do you have any insight as to what’s happening?
Dr. Friday 1:27
Well, I do. It’s probably not what you wanna hear but thank you for calling because this is a question that is on a lot of people’s minds, not just yours. We probably get at least 10 phone calls a day. So here’s what we’re hearing from Social Security. You’re not getting your check directly from the IRS. It’s going to be going through the Social Security the same way you get your monthly checks. Those checks were delayed waiting for non-filers with children in their homes. So they started issuing them about a week and a half, two weeks ago to them. The IRS is issuing 5 million checks a week. Obviously like I said, Social Security and IRS are both issuing these. They’re going to be issuing all the way up until September. So I know everyone’s like, “Oh, everyone else got one, but I didn’t get one.” There are millions of people yet haven’t gotten them, Tony. So you are on the list. Unfortunately, I can’t tell you when. The website is more confusing to individuals, in my opinion, in some ways than helpful because getting a thing saying there’s not enough information or the information you’re putting in doesn’t match is more frustrating than helpful. So, again, Social Security doesn’t issue the checks themselves, but they’re using the same banking information. So keep an eye out. I can tell you that as of about 10 days ago, several of my own personal clients called me and said that they had received and these are people that are only on Social Security non-filers that and they did receive them. So I know that it has started with Social Security. I don’t know how many people are on Social Security, but a large number, so I’m assuming it’s going to spread out, Tony.
I get direct deposit, will I get it direct deposit or check?
Dr. Friday 3:10
Absolutely, you will get a direct deposit in the same account number that you have under your Social Security, where you’re getting your payments every month.
Oh, okay. So they haven’t just poo-pooed me and kicked me out then. Right?
Dr. Friday 3:24
No, it just sorts of feels like, “Why is anyone else getting it and I’m not?” I know a lot of people, you know, could use the money. Don’t get me wrong. Not to make excuses on behalf of the IRS, but can you imagine 180 million people getting checks at one time? That’s something that can be issued out and there’s a lot of mistakes. I know some people are calling and telling me they haven’t gotten their kid’s money or they got too much or people have passed away. My initial answer to that has changed. Thank you, Tony, because that is going to be a huge topic today. I appreciate you starting the ball rolling and hopefully answering some of the people’s questions.
Thanks for taking that topic, I appreciate it.
Dr. Friday 4:02
No problem. Okay, so we’re gonna continue on that topic a little bit. If you want to join the show, you certainly can. 615-737-9986. So we do know now, according to the IRS, and I’m not gonna tell you there’s a lot of dispute about this. According to the IRS, if someone has received a check for someone that has passed away in the year of 2019 or prior, I had one person call and say they got a check for someone in 2018. So if they passed away in 19 or earlier, those funds are supposed to be refunded back to the IRS, you’re supposed to write void on them and send them if it comes in electronic format, you’re supposed to issue a check back to the IRS. They’re saying that people that have passed away should not be receiving money in 2019 because the reconciliation is happening in 2020. Therefore, those individuals will not be filing tax returns. Now for some reason, if that State is filing a tax return in 2020, depending on the time of death and everything else, or anyone that passed away in 2020, that will be the case. You’ll do the reconciliation and you can keep the refund. If you had a child in 2019 or 20, especially if you didn’t file for 2019 or 20. You will do the reconciliation for that on your 2020 tax return. So there will not be a second check to you because the IRS did not pick up somebody that they should have in your household. It’s when you file your 2019 tax return or your 2020 tax return next year. It will reconcile at that time, and it will show as a credit.
One of the questions we do not know is if you owe the IRS money, will it still be able to be given to you like right now? If you owe the IRS money, you should still be receiving the stimulus check. They’re not holding the only reasons they’re holding back the stimulus checks are If you have back child support, and they’re not really holding it, they’re just paying it towards your child support instead of towards your personal pocket, it’s going to pay 1200 dollars of your back child support. If you haven’t filed 2018 and 2019, and you are required to file taxes, then you’re not going to get the stimulus check. If you’re not a US citizen, you’re not going to get a stimulus check, and if someone claims you as a dependent. This is a huge year for us because tax people are looking at things a little differently. Normally, we’re looking at, “Hey, my adult parent or adult child lives at home, they’re not working, I’m providing more than 50% of their support. I’m claiming them as a dependent getting the $500 credits.” But in 2019, we have reevaluated possibly that adult child is earning enough money 6000 or 7000and so they’re claiming themselves instead of them getting 500, the households getting 1200 and they’re claiming themselves. Or a person on social security that may live in the same house and all these years, we’ve claimed them as a dependent because legitimately you can because social security is not considered earnings. This year, you may not claim mom that lives in the house or whatever, because she would not qualify for the 1200 or dad, whatever, versus the $500 credit.
So again, a lot of interesting changes, conversations, and adjustments are being made to accommodate this stimulus check. As far as I’m concerned, there were about six weeks that the Internal Revenue Service was closed, period, not moving phone calls not happening. I will be honest, many of the representatives have called me because we have open cases they seem to be still working. But the phone system this the customer service side has not been working and I’m told that it’s reopened, but I know many times, they’re being told to call their tax person or being told to call because I’m getting quite a few calls for individuals, not even the tax person. I have no problem. I’m just saying, I can’t answer a lot of the questions because the stimulus has nothing at all to do with taxes, besides the fact that you have to file 18 or 19 taxes to qualify if you are a filer that requires that So, and I guess I need them. I have a text here where someone says, “Does everybody get the stimulus?” And the answer is no, not everyone’s going to get the stimulus. If you’re single, and you’re making more than $98,000 you’re not going to see a stimulus. If you’re married and you’re making more than $198,000 you’re not going to see the stimulus. I have many people that have heard that everyone’s just beginning the stimulus check, but it isn’t for everyone. Some of us will never get the stimulus check and that’s cool. We’re gonna figure out how to make sure that all the people that are in need. We’re also going to talk a little bit about unemployment. I’ve been doing quite a bit on Channel 5 plus and we know a little bit more about some of the unemployment as far as how, when or where. PPP money is coming which a lot of you guys have heard those terms because your employer has called you and said, “I’m going to go to work” or they want you to come back to work. You’re sitting there going, “Should I? If I don’t what’s going to happen?” So we need to figure out exactly how that’s going to affect you and if you have any other situation. Let’s go ahead and take that call from Allen real quick and then we’ll probably hit the break. Hey Allen, thanks for calling.
Thank you very much for taking my call. My father is 88 and my mothers 84 are in assisted living. My mother has dementia to the point where we are now having to, by we I mean my sister’s and I, pay for a private sitter agency to sit with mom. Is that deductible?
It will not be deductible, unfortunately. Unless one person’s providing more than 50% of their care, it’s been split between siblings. It’s not going to equal out and maybe smarter in some ways. Is mom only on Social Security? I mean, since mom and dad don’t have the money, I’m assuming that they’re on a fixed income?
Dr. Friday 10:21
Okay. Yes. So it could be a possibility of each year one person paid the bill versus splitting in between all of you, I don’t know the situation. But that would be something to look at. That way each year, that person that paid the bill may be able to claim the mother and then claim the medical deduction.
Claim the mother as a dependent?
Dr. Friday 10:43
Correct, because they’re providing more than 50% of the care so you might be able to qualify for that and then be able to have medical. It also would depend on the person’s income because you lose the first 10% well, 7.5% under the curtain, of so if you make $100,000 the first $7500 is out the door before you even get $1. And then you still have to meet the standard, the itemizing, which is if you’re married over $24,400. So it’s not easy to use the medical period, as far as I’m concerned.
Can it be split? Well, I’m out then can I? Can it be split between siblings, two siblings?
Dr. Friday 11:20
It could be. I mean, in essence, if you sit down and make an actual plan. There’s nothing wrong with you, Allen, gifting the medical to one of your siblings is less than $15,000. In theory, you could gift that to them, and they could qualify for the cost. There are ways of working around the system, but the person with the lowest income would be the person that would benefit because the higher-income people aren’t going to benefit no matter what you do.
So if you’re well into the six figures, then no.
Dr. Friday 11:50
In my opinion, no, because I don’t know how much you’re paying. So I’m winging the conversation, but I’m assuming that you’re not paying $50,000 a year to do this. So my opinion, if you’re in the six figures or higher, I think you’re looking at having to have more than, you know, $7500 and then 24 so you have to have more than $35,000 to even really qualify for $1 of additional deduction that you’re getting already.
Okay. I appreciate your time. Thanks so much.
Dr. Friday 12:16
No problem. Thank you. Alrighty. That’s a great question. Because medical is not one of those things that you can easily itemize as far as I’m concerned. So it’s difficult with a gentleman or someone that might be making more than enough money or making more than 100,000, which the government considers on the right side, then you’re probably in trouble. Okay. We’re gonna come back and we’ll talk more about how and what choices you have to say to your employer if they’re offering you work and what the employer is doing. So you think “Well, hey, I just won’t tell the unemployment that I’ve been offered a job.” That may come back to bite you. Quite a few cases have come up where employers are turning in your name and social security number to the unemployment department to tell them that you have decided not to work or come back to work. You do have a few options, reasons that you can use not to have it. But other than that, you really are going to need to make sure that you have everything going forward to justify the situation. So, we’re gonna take a break in about a minute. So if you want to join the show, oh 615-737-9986. Today, we’re really going to kind of talk about what people need to know what part of unemployment is going to be taxable. What part of the stimulus, if any, is taxable? The answer is, none of the money from the stimulus is going to be taxable. So don’t wanna put anyone into a panic. The stimulus is not taxable, but unemployment is taxable. So if for some reason you go back to work and you’ve already been receiving this money, it’s something that we’re going to need to make sure that we’re going to be going into and that you’ve set aside some of the money. The last thing you want to do is finally make it through this COVID-19and then have Uncle Sam turn around and say “walla!” now you owe us money and their penalties and interest can be extremely painful. All right, well, we go to a quick break. That way we can get to the phone lines and we can get to more of the questions that are coming up. If you’ve got anything 615-737-9986. We’ll be right back with the Dr. Friday show.
Chapter Two. All right. We are back here live. If you’ve got questions, the number you want to reach is 615-737-9986. Taylor is gonna be busy today apparently. Alright, why don’t we go ahead and start with whoever is first? I guess it is Jim.
Hey, good afternoon. I had a quick question for you. We recently, fortunately, ranged out of the Roth IRA, I believe it’s like 205,000 per year. I’ve been reading about how you can do a non-taxable, I’m gonna call it regular IRA, and then just convert the money from that into a ROTH. Is that true?
Dr. Friday 15:55
You can, but your income bracket I’m not sure if that’s partly because you’re what the 22% tax bracket? Yeah, it could be dependent depends on your income. Either way, 22 to 24, doing a conversion may not be the smartest thing, to be quite honest. I know, the ROTH is a sweet thing when you hit retirement, but your hope is that you won’t be at the 24% tax bracket. But as fast as Congress incentive money 24 maybe the lowest tax bracket, we’re looking at Jim. I have absolutely no idea but normally, and again, I’m not financial, but from the tech standpoint, we normally keep people as close as we can to the 12 to 22. If you’re in the 24, 26, or28 bracket, I’m thinking that you could possibly just contribute to a regular 401k or IRA which would defer it and then when you get ready to closer to retirement, you have a little lower income or a lower year look at a conversion. You can do conversions whenever.
Okay, so we could do the conversion once we retire? Yeah, but then it’s not going to grow tax-free if it’s in a taxable IRA. Correct?
Dr. Friday 17:06
Right. I mean, you can do conversions. I mean, you sound like you’re fairly young. So I think there’s a point between now and when you hit 70, or 67, or whatever your retirement age is, full Social Security age, at least for retirement. You might have a few years between point one. Normally between, you know, 35 to 55 is your highest earning years do the conversions from 55 to 67. That way, still growing partially cut tax free, but also like right now a lot of people are looking at because they’re, their portfolios have kind of bombed, right? They’re really low. So now is the time that people are looking at doing conversions because we all know eventually it’s going to come back and then it will all grow as a tax-free situation. So I’m not saying there isn’t good times and bad times, but I would definitely sit down with a financial planner of some sort, and get good advice because from my standpoint, I’m thinking 24% tax seems high, but it might be that your portfolio is really low right now. So it may be a good time for you to do that. Most of my portfolio people are not doing that for other individuals. So let me just say that,
Then what do I do with the money? What would you suggest from a tax perspective? With the money that I was currently, I don’t know what it’s $500 a month or something or $600 a month, I was saving and putting in the ROTH, what would you suggest I do with that money right now?
Dr. Friday 18:25
If you’ve altered the ROTH, you can still do a portfolio. I mean, it’s not going to grow tax-free. The ROTH is the only thing that’s going to grow tax-free. So if you don’t want to use a ROTH, you can still do a 401 K or a SEP. I don’t know if you’re self-employed or an employee, are you an employee or self-employed?
Dr. Friday 18:42
Okay, so you’d have to do a 401k. Do they have a 401k at work?
No, I don’t.
Dr. Friday 18:50
You don’t. Okay, so if you don’t have a 401k at work, you can do a simple IRA or an IRA. Both of them I think are simple you can actually put a little bit more money they would all be taken tax-deferred, just so you know what I’m talking about and you should still qualify for tax-deferred.
Then why wouldn’t I want to transfer it into the ROTH? So because I mean, a 4% swing in taxes, you’re saying?
Dr. Friday 19:12
Yeah, that’s pretty much it. I mean, again, if you sat down and you’re figuring, “Okay, right now, everything’s really low. So it’s going to come back and it’s going to grow a lot faster.” That’s possible, but the fact is, it is over 2030 years you’re looking at and most people aren’t sure what taxes are going to do. Again, I’m not a financial planner. But from the tech standpoint, most financial planners are looking for lower conversion rates when they’re talking. I would definitely talk to somebody that’s a financial planner before you make that choice. You can’t contribute directly to the ROTH but in answer to your question, you can convert every year if you wanted to.
Okay, thank you very much.
Dr. Friday 19:49
As much as you want up to I think 100,000 or something, you can convert anyhow. All right, you got it. Thank you. Let’s keep going. Let’s go up to the first person, Houston. We’re gonna go to Houston.
Oh, yes. Hello. I’m wondering, as a college student and about the stimulus check and the requirements of that.
Dr. Friday 20:09
Okay, do you work?
Dr. Friday 20:13
Okay, so do you file taxes every year?
I’ll file them in 2019.
Dr. Friday 20:19
Okay, prior to that, were your parents claiming you, or did your parents claim you in 19 or 18?
I believe my mother did claim me in 2018.
Dr. Friday 20:29
So depending on when you filed or when she’s filed, your stimulus will be issued. The fact is based on 18 and I don’t know if your mom’s already filed. You don’t have any idea if your moms filed or not. Right?
For 19, I believe she did. It was a little late though.
Dr. Friday 20:47
Okay. So once they get both of those, they’re likely to do it. So again, like I was telling the other gentlemen they’re issuing stimulus all the way up to September you would qualify for the stimulus assuming that you made less than $75,000 you get 100% of the stimulus. Since your mom didn’t claim you this year, you will get the $1200 in your pocket, but it may take a little while because in 18, you were her dependent so they probably looked at 18 right now and did not see you as a viable option, you know?
Okay, thank you.
Dr. Friday 21:20
You got it. Thanks. Okay, let’s go ahead and just keep the ball rolling. Let’s go down to Sally. Hello, Sally. Hi. What can I do for you?
Well, I think in a way you kind of answer but maybe not. The gentleman you just talked to. I haven’t filed taxes for the past two, possibly three years because I just get Social Security. But my daughter is going to college. She’s 20 this year. I didn’t file taxes last year. She filed as my dependent and she hasn’t got a stimulus check, and I’m wondering, what do we need to do?
Dr. Friday 22:04
You need to amend the tax return. She’s gonna have to go back and amend 2018. It won’t change, she probably didn’t have high enough earning. So in 19, did she file as a dependent as well or hasn’t filed her 19 yet, or does it need to? f
We didn’t file.
Dr. Friday 22:22
Okay, I would suggest just filing her 19th as soon as possible if she’s required, and make sure she doesn’t claim herself as a dependent this year. That would clear up.
I’m sorry. She did file 19. She filed for 19 and she claimed herself as a dependant.
Dr. Friday 22:41
Of yours, or she marked the box that said she was a dependent of somebody? Then she needs to amend she needs to do a 1040X and she needs to amend that return, changing the dependency from you know being a dependent to not being a dependent.
Well, she did that because the tax people told her if I would go ahead and file, I would get substantial money back and I don’t know.
Dr. Friday 23:05
Well, the fact is she could file herself as her own. She’s 20 years old, she could get the college credit on her own tax return. So I’m not too sure. I totally agree with whatever that’s been said. I don’t know the whole story. But at this point, you don’t have any earnings. So there are no credits available to you. So I don’t understand.
That’s why I don’t understand why they told her to do that.
Dr. Friday 23:32
Yeah. Okay. I agree. I don’t think that was good. Well, I don’t think that’s a great plan. So I think that she needs to amend her tax return and then put in her college education information so that she might qualify not only for the stimulus but also possibly for some college credits.
Wonderful. Thank you very much. Do you know where people are that are doing free taxes now?
Dr. Friday 23:57
You know, I don’t know if anyone’s actually doing face to Free taxes this year. Normally, we hear quite a bit of that. But I think everything that’s free is online. You can go to irs.gov and click on that. If you’re making less than $50,000 or something, they’ll do it for free.
Okay, she can do that herself then, right?
Dr. Friday 24:18
She should be able to. Now, amended returns may require her to download a certain form, but she should be able to handle it herself. Yes.
Great. Thank you. Thank you.
Dr. Friday 24:27
No problem. Thank you for calling Sally. I appreciate it. Okay. Taylor, why don’t we take a break here and then we’ll come back to our next callers. So we’ve got Alan, Melissa, and Bill. It looks like we have one more person there. So as soon as we get all those done, we will come right back. But let’s take a break. We’ll be right back with the Dr. Friday show.
All righty. We are back. Live in the studio. All right, we’re ready to move forward. So we’ve got a few more people to tilt to the break. So we’re gonna go ahead and see we can get right to them. Why don’t we go ahead and start with Alan, let’s go to Alan?
Dr. Friday, thank you very much for taking my call. Fantastic show, I listen every weekend. Back to the stimulus part. I’m W2, and I work. My wife has a business 1099 pretty much everything she was able to get the PPP all that good stuff. Back to 18, I filed an extension. We just now sent them back our completed 18. So where’s that put us as far as the stimulus?
Dr. Friday 25:52
I mean, perfect. Did you e-file it or mail it?
Yes, we had to mail it because it was we had to paper mail it.
Dr. Friday 25:55
Okay, so if you mailed it because we can actually file 17, 18, and 19. But if you had to mail it, I’m going to tell you, as soon as it gets accepted, it’s going to take them probably 60 to 90 days to show it in the system. You won’t be able to check where your refund is because it’s a prior year, and that doesn’t work only for the current year. So you should be able to be on the list, obviously. But I would say your stimulus is probably going to be delayed at least I’m gonna go at least 60 to 90 days. I mean, just to be honest. I filed amended returns and we’re seeing that it’s taking them that long to process and we have to do those by paper. So unless they move them faster, because they’re not amended, I would expect. The IRS has been a little slow lately, but I think hopefully that’s going to fix itself.
Now let me ask you this. We sent a certified paper now and they denied whatever, there’s nobody there. So how does that work? Is there somebody there?
Dr. Friday 27:11
Yeah, my understanding is the mailroom was still moving. The question I had was, so it’s moving out of the mailroom into what? Is their big been sitting in offices? Eventually, they’re going to open those. So yeah, I’m not sure again, most of the revenue officers and auditors I’m dealing with are still in and out. I mean, they’re working from home, some of them but they’re going in and out to pick up their information. So you know, there are people and there are things moving, but I’m gonna be quite honest with you. I have no idea. As I said, I’ve mailed things back in February and March and they’re not showing received yet as far as in their system when we’re checking amended returns.
So just be prepared for a little longer wait, but it will get to you. And the good news is no matter what you get ready to file your 19th or whatever, and then when you file 20 if for some reason It just doesn’t happen, when you do fall your 20s it will come to you as a full credit on that return. Just in case, okay. All right, man. Thanks. Thank you. Bye. All right, let’s go ahead and go to Melissa.
Thank you for taking my call. I filed a paper tax return approximately 10 weeks ago, it was mailed on03/03/20. I’ve not received my refund and when I go to irs.gov it says to check the filing date and or say the tax preparer. What do I do?
Dr. Friday 28:39
Well, we’re getting in the same thing and I’m just telling you that so you know, basically it’s not quite been eight weeks actually because 3-20 to 4-20 and 4-20 and 5-20. Give or take at around eight weeks. I’m telling people I mean just because we have that exact same situation with a couple of ours they have to be mailed in because the type of returns and because they were closed basically the entire month of April, we’re seeing that it’s just taking longer. So there’s nothing you can do, you’re just going to have to wait it out. They will get caught up here and then they’ll be able to start issuing those refunds. And they should eventually show up in the system. We have proof that they’ve received them, at least on my side with our cases, we have proof that they’ve received them. But to be honest with you, Melissa, there isn’t anything else you can try calling the 1-800-829-1040 number that’s the direct number into the IRS and see if they can give you a status, they will say yes, it’s been received. That way at least you have the idea that you know, it’s been received, right? I mean, the process will then move slowly. It always takes longer to do a paper that does electronic but yeah, it’s I would say you’re looking at at least another 30 days, personally.
Okay, so just keep waiting, then.
Dr. Friday 29:53
Yes, ma’am. That’s what we’re doing. Yes, ma’am.
Okay, thank you so much.
Dr. Friday 29:57
I appreciate the phone call. Thank you very much. All righty. Let’s go to Bill. He’s been patient enough to wait for me. Thank you, Bill.
Yeah. I want to ask you about the VA thing. I have filed taxes in years and I’m 82 already. But I got an email and I don’t pay a copay at the VA I haven’t paid in 12-15 years. I got an email saying that they sent my check to them to the VA.
Dr. Friday 30:29
Any emails you’ve received are frauds, the IRS the Social Security, I doubt even VA’s are allowing emails to give you that kind of information. I would be very cautious.
It was confirmed that they’re given the confirmation number.
Dr. Friday 30:52
Yeah, I would be very cautious about anything that came through the internet. If that’s the case, Bill, and I’m not saying that it Isn’t I’m just saying, if that’s the case, you should be able to call someone at the VA and ask them if they’re receiving stimulus checks. I mean, they may be sending them to the VA and the VA issuing them directly to you, because the VA has your banking information, they’re the ones issuing you a monthly stipend, or whatever you get for your service. But that is not the way I’m understanding it to be happening. My understanding is that the VA, which is obviously part of the United States Treasury would have that information. So I would just don’t do anything, be very careful with that email. I would not respond to it. I would not do anything with it. If nothing else, call the VA directly and ask them if they’re receiving VA checks. I would say that that was somebody pulling something looking for something, be careful with that. Okay. Thank you for your service.
Thank you. Take care.
Dr. Friday 31:52
Thanks, buddy. Alright, Skip what’s happened Skip. I like that name.
Thank you. I haven’t paid my taxes in a while. They owe me money. I don’t owe them money in the past couple of years. Probably for three years. Can you not hear me?
Dr. Friday 32:09
Yes, I got Yes.
Okay. In probably three years, I’ve gotten money out of my retirement early. The problem is due to health and medication. I am just so forgetful about stuff and I don’t even know where all the paperwork is that I need. Here’s my question. Do I need to call the IRS and explain it to them and throw myself on their mercy? I know they know everything, or is there a service I heard about service on the radio where they can look all that stuff up and take care of it for me, what was my best option here?
Dr. Friday 32:41
Right being an EA, we’re Enrolled Agents here and we can do that. We can get the power of attorney to obtain all the tax documents file the tax returns. If you do a refund, we need to make sure if it’s 16, 17, and 18, and maybe 16 have been filed, but 16 has to be filed before July 15, or you’ll lose that refund. 17, 18, and 19 we’ve got a little bit of a window. Once those are filed, then you would also qualify for the stimulus and you know, be able to move forward but you can either call my office. I would not call the IRS directly for one, you’ll probably pull your hair out by the time you get ahold of them. And they’re going to tell you, you have to file tax returns, period. You’ve got to be in compliance before they can help you. So either that or you know, a good enrolled agent or CPA would be perfect for you.
Okay, and what? I’m so sorry, I just turned the radio on. What’s the name of your company?
Dr. Friday 33:32
It’s easy. It’s Dr. Friday, calm. You can go to Dr.friday.com. And all my information there.
I absolutely, I knew that. I’m so sorry. Okay, thank you very much.
Dr. Friday 33:43
Thank you, sweetheart. I appreciate you very much. All right. Let’s go to Scott. I appreciate these calls. I know it’s busy out there. Hey, Scott.
How you doing Dr. Friday, thanks for what you do for us. Quick question. My son is 20 years old and we’ve always filed him as a dependent since he was old enough to high taxes. And we haven’t gotten a stimulus check yet. I guess sound through the mail. If our accountant hasn’t submitted our taxes yet, will he qualify this year if he files as a nondependent?
Dr. Friday 34:17
He will. 19 may be the only year we decided to do that for these kids because they truly our dependants are just that it’s a kind of unique year.
This is his first year working full time, summers, and things of that nature. So he is more nondependent on us.
Dr. Friday 34:39
No worries. To be honest with the parents that are sitting there going, “Well I’m definitely helping me I pay their car payments, I pay their insurance, I give them a roof over their head.” You know, the fact is being independent or not, It’s usually the opposite. We’re having the discussion. Oh, no, they’re really not independent, but people are trying. To answer your question. If you haven’t filed 19. And he goes ahead and files his and claims himself as a single individual, not as a dependent, then he will get himself on the list because right now they’re looking probably at 18 and he would not qualify. Obviously, once you guys file 19, you don’t claim him but yet he claims himself then both of you or whatever will happen in that situation, but it will open him up for a stimulus check, at least depending on your income, you’ll either qualify or not.
Can I ask for more things?
Dr. Friday 35:31
With everything extended out three months, does the deadline of the 120 days past that if you let’s say you owe a significant amount. Does it extend out also or is everything due for three months? Three months out?
Dr. Friday 35:48
Right. So yes, so at this point, we’re going to have July 15, which is our normal April 15 deadline, right? And then we’re going to have the October if you file an extension.
I appreciate you, Dr. Friday.
Dr. Friday 36:00
No problem. That’s great questions. Thank you very much, Scott. All right. We’re going to keep going here. We’re gonna go ahead and take a quick break. If you want to join the show you can at 615-737-9986. There are a lot of calls coming in. I appreciate the calls and we get back we’re gonna take more of them. This is the Dr. Friday show and we’ll be right back.
All righty. We are back. live here. Well, as live as we are nowadays in studios, right? Live from the home studio, I guess I should say. All right, let’s just keep the phone lines rolling. We have got a bunch of people, and I totally appreciate it. So let’s go right to Chris and see if we can help you out. Hey, Chris, what’s happening?
Hi Dr, Friday, I would like to my mother passed away in November of 2019. And we received in her mailbox a couple of weeks ago, a $1200 dollar stimulus check and I’ve heard different things about what to do with it. Could you help me out?
Dr. Friday 37:24
I would love to I’m going to. I’m going to tell you what the IRS is telling me to tell you which is that you’re supposed to return that check with the word void on it. There is a large conversation in the accounting world because it’s based on 2019 reconciled in 2020. So the IRS is saying since these individuals will not be filing 2020 returns, they can’t reconcile them. Therefore you need to return that stimulus. There are many out there that are saying that since it’s based on 19, and mom is filing taxes on 19 that the estate would be entitled to it. I’d hate to tell people not to do exactly as they’re told because what we don’t want is penalties or some sort of interest to come back on us because there’s not. They’re winging this to be quite honest with you, in some ways, they’re making judgment calls. But at this moment, I’m going to suggest that people return them, put void on them, send them back to the IRS, because the last thing we want is to have an estate held up because it’s something silly, like stimulus money that ended up being put in there. Then the beneficiaries having to write checks back with the penalty because it was put into the estate fund. So that would be the safe bet to go with it. But thanks, great question.
Okay, thanks a lot. Have a good day. Thanks.
Dr. Friday 38:43
Bye. All right. Let’s go to Robert. Robert. What can I do for you?
Oh, yes. My mother lives with us and we claim her as a dependant. She’s 91 and the only thing she gets to Social Security. We claim her. Will she get the stainless check?
Dr. Friday 39:06
No, this would be the one year in which you may choose not to claim her, she would have qualified under a nonfiler. But at this point, they’ve kind of closed that as well. That would be what I would have advised almost the last 20 plus years a good deduction. In 2019, they change the game on us and saying, “We’re going to get these checks out.” So mom is not going to qualify for a 1200 dollar check unless you don’t claim her. And then we’ll be able to do some sort of stimulus for as a nonfiler for your mother, but that will take a little while you do get the 500 stuff for her when you claim or so there’s a difference, but not all 1200.
Well, it’s too late now because I’ve already filed.
Dr. Friday 39:53
Yeah, and you got the 500 and there’s nothing wrong with that. It’s a pretty straightforward way to go about it. But again, Robert, I would have been advising people every day of the week. That’s a great deduction under normal situations. So go for it. Stick to the basics.
Thank you. Goodbye.
Dr. Friday 40:10
Goodbye. All right, let’s hit Chris in Goodlettsville. What can we have on that one, Chris?
Dr. Friday, I want to ask you a question. My little nephew worked and he was under he was 16 17 and 18. But still a student in school. He worked and made extra money for gas. It’s not in money. Well, his mom was on Social Security disability. She got a little check for both of the children because she still hasn’t been home. Well, now Social Security had written the mother and told her because of the little guy working. She had to make some money back. Well, she never did. But in the child payment is income tax and they took his money.
Dr. Friday 40:54
So I’m going to make a wild guess that there were no taxes filed during the time that they did this because he should have claimed the Social Security benefits that were received under his name as part of his income just as if you’re on social security in any other way. So it no matters. I mean, it’s not age-appropriate. It’s basically if that child goes to work and they’re still under the Social Security from their mother, or someone that’s passed away, sometimes a parent, then there is a potential for taxes. So he had to have made, you know, more than $6,000 I’m making a guess, to have triggered. You know, in theory, he needs to go back and I would actually suggest the possibility of going back and making sure he files all the proper years because that way, he knows how much money there have been assessments done possibly for him. It’s under his social security. So he’s the one that’s going to actually be paying the bill back at this point, mom’s not filing taxes.
Right, but even though he was a minor, they could come to get it from him after?
Dr. Friday 42:01
Absolutely because he’s the one working and it’s under his social security. It doesn’t make a difference if you’re over under certain ages. It’s all deals with age. He’s old enough to work. He’s old enough to pay taxes.
Okay, thank you.
Dr. Friday 42:17
Thank you to appreciate it. Hey, thank you. Alright, let’s go ahead and head right down to Alan. Hey, bud.
Hey, bud. Oh, hey, how you doing? I have a situation with my nephew where I’ve been to claim I’ve been claiming him as a dependent but he just filed his 18 and 19 returns and file both returns saying that he was my dependent, or however you put that okay. He was waiting for the 12000 dollar check and he just found out he wasn’t going to get it.
Dr. Friday 43:04
Right. So, you know, you can amend a tax return.
I haven’t filed 19 yet or even 18 and can you go back and do an amended and get this check back by doing that? Since I haven’t filed?
Dr. Friday 43:21
Yes, exactly. Exactly. So 18 would not make a difference he can say whatever, you know what he had there and then in 19, he can amend or wait till he files his 20 and he would get it then because it’s reconciled on our 20s. I would just suggest possibly amending 2019 and then that way then he would eventually. It won’t be fast because amending returns, you have to mail so he’s looking at least 90 days or more before that would even happen but he could amend his 2019, claim himself as an individual and then, qualify for the stimulus.
Okay, he just filed his 2019 about a week and a half ago, I guess he could just hurry it up. That’d be that would help a little, but it’s gonna be 90 days?
Dr. Friday 44:12
Yeah. The amended return the 1040 X that he has to do to correct that situation is going to take at least 90 days, maybe more but at least 90 days to get into the system, and then he’s got to get into the stimulus check system. So I don’t think it’s going to happen quickly just prepare him for that it’s not going to be something that’s going to happen fast.
Absolutely, you can amend the return and he can do the 8822 or he included with that or on the 1040 X I believe one of the questions says is, “Are you changing your address or your filing status?” He can do the 8822 by itself that would be an address change, but he needs to do the 1040 X for the filing status change? Okay?
All right. Yes. All right. So let’s go to Jim. I think we have a few minutes here. What can we do for you?
All right. My daughter is 17 years old and she is on our taxes. They sent her a $500 stimulus anyway, do we need to return that? We kept it.
Dr. Friday 45:37
According to what we had read in the beginning, if the IRS makes a mistake of sending it to you, it is going to be something that they aren’t going to come back and ask because in 18 which is possibly what they use to eventually get it she was only 16. I don’t have the perfect answer, Jim, my answer is going to wait till 2020 and it will reconcile itself out, or they’re going to allow the IRS to go that direction. I would not return it.
Okay, we set it aside. We didn’t spend it or anything.
Dr. Friday 46:10
Perfect. Yeah, I think you’ll be fine. I think you’ll reconcile it next year and who knows what they’ll do on that element, but my understanding is they’re gonna do nothing. Okay? Thank you, sir. Appreciate it. Alright, that is it. It sounds like the music is rolling. So if you need to reach me, you can Monday morning at 615-367-0819.