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On this rainy Saturday, Dr. Friday jumps right into critical tax information, starting with an urgent reminder about the upcoming September 15th deadline for S-Corps, Partnerships, and LLCs, which is not covered by the federal disaster extension. She then unpacks the major tax law changes coming in 2025, including a new senior deduction, tax-free tips and overtime, and a deduction for auto loan interest. Throughout the show, Dr. Friday answers a wide range of listener calls on topics from 1031 exchanges and Social Security earnings limits to fixing W-4 withholdings to avoid a surprise tax bill.
Key points from the show:
- Urgent Deadline: The federal disaster extension to November 3rd does NOT apply to S-Corporations, Partnerships, and LLCs that were on extension. Their filing deadline is still September 15th.
- 2024 Contributions Still Open: Individuals under the federal disaster extension have until November 3rd to make contributions to their SEP, traditional IRA, or Roth IRA for the 2024 tax year.
- New Senior Deduction (2025): Starting with the 2025 tax year, individuals over 65 may qualify for a $6,000 deduction, which will be added to their standard deduction to help reduce taxes on Social Security income. This is not a refundable credit.
- Tax-Free Tips (2025): A new law will make up to $25,000 in qualified tips deductible, though this phases out at higher income levels ($150,000 for single, $300,000 for married).
- Tax-Free Overtime (2025): The time-and-a-half portion of overtime pay will be non-taxable for W-2 employees from 2025 through 2028. Dr. Friday cautions that this likely won’t apply to 1099 workers.
- Auto Loan Interest Deduction (2025): A deduction of up to $10,000 for interest paid on a loan for a qualified, US-assembled personal vehicle will be available for loans originated after December 31, 2024.
Episode FAQ
Q1: I thought the federal disaster declaration extended all tax deadlines to November. Is my business tax return also extended? A: No. While the federal disaster extension moved the deadline for individual returns to November 3rd, it did not change the deadline for S-Corporations, Partnerships, and LLCs. Those returns are still due on September 15th.
Q2: I’m over 65. How do I get the new $6,000 tax credit for seniors? A: It is a $6,000 deduction, not a credit, and it begins with the 2025 tax year, not 2024. It will be added to the standard deduction for qualifying individuals over 65, which will lower your taxable income. You do not need to amend your 2024 return.
Q3: My wife started collecting Social Security at age 62 and still works. How much can she earn before her benefits are reduced? A: The annual earnings limit for those taking Social Security early is around $21,000. This limit applies only to earned income from a W-2 or 1099 job, not to distributions from pensions or 401(k)s.
Transcript
Announcer
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.
Announcer
She’s the how-to girl.
Announcer
It’s the Doctor Friday show.
Announcer
If you have a Question for Dr.
Announcer
Friday, call her now.
Announcer
737-WWTN.
Announcer
That’s 737-9986.
Announcer
So here’s your host, financial counselor, and tax consultant, Dr.
Announcer
Friday.
Dr. Friday
G’day, I’m Dr.
Dr. Friday
Friday, and the doctor is in the house on this very, very wet Saturday.
Dr. Friday
Actually, uh my my yard needed it, so I’m kinda happy we had some of it.
Dr. Friday
Maybe a little too much rain in the Spring Hill area, but All in all, can’t complain when you get what you ask for.
Dr. Friday
So anyways, it’s a great Saturday to be listening to the radio, hopefully, and enjoying uh the Dr.
Dr. Friday
Friday show So that being said, the first thing I wanted to hit, because I have had a number of phone calls that we all know, or at least by now, many of my listeners should know that we are under a federal disaster extension.
Dr. Friday
That took place for anything that was extended after 4.
Dr. Friday
8.
Dr. Friday
So if you are an LLC that was due on 315, extended till 915, if you are a sub-s corporation.
Dr. Friday
Originally due on 315 would have been extended till 915.
Dr. Friday
These entities are not extended to the 11.
Dr. Friday
3.
Dr. Friday
So if you have not completed your partnership.
Dr. Friday
LLC, any of those, as well as if you have not finished your sub-S Corporation.
Dr. Friday
Those all are due on the 15th of September.
Dr. Friday
So I really wanted to get in there, bring that information back in, because without it, um, you know, to be quite honest.
Dr. Friday
You’re going to be in a situation where you’re like, oh my gosh, I didn’t know.
Dr. Friday
I thought everything was extended.
Dr. Friday
And I want to make sure my people at least.
Dr. Friday
Do understand that it is not extended and if you have an entity, a separate entity in which you file normally This is the time to make sure that that entity has been completed by your tax person.
Dr. Friday
It may have been completed already.
Dr. Friday
It’s not a big deal in some cases, but in some cases you may need to confirm that it was prepared and filed just because with this unusual extension sometimes that leads to um you know an additional situation where we need to make sure you have all of your information because again what we don’t want is to have you turn around and think that something was done and then find out that it wasn’t and now you’re kind of up the creek because It’s uh pretty late in the season to be um trying to get somebody that, you know, if they haven’t already finished it, that they have it.
Dr. Friday
So Again, just really more making sure that all of your taxes are on time.
Dr. Friday
We are under a federal disaster extension for individuals, those individuals that have that same situation no problem um you know we’ll be able to get all those done and and i mean same thing for payroll taxes that were due um you know after the the due date um I guess, you know, all your estimated because that was due April 15th, June 15th, September 15th.
Dr. Friday
All three of those are extended to 11.
Dr. Friday
3.
Dr. Friday
Um, so if you have questions If I’m confusing you more, please feel free to give us a call here in the studio, 615-737-9986.
Dr. Friday
615-737-9986.
Dr. Friday
For all of you that have never heard this radio show and you just pinged into it or listened to it or maybe you’re on iHeartRadio and you’re listening to it through your um your app of some sort.
Dr. Friday
I’m Dr.
Dr. Friday
Friday.
Dr. Friday
I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.
Dr. Friday
We have in my office has been around for 30 years here in the Brentwood, Nashville area.
Dr. Friday
And what we really deal with is mostly taxation, obviously mostly federal and IRS issues.
Dr. Friday
That is what we have specialized in and have been doing for a long time.
Dr. Friday
So if you have a question, something that uh has to do with maybe you haven’t filed your 2024 or maybe you’re planning your 2025 taxes because Come on, guys, we only have like three or four months left of this year, besides the fact that you have to finish your 2024.
Dr. Friday
If you have um not maximized your SEP.
Dr. Friday
It is still able to be maximized up until 11.
Dr. Friday
3.
Dr. Friday
You can even put your IRA Which normally cuts out on 415.
Dr. Friday
But if you have not put money into your traditional IRAs or Roth for this uh 2024 tax year, you are still good to put money into those accounts for the year of 2024.
Dr. Friday
So all these things are out there.
Dr. Friday
I want to make sure that you’re maximizing, understanding what they are, what you need to be doing, so that you have all of that in the right place so you don’t have to worry about any of those questions.
Dr. Friday
But if you um do have a question or you need some help, all you have to do is give us a call here in the studio at 615-737-9986-615.
Dr. Friday
737-9986, uh taking your calls, talking about taxes.
Dr. Friday
Um, we did cover a lot time last Saturday um or or thereabouts when we were talking about how they are going to be giving you your $6,000 if you are over the age of 65 making less than um I believe uh 75,000 for single, 150 for married, I believe.
Dr. Friday
Um You are going to be getting or possibly qualifying for a $6,000 deduction.
Dr. Friday
And that deduction is going to fall in a way of increasing your standard deduction.
Dr. Friday
So it’s going to be on the standard deduction.
Dr. Friday
So that way they’ll be able to increase the standard deduction and give you what you um what you want.
Dr. Friday
So again, all this comes back into play, making sure that you understand.
Dr. Friday
So in 2024, we’re going to have a very interesting tax season.
Dr. Friday
Um it it should be uh pretty straightforward.
Dr. Friday
Um but if you have a situation where you have not uh filed taxes and maybe This isn’t really going to affect you.
Dr. Friday
So if you’re over the age of 65 and you’re on Social Security only, I want to clarify there’s not going to be a refund of additional money.
Dr. Friday
I’ve had a number of people that have contacted me thinking, is this something I can get to uh you know add and they’re going to give me a bigger refund?
Dr. Friday
The answer is no So again, over the age of 65, on or before the last day of the tax year, they will be qualifying for a $6,000 senior deduction That is not a credit, a deduction that they’ll be adding to the standard deduction.
Dr. Friday
And that’s what they’re going to use to help what they were talking about, trying to make Social Security less taxed.
Dr. Friday
I will not say it’s not going to be taxed because in some cases it still can be taxed, but at least it’s going to be less taxed.
Dr. Friday
So that will be.
Dr. Friday
And then of course we all know about the no tax on tips Uh some of these headings are a bit um misconceiving, I guess.
Dr. Friday
You know, they they’re very confusing because some people they’re going to have uh qualified tips They’re going to have a maximum deduction of $25,000.
Dr. Friday
So some people will be making more than $25,000 in tips.
Dr. Friday
So some of those tips could be become deductible.
Dr. Friday
Um and then the deduction phases out.
Dr. Friday
So if you are married, you have 300,000.
Dr. Friday
If you are single 150,000.
Dr. Friday
So if you’re married and you happen to be married to a spouse that makes decent amount of money or or you make very good money.
Dr. Friday
I’ve got waiters um they make over a hundred thousand dollars a year.
Dr. Friday
You know what I mean?
Dr. Friday
And if they’re married, they may have another um individual and some of them actually work two jobs so it makes it where it’s a little bit more complicated that way but still doesn’t change the fact that that is going to be added in.
Dr. Friday
It’s going to be more guidance should be coming out on October 2nd.
Dr. Friday
So hopefully we will get a better understanding of exactly how we’re going to treat that and what we’re going to do with it.
Dr. Friday
Why don’t we go to Bob on the phone so he doesn’t have to wait through the break?
Dr. Friday
Hey Bob, what’s happening?
Dr. Friday
Hey Bob, what’s happening?
Dr. Friday
I can’t hear him, so we’re gonna keep going and maybe you can get him on the line for me.
Dr. Friday
Um but meanwhile, so again, we’re talking about tips, and I um There is a publication out there for anyone that is curious.
Dr. Friday
It’s a 4137.
Dr. Friday
Remember also, these are qualified tips.
Dr. Friday
Now there will be some for the self-employed, which would be like maybe my Uber drivers and things.
Dr. Friday
But otherwise, there’s going to be where you’re going to be reporting, but keep in mind this does need to be tracked.
Dr. Friday
I would say this is going to be a very big area in which the IRS could very easily track your information and take it from there.
Dr. Friday
All right, so it looks like uh we lost our caller, but Bob, if you are available, just uh give us another call.
Dr. Friday
I’m not too sure if it was a malfunction on my side Everything’s possible in my world.
Dr. Friday
Um, or um or if you or if it was just some situation.
Dr. Friday
But if you don’t mind, give us a call back.
Dr. Friday
I love my callers.
Dr. Friday
Always better than me sitting here trying to figure out what you guys would like to hear about, more about what I could help you with.
Dr. Friday
if possible.
Dr. Friday
And then um the last big the three big things we’re gonna see well there’s probably four but one is on social security you have to be over 65.
Dr. Friday
One is gonna be for tips which means you have to be working in a job.
Dr. Friday
And then the third is the overtime, right?
Dr. Friday
Again, this is only going to be effective for 25 through 28.
Dr. Friday
It’s only the half, the time and a half portion of your overtime.
Dr. Friday
It has to be reported on a W2.
Dr. Friday
Or if it is somehow reported on a 1099, I’m going to tell you right now, if you’re getting paid overtime and you’re receiving a 1099.
Dr. Friday
Yeah, that is um not going to probably uh I mean I think that will cause an audit.
Dr. Friday
I really do.
Dr. Friday
Because 1099 individuals Should not be, I mean, the whole purpose is you’re self-employed, that’s what a ten ninety-nine means.
Dr. Friday
You’ve agreed to do something for a certain dollar amount.
Dr. Friday
not an hourly wage and a time and a half wage.
Dr. Friday
That is for people that are actually on W-2s.
Dr. Friday
I sometimes wonder if they’re actually putting this no tax on overtime and this whole no tax on tips as a way of trying to catch people that are underreporting their income because of tips.
Dr. Friday
Because if it’s cash and things like that that they don’t have it.
Dr. Friday
So now people are going to want to get it out there because they can get more money show more money on their tax return and pay less.
Dr. Friday
Um and the same thing with um uh overtime if you are a 10 non or have anything other than a W-2, I think we’re probably going to be looking at a situation where that’s going to come back and bite you.
Dr. Friday
So just, you know, not saying you should, you know, tax law is very specific.
Dr. Friday
Any money you earn that is earned is taxable income, no matter if you receive it on a W-2, no matter if you receive it as a 1099.
Dr. Friday
No matter if nothing comes to you, but you are using it as part of your lifestyle, it is income to you.
Dr. Friday
And they do have a lifestyle track.
Dr. Friday
I’ve handled, gosh, a lot of different audits.
Dr. Friday
And one of the first things they do is they track it right back through.
Dr. Friday
And then that way they can make sure that that is working Um, and and so if you say you make $20,000, yet your rent is, you know, $1,500 a month, your utilities, blah, blah, blah, then you’re going to have a situation where it’s a whole different idea.
Dr. Friday
All right, we’re going to take our first break.
Dr. Friday
When we come back, we’ll get George, who’s going to be on the line here for us.
Dr. Friday
But why don’t we take a quick break?
Dr. Friday
We’ll be right back with the Dr.
Dr. Friday
Friday show.
Dr. Friday
Alright, I guess we’re back live here in studio.
Dr. Friday
This is Dr.
Dr. Friday
Friday.
Dr. Friday
And well let’s go right to the phone for George.
Dr. Friday
See what he’s been holding for.
Dr. Friday
Hey George.
Dr. Friday
George.
Caller 1
Hello, this is me.
Dr. Friday
Hey buddy, thanks.
Dr. Friday
What can I do for you, sweetie?
Caller 1
Well well I heard you say something about a six thousand dollar credit for uh people A deduction, yes.
Caller 1
Deduction, yeah.
Caller 1
Deduction on uh if you make 150.
Caller 1
Is that for last uh for 2024 or 2025?
Dr. Friday
This is gonna be 2025.
Dr. Friday
You have to be over the age of 65, um, getting social security.
Dr. Friday
Which is the same thing.
Caller 1
I’m seventy five against social security and I’m married.
Dr. Friday
Okay.
Dr. Friday
So you make three hundred thousand for married and if you’re both on social security, they’ll add to your standard deduction twelve thousand dollars.
Caller 1
Oh, okay.
Caller 1
Yeah, I’m definitely not making three hundred thousand, but uh I’m married and over six oh uh you know, I’m over seventy five and so So this is gonna be for next year.
Dr. Friday
Yeah, this will be for your twenty twenty twenty uh five tax return through twenty twenty-eight.
Caller 1
Good, good.
Caller 1
Okay.
Caller 1
That’s why I wasn’t sure because I didn’t know if I had to put an amendment if it was for last year because I didn’t do it
Dr. Friday
Yeah, well, and you know, we’ve had that happen in the past where they’ve made tax laws in the middle of nowhere.
Dr. Friday
So no worries.
Caller 1
You did good though.
Caller 1
I appreciate it, hon.
Caller 1
Thank you very much.
Dr. Friday
Thank you.
Caller 1
Bye.
Caller 1
Uh-huh.
Dr. Friday
That was a great question because I know again sometimes we get especially when I keep saying 24 and 25 because at this point a lot of people haven’t filed 24s, including myself, and many people haven’t filed 25.
Dr. Friday
So it’s just a matter of making sure that we’ve kind of done both to make it balance out and do exactly what we need done.
Dr. Friday
So if you again need help and knowing what’s changing you.
Dr. Friday
can always give our office call but these are all most of the things I’m talking about when it comes to the deduction um for all of these different tax situations.
Dr. Friday
We are looking at mostly tw I mean this is all 25 when I’m talking about the um overtime the tips The Social Security and the only other one that’s kind of unique that’s gonna be during that same time period is um for individuals may deduct interest paid on a loan used to purchase a qualified vehicle purchased the vehicle for personal use and meets other eligibilities.
Dr. Friday
Leases do not qualify, just in case you want to make sure you know that.
Dr. Friday
And so you have um A whole list of different things that are cars that are there, but mainly it’s a unique one because you know it’s been a long time where we haven’t been able to take interest.
Dr. Friday
And I know the maximum annual deduction is $10,000.
Dr. Friday
So the deduction phases out for $100,000 for single, $200,000 for files.
Dr. Friday
um origination after 1231 2024 so that makes it work really well for that one all right the phones are blowing up oh gosh i’d like you bless you bless you all right nancy let’s see what you have for me girl
Caller 2
All right, thank you.
Caller 2
Um last year I sold a piece of uh rental property and it cost me a lot of money in taxes.
Caller 2
I am thinking about selling another piece this coming year.
Caller 2
I understand at the second I can’t recall what it’s called when you invest in another piece of rental property.
Dr. Friday
Called the ten thirty one exchange.
Caller 2
It’s what?
Dr. Friday
It’s called a ten thirty one exchange.
Caller 2
Exactly.
Caller 2
Does that go for vacant property that perhaps you are intending on building?
Caller 2
Uh a home for rental?
Dr. Friday
So I have seen and I am I’m a I’m a preference this that I’m not an attorney and I would definitely suggest calling Bob Notstein.
Dr. Friday
He’s a 1031 attorney in town.
Dr. Friday
He handles all mine and most of my clients.
Dr. Friday
But I have seen where people have been able to take a 1031.
Dr. Friday
Now the question is going to be, can you, as far as I know, you can buy a lot and then build on it through the 1031.
Dr. Friday
Can you already own the lot and then build?
Dr. Friday
That’s the question I don’t know the perfect answer for Nancy.
Dr. Friday
And I don’t want to say yes because again, I have had clients buy dirt and then build commercial buildings on them and then all of that, all of that fell under the 1031.
Dr. Friday
But I’ve I I think I don’t think you can invest into anything that you already own.
Dr. Friday
But again, um if you you can call my office Monday, I can give you his number.
Dr. Friday
He’s a great guy.
Dr. Friday
His name’s Bob Notstein.
Dr. Friday
And um he can um give you the actual true answer on that one, Nancy, because I don’t know for sure and I’d hate to lead you in the right the wrong direction for that situation.
Caller 2
I of course you understand what my uh uh goal is is to not pay that tax.
Caller 2
It it was Right.
Dr. Friday
No, and I mean that’s why we all love ten thirty ones, because you keep the money working versus giving Uncle Sam twenty-five percent of our income or whatever it works out to be and I guess twenty-four point eight in some cases.
Dr. Friday
But um yeah, it’s a lot of money that you could have kept working, especially if you didn’t necessarily, if you don’t mind staying in the rental industry, right?
Dr. Friday
Because that’s really the big problem.
Dr. Friday
Some people just want to get out, they’re tired of it Um, myself, I I’m I’m I’m still in it.
Dr. Friday
I love it right now.
Dr. Friday
I won’t tell you if I’m in my 70s, if I’ll still enjoy my renters, but at the moment, um, it’s a good investment as far as I’m concerned
Caller 2
Oh totally.
Caller 2
And I have had uh n a number of rental properties uh for a number of years and that’s why it cost me a little over forty thousand dollars.
Caller 2
And built up some nice equity.
Caller 2
Yes.
Caller 2
But having said that, um I’m kinda over it with the rental properties.
Caller 2
But um what my idea was is to buy a lot, build something on it at um another location that would be more appropriate for an Airbnb and just let it be an Airbnb.
Dr. Friday
Right.
Dr. Friday
I and and I’ve thought about going Airbnb.
Dr. Friday
I’ve got a number of clients very successful with it, especially if it’s in like the na uh uh Nashville or Knoxville areas.
Dr. Friday
Um and then um I’ve also thought of going a little bit more commercial.
Dr. Friday
I’ve got a number of clients.
Dr. Friday
You know, as it it seems like that rides a little better as you get older.
Dr. Friday
You know, I mean it’s not quite hands-on like like residential rentals are.
Caller 2
Exactly.
Dr. Friday
Yeah.
Dr. Friday
Okay, so what is that number that I need to call you on Monday?
Dr. Friday
Uh the phone number would be six one five 367-0819.
Dr. Friday
And I’ll give you his number at that time, okay?
Dr. Friday
Okay, that’ll be great.
Caller 2
I really appreciate the uh the assistance.
Dr. Friday
No problem.
Dr. Friday
Thanks.
Dr. Friday
It looks like Bob is back on the line.
Dr. Friday
Let’s see if that’s the same Bob.
Dr. Friday
Let’s get him back in here since he was so nice to wait through.
Dr. Friday
Hey, Bob.
Caller 4
Hey Dr.
Caller 4
Friday.
Dr. Friday
Hey baby.
Dr. Friday
All right.
Dr. Friday
What do you have for us?
Caller 4
credit for individuals who donate to scholarship organizations?
Dr. Friday
Yes.
Dr. Friday
Yes.
Dr. Friday
I covered that last week, but yes.
Dr. Friday
Do you want to know more about it?
Caller 4
Are we not connected?
Dr. Friday
Yeah, I think we are.
Dr. Friday
Can I hear you?
Caller 4
Can you hear me?
Dr. Friday
Come on, Bob.
Dr. Friday
Can you guys well I’m gonna start talking just so you know, Bob is talking about the scholarship where you can actually be giving money and you’re gonna be able to deduct it.
Dr. Friday
um on the uh 2027 uh situation where it’s not quite in uh in the system and I don’t know exactly where in the tax form we’re going to have uh that it it’s going to be for K to 12.
Dr. Friday
Educational Choice for Children Act ECCA.
Dr. Friday
It allows families to apply for scholarship funds from different establishments and then you can give which the scholarship fund can be used for tuition, books.
Dr. Friday
obviously tuition for itself, but also books and everything else.
Dr. Friday
This is the first Ederall tax credit scholarship program in existence that I’m I’m knowing about.
Dr. Friday
At least that’s what they’re telling me here.
Dr. Friday
It has passed.
Dr. Friday
And again, it is K to 12 students from households with income up to 300% of the media gross.
Dr. Friday
I’m assume we’re still talking probably the 100 and 200,000, 100,000 for single 200,000.
Dr. Friday
Under the ECC donorates, and the state will be able to donate up to $1,700 annually to one of over 250 scholarships.
Dr. Friday
in Pennsylvania.
Dr. Friday
This one is, but I think this is the the Congress has passed it um for millions.
Dr. Friday
It’s called the Pennsylvania Kids.
Dr. Friday
But There is several of them that are going to be out there that’s going to allow you to, you know, give money into that.
Dr. Friday
So that is a um it’s going to be a few years before we can actually do it.
Dr. Friday
And hopefully we’ll have a little better fact sheet than I have right this second.
Dr. Friday
But it is something that has passed Because everything I’m reading here, it’s under the Educational Department of Treasury.
Dr. Friday
We’ll oversee the program.
Dr. Friday
Um, but it starts as of January of 2027.
Dr. Friday
So we’ll have a little time.
Dr. Friday
All right, really quick.
Dr. Friday
Let’s see who um is it Steve that was next?
Dr. Friday
Okay, let’s hit Steve real quick.
Dr. Friday
Hey Steve.
Caller 5
Hi there, how you doing?
Dr. Friday
I am doing well.
Dr. Friday
What can I do to help you?
Dr. Friday
Hopefully.
Caller 5
Okay, um I’m file I file married jointly and my wife started collecting social security this year at age sixty-two.
Caller 5
So what’s the income limit that she can earn before there’s a reduction or tax, I guess?
Caller 5
Yeah.
Dr. Friday
No, it’s like twenty one thousand in the year.
Dr. Friday
Now the year in which she takes it early, there is a special calculation, but annually under a normal early Social Security, it’s around $20,000, $21,000 that she can earn a year.
Caller 5
Okay.
Caller 5
And that just applies to the her income and not my income.
Caller 5
Right, yes.
Dr. Friday
No, you’re you’re and this has to be earnings, not like if she takes it from a 401k or anything.
Dr. Friday
This would actually be working either a 1099 or W-2 job.
Caller 5
Okay.
Caller 5
Okay, so then this is then if I start collecting social security next year, I’ll be doing sixty-two next year in January.
Caller 5
So just uh it’s earnings and not anything I take out of 401k distribution or anything.
Caller 5
Right.
Dr. Friday
Those are not earnings.
Dr. Friday
So that would be if you have a pension or you have 401ks or IRAs, whatever they might be in at this point, those would not be part of the qualification.
Dr. Friday
It’s only earnings.
Caller 5
Okay.
Dr. Friday
If I go over to twenty one thousand then you have to pay back one dollar for every two dollars that you took out
Caller 5
Okay, okay.
Caller 5
And okay, that’s what I was trying I’m a little confused about that part of it.
Caller 5
I wasn’t quite sure how that all
Dr. Friday
Well yours is gonna be a little easier, Steve, because you actually are starting at the beginning of a year where you know I’m just saying because your earnings would only be for that year where sometimes people retire part way through or get onto it early, you know, due to other reasons.
Dr. Friday
But Yeah, you should be fine as long as you can keep your earnings under those twenty-one, twenty-two.
Dr. Friday
It’s somewhere in that ballpark.
Dr. Friday
And um I have to look it up.
Caller 5
Okay.
Caller 5
Okay, I appreciate it.
Caller 5
Thank you.
Dr. Friday
Perfect.
Dr. Friday
Ye Yep.
Dr. Friday
Let’s hit Judy really quick before the break and see that way she doesn’t have to wait through that.
Dr. Friday
Hey Judy, what can I do for ya?
Caller 6
Hey Doctor Friday.
Caller 6
Um I talked with you in two thousand twenty about my twenty nineteen tax return.
Caller 6
Wherein the government sent me a cheque for seventeen hundred nine dollars and fifty four cents.
Caller 6
We combed through it And your advice was to send the check back, marked void.
Dr. Friday
Right.
Caller 6
Fast forward.
Dr. Friday
They sent it back.
Caller 6
Three uh three or four days ago I received a check for sixteen hundred and eighty dollars, which did not clu include the twenty nine dollars interest.
Caller 6
on the same two thousand nineteen tax return.
Caller 6
What have the news for you money?
Dr. Friday
Yeah, you’re gonna put it in the bank.
Dr. Friday
Because at this point it’s outside the audit period.
Dr. Friday
Um, so they have reviewed it and they are saying it’s yours.
Dr. Friday
So at this point, I don’t know why they didn’t give you interest.
Dr. Friday
Because they should have been giving you interest for the last four years or whatever number it’s been.
Dr. Friday
Um but that could come separately.
Dr. Friday
I’ll be honest.
Dr. Friday
It could be coming separately.
Dr. Friday
But at this point Um, you know, I mean, if it’s from 2019, they can only go back two years in initial audits.
Dr. Friday
You’ve replied to them, you’ve given them the details, you have already told them.
Dr. Friday
So at this point, they’re coming back and you should get a letter, Judy.
Dr. Friday
Um, that will explain why they sent it to you again?
Dr. Friday
I mean they should.
Caller 6
I mean life is good if they do.
Caller 6
I I did get a letter and s it but it just it was just very generic and said, uh you will You will receive a refund in four to eight weeks and it w was only a few days.
Caller 6
Um
Dr. Friday
And I’ve tried to call.
Caller 6
Of course that’s useless.
Dr. Friday
You’re not gonna get I mean at this point you’re even not gonna really get anywhere anyways with them.
Dr. Friday
Um so I would honestly say put it in the bank.
Dr. Friday
And nothing and nothing’s gonna follow with it.
Caller 6
They’ve closed out twenty nineteen.
Caller 6
Okay, yeah.
Caller 6
Well, I thought about putting it in the bank.
Caller 6
POD just to my one of my grandchildren and by that time I may be dead if they p if they Well if you’re dead they can’t audit you.
Caller 3
It’s right.
Caller 6
It it exact that was my that was my thought and I’m I’m eighty one years old.
Caller 6
It is just you know, it’s time that I don’t have to fool with this kind of thing.
Caller 6
Exactly.
Dr. Friday
Exactly.
Dr. Friday
And I I really wouldn’t put in I wouldn’t lose a minute’s sleep on it either.
Dr. Friday
Um just put it in the bank.
Dr. Friday
Put it in the savings doesn’t make a difference whatever you’re comfortable with um I you know the I mean you’ve already tried to resolve the issue at this point they’re sending it back for a year in which they’ve already closed those periods so unless you know unless
Caller 6
They find that you have well didn’t close the period or they wouldn’t be sending it back.
Dr. Friday
It’s just that’s why they did, because the it’s still standing out there and they can’t hold it now.
Dr. Friday
Ah, gotcha.
Dr. Friday
Yeah.
Dr. Friday
To to balance their books.
Dr. Friday
We st we like to believe the IRS is balancing their books at least.
Caller 3
To balance their books.
Dr. Friday
They had to send that back.
Dr. Friday
Okay.
Dr. Friday
I’m not too sure how they managed to lose money instead of grow money on your money, but hey, I don’t have a good answer.
Dr. Friday
answer on that one.
Caller 6
Yeah, I w well I’m such a balance it to the penny kind of person.
Caller 6
It just Yep, I I hear you.
Dr. Friday
I hear you.
Caller 6
Okay.
Caller 6
Thank you, Sarah.
Caller 6
Thank you, sweetie.
Dr. Friday
No problem.
Caller 6
All right.
Caller 6
We’re going to take another break here.
Dr. Friday
If you want to join the show, that was great.
Dr. Friday
You can certainly do it.
Dr. Friday
615-737-9986.
Dr. Friday
We’ll be right back with the Dr.
Dr. Friday
Friday show.
Dr. Friday
Alrighty, we are back here live in studio and uh you probably hear my beautiful dog barking in the background.
Dr. Friday
Sorry guys, but It’s uh it’s that kind of day.
Dr. Friday
All right, let’s go right to the phones and hit Jillian.
Dr. Friday
Is it Jillian or Julian?
Dr. Friday
It’s one of the two.
Dr. Friday
Oh, it’s Alan.
Dr. Friday
Sorry.
Dr. Friday
Let me get my eyes checked.
Dr. Friday
Hey Alan, are you there?
Dr. Friday
Okay, I can’t hear anybody.
Dr. Friday
So, all right, we’ll have to see if we can get Alan to work on the phone there.
Dr. Friday
Otherwise, I will um just keep talking about my usual stuff.
Dr. Friday
So we’re going to go back to talking about what do we need to do to kick off $10,000 worth of auto interest on our vehicles.
Dr. Friday
And that is going to be first.
Dr. Friday
It has to be a qualified vehicle, which basically means it has to be any kind of car, minivan, SUV, pickup truck, motorcycle, yes, motorcycle.
Dr. Friday
with a gross weight less than 14,000 pounds, which we’re usually talking more than 6,000 because we want to have that section 179.
Dr. Friday
This is going to be final assembly has to have been done in the United States This isn’t going to be one of those things you can just say, oh yeah, I purchased the car.
Dr. Friday
We are going to need a FIN number.
Dr. Friday
You’re going to have to have a secured lien on the vehicle.
Dr. Friday
Meaning that you’re actually paying a loan with interest.
Dr. Friday
You’re going to have to use the vehicle for personal use only.
Dr. Friday
And it has to have originated after December 31st, 2024.
Dr. Friday
So these are all very important because you will not be able to deduct it if it doesn’t happen.
Dr. Friday
So if you have that situation, then we’ll be able to go from there.
Dr. Friday
Um just let me know if Alan is on the I’ll see it turn green if you can actually or red whatever but I don’t see anything there.
Dr. Friday
Um all right, so other than that, oh there, okay.
Caller 7
Is he there Hello.
Dr. Friday
Hey, there you are.
Caller 7
Hey, Alan.
Dr. Friday
Sorry about that.
Dr. Friday
I’m sure it was something I didn’t hit properly.
Caller 7
No worries, no worries.
Caller 7
So my question is, my wife and I, uh uh at full sixty six and two thirds, pulled our security out.
Caller 7
Uh we’re now uh we’re now seventy.
Caller 7
I continue to to work and my income increased every year tremendously.
Caller 7
Uh planned on working ’til seventy five And wanted to know if number one, uh my my social security income can be readjusted since I never stopped working uh based on the higher income and the fact that I’ve been contributing to social security this entire time.
Caller 7
Yep.
Caller 7
And And number two, uh the the the the income uh basically I’m I’m I’m I’m doing that so that I can have my home completely paid off at seventy five.
Caller 7
Right.
Dr. Friday
So yeah, and and obviously you’re good at what you’re doing and you don’t hate it because some people just totally I’m blessed.
Dr. Friday
I don’t have that particular problem, but a lot you know, some people are just doing time Okay, so in answer to your question, um, every year Social Security will reevaluate, but it basically it’s every two years because by the time they get your 20, let’s just say your 2024, they don’t get it into the system until March, April, or May.
Dr. Friday
And by the time everything’s filed, it’s basically not to the end of 25 will they actually be doing any adjustments for the year of of 24, right?
Dr. Friday
So basically you would then get something that should give you a bump on it in 26 in in my scenario.
Dr. Friday
So it should be happening if, you know, again, not knowing what your your quarters are as far as, you know, they take the highest 10 quarters.
Dr. Friday
uh I’m sorry, 40 quarters, 10 years to to do it.
Dr. Friday
So the other way to look and just see if it’s being done would be just you do you have your online access to Social Security?
Caller 3
I mean like you can log into SSA.
Dr. Friday
I would go in there and and look and see what they’re using for your calculations because it does actually tell you uh what what years, what quarters they’ve pulled.
Dr. Friday
So in theory, in in your world, since you’ve continued to work, your earliest years of those 30 years that they use, the earliest ones would fall off because you obviously are making a ton more than you may have done in the early days.
Caller 3
of the of your working.
Dr. Friday
So that would be the way it would work.
Dr. Friday
And if you don’t see it happen, I mean I’ve been told that’s what’s supposed to happen because Um, you know, I mean, many of many of my clients and in myself included, I’m not that age yet, but I have no intention of ever retiring.
Dr. Friday
Um and all goes well, I’ll continue to make as much, if not more, than I’d made the year before.
Caller 3
So
Dr. Friday
Hopefully that is the truth because I’m also a firm believer to take your so I mean I’m not a financial planner.
Dr. Friday
I gotta put that little caveat out, but I can’t leave my social security to somebody else.
Dr. Friday
So why am I not taking the social security?
Dr. Friday
reinvesting it, doing something with it, paying off your home, whatever you’re doing, um, versus it’s sitting in there making eight percent and who knows if I’m gonna make it eighty-eight years old before it breaks even on me taking it you know, at my normal versus 70 or whatever.
Dr. Friday
Um so you know, that’s uh I I know there’s financial planners that make a very good living telling people that, but as far as my my expectation would be to do as you did, which is just You know, use it to pay off debt or invest it so that, you know, you have a bigger rainy day fund or whatever.
Dr. Friday
Just it’s yours.
Dr. Friday
You earned it.
Dr. Friday
So I’m not helping a whole bunch besides sharing my opinion there, Alan, but My my suggestion would be is go on to SSA and if you don’t see any kind of adjustments, because not just the two or three percent, yours should be being.
Dr. Friday
I would think a bigger adjustment every year.
Dr. Friday
And then your wife would also get a portion of that if she’s, well, if she’s on her own, no.
Dr. Friday
But if she’s getting portion of yours, yes.
Caller 7
Yeah, she’s getting a portion and we’re we’re thinking the same way, so that makes me feel better.
Dr. Friday
Yeah, you got it, babe.
Dr. Friday
Well, thank you for calling.
Caller 7
Thank you.
Caller 7
Okay.
Caller 7
Bye.
Dr. Friday
All right.
Dr. Friday
So it looks like we have a few set minutes here before we have to take our next break, and that’ll be our last break.
Dr. Friday
So if you’ve been holding on, trying to think of a good question, and guys, I do appreciate the questions because You know, if you’re thinking it, I have found that a lot of people come my office and they’re like, oh, I heard this caller ask this, or I heard that, you know, because not everyone’s brave enough to.
Dr. Friday
to call a radio station.
Dr. Friday
It’s not something that’s in all of our DNA.
Dr. Friday
Before I got on the radio 15 or plus years ago, I guarantee you I had never called in a radio station So it’s very appreciated when you have something to share.
Dr. Friday
And Judy, who’s been listening for at least five or six years, thank you for being such an advocate.
Dr. Friday
listener totally appreciate that as well okay so when we get done from this break we’re gonna take a few more phone calls we’ll run over a few things that again I want to make sure that people that are in business that are operating with partnership LLCs or sub-S corporations, I really need to make sure you know those have not extended past the normal extension date, which is 9.
Dr. Friday
15, which is like nine days from now.
Dr. Friday
So you need to make sure those have been filed.
Dr. Friday
You don’t want to deal with penalties and stuff.
Dr. Friday
Hopefully you filed an extension.
Dr. Friday
But I I know there’s a big misconception out there um that everything got extended and you don’t have to worry about it, but those did not.
Dr. Friday
So unless um unless you truly were affected.
Dr. Friday
by some of these major storms and things, and you’re under a true federal disaster, then you do have some exception to this rule.
Dr. Friday
But Many of my clients, they they may have had a little roof damage, but none of them lost like their businesses or had major um disaster areas.
Dr. Friday
Um so we’re not dealing with that.
Dr. Friday
We’re just dealing with the the extensions that are on the table All right, so when we get back, you can also call 615-737-9986.
Dr. Friday
Number here in the studio, 615-78 737-9986.
Caller 3
We’ll be right back with the Doctor Friday show.
Dr. Friday
Alrighty, we are back here live in Cydia.
Dr. Friday
This is the last Bit of the show.
Dr. Friday
So if you’ve been holding out, you might want to call 615-737-9986.
Dr. Friday
615-737-9986.
Dr. Friday
We got Scott on the line.
Dr. Friday
Let’s see if we can help Scott.
Caller 7
Can you hear me?
Dr. Friday
Yes, I can.
Dr. Friday
What do you have happening, love?
Caller 7
Uh you may have a seriously?
Dr. Friday
Are we just having problems with the phones?
Dr. Friday
Because we just lost Scott.
Dr. Friday
Okay, Scott, try calling back again.
Dr. Friday
I am so sorry.
Dr. Friday
Somehow we are having some serious issues with our phones today.
Dr. Friday
I’m not too sure why, but we are going to Persevere no matter what.
Dr. Friday
So let’s try one more time.
Dr. Friday
If you happen to be out there, Scott, that would be great.
Dr. Friday
Um, and we’ll see what you have going there.
Dr. Friday
Um, otherwise, all right, so anyways.
Dr. Friday
It looks like the lines are off, but I’ll let you deal with that in the studio.
Dr. Friday
So if you have questions, obviously you can give us a call, but um you also can email friday at drfriday.
Dr. Friday
com just in case that doesn’t work for the phone lines.
Dr. Friday
Friday at drfriday.
Dr. Friday
com.
Dr. Friday
We’ll take your calls that way or we can answer your questions that way as well.
Dr. Friday
So that way we can hopefully get Scott.
Dr. Friday
If not, Scott, you can always call me um directly, whichever.
Dr. Friday
But the phone’s line seem to be up again.
Dr. Friday
So Scott, try one more time if you don’t mind.
Dr. Friday
If it uh doesn’t work, then we’ll follow up from there.
Dr. Friday
Okay, so um we’re getting close to the end of the show and we want to make sure that we have all of your uh main important things right we’re we’re getting close to uh preparing the end of the year for 2024 a lot of people have procrastinated Um, it’s not so much procrastinated.
Dr. Friday
Many, many people have gotten their taxes done.
Dr. Friday
They’re just waiting because they don’t have to file something.
Dr. Friday
So why pay the government before you have to pay the government?
Dr. Friday
And that’s a I mean, personally speaking, that’s a great idea.
Dr. Friday
I would not actually say don’t do that.
Dr. Friday
So um why not earn a little bit?
Dr. Friday
I had one client, he owed quite a bit of money, but he earned over $30,000 by just keeping the money in a high interest bearing situation.
Dr. Friday
I mean, he didn’t gamble it, he didn’t do anything with it.
Dr. Friday
He just took it and put it in a high interest bearing interest bearing situation and was able to make that kind of money.
Dr. Friday
And you know how often can you say you’re making money off the IRS?
Dr. Friday
Not too often, to be quite honest.
Dr. Friday
Normally we’re on the other side of that conversation.
Dr. Friday
We usually say no we’re not.
Dr. Friday
not making money.
Dr. Friday
No, not happening.
Dr. Friday
Okay.
Dr. Friday
So um if you need help with that or you know I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.
Dr. Friday
That is what I do.
Dr. Friday
So if you have questions dealing with the IRS, or maybe you haven’t filed taxes in a long time, or maybe you don’t even know, I had gentlemen coming the other day and he’s like I don’t remember the last time I filed my taxes.
Dr. Friday
I mean it wasn’t so much that it was that long, but he doesn’t remember if it was 19, 20.
Dr. Friday
Um, you know, I’ve had people that have filed taxes in 15 and 20 years Um and and to be amazing, you know, one of the big things is you’d be a bit shocked that you may not actually have to file all those years.
Dr. Friday
Then I had a woman filed taxes for years.
Dr. Friday
didn’t file one year and then she retired years later, nine, ten years later.
Dr. Friday
Um the IRS didn’t assess her taxes until like five years after the This was years ago, but it was like in 1996.
Dr. Friday
She had not filed taxes.
Dr. Friday
They had assessed her a hundred and some thousand dollars because she was a real estate person.
Dr. Friday
And then when she got onto Social Security, what do you think the first thing they did Sure, they put a levy against her social security because they said that, you know, she was owing a hundred and some thousand dollars.
Dr. Friday
So we had to go back, ask for a reconsideration, ask them to amend the tax return.
Dr. Friday
Um and this took a while, obviously not.
Dr. Friday
moves quickly with good old Uncle Sam.
Dr. Friday
And so we were able to do that and then eventually got her where she was not being levied.
Dr. Friday
But you don’t always think if you think you’ve missed the tax year and you’re not sure if you should have filed.
Dr. Friday
You don’t want it to be when you’re 65 at this point she was 65 and you’re ready to retire and now you find out that the IRS is going to be making you for the rest of your life pretty much take a levy um against uh your social security.
Dr. Friday
It wouldn’t have been that long, but it’s still when you’re living on a fixed income, having to deal with something like that is a lot.
Dr. Friday
So again, making sure that you have that information, making sure that you’re in good standing.
Dr. Friday
You know, um, I have a number of people that end up with state issues.
Dr. Friday
because they’ve lived in other states other than Tennessee.
Dr. Friday
And so then again, you know, 2019, 2020, 2022 have a couple of cases.
Dr. Friday
dealing with the state of Michigan, um, where the person uh made good money, filed the taxes, but somehow the numbers aren’t matching up with what the state is assuming, therefore they’re assessing.
Dr. Friday
And so they are making that be um a pretty big situation on that uh section.
Dr. Friday
Okay, so I have a question from Julia.
Dr. Friday
She said last year I had to pay a lot of money to the IRS because my employer and husband did not take out enough.
Dr. Friday
I think part of that was because I received a lot of company stock and it looked like they added that into my income.
Dr. Friday
How can I check and see if enough is being taken out to cover my checks so I don’t have this happen again Great question because that happens more times, Julia, than especially when you have company stock options.
Dr. Friday
So when you do buy the stock, they basically.
Dr. Friday
Take that money, they sell a portion, they add that in as income, and they should be taking out the highest portion of your W-2 income.
Dr. Friday
So I would say that that may not have been your fault.
Dr. Friday
I mean, on that one, you said your husband and your employer, but um If you’re doing that, I said the best way look at your pay stuff.
Dr. Friday
You can go to irs.
Dr. Friday
gov and you can estimate right there on irs.
Dr. Friday
gov if your income is this much money and you paid in this much money and you’re assuming by the end of the year this will be your in it will tell you how much more money you should have paid in.
Dr. Friday
Um if if you’re both claim if maybe you’re married and you have one child Make sure both people aren’t claiming married in one because that means you have two children, right?
Dr. Friday
Because if you’re claiming married to one and you’re claiming the child, and then your husband’s claiming married in one and they’re I find that to be a problem.
Dr. Friday
If you’re in higher earnings, always the simplest thing to do is to play it on the safe side and one of you go to single and zero.
Dr. Friday
That’s going to give you a higher deduction, especially but for the like the last three or four months because then you’ll have a lot more coming out because less less is more.
Dr. Friday
I mean bottom line is you don’t want to owe the IRS.
Dr. Friday
We don’t like to have that kind of question and do um that kind of, you know, no one likes to have me.
Dr. Friday
I sitting at the desk telling someone, I just prepared your taxes and you owe fifteen thousand dollars and you’re two W-2 earners and you’re sitting there going, how in the good book could that happen?
Dr. Friday
And I’m not saying that’s how much Julia Ode, but my point is I’ve had that on my desk.
Dr. Friday
And the the question always is how that happened?
Dr. Friday
Who did it?
Dr. Friday
What you know?
Dr. Friday
And then sometimes I have some, every year they end up with it.
Dr. Friday
Every year I tell them change your withholdings And if you’re not sure, if you go to that IRS, Julia, and you go to that IRS website and it goes, you know, you you do your calculation for wages.
Dr. Friday
And it says that you owe estimating you’re gonna owe another $4,000.
Dr. Friday
You can also just go on to your W4 um line four it says do you want additional withholdings multiply divide that by the number of pays you still have left and have just that a little additional money coming out to make a cushion uh for what you have because obviously buying stock options is a good thing but it can be very distorting on your wages because you know um when you see someone that says oh you’ve made you know 250 000 350 000 and your salary is actually 140 but all the rest was stock options that you went ahead and maximized Not a bad plan.
Dr. Friday
Usually that comes back to you in a very good situation, but it does make it distorting, which puts you in a higher tax bracket.
Dr. Friday
Which sometimes, especially also, Julia, make sure you and your husband on the W4 form, you both have um checked the box that says your spouse is working.
Dr. Friday
You know, few years ago they changed the W4, wasn’t overly excited about it.
Dr. Friday
But we have to live with what we know and And on this W4, there is a box that says, does your spouse work?
Dr. Friday
You want to make sure that box is checked.
Dr. Friday
So your employer is using that to take a higher tax amount out that if your spouse doesn’t work Because again, if you’re both married and you’re both claiming you’re married, tax code says that you’re supporting another person.
Dr. Friday
Married means that that other person does not work.
Dr. Friday
If you don’t have that box check, they think that you are the only breadwinner and that you’re supporting that spouse.
Dr. Friday
Otherwise, basically single and zero is what you are if there’s no children.
Dr. Friday
Um, so I’m not trying to confuse, but bottom line is you do want to go out, it’s only what it’s already September, so you only have four months left to make any adjustments so that you don’t end up with a big check uh check due come next April or March April when you file your taxes.
Dr. Friday
Hopefully that answers the question for you.
Dr. Friday
All right.
Dr. Friday
We are getting ready to wind down on the uh show here.
Dr. Friday
So thank you for emailing that makes it at least easier.
Dr. Friday
for me to answer.
Dr. Friday
So if you have questions, you can obviously call the office on Monday morning.
Dr. Friday
That phone number again is 615.
Dr. Friday
367-0819-615-367-0819.
Dr. Friday
My phone number in the office.
Dr. Friday
And also you can email.
Dr. Friday
That was Friday at DRfriday.
Dr. Friday
com.
Dr. Friday
Friday at drfriday.
Dr. Friday
com.
Dr. Friday
If you have no idea who I am and you’re like, wow, who is this person?
Dr. Friday
First time listener, which I appreciate you tuning in, just go to drfriday.
Dr. Friday
com.
Dr. Friday
That’s the website.
Dr. Friday
You can also send a link through there to me.
Dr. Friday
And we can try to get your questions answered to the best of our ability.
Dr. Friday
And if you haven’t filed your taxes or you need help with that, we’ll be more than glad to try to help you out.
Dr. Friday
Again, easiest way, call 615-367-0819 or just email Friday at drfriday.
Dr. Friday
com go to the website we will be getting the calendar open for the twenty twenty five tax season pretty soon not quite well I have to get all my regular clients in there and then we’ll open it up so if you have any questions Top you later.