Welcome to the Dr. Friday Radio Show! In this episode, host John Haggard and tax expert Dr. Friday take on the latest tax updates, answer caller’s questions, and talk over the following topics:
- Are There Increased Child Tax Credits for 2022?
- Should We File for Married Filing Jointly or Separately?
- Penalties to Keep In Mind When Married Filing Separate
- Can I Actually Do M Taxes for Free?
and much more!
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or financial woes. She’s the how-to girl. It’s the Dr. Friday show. If you have a question for Dr. Friday, call her now. 615-737-9986. So here’s your host, financial counselor, and tax consultant, Dr. Friday.
John Haggard 0:28
And live from America’s Music City it may be Saturday where you are but it’s Friday all day every day all the time with the tax doctor the tax lady, the doctor of accounting known in these parts of America ladies and gentlemen, right here she is the Dr. Friday. Hey, how are you doing there, Dr. Friday? You ready?
Dr. Friday 0:50
I am ready. I am ready to go. Let me tell you it’s been a crazy month for me but I am ready.
John Haggard 0:58
I know you are because, boy, we are at T-minus about, I’m gonna guess. What about seven weeks? And that’s the end of 2022. And you’re an all comes, right? Like an avalanche to you.
Dr. Friday 1:12
Absolutely. We are getting geared up as we speak for the next season. It’s like, you know, one prepares for Black Friday and Christmas. I prepare for tax season.
John Haggard 1:21
Absolutely you do. And I guess you probably may be up about 3:30 or 4 o’clock in the morning to do those calisthenics workout, get ready to go and boom, bam, here we are. It’s been a quick, quick year. And I think the very first thing people want to know right now at this very moment is do we have more clarity yet on what’s going to happen to us for 2022 tax returns? Has Joe Biden or Congress or anybody done anything that’s going to hurt us?
Dr. Friday 1:54
Well, it’s a great question. And we don’t have all the clarity that we’d want to have. We do know some of the tax laws that have come down, that have made but most of those haven’t really affected really more of the concern that most of us people in the tax businesses having is still getting resolution for issues that came up in 2019 and 2020 and also 2021.
Dr. Friday 2:17
We still have clients that haven’t received stimulus checks, we still have clients that have mailed-in tax returns that haven’t been processed for the year of 20 or 21. So we’re really just hoping that the IRS is going to get caught up so that we can actually start a tax year without having to be dealing with two or three other years at the same time. Because many times people hold off in filing because they don’t have resolution for the prior year. And you really can’t do that in some cases. So now we have multiple years with issues on the same client.
John Haggard 2:51
Now is this the worst it’s ever been that far back? And you know, no sort of acknowledgment or what’s going on?
Dr. Friday 2:58
Well, I mean, I’ve been doing this 25 years. And in my record, this is the worst we’ve had as far as communication and resolution. We’re just not getting, the poor tax advocate office, at least for my office. I mean, we probably have four to five cases open. And in the history of my 25 years, I would have been lucky to have one or two in a year. I’ve probably opened up five or six every few months with them. They’re the only ones that seem to be able to actually get anything accomplished as far as I’m concerned.
Dr. Friday 3:29
Trying to deal with someone on the phone most of the time they don’t have the ability or you get hung up on. You don’t ever talk to the same person twice so then you’re starting the entire verbage over again trying to get them on the right page to get resolution and trying to do it through the mail takes six to nine months to get anything accomplished. So yes, I think I mean I know the government one of the things Biden is pushing, I’m gotta be honest, I’m somewhat for is hiring more agents to work for the IRS they are in the lowest number of agents working since I think that I heard somewhere in the 70s.
Dr. Friday 4:06
So I mean, they kept reducing budgets and things so they don’t have the number of representatives customer service people than we’ve had in a long time and we’ve got a lot of issues that need to be resolved for taxpayers.
John Haggard 4:18
Right. Hey, and one thing folks, just so you know off the top a lot of people very angry at the Internal Revenue Service and think that most of them are you know there to hurt you and and you know, try to throw you in jail and this and that. Remember one thing because voting comes up Tuesday the IRS there are a lot of great people in the IRS.
John Haggard 4:39
But there’s some bad ones just like there are in any business but here’s what you need to know. The IRS enforces the law that your congress people write and pass they don’t make the laws. IRS does not make the laws they have the interpretation and what to do. Am I right write about that Dr. Friday?
Dr. Friday 5:02
100%. I’m glad you made that point, John, because I know every time someone comes in, it’s always how, “I hate this about the IRS or I wish the IRS would be abolished.” But it’s not the IRS. They’re a collection agency. That is all the IRS is doing. They’re either collecting documentation or they’re collecting money. They don’t write the laws. If you don’t like what’s on the books, you need to vote.
John Haggard 5:23
There you go. All right, folks. Now that’s the best advice we can give you. I heard somebody say the other say, “I don’t like one of the candidates. I’m gonna vote for him.” You’ve got to vote. Sometimes you just vote for the best of the worst, but you have got to vote. This is the kind of thing that’s going on. It’s so important. If you don’t, you’re gonna just you know, you can’t complain about the rules that the IRS goes by because you’re the person who elects and helps elect those people in there.
John Haggard 5:50
So just want to give credit to where credit is due. If you’d like to join the Dr. Friday program, when we say live, that means you can jump on the phones now. No matter what the tax question is, let’s get your resolution and answer a place to start let’s lift you up, give you some hope. And the number to call 615-737 WWTN. 615-737-9986.
John Haggard 6:14
My advice is to call now because the phones get very busy at this time of the year. And we’d like to get you some information to hopefully take a burden off of you. So let’s start with Pam and bring Pam on to the Dr. Friday show. Pam, here’s Dr. Friday for you. Go ahead with your question.
Hi, I just inherited a house. And I want to know, do I have to have a formal appraisal? Or can I set the price myself? And the second question I have is if I sell the house to a family member, what are the tax ramifications? Can I claim a loss or is it considered a gift?
Dr. Friday 6:57
Right. So first question, when you inherit a house, you get what’s called a step up in basis. So ideally, an appraisal or something from an outside source giving you the value of that home would be needed in case you ever requested. So that would be what we refer to as basis. So let’s just use an example. You inherited the house and the house is worth $200,000 in today’s market. So if you were to sell this to a family member, you have to sell at a fair market value, you cannot claim a loss.
Okay, all right. Okay, all right. That answered both questions, right?
Dr. Friday 7:38
It did but as well, yeah. Because if you were to sell to someone that was not related or not a family member, and then you took a loss that is allowed, but if a family member is is a part of that scenario, you cannot claim that loss.
Okay, I appreciate your answer. Thank you.
John Haggard 7:56
All right. I appreciate the phone call. That’s how simple it is, folks. You can get an answer right there. Because imagine if Pam had sold that $200,000 house using that as an example, let’s say for you know, $50,000 to a family member, look what kind of trouble she would have been in and look what a simple answer it was. That’s why we have Dr. Friday, every Saturday two to three here on SuperTalk 997 WTN.
John Haggard 8:20
And now this time of the year, Dr. Friday, we’re going to begin to hear I believe and see “1800-1866-1877-1888 tax resolution number call me give us this amount of money, we’re gonna get you out all kinds of trouble.” Would you kind of give the folks what they better be aware of on some of those offers?
Dr. Friday 8:42
Great. I had a gentleman come in last Thursday to my office. And he came in and he called me earlier. He owes the government a half million dollars. He was a restaurant owner back in 2012 and he called one of those companies and they said, “Hey, we can make a deal. You’re going to owe about $3,000 to the government, but you’re going to be paying us $25,000.”
Dr. Friday 9:09
Now a lot of people here have half million dollars paying 25,000. That’s a great deal. Well, the thing is, this gentleman is basically working as an Uber driver making $30,000 with a single child to support. There’s no way he can afford to pay them 25,000, bad enough anything else. This is a case where the gentleman has absolutely no assets, no home, he has one car, he rents a house. I mean, it’s about as simple as it gets in the world of offer and compromises.
Dr. Friday 9:39
Obviously he came to me because my fees were not near that were like $4,500 on the exact same case and very simple straightforward, makes it over a year. But you’ve got to be careful. A lot of these companies out there are billing you based on… Keep in mind, they didn’t even have him fill out any information. All they received was his power of attorney and they pulled the his transcripts to see how much he owes.
Dr. Friday 10:01
They were estimated what he owed, they haven’t pulled anything else and they already came up with a price. There’s no guarantee this guy will qualify, he should. But that doesn’t mean they wanted him to put $1,100 a month, every month for the next 12 months plus a balloon payment. He wasn’t going to be able to do it. So he was very upset.
Dr. Friday 10:22
So all my advice to you will be is be logical on what numbers these people are doing. It may sound great, “500,000 and I’m paying them 25,000 And I’m gonna save all this money and the government’s not going to come back at me.” But that was a ridiculous fee to be costed. They weren’t going to be spending more than 10 hours on this case total. Why would you pay someone $25,000?
Dr. Friday 10:44
So be smart. Hate to quote Dr. Electric around but you know, be a little more wallet friendly. Make sure that you’re getting a second opinion. Because I think a lot of times people are just very afraid of the IRS they and they use that fear against you. And they basically try to make you feel like they’re the only person that can help you and that’s not the case.
John Haggard 11:05
All right, you heard it right there from Dr. Friday. The number to call 615-737 WWTN. 615-737-9986. A big shout out and welcome to all the new folks that are moving into Nashville. Have you heard folks, Nashville, Tennessee, now formerly known as the 30th largest television market in America. Now, number 27. We’ve moved up three. Just amazing. So thank you, California. Thank you, Pennsylvania. Thank you, Chicago. And all the folks who are moving in to Nashville.
John Haggard 11:40
When we come back, we’ll be taking your phone calls at this number. Write it down, especially for the new folks that are here. I’ll translate it for you. Just like we had last hours 615-737 WWTN and that translates to 615-737-9986. I do have to do the counter folks. It’s t minus 46 minutes on the Dr. Friday show. We say that because a lot of people wait until the last minute and then they don’t get an answer. We like to say on the Dr. Friday show get an answer today so you can sleep tonight. It’s really just that simple. We’ll take your phone calls next. John Haggard in the broadcast studio with Dr. Friday on SuperTalk 997 WWTN.
John Haggard 12:26
All right, everybody. Welcome back to segments number two, the Dr. Friday show. Yes, we are live from America’s Music City. Nashville, Tennessee. By the way, if you are ever outside of the listening area of this radio station, if you’ve got one of those smartphones, just download that app. The iHeart app and search WWTN that way you can listen to the Dr. Friday show every Saturday from two to three or any program on this radio station the number now to call 615-737 WWTN, that’s 615-737-9986.
John Haggard 12:59
One thing about Dr. Friday, if you have not heard, and especially if you are new to the area from one of those states we talked about a moment ago. Dr. Friday is an enrolled agent with the Internal Revenue Service. Now when you hear that word or words you think she works for the IRS. That couldn’t be further from the truth. She is an enrolled agent.
John Haggard 13:26
Think about it this way, if you had to go to court, because somebody is suing you, you would have an attorney right? Well, an enrolled agent with the IRS is much like that. We’re Dr. Friday represents you in front of the IRS. So if you have one of those situations, once she had a client few years back that owed over 1 million, I said $1 million to the Internal Revenue Service. You probably don’t want to talk to him, but she will for you. But that’s what an enrolled agent is.
John Haggard 13:55
So when you hear that, don’t think, “That’s an IRS agent.” Because it’s not. Now she doesn’t just fill out a piece of paper and they say yeah, you are a EA as they call it in the business. She has to go through a lot of you know, a lot of training, a lot of courses, continuing education, all that stuff. So if you don’t want to talk to the IRS Dr. Friday is your next best bet.
John Haggard 14:17
And Dr. Friday from the email bank, some people wonder, this crypto thing that seems to be coming off and some positive and negative and so forth. But if somebody’s got, you know, $5,000 or $10,000 worth of crypto, is there any advice for their 2022 taxes that ought to be done or does it make any difference? Do they send you a form or what goes on with crypto?
Dr. Friday 14:40
Right. That’s great and it’s it’s almost the tax code within the tax code. It’s becoming because the IRS is gonna hold the vision of individuals looking into cryptocurrency Bitcoins, and it is up to the taxpayer. So even if you don’t have any documentation but you are using coin wallet or Coinbase, or any of the buying and selling of different crypto or mining, any of that, that is a taxable situation if you’re selling.
Dr. Friday 15:10
If you’re just buying, and you’ve never sold it, you’ve done nothing besides invest. But if you’ve purchased one and then sold it and then purchase something else, and so that each time you have sold it, it is a taxable thing, win or lose, you would need to be reporting that on your tax return. About two years ago, the IRS actually came up with a question all of us ask or answer on our taxes. Have you sold cryptocurrency in the year? And you have to answer that question yes or no. It is something that they’re tracking. So again, don’t think because you don’t receive something from the company that you’re buying and selling like we do with TD Ameritrade or any of those, that somehow the IRS will not know about it.
Dr. Friday 15:14
Because there are other ways there are other ways that they can find out and I’ve always done my taxes, guys. I don’t want to have to lose sleep, and hope that they don’t get caught at doing something. You want to do your taxes with the idea you put them to bed and the next year, you’re on to something else. So that way, you don’t worry about what’s going to happen because they can go back two years or whatever they do. They can go back further if they find fraud, and that would be fraud if you don’t report it as taxable income.
John Haggard 16:24
All right, simple enough, folks, right there. And Dr. Friday, your opinion, just briefly, I mean, a lot of speculation with crypto, but just any advice should folks, you know, again, everybody’s situation is different. We can’t really give financial or legal advice, I guess investment advice might be the word. But how do you feel about the crypto thing? I mean, would you I guess if you can afford to lose the money and like you’d never had it, and maybe you can do it, but any any sort of words of wisdom there?
Dr. Friday 16:50
Well, I guess it’s like anything else I will be quite honest, I have purchased some myself, I’ve never sold any yet. But I’ve purchased some, I think it’s if you talk to people, I have clients that have been in the cryptocurrency for the last 10-15 years, many of them were doing very well as we all know, a lot of that went down big downturns. I have one that lost over a million dollars of value. But that being said, he’s still up with the overall dollar amount.
Dr. Friday 17:19
I think if you know what you’re doing in any investment, and like John said, I am far from an investment advisor. So don’t take this but I think anything that you invest in and you totally believe in it, then that’s fine. But I would always get a second opinion in any type of stock or investing unless you feel you have the education. I know I don’t. I don’t do my own investing. I bought cryptocurrency out of curiosity, never figured it would ever come into my financial planning for the future.
John Haggard 17:50
All right, there you go, folks, it’s the crypto advice there. And what if Dr. Friday, as we look forward to you know, the having a file or income taxes again. What if I was unemployed in 2022? Is there anything I have to do? Just say, “Forget it. I didn’t make any money. We’ll see you next year IRS,” or how does that work?
Dr. Friday 18:13
That’s a great question. I had people call me all the time saying, “Do I have to file taxes?” Is usually the question. And so the answer to that is if you’re unemployed and receiving unemployment, you will get a form called a 1099 G and you will possibly have to pay tax. So if it’s your only income, and it’s less than $12,000 or $13,000, you probably won’t have anything you have to worry about.
Dr. Friday 18:36
But a lot of times that same question comes up if someone is hit retirement, and they have social security and maybe a small pension, or they’ve sold some stocks or real estate, and they’re trying to figure out do they have to file taxes. And usually my suggestion is this, if you have a tax person, their advice would be to go through and just run the numbers.
Dr. Friday 18:58
If all you have is Social Security, and you have no other income at all, you are not required to file taxes. If you were unemployed, and you lived off credit cards or a gift from a family member, you are not required to file taxes, people are often confused that I have to file every year no matter what that is not the tax law. Tax law says you have to file if you have income to report. So if you don’t have any, you’re not required to file any.
John Haggard 19:23
All right. So what about we heard something in the American Rescue Plan Act of 2021, also referred to as the COVID-19 stimulus package, I think a $1.9 trillion Bill they’re about but are there increased child tax credits for 2022? Or is there anything any gimmies? Or what can I get anything out of that American Rescue Plan Act for 2022 taxes?
Dr. Friday 19:55
Yes, I mean, they did increase the dollar amounts. So So, for people that earn income credit for people that have no qualified children, they still can get a credit up to about $1,500. And then you can also have, it’s $2,000, I believe, no, here it is, it’s $3,000 for children, 6-17, and $3,600, for children under the age of six. So that is still on the books. So you will get a possibility more than what it was before. So that is still on the books for the year of 2022.
John Haggard 20:31
All right, and here’s another question we get this time of the year, too. And that is, “I am married. And I just don’t know, in my situation, should I do married and a household single?” How do you do all that stuff? In other words, if I’ve got a wife, who’s also working, and I’m working, and we’re making over $100,000 a year, should we file separate? Or is there any advantage to being married by changing the classification not to have to pay as much tax?
Dr. Friday 21:06
Yes, that’s a great question. And again, I would suggest, if you are in the income bracket, where you have is two scenarios. One, one spouse is working. And the other one is on Social Security, which basically says security, if you don’t work, you don’t have to pay. So when married filing separately be good or bad? And again, I we have quite a few of these and that what we do every year, as we’ll put in the information and figure out which one is best for those individuals.
Dr. Friday 21:36
Many times higher income individuals, but keep in mind married filing separately does have certain penalties that can come along with those being but prior question that you just had would be child credits are earned income credits, or college credits, or certain other charity credits and things like that a lot of them are limited, or can be disallowed completely if you’re doing file married separately. And you can’t make the choice of going from married to an amended return you can, you cannot change your mind on that.
Dr. Friday 22:11
So it’s something you need to determine at the time of filing. And I would always every year even if you say well, this year, it’s good. Every year preparing your taxes with the idea of what would it be if we each filed and then what would it be a combined joint return. And if there’s children, most of the time, you’re going to want to file married filing jointly to get all of the credits, but if your income is over the $250,000 mark combined, some of those don’t qualify anyway, so it may be better to look at both options.
John Haggard 22:42
See you there go folks, I mean, we like to say on the Dr. Friday program, get an answer today so you can sleep tonight. And that’s where you can get the answers right here phone number to give us a call if you’ve got a specific question about your case.
John Haggard 22:55
And you know, some people are a little shy to call and I’ve always suggested you know, get a sock out of your drawer and kind of put it on remove and wants it to recognize your voice will answer any question at all for you the number to call here it is 615-737 WWTN and that’s 615-737-9986. If you’d like to email the Dr. Friday program here is Dr. Friday’s email address one of the most simples you could ever imagine. We want to guess what it is? Here it is folks email@example.com.
John Haggard 23:28
And the website is drfriday.com. When we come back, we’ll be taking your phone calls as the lines begin to light up now. And that number is 615-737-9986. John Haggard in the broadcast studio with Dr. Friday and your phone calls all next on Super Talk 997 WTN.
John Haggard 24:03
Welcome to the third corner the Dr. Friday show live from America’s Music City if you’ve just joined us, no I’m not Dr. Friday, but she’s right here. Let’s go to Greenbrier and bring Chris onto the Dr. Friday show. Chris Dr. Friday right here for you. What’s your question?
Yes Dr. Friday. I have really two questions about social security. First one is if you’re working but you’re collecting your social security because you’re of age to collect, you pay taxes on it. But after you retire and stop working completely, do you still pay taxes on that Social Security?
Dr. Friday 24:44
You could because it’s all you’re receiving a Social Security by itself and you’re living off only so security The answer is no you will not pay taxes. But if you have a pension or a 401 K or other other incomes coming in the house to help support you so it’s hard to live off the security by itself, then you could end up with Social Security being up to 85% tax.
Okay. That’s the question. All right. Thank you.
John Haggard 25:13
All right. Appreciate your phone call Chris. Now to line to and to Mount Juliet. We go. Here’s Leslie, on the Dr. Friday show. Leslie, what’s your question for Dr. Friday.
So, first of all, I just want to thank you Dr. Friday for your program, I always learned something from you. And I’m a senior also. And I’m, I want to tell your listeners to plan ahead. Because I’m in dire financial straits. I am still working part time. And I’m still I’m getting Social Security and a little bit of retirement.
But I want to know is is there anything that I can put some funds into that I can use as a deduction on my social security, like, you know, next April, when I send it in? Because I, I’m still paying taxes on my social security, it’s so frustrating, I’m only making about 16,000 a year with the job that I have.
Dr. Friday 26:20
What she has is the provisional tax code, which is what you’re talking about is they take half of your social security plus whatever you earn, and then you end up paying tax on that social security because you’re earning just a little too much money. Apparently, there isn’t a whole I mean, really, the fact is itemizing under the current tax law, is pretty much impossible for most people that are seniors, especially because you’re hopefully you’re not paying more than $13,000 in mortgage interest in property tax. You do have $100 of charity that you can, you know, if you get cash, you can write off above the above the line, but there’s no way of giving into any kind of retirement if you’re over the age of and I don’t know your age, but if you hit the 72 mark, there is nothing that you can start taking Social Security, most people are at 65, or 66, depending on when your birthday is.
Dr. Friday 27:11
So you know, there really isn’t a lot of other places to put it used to be where you if you’re if you hit the point where you have maybe taking draws from an IRA, because you’re 70 or 72, you can do qualified charitable deductions. But you’re talking just so security and a job, you’re pretty much into paying the taxes with the exception of the little $300 situation, because there’s really nothing here. I’m assuming you’re already on Medicare, so you can’t contribute to a health savings account or anything else. So not much help on that one, sweetheart. Sorry to say.
So there’s not like an IRA or something like that, that you can put money into?
Dr. Friday 27:53
Not likely. I mean, theoretically, how old are you?
Dr. Friday 28:00
Yeah, so at this point, I mean, that you’re working, they do have the law that allows you to still contribute to a retirement account. But to be quite honest, you’re in such a tight numbers. You know, I’m just being honest, you’re still working. The one of the reasons you’re working is probably to offset your lifestyle to a point, right? I mean, like you said, people will have to wait, we can’t work.
I had a lot of medical bills. And I used to have a 401 K, but I had to spend it to live on for a while, while I was recovering from a stroke. And so my goodness, you know, I’m just trying to I’m so angry at the IRS, I mean, because, you know, here I’ve paid money into Social Security all these years, and I’m not making very much on it anyway. And now they charge from tax on it.
Dr. Friday 28:58
And I know it and I said this for the last 13 years of it already. One of my biggest pet peeves as far as taxes and it was both sides of the table the Republicans and the Democrats that started taxing Social Security. We paid tax on Social Security when we put it into the fund and now there’s this when we take it back out if there’s no double taxation that’s slightly is one of them but I guess that’s a good reason why and I’ve never seen it back on the table of anyone not wanting to tax the Social Security unfortunately it’s not in any of the current bills I’ve read. It does come down to who you’re going to vote and see if there’s any way of changing some of these laws that are just ridiculous but I appreciate the phone call I’m not helping a whole bunch but I do appreciate the phone call.
Dr. Friday 29:43
Okay, well, and thank you for your program. Bye bye.
John Haggard 29:48
Thank you, Leslie. Appreciate your phone call to the Dr. Friday program. We are here. Now some folks another question that comes up this time of the year for those who are self employed But even those who are not is there a situation Dr. Friday? People who are self employed, they’ve heard about estimated tax payments, or hopefully they have otherwise they gonna be in a lot of trouble with some penalties. But what about someone who is not self employed? Would there be a situation where that person would need to file estimated tax payments as well? And they just don’t know about it until right now?
Dr. Friday 30:26
Yeah, that is a great question, because everyone thinks about estimated payments only applying to individuals that are self employed often. But the tax code has nothing to do with being self employed or anything else, if you owe more than $500, the prior year. So we base estimates on the prior year. So whatever you owed in 2021, theoretically, you need to pay 100% into 2022. And being four equal payments and or coming out of paychecks or pensions, or whatever.
Dr. Friday 30:56
So if you owed money, the prior year, you need to be making estimated payments into this year, or adjust your withholdings on whatever form that might be, again, W2s or money coming out of a 401k or anything else. Estimated payments are really now more for the self employed, because that’s the only way we can actually pay into our taxes. But everybody or anybody that has a situation, let’s say you sold something this year, and you know, you’re going to owe 10,000, 20,000, $30,000, within 90 days of the sale, or upon the next quarterly estimate, you’re supposed to be making that payment.
Dr. Friday 31:34
In theory. Now, I mean, again, as long as you’ve paid in 110% of the year before, you may not have to make all of that payment at one time and avoid penalties. But if you have a situation, this is when you really do want to talk to a tax person to get the advice as well as figure out how and when to pay that money. Because the last thing you want to do is have failure to file or failure to pay penalties. Which, you know, that’s just taking more money out of your pocket when you had the money in the first place to pay it. And you just didn’t know what to do.
John Haggard 32:05
Well, about that advice right there, folks. I mean, who would have ever thought, there’s a situation right there. That’s why you listen to the Dr. Friday show. It’s these little technicalities and little things that most people don’t know about. That’s why you want to be here. By the way, you can always go to the Dr. Friday website, which is drfriday.com. And did you know you can listen to the playback of these programs, you certainly can. So if you missed this, oh, gosh, I missed last Saturday show we want you can go and get it right there on the website so that you always again, we like you get an answered today. So you can sleep tonight. I don’t know about you, but I want to sleep sometimes. Is there a limit? That’s from the email bag at Dr. Friday, and that email bag again, folks is firstname.lastname@example.org. Is there any limit to the amount of charity cash payments that I can make before the IRS says, “You can give to your heart’s desire. But when you get above this amount, you can’t get any more deduction for that.”
Dr. Friday 33:09
There really isn’t. But in a year, you can only give up to 60% of your income, the rest of it would roll over to the next year. To be able to do it. I have many cases where somebody will inherit or they will win the lottery or something like that. And we’ll give a large amount I had one they gave a million dollars to charity. Now they didn’t have enough to write off. And it took us about five years to actually zero that down in their situation. But so the answer is no. There isn’t really a limit, but there is a minimum or maximum you will be able to take in any one given year based on your income.
John Haggard 33:48
All right, that’s the key right there like the rollover. That sounds pretty nice right there. How about someone who was affected by a disaster? Maybe they had a condo down in Florida and it’s hurricane Ian, I guess it was or whatever it was that went through their horrible situation for Florida the 500 year destruction as they say, how do you what do you do in a situation like that? How do you how do you get a tax benefit out of it? And maybe what are the steps to take?
Dr. Friday 34:20
Right? And that’s great. We do have many times. So the first thing you have to be it has to be a federally done disaster, which of course you’re talking about where anytime the government gets involved, they can’t just be my house burned down, which is a disaster. But if it’s not a federal disaster, you can’t claim it on your tax return any longer. But if it is a natural disaster, and the government has come in and said this is a federal disaster, then you’re going to do a casualty and loss on your tax return. And you’ll be able to claim the difference between you know, maybe FEMA or Red Cross gave you some money to help off you had insurance and they replaced a lot of things but sometimes it doesn’t cover everything.
Dr. Friday 35:00
And if you don’t get reimbursed the total dollar amount, then you can get it onto your tax return. But it does fall onto the Schedule A, which is where we itemize taxes. So if you only have a $15,000 loss above everything else, and I don’t mean only, but if you’re married and you have more than $26,000 standard deduction, you won’t get it anyways. But you need to make sure that the best way to keep that is first, I try to tell people all the time taking keep an inventory of what you have in your house, your insurance people don’t really do at one point I know our older insurance person used to come in to you know, take a video or take pictures and keep them in a safe spot of things that are show you own this stuff.
Dr. Friday 35:48
And that we had and anything that is collectible, or maybe precious or inherited or anything like that, that maybe has a value, but you know, to you, it’s more precious than it is anything else keep all of that information. Because when you have to go and turn it in, when a disaster happens, the insurance company is not necessarily working in your favor. They’re saying, Well, you know, we’re just going to give you a replacement value period, here’s what you have, whatever is in your house, here’s your limitations. And then, you know, having that documentation and then being able to present that to the IRS showing, “Hey, we had you know this, this and this and we never got reimbursed for it because the insurance company would give it to us.” Now you’re writing it off your taxes as a loss. So documentation is always the secret to a successful situation anytime that you’re dealing with the IRS but especially in a loss situation.
John Haggard 36:39
Folks, that’s really good advice. You know, if you store your pictures from your iPhone on iCloud or whatever it is just go around the house and snap snap, snap, snap snap. Because you got to you know, the Dr. Friday says you got to have the documentation, you’ve got to prove it. Alright, that’s the end of the third quarter ladies and gentlemen, that means it’s is your last call.
John Haggard 37:00
Now is the time to jump on the phone lines for the Dr. Friday show get the answers to the tax things that are bugging you are just so complicated to try and understand what it is. phone number to call 615-737 WWTN and that translates to 615-737-9986 John haggard in the broadcast studio with Dr. Friday, we’ll take your phone calls next here on Super Talk 997 WTN.
John Haggard 37:37
The fouth quarter on Super Talk 997 WTN. John Haggard in the broadcast studio, and here she is Dr. Friday as well. And this question comes up a lot this time of the year, as well. Dr. Friday, and for folks who have not heard your answer before just wondered your opinion for somebody who says, “You know, I just can’t afford to go to anybody, I got to do this myself.” And there are these programs that you can buy that are supposed to figure out your taxes for you. Are they accurate? Should I do that? Or what’s your advice? How accurate? How good is that stuff? All these tax prep programs for little folks like me?
Dr. Friday 38:18
Right. Well, I think like anything else, if you only have a W 2, there is even free programs out there for individuals. I don’t know what the dollar amount, I think it’s less than $50,000 or $60,000. But I think if you start getting into more complicated, it’s not always the program. But it’s asking the question, “does this apply to me?”
Dr. Friday 38:38
I have people that will check boxes, partly because they know if they check that box is going to get them a larger refund or pay less in taxes. Is the box being checked proper? And they don’t really even know or they you know, earlier you’re asking about married or married filing jointly or separately? These are the kinds of questions that someone that is doing taxes and tax, you know, an EA, an enrolled agent, they should know what’s best for you. And a lot of times it also comes in when we do taxes we do tax planning. What What about next year if we decide to sell off this and we decide to buy this, how does that affect my taxes? Do I need to make quarterly payments?
Dr. Friday 39:16
Because if you don’t know the answer to those things, so often you’re doing to the best of your ability, and you may just be leaving money on the table. I mean, the IRS isn’t going to come back and say, “Oh, if you had done this, you could have saved tax dollars.” That’s not their job to do. And so they’re not going to correct even if you’re wrong so many times I think it’s not so much that the tech software is right or wrong, but isn’t giving you all the advice that you need to make good decisions before you make the decision not waiting until you file your taxes and you find out now you owe $55,000. And how do you you know how am I going to pay this?
John Haggard 39:53
Folks, that’s why we listened to Dr. Friday right there because if you answer the question wrong, it’s just like she said. So there you go. All right, if you’d like to email Dr. Friday, by the way, with your question email@example.com, like this one right here. And that is how was it, Dr. Friday, this guy says, “I’m an employer, well, not really an employer, but I have a couple of subcontractors, independent contractors working for me. And I’m aware that the IRS has a checklist, maybe it’s 15-20 items or something like that, to differentiate if the person is really an employee, which would mean I need to pay Social Security tax,” and he calls it Sudha, and Fudha and everything else that goes with it, or are they independent? In other words, I don’t want to be caught holding the bag and be in trouble here. What are the rules on that?
Dr. Friday 40:49
You know, and that is a great question. I was just talking to Tennessee Department of Labor, they have a an audit department. And there’s also the Federal Department of Labor. And all of them kind of have a small difference in interpretation along with the IRS, but it’s usually the Federal Department of Labor, or the state department of labor that you’d be dealing with on these issues, and the safest answer to you on that as if you’re an employer, and you can tell them when to show up on a job, how the job is going to be done.
Dr. Friday 41:20
If they are hiring people, and you have an input on who they hire to do the extra work. If you have basically anything from any kind of involvement, other than I’m hiring you to fix their build that wall, and then they build the wall, the way you’ve already agreed there’s a contract, and it’s signed. And that person then has a actual business license is required. Do they have they don’t have to have a federal ID number, but usually a business entity of some sorts, and then their own work comp, in most cases, if that doesn’t apply, if you’re basically saying, “Hey, you come in, or I pick you up every day, you get in my truck, and you’re gonna come to work with me, and you’re gonna do what I tell you all day, and then I’m gonna drop you off, or you’re gonna leave the job site,” and I talked about construction is a very big area where this happens.
Dr. Friday 42:10
But I’ve had restaurants that have done this. So anytime you tell them when where or how they are employees, it’s that simple. There is no real definition to that. If you hire me to do your taxes, you’re walking into my office, I have a physical business, and then I’m doing a service and you’re leaving, you’re not telling me how to do your taxes. I’m doing your taxes, because that’s what I’m good at. So same thing with anything else. If you’re instructing those people how to do their job, or when where or how to do that job. They are employees, no matter what you want to hear as far as being a subcontractor.
John Haggard 42:48
There you have it, folks. There you have it. All right, that was a great answer. What a question that was. A few articles have been appearing Jim says from the email bag about PPP loan money. Is there any of that stuff still available Dr. Friday? Or is that just old stories that I’m reading?
Dr. Friday 43:06
No, you’re right, there is a lot of people saying there’s still some money out there. But I have not found the only thing that’s still out there is the employee retention tax credit, ERTC and I don’t know about anyone else listening, but I have gotten so many freaking phone calls, my employees are getting phone calls, and they don’t even employers so they can’t qualify for it if they wanted to. But there’s a lot of people trying to push the employee retention tax credit, we have done a lot of them, they are slow, they’re not a fast fix, but there is some tax and when you do get that money, it is taxable.
Dr. Friday 43:42
So it’s not like PPP money or a loan or something. This is money they’re giving back and therefore you’re paying taxes on that. But I don’t I’ve not found any PPP or even SBA loans being available other than the standard loans that they’ve always been giving out for people that qualify for but not like that was during the COVID. So the last one I know of is the ERTC.
John Haggard 44:09
All right, folks, so watch out for any scam if somebody’s trying to get you to fill something out or tell you something. Great hour with Dr. Friday here. Let me give you some contact information folks. And here it is for you. If you’d like to call Dr. Friday you can reach her at 615-367-0819 or email always firstname.lastname@example.org.
John Haggard 44:39
You ever been burned by people who you thought were your friends or never had someone walk out on you? Have you ever felt like given up because everything you try just doesn’t work? Well there is one person who will ever burn you, leave you forsake you, harm you or make fun of you no matter what you’ve ever done. And that person is Jesus Christ. And the good news, it doesn’t cost anything to accept His free gift of eternal life in Heaven where there is no condemnation.
John Haggard 45:13
Wouldn’t you want to know somebody who would be willing to just willing to die for you? And that’s exactly what Jesus did. Jesus died on the cross to pay for all of your sins. Get all of this folks past, present, and future. Yes, future sins included, Jesus died and paid for them all, even the ones you haven’t committed yet. If you’d like to accept Jesus as your Lord and Savior, or maybe you just want to recommit your life to Christ, you kind of walked away kind of fell off the wagon, as they say, very simple to do, like I said, and cost you a penny, is pray this prayer out loud or to yourself.
John Haggard 45:49
Just say, “Jesus, I blown it. I tried it my way didn’t work. I need you which would you would you come into my heart? I want you to be my Lord and Savior. Forgive me of my sins.” If you just pray that prayer, If you just pray that prayer, you have a non cancelable ETERNAL LIFE reservation in heaven. God willing, we’ll see you next week right here. John Haggard saying so long and blessings to you and your family from the Dr. Friday program on Super Talk 997 WTN.