Another episode of the Dr. Friday Radio Show is here! In this episode, Dr. Friday answers all the caller’s questions:
- Check The SBA If You’re Selling A Business That You Received PPP Money On
- Cares Acts Deadline
- Who You Vote For President Will Affect Your Taxes
- Why You Need Help With Tax Representation
- If I Gift A House, Do I Pay Taxes On It?
- Get Forgiveness For PPP Loan
- Can Entrepreneurs’ Taxes Be Forgiven After 10 Years?
and other callers’ questions!
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday show. If you have a question for Dr. Friday, call her now at 615-737-9986. So here’s your host financial counselor and tax consultant, Dr. Friday.
Dr. Friday 0:30
Good day, I’m Dr. Friday. It is an awesome Saturday here at two o’clock on this wonderful Saturday and the weather. It’s Halloween people, this is a great time of the year. But you know what, we have to talk about a few different things. One, PPP. I had a situation that came into my office for all of you that may have applied or received PPP money, this may be something you may have to face. This particular person was in the process of wanting to sell the business. But they had received PPP money. So actually the SBA did release and we found out some pretty interesting information. So if you’re in the process of selling a business that you did get PPP money on, very important that you go and you check out the SBA, what you need to do, because it’s not just a matter that you can now sell that business because you want to, there are some rules and even possibly pay back that loan, because it’s not going to be with the same owner. So very, very important that we do that. All right. Well, we’ve already got somebody on the line, and I believe it’s Steve in Cooksville.
Yes, I was gonna ask I have a couple of annuity. They use of term qualified nonqualified. Just wondering, about the one that’s not the right base type of annuity. What would be the difference in having an annuity that you could have just a regular life savings account? You know, if it’s one that they talk about free money? On the statement, I could take out so much money, cash before the penalty. And I thought as long as I stay below it Is there much different than withdrawing as far as tax-wise?
Dr. Friday 2:21
As you said, Steve, if it’s not in an IRA situation, but it’s with an after-tax investment, you’re allowed once a year to take the money out a certain dollar amount without penalty from the annuity, you will pay on the tax first, most annuities take out the growth of the annuity first, leaving the original investment in there. So later on, you’ll eventually if you take it all out, we’ll eventually have that. So the biggest difference will be is that if you’ve had, let’s just say you’re taking $5,000 out and it’s and you’ve had 5000 in that year of growth, you’re gonna pay tax on all $5,000.
I know I’m sounding stupid here. But, when I get my statement ready to file for IRS, does it show how much or if that’s something totally taxable all the way or?
Dr. Friday 3:14
Right, they’re gonna give you that information, to be honest. You’re gonna receive a form called the 1099 R and in box one, it’s going to show the total distribution and in box two, it’s going to show the taxable amount, doesn’t mean they’re going to match. Theoretically, box five would be the difference. So just as a point of interest, yeah, you’ll find out from them what they’re going to consider taxable and what’s not taxable.
But I’m still glad I called because I definitely learned something there because I did. I wondered how that worked. And especially during this past year that it has really grown a whole lot. I didn’t realize that that the principal or whatever, start with a stay in there. The longest thing so what’s coming out on the front end is going to be all whatever I guess it’s earned.
Dr. Friday 3:56
Exactly. That’s a great idea. And right now, I mean, with kind of these questionable times, probably not a bad idea to be looking at. I’m not a financial planner, but from the tax standpoint, not a bad time to possibly look at taking some of that out.
Well, a necessity, something I needed. And I was trying to take out as little as I could, but also trying to create. Well, here’s what really made my call. I didn’t the first thing they asked on the forum is what percent or if any, I want to be withheld, and I had no idea I didn’t really want to just owe a lot more money and get a surprise later.
Dr. Friday 4:32
Yeah, exactly. Well, I will tell you, depending on your income, and if you’re single or married, if you’re making less than $50,000 as a single person or less than $100,000, I would have them take out 12% or whatever.
I’m single and a little under 50,000.
Dr. Friday 4:51
That would be what you want to have withheld then.
Okay, but 12 would be standard? About?
Dr. Friday 4:58
Okay, well Good. I think that’s all I need to know. I just need to find what I need to take it out.
Dr. Friday 5:05
I appreciate you calling me. Thanks, Steve. All right, let’s see here. My phone lines are lighting up. I’m so excited. It’s Halloween. Let’s go to Bob. My poor guy at the studio is gonna be multitasking. Hey, Bob.
Hey, how’s it going? I have a question. My dad passed away and left my sister and me to the state. And the problem is that some of his bank accounts have my name on them as joint. I’m trying to figure out how do I get that money over to my sister if I want to split 50/50?
Dr. Friday 5:43
Well, the nice thing about bank accounts is in most cases, that is already money that your father paid tax on. I’m assuming you were just put on as a signer, which never really overly excited about the way people. They think they’re protecting and doing good things by putting their children’s names on accounts. But it would have been better if he had put it as a POD. But whatever it is, you know, it is what it is. So all you need to do in theory would write a check for 50% of it or write 100% to the estate and then you guys divide it out.
So I can put that money in probate and then the probate can split it up?
Dr. Friday 6:20
Well, I mean, you have to put that amount into probate anyway, because it’s part of your father’s estate.
Okay, so I don’t have to pay gift tax on that money? If I gave it to my sister?
Dr. Friday 6:34
No, no, there’s no gift. This is inheritance. So he’s not gifting it. You’re basically only worried about what is taxable at this point. And with the current until November 3, or whatever. Who knows. Until right now, you have to have $11 million to barely have an estate tax of any sort. And gift taxes 5 million or so. So I’m sure your father at this point, probably at least most I’m assuming I never met you. So I’m assuming that this is under $5 million, or 11 million as an estate.
Right? Do I have to fill out any paperwork for that to shift that money into probate?
Dr. Friday 7:08
You should not. When you fill out the probate, you’re going to actually list all the bank accounts. Including the joint ones.
Dr. Friday 7:19
Yeah. Okay. Just make it easy on yourself. Then that way, everything goes through probate and then that way it all gets split up after his debts are paid.
Okay, I’ll appreciate the advice.
Dr. Friday 7:30
No problem. Thanks, Bob. Appreciate. Alrighty. Again, I appreciate the phone calls. Let’s go to Mac. Hey, Mac
Hi, Dr. Friday, thank you for taking my call Happy Halloween. I’m was a small computer repair and consulting and training business for Macintosh computers. And I got a letter from the State Department of Revenue. They said I have been identified as a small business that may have been affected by the COVID. Please fill this form out and send it back to us. So I filled the form out correctly. They sent it back and they sent me back a check for $2,500. Yes, and what are my tax ramifications for that?
Dr. Friday 8:20
Zero. It’s a grant. So that’s not taxable at all.
Dr. Friday 8:28
[Laughter] It’s a good Halloween, isn’t it? Mac?
Oh, yeah. Getting a four or $5,000 check.
Dr. Friday 8:35
Exactly. It’s pretty sweet. I mean, that’s what they did. I have to say Tennessee did a pretty decent job of taking the money that the feds gave and turn around and give it back to the businesses. I’m sure not everyone’s gonna agree with me, but a lot of my business owners that just like that, they weren’t huge checks, but those little checks are enough to keep the rent paid and the lights on. So it did help. So yes, and there is another one through TNCare. It’s the Cares Act in Tennessee. Again, I don’t know how much of an effect you’ve had. But if there has been a drop of sales from your 2019 numbers from May to September and your 2020 numbers from those time period you might want to look at it’s another grant that’s available to small businesses
When is the deadline for that one?
Dr. Friday 9:21
I think it’s the end of the year. I think they’re taking them up until December 30 or something like that. I would do it earlier versus later because the money is going to run out probably
I need to go to the TNCare website?
Dr. Friday 9:33
You go to Cares Act 2020, I believe I’m trying to pull it up as I’m babbling because I don’t remember. Let’s see if I’m right should do this right on the radio. That’s a perfect Friday. Yes, TNCare.tn.gov will get you there. And if it doesn’t, you can email me and I’ll send you the exact link because I use it all the time.
Now is this an addition to the other… remember that paycheck? What was that?
Dr. Friday 10:03
So the PPP, that’s the one I started out with where, that’s the one that you have to file for forgiveness, or it becomes a loan for one year, five years at 1%. I believe it is.
For regularly employed people for a W2, W4 people?
Dr. Friday 10:20
that was actually for employers that had w twos and then they open it up for people that were schedule C’s, or, or 1099 people that could actually get it. But now that’s closed and has been for a couple of months now. I think that closed in August. They’re hoping to reopen it. But again, we’re in election time. Nothing’s happening at the moment. Exactly.
All right. Well, thank you so much. I appreciate.
Dr. Friday 10:45
Good luck. Thank you. Thanks. Bye, bye. All right, and let’s hit Steve, before the break. Hey, Steve.
Hey, how are you doing?
Dr. Friday 10:55
I am awesome. What are you doing?
Oh, man, I’m just hanging out today. Got a question for you. Kind of a follow up your first caller there. I’ve got a house down in Murfreesboro, it’s $200,000, it’s paid for I want to gift it to my son. Do I have to pay taxes on that?
Dr. Friday 11:12
You don’t. I mean, I would do that before the end of this year, if it’s seriously something you want to do. Because if there’s a new president coming in, that new president isn’t going to be in the same page as the old president. Let’s put it that way. So I’ll cover a couple things people probably should think about. But if you’re thinking that you want to do that, you will have to file a gift tax return at the end of the year, this will put 15,000 of it is allowed. Everything above that you’ll be taking from your lifetime, which right now is 5 million, but that could very likely drop down to a million, which again, might not affect any people listening. But that’s a big drop for a lot of people. But yes, you can do that and you want to do it the right way. You want to make sure that you’re gifting it to them at the $200,000 don’t do one of those quick claims that say $1. And I quickly claimed it to my son. Put the total value because the son’s gonna need that if he ever sells it.
Alright, what’s the tax form that I have to file?
Dr. Friday 12:11
It’s a 709 gift tax return.
Okay, 709. I got you. I appreciate that. And you’d have a happy Halloween.
Dr. Friday 12:20
Hey, you too. Thank you so much for calling. All right, why don’t we take our first break, if you want to join the show? Looks like we’ve got some listeners on this wonderful Saturday. I’m so excited because I know it’s Halloween. And this is a scary show. But hey, it’s great to hear you guys’ voice. You can reach me here at 615-737-9986. We’re also gonna come back and we’re going to talk a little bit more about maybe a few things we might want to do before the end of the year with this questionable change of possible president. So we’ll be right back with the Dr. Friday show.
Dr. Friday 13:01
Oh, righty, we are live here in studio. You can reach us if you want 615-737-9986. Happy Halloween. All right. The gentleman I believe it may have been Steve, but I think it was Bob. Anyways, the gentleman that called me I think it was Bob, the website you need to go to is TNCaresAct.tn.gov. That is where you might want to look at a second grant that’s available to small business owners. Hopefully that will help you get a little closer. Okay.
Dr. Friday 13:42
So you know, I’m honestly to not get too much into politics. Because when it comes to taxes, we are always changing depending on who, what, when, or where. And often we run a bit behind. But we do know that if the election goes towards Biden, there is going to likely be some changes. One of the biggest things is if in some of these changes, you might want to consider it. For example, I was talking to Steve and he said he had money to maybe gift the house to his son. I mean, again, we don’t know what’s going to happen. But based on what we hear at these conversations that they do at their speeches and all that Biden wants to overturn pretty much what Trump put in and one of the things Trump did was lower tax rates, especially for capital gains, and or just the rate for ordinary income tax. I have a person that’s got a three-year contract right now where they’re being brought out of their business, and we were predicting basically using and this is a fairly decent sale. And we’re now considering doing an acceleration and finishing it out before the end of this year. Everyone seems to be pretty much on the same page. So This will save this person probably based if they change the taxes back to what it was prior to 2017. And they’re actually talking about maybe going even back further. But you know, going back up to the 15, 24, 28 and a highest 39.6, this person would end up paying about 7% more on the sale, which would be equivalent to about $60,000. So this is a pretty healthy difference in tax. So if you’re doing something right now, and you’re not sure, you might want to sit down with your tax person time. I mean, we’re at the last day of October, we only have two months for this year. And we don’t really know what’s going to happen. So I don’t know if waiting is a good suggestion. All right. Let’s hit Nancy in my neighboring town, Columbia. What’s happening, Nance.
Yes, I’m here.
Dr. Friday 15:50
Hello, sweetheart. What can I do for you?
I overpaid my Tennessee State tax one year, and they sent the excess to the government. I don’t know what the government’s done with it, because I have not applied it to any federal taxes. How do I get that back?
Dr. Friday 16:16
Nancy, do you owe the IRS any back taxes?
Not much if I do. I pay them quarterly.
Dr. Friday 16:27
Okay, so if you owed back taxes, not so much that you didn’t pay enough in that given year, but if you owe for some past years, the state has to give the money back to the Fed to pay for that tax. That’s where it’s sitting. And you could pull your transcripts or call the IRS and have them mail you your transcripts, and you’d be able to track where they apply what year you should have gotten a letter. I mean, I say should have because with all the slowness of the IRS lately. Who knows. When did this happen years ago, or recently?
They sent it and this year. It was from another year, but they sent it in this year. I have a letter from the state that they did send it in.
Dr. Friday 17:15
So what you need to do is either call the IRS at the one 800 number, and I’ll give it to you if you have a pen, and it’s going to take you at least an hour or so to get through. So make sure you’re sitting someplace comfortable and have a nice hot cup of tea and you can just wait it out. And then you just need to call and tell them you have a letter saying that the states in this and they should be able to go back look up the dollar amount because you know how much it was, they should be able to look that dollar amount up and be able to tell you what year which quarter whatever. It may be sitting there for 2020 as far as we know. I mean, if they sent it in this recently, it could be sitting there for you to apply to your 2020.
I hope to apply to this year’s taxes but they had someone from h&r block do it and it was in with my papers and they didn’t do anything with it.
Dr. Friday 18:09
Yeah, I’m gonna guess that. I mean, good news will be Nancy, if for some reason it was overlooked in about six months afterward, they do reconcile all that. And it should come back to you. The IRS will send you a letter saying you underreported your estimates, here’s an additional check, and they’ll pay you even interest. But I’d be more concerned because the state only sends it to the IRS is that the IRS has put out, they send a list and saying that this person is behind on taxes. It doesn’t sound like that’s your case, but I’m just saying that’s the only time that that kind of thing kind of happens is under that circumstance. So yeah, I would definitely call 1-800-829-1040 It’s a pretty easy number 1-800-829-1040 give them a call have that letter in hand and then see if they can’t just look and see where it’s applied. Because I have a feeling you might have had an outstanding balance or at least that’s what their state is being told by the Fed. You might not know about it, but I’m saying that’s what’s being told.
I have not. I’m pretty sure I’m not behind on my taxes.
Dr. Friday 19:15
Yeah, I’m not disagreeing at all.
In fact, I got a refund back this year.
Dr. Friday 19:23
So that didn’t really make any sense. Yeah, but the only reason the state. Otherwise, TN that the house tax would have just rolled it over to next year in their own account, you know, or refunded it to you but it would have not given it to the federal government unless somehow your name was on a list so I would definitely call the federal government since you have the letter, you know that the money left your account went to the IRS, I would find out where that money went. Because my concern is that it went to the wrong person. You know, somehow they did something incorrectly. So we definitely want to track that down even if it’s just takes a little time but it’s worth it if you can find it. Okay?
Yeah. Thank you.
Dr. Friday 20:01
No problem, sweetheart. Thanks for the phone call. Okay, we are talking about taxes. So if you’ve got any questions, or you’ve gotten a love letter, or you’re dealing with small business things, because we have been started the PPP. And I’ll tell you, I’ve gotten several people, some of my clients have gotten letters from places like American Express, and all them that of saying, “This loan is going to turn into a lot of the for, if you haven’t filed for forgiveness, we’re turning this into a loan. On December 20, we’re gonna start withdrawing your monthly payment of $700,” or whatever to pay this loan over the next number of years. And people are kind of getting upset because they’re like, “Wait for a second, we want forgiveness, how do we do it?” They’re not really giving a lot of information out there. So I am suggesting and actually urging everybody if you haven’t already applied, you need to. Because the SBA pacifically says right off their website says your lender can provide you with either an SBA 3508 or 3508 EZ. And the difference is the dollar amount, or the lender has its equivalent form. And that’s the problem. It specifically says you have to go to your lender to complete the correct form.
Dr. Friday 21:11
So if you went through QuickBooks, I do know QuickBooks has a lot of theirs on their site. SunTrust I know, I guess it’s Truest now, but they have a site that’s up. Don’t let this pass because if you haven’t filed for it by December 31, it doesn’t make a difference, you’re going to end up with a loan. I know a lot of people waited because we thought that maybe they were going to forgive just people making under $50,000, or receive loans for less than 50, or up to 150. At one point we heard. It never happened, guys. So you need to get out there and start filling out that form. I’m having all my clients just complete the 3508 dipping in or whatever, which basically then gives all of the information because they’re asking for your SBA loan number, they’re asking for your lender’s loan number, the date you received it. A lot of times people have to look up all this information, did you receive an EIDL loan in advance? All these different questions.
Dr. Friday 22:09
So you want to make sure if you’re if you haven’t completed yet, I’m definitely suggesting that you go into the sba.gov and look under those frequent questions that you might want to have or look at, to see what you have, and where are you going for that information. Because the lenders, I don’t feel they’re really helping us out a whole bunch. So you want to make sure that you have the information you want. Then again, if you are a person that is maybe in the middle of selling something, or capital gains rates right now, for people making the higher income brackets can be as low as 23.8. And that could very likely go up ordinary income rates, of course, they’re going to go up. So if you know if you’re in the middle of negotiating, you might want to consider some of the higher things that could happen in the next couple of years. People have emailed me several times asking when do you think it would go up? And my thing is, even if we assume Biden takes over, it’s not going to happen, and so the first year, but he can backdate, theoretically, to the first of 2021. I don’t think they would actually do anything with 2020. But his tax plan is definitely making sure more of corporations, he’ll probably bring the corporate rate back up, and very likely the wealthy will pay what he considers their fair share. Definition of fair shares mine vs. him but that doesn’t make a difference because we have to live with the rules and the games that we have to play.
Dr. Friday 22:09
Alright, so if you’ve got questions, you can certainly call the show at 615-737-9986. We’ll take your calls talking about taxes or money questions. Or maybe you had an inheritance that’s often sometimes a question people are like, “Well, what do I have to pay tax on or what don’t I?” And sometimes, if your hands aren’t on the beneficiary information people are giving you like you just get a check. You’re not sure if you’re supposed to be reporting that or not. And there’s some steps we probably need to take. So we’ll talk about that and a couple of the questions I’m getting through the email. PPP as soon as we get back from this break, we’ll be right back.
Dr. Friday 24:35
Alrighty, we are back here live in-studio on this wonderful, wonderful Saturday. I keep looking out the window and I can’t wait to get back outside. And you know what? It’s Halloween but I’m preparing to hang Christmas lights guys. It’s a little crazy. I know. But you know, when you get these crazy Christmas people going, you know the weather is perfect and the season is right. So anyway, so let’s go to the phones and hit Joe first. In Cookeville. Hey Joe, what’s happening?
Hey, good morning. How are you today? My nephew has passed away and I’ve got custody of two of his kids. And when we found his taxes this year, we found the form for a decedent. I can’t remember the form number offhand. But the IRS mailed everything back to me saying they needed his signature on his taxes, even though they wrote on it, the state of his name, and so forth. Can I legally sign his name on that? Or what do I do?
Dr. Friday 25:38
No, you just need to sign it as a beneficiary as well, I don’t know if you’re the beneficiary or if you’re the executor of his estate, but whatever state, I’m assuming has an estate of some sort, or was pretty much.
Very little, the only thing really is taxes, which we’re splitting four ways, because he had four children, I’ve got two of them. I’m going to give half of the tax check to the children.
Dr. Friday 26:08
He was pretty much homeless, didn’t have much of anything else.
Dr. Friday 26:14
Yeah, that’s tough. But when it comes down to it, you basically need to fill out. Did you fill out the 3900? I know, I should memorize these forms
3910, I think it’s the form number.
Dr. Friday 26:29
Right. That basically, you would then attach a copy of the death certificate? Or if there’s any kind of court. So yeah, you just need to send back. I mean, again, I would just simply put back in the same envelope, a copy of the death certificate, or an original death certificate we usually send. Either way, basically say, you know, he is passed away on this date not possible to sign. It’s a stupid question to have them send you. Somebody didn’t read the fine print, obviously.
The funny thing is, they even wrote on it estate off and wrote across the front of his tax form that they mailed back to me.
Dr. Friday 27:10
Yeah. So, you know, but do you have anything from the courts or anything that shows that you’re handling his estate for him?
Not really, because the cost of that would have just paid up the whole tax form. And that’s the only real thing that he had.
Dr. Friday 27:26
Okay. And his parents? I mean, I know that he’s overage, but I mean, he did he leave anything to anybody or no? I mean, it sounds like it was hopeless.
Dr. Friday 27:37
Okay. So, I would try to send it back with a copy of the death certificate. He wasn’t married at that time?
No, he was actually in the middle of a divorce at that time. Was he legally divorced at that time?
No, not yet.
Dr. Friday 27:53
Okay. Then. And his, his soon to be ex? Did they file separately?
Yeah, they filed separately. They’d been separated for like three years.
Dr. Friday 28:04
Okay. All right. Yeah, I would just send it back with that, and see what comes of that. Because obviously, at this point, we don’t really have any person that’s directly associated with him. And you don’t have any documents to say that you’re over his estate. You weren’t court appointed. So, you know, I would just make sure that you provide that information, and basically just see what they say. You may actually have to get an officer-involved. To be honest,
Well, I didn’t know if I could sign his name like they do sometimes signed by so and so you know?
Dr. Friday 28:43
Yeah, no, you’re not gonna want to do that. You’re just gonna sign your name and then put, I would put the executor next to it. That way, they know that this was someone from the estate.
Okay, my next question for you real quick, is the stimulus checks that they had issued way back? Since I have his two kids, I never got that stimulus portion for the children? Are they going to do something at the end of the year when we filed taxes? Or I can’t get any answers from the IRS. I’ve tried spent hours and hours on hold for nothing
Dr. Friday 29:16
So the good news is when you file your 2020, there’s a good question on the new tax return that asked how much stimulus did you receive? And you would put in whatever you received and the children would be listed, and that would mean that you didn’t receive the money. Now, do you know if the father received the money for the children, or did he die early on in the year?
He died before, I mean, we found the taxes back in March before everything shut down.
Dr. Friday 29:40
Gotcha. Okay. Okay.
[Inaaudibale] paperwork yesterday.
Dr. Friday 29:44
Yeah. Well, that’s because if you actually mailed it out, that’s how long it’s taking to get through their mailroom. It’s ridiculous. I mean, you know, I tried never to say much about the IRS because I know how hard it is to do their job. But I mean, this is ridiculous. Yes, so In answer to your question, you will get it as Credit on your 2020. On your 2012 since you’ll be claiming the kids.
Okay, well, thank you so much.
Dr. Friday 30:09
No problem appreciate the phone call. Alrighty, if you want to join the show you can at 615-737-9986. I know that sometimes it’s never fun to call a live radio show. But believe it or not, we don’t take down your name or number. I wouldn’t know if you were anyone specific. But your questions. I think a lot of people listening always love to have someone ask a question because a lot of times there are other people that might want to know the answer as well.
Dr. Friday 30:40
So one of the questions I got through my email was that the PPP and I know I talk a lot about this, guys, but this is pretty big on small businesses. A lot of us got PPP money, and we need now to make sure that we can get it forgiven if that’s what we want to do. But on the loan application, the 3508 apparently in the top upper right corner says expiration date 10/31/20. The person was asking, “Hey, if that’s 10/31/20 and the deadline, does that apply to the forgiveness?” And the answer is no, borrowers may submit loan forgiveness applications anytime before the maturity date of your loan. I’m trying to get all my people in before December 31. But some loans actually went out longer. So you know, which is either two or five years from the loan origination date. So there is some window of time, don’t wait too long, I’m just concerned. But if a borrower does not apply for loan forgiveness within 10 months after the last date of the borrower’s loan forgiveness cover period, loan payments are no longer deferred. So your choice. Do you want it to be a loan? Or do you want it to be forgiven, and there are a couple of cases where maybe a loan is better than being forgiven. But you know, you need to be on top of this because it’s not one of those deals that you missed, or forgot. And then you turn around and go, oops, you know, you now have a $10,000 or 20, or 30, or 50, or $500,000 loan because you made a mistake and did not follow up in the proper way.
Dr. Friday 32:11
So just saying, guys, this is something you want to make sure that you’re following up and don’t. In some cases, it’s gonna be a little more confusing. But still don’t just let it slide through. If you’ve got a question, you can join the show again at 615-737-9986. Or if you’re a bit shy, everyone knows my email Ffriday@Drfriday.com. So if you’re a little bit on the shy side, and you want to be able to just you know, send me an email, make it a little easier, I will still probably use it on the radio show. But it doesn’t make a difference, whatever works for you guys to make it happen. So if you’ve got questions, all right, so we filed all of our 2019 tax returns, hopefully, maybe you haven’t, because, you know, I had people come to my office just yesterday and they hadn’t filed for a couple of years. And that happens guys, you know, life happens. Taxes are a part of life. And the best thing that you could ever do is just start to get a handle on it. Like I said these people I mean, you know you can’t change the past but what you can do is move forward so if you’re ready to do that, you need to go to my website, Drfriday.com, and click on “appointments”, set up an appointment let’s do a free consult and see if we’re ready to move forward and get your taxes taken care of.
Dr. Friday 33:31
All right, we got a phone call from Scott. Let’s go to Scott. Hey, oops, we lost Scott. Scott got scared it was Halloween he was playing a trick. Alright trick or treat. If Scott wants to call back you can 615-737-9986. So again, if you haven’t filed your back taxes or you haven’t filed 19 yet. Remember the stimulus money only applied to people that actually filed ’18 and or ’19 and people that filed 19 late are still waiting for those stimulus checks because the IRS really didn’t send out many more after about I think August or September. I know we kept hearing different numbers, but that would be the situation so if you need to, and that’s 1200 dollars a person something you might want to move into get going and dealing with. Alright, I know my buddy at the studio is multitasking. Let’s hit Roger real quick. Roger, hey.
Hey, how you doing?
Dr. Friday 34:32
I am good what’s happening live?
Well, I’ve got a live question. We recently sold a property condo where we lived and we made a nice profit. Now understand there is a one-time exemption that can be taken. We have never done that, we’ve moved several times. Each time profiting, fortunately, but as the situation is now, this is probably our last move until the Lord comes. So I just need to know, is there a particular form that has to be completed in order to make sure that we are doing everything legally? Or do we just take it? And that’s it?
Dr. Friday 35:25
Well, it’s pretty simple. There is a home sale form that you’re going to take on your tax return for your primary home. It’s $500,000 for a married couple are $250,000 for a single person. And that’s a sale of your primary assuming that you guys lived in this home more than two out of the last five years.
Were there seven years? And we turned around, but most of that money back into the place where we are now. So that we would not have a mortgage.
Dr. Friday 36:03
Well, that’s perfect. So did you make more than $500,000 on the home that you just sold above what you paid for it?
No, maybe about three.
Dr. Friday 36:15
Okay, so you will be in perfect shape. You will report that on your tax return. I’m trying to find the actual form, primary home sale. It’s basically going to ask you for the sale of the original purchase price, the date you purchased, and then you know the sale price and the date you sold it, make sure it meets all those criteria on your situation. But I am not finding the actual tax form. Whenever you have the pressure on and you’re looking it up and it never comes up. You know, tech software makes it easier sometimes. But If you want, you can certainly Just give me a call after the show or Monday or whatever at my regular phone number. I’ll be more than glad to pull up the form Roger and give you the form number if you need it. Sorry.
All right. So just call this number again?
Dr. Friday 37:10
Yeah, call my regular number. Roger, My phone number is 615-367-0819.
Perfect. All right. I’ll touch base with you on Monday. We’ll see if we can get that form number and make sure we touch all the bases on this thing.
Dr. Friday 37:33
You got it, sir. No problem. Thanks. Alrighty, I’m thinking that we’ve got four callers. Why don’t we take a quick break because among the top of the clock, and then we can do the last eight minutes with Jim, Melton, I know my boy Melton, Mark, and Sandy? We may have just lost one. So we’re I’ll take a quick break and we’ll be right back with the Dr. Friday show.
Dr. Friday 38:03
All righty. We are back here in the studio. Thank you, Sandy, for holding through that break. And we’re gonna take who’s on longest which is Milton. Milton, my boy what’s happening love?
Hello Dr. Friday, how are you?
Dr. Friday 38:18
I am awesome.
Well, Happy Halloween, and I hope you’re staying warm.
Dr. Friday 38:23
I’m staying warm. No problem.
Okay. Hey, let me tell you what I recently found out. We know about the $300 donation that people who are not I’m not able to itemize and be able to use the $300 if they make a donation? Well, I got something from the IRS saying this week, saying that they may, it’s not definite yet, but they may allow $300 per person if it’s a married couple for a total of $600.
Dr. Friday 38:53
Wow, okay, well, we’ll keep an eye on that. That would be nice. And it probably is nice and be much simpler, because it’s not very fair for a married couple to only get three and a single person to get three they tried to try to eliminate those penalties as much as they can. So that would be great.
That may be the reason and the reason I wanted to put it out there like now is that there are people who have probably reached their maximum of 300. And they’re waiting. And what they may want to do is just go ahead and donate up to 600 just in case because they will say it and I’m gonna send you this by way of email that it hadn’t been decided on yet. But there’s a strong possibility. It may be $600 per couple filing together.
Dr. Friday 39:36
Perfect. I appreciate that. Melton, thank you very much.
Okay, take good care.
Dr. Friday 39:41
You too. All right, let’s keep going here. We’ve got Sandy’s next. Hey, Sandy, thanks for holding.
Hey, thanks for taking my call. Ask a question about some back-taxes. My husband, self-employed and he owes taxes for the years 2008 and 2009. Somebody had told me those are forgiven after 10 years, is that true?
Dr. Friday 40:06
Well, they are forgiven, the question will be is with many entrepreneurs, sometimes they don’t always file the taxes perfectly on time. If the time clock has been stopped for any reason for collections, either maybe he contacted him and said he wasn’t gonna be collectible, or some reason they may have stopped the time clock. Theoretically, the IRS has 10 years from the date of filing. So 2008 would have been filed by April theoretically, of 2009. So 10 years after that would be April of 2019. So it is very likely that that could have fallen off or will be falling off very soon. He probably I know, a lot of times, people just think I’ll keep my head down my mouth shut, and just see what happens. But you can go to irs.gov, and you can look under “get your records” and just pull these transcripts upright through there and just see if he wants to. I mean, it’s a choice.
Okay, so that wouldn’t throw a red flag or?
Dr. Friday 41:02
It would not know a lot of people think so. But no, I’ve never found any reason for them to get any additional information. You’re already basically probably been sent out to collections or something else anyway. So the outside collection surprise, you haven’t gotten a phone call, or maybe he’s relocated recently. So it’ll track him very well since he’s self-employed, who knows.
Well, he had stayed in contact with them over the phone and would tell them, he’s disabled and whatnot.
Dr. Friday 41:27
I gotcha. So he’s been in a difficult situation, possibly. So it may be that it has fallen off. I mean, he if he’s not been moving and try to avoid him and throw him things in a drawer. Like I said, 10 years is their collection period. So I would say 2008. If it’s been filed roughly at the right time, he would probably have fallen off by 2020. Maybe both. Okay.
Okay, well thank you so much.
Dr. Friday 41:53
Thank you for calling. I appreciate that. All right, Mark, you’ve been holding for almost eight minutes. I appreciate it.
Dr. Friday. Thank you, I got a big question for the last three minutes. Is there any tax benefit for an individual to create an LLC, and funnel all their income through that, and then pay their expenses and rent an office and all that stuff through the LLC?
Dr. Friday 42:19
Not really. Single-member LLCs are actually sole proprietorships, based on the IRS standings, and then you’ve got the franchise excise minimum of $100. In the state of Tennessee. The only reason most people we even suggest most people do those is more for liability protection, right. So if you’re in business, the likeliness of a lawsuit is probably higher than anyone else, most business owners have a risk. So by putting your assets in your name, and then keeping the company in a separate asset, an LLC, or a corporation, that’s where the protection comes in. There isn’t a huge, if you’re the only employee, you could start your own SEP or something like that, put more money into a retirement, but you can do this a Schedule C. If you’re a sub s corporation, there are some other advantages, depending on the amount of income you’re earning, because you can defer some of that as dividends where there’s no Social Security or Medicare tax on that. So there are some things but for a single-member LLC, no, I don’t see any advantages or disadvantages from that tax standpoint. I’m sure a lawyer would have a different saying possibly.
Sure. Okay. Great. Thank you very much.
Dr. Friday 43:32
No worries. Thank you. All right, guys, this has been an awesome Halloween show, we have done a great job of keeping my phone lines going. So let’s make sure you guys know how to reach me in case you do need some tax help. Or maybe you’re thinking about next year, you want to have me help you prepare your taxes, or something’s changed and you might need someone to help you. It’s really easy. You can go to my website and I will tell you, we haven’t quite opened up the website for booking 2020 taxes that should be happening within the next couple of weeks. But we will be starting to get into how many or what you have gone as far as setting up your appointments or if you want to get an appointment during this time for looking at your prior your taxes or anything else. Then all you have to do is go to drfriday.com click on the button that says “appointments” and you’ll be in good shape. You can set up an appointment to make it all happen.
Dr. Friday 44:33
Someone asked off air how to make sure that they’re RSVP to your events coming up. Right now we don’t have any coming up events. Thank you for letting me know that. We don’t have anything. As soon as we start doing some more speaking engagements and things we will be more than glad to put some of that out there. But with COVID we haven’t really had top many speaking events but just keep an eye on the website and we will be more than glad to update anyone that wants to do that. So again, if you want to make an appointment, all initial consultations are free. So that way we make sure we’re all on the same page, you can go to the website, Drfriday.com. And you can click on “appointment”, you can make your appointment. If you want, or you’ve got questions, you’re not sure exactly what you do or don’t need to do, or maybe you haven’t filed taxes in a number of years, and you’re like, “I don’t have the records I’ve moved, I’ve gone through floods,” you’d be amazed what people have had to suffer or went through. And paperwork is the last thing they’re worried about. We can have a way to help you recreate those years to the best of our abilities and help you get some taxes filed.
Dr. Friday 45:39
So to do that you can either email firstname.lastname@example.org. We can start the process because will most likely need to get power of attorney and that takes usually 10 to 15 days before we can actually do anything along that line. But if you do need assistance, we can help you with that. Also if you need to call me 615-367-0819, that’s my phone number to the office. You can also text to that number. If you have any questions. That way we can do the show my 20 years of doing business is all about trying to help people get current with their taxes because you can’t make a deal with the IRS. I know a lot of people hear those things on the radio or whatever else. But the truth is you’ve got to be current and all my entrepreneurs that we probably can make or deal with do some deals possibly with remember you’ve got to be making quarterly estimates you’ve got to be current with your taxes and you’ve got to be taking care of it. So if you want to reach me at 615-367-0819. I hope you guys have an awesome Halloween and I’ll catch you next Saturday. Call you later.