Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I probably should have had this one a lot earlier. Short-term rentals and Airbnbs are everywhere.

If you don’t run those right, and you’re taking a portion of your house and turning it into an Airbnb, you may find that the IRS is gonna be looking a lot closer at you.

Also, how are you handling all the utilities and things? Because if it’s not 24-7 an Airbnb or rental, are you using the proper percentages?

Are you depreciating things on the proper percentages? Are you making sure that you’re complying with not only federal but state and local regulations, with licensing and other additional taxes due for compliance?

If you need help, go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Real estate professional status, wow, this is a big question.

I have a lot of people that swear they’re real estate professionals because they put in more than 750 hours. That is only part of it.

If you have a full-time job and you want to claim that you’re a real estate professional, you’re gonna find out it doesn’t work. The IRS will disallow it.

If you are a licensed real estate person and you’re doing it 24-7 like most of us do our business, sure, you’re a real estate professional. But sometimes there’s pros and sometimes there’s cons.

Do you really want to be paying self-employment tax on a rental property? You may have to if you’re treated as a real estate professional.

Need help? Go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Sometimes we’re just looking for good ways to save money, and one way to do that is opportunity zones.

They continue to have favorable tax treatment for investors who reinvest capital gains into what we call QOFs, or qualified opportunity funds, within required time windows.

A lot of times you have to do it for the long term, five to ten years. There are different rules, but instead of doing a 1031 exchange, you might want to look into an opportunity zone.

That may be another way for you to defer capital gains and potentially reduce taxes in the future. If you need help, go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Rental properties continue to have depreciation rules: 27.5 years for residential and 39 years for commercial. Bonus depreciation may apply to improvements, although bonus rates decrease on schedule.

Landlords can still use cost segregation studies. That’s big, because if you’re buying something and you want to do cost segregation, you can pull out air conditioners and other equipment for faster depreciation.

But if you’re doing all that, you need to understand in the big picture you do have to do the other side, which is called recapture of depreciation.

So make sure you’re saving money today and not putting a big old hole in your pocket tomorrow.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points

• IRS disaster extension: Dr. Friday says taxpayers in the covered Tennessee counties may have certain filing and payment deadlines pushed to May 22, 2026, with eligibility tied to the address on the return.
• Social Security filing thresholds: A caller example showed that when most income is Social Security and the remaining income is low enough, a federal return may not be required under the provisional income rules she discussed.
• Inherited home sales: Selling inherited property can still create capital gains above the stepped-up basis, which is why she stresses getting a real appraisal at the date of inheritance.
• Donation records and sales tax: Non-cash charitable donations need stronger substantiation than a rough estimate, and detailed Tennessee sales tax receipts can add up for taxpayers who itemize.
• Identity letters and refunds: She warns that IRS identity-verification letters can be legitimate and says some taxpayers may need to use ID.me and direct deposit details before a refund is released.
• Extensions, payroll taxes, and S-corp pay: Filing an extension can reduce the failure-to-file problem, but payroll taxes should be paid promptly and artificially low S-corp wages can reduce future Social Security and retirement contribution room.

Episode FAQ

Q: Who gets the May 22, 2026 IRS extension discussed in this episode? A: Dr. Friday says the relief applies based on the return address for taxpayers in the covered Tennessee disaster counties, with certain filing and payment deadlines moved to May 22, 2026.

Q: If my income is only Social Security, do I usually need to file a federal return? A: As discussed on the show, Social Security by itself is generally not taxed; filing becomes an issue when enough other income pushes provisional income over the threshold she described.

Q: Why does she stress appraisals for inherited homes and major donations? A: Because the appraisal helps support basis or value if the IRS later questions the number used on the return.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

1031 exchange rules for real estate have no big change. It’s what’s called a like-kind exchange.

A like-kind exchange basically means we can defer, that’s a good word, right, defer capital gains and buy something else.

The simplistic side of this is, let’s say you sell something for a million dollars and you’ve got a ton of capital gains in that, right? Maybe you originally paid 200, so you’d have like 800 grand of capital gains that you have to pay tax on.

Guess what? You go buy something else, or up to three other properties, for that million dollars, and you don’t have to pay tax right now.

You exchange it for one big property, maybe some other types of property. This is something that can work to save tax dollars. You need help? Go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

A step-up in basis. Have you ever heard better words? A step-up in basis. I love it. It’s a lot of money in my pocket if I get a step-up in basis.

Now sometimes people think they’re really helping the family by doing quitclaims or giving the kids or the grandchildren something during their lifetime. Sometimes it is.

You need to plan it, though, because most of the time you’re leaving tax dollars on the table by giving something during your lifetime instead of waiting until you pass away.

Not saying it’s always one way or the other, but you need to consider both sides of this situation before you make that decision. If you need help, just go to the website at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Adoption tax credit continues under the extended rules, with annual inflation adjustments increasing the maximum credit amount.

It’s a great thing. First, you’re adopting a child. That’s a wonderful thing. You’re helping people and doing important things, and you may also get the credit.

Maybe you can’t use it all in the first year. Well, this can roll forward up to five years, so it’s not like you’re gonna lose it if you don’t have all that expense in the first year.

So it’s a wonderful thing to do, A, to adopt a child, and B, to get a few more dollars in your pocket, because everyone knows that children are not inexpensive.

If you need help understanding how tax law works, or maybe you’re dealing with the IRS, just come to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Guess what? The IRS just passed the law saying no more taxes. That’s right. We’re not paying taxes anymore. Ha, April Fool’s.

For one, the IRS does not pass laws. It’s Congress and the Senate, people. But that being said, we will be paying taxes. We’ll pay taxes actually after we’re dead, so think about that.

If you need help understanding taxes, maybe you need to file an extension now and you need to be able to get some tax work done and explain it all, you can certainly call us, 615-367-0819, or check us out on the web at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Energy credit for home improvements is still on the table. HVAC, windows, insulation, and energy-efficient property improvements are subject to annual limitations, but you still have them on the table.

It’s very important, but you do need the receipt and the manufacturer certificate to prove they meet IRS code. That’s the important part.

A lot of times people come in and say, well I got a new AC unit. Okay, we need the receipt. We need to see, did it really meet the energy credit, or was it just a new unit that was cheaper and not able to meet those criteria?

If you need help with this, just go to the web at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Divorce, alimony, really doesn’t make a big difference to be quite honest, because none of it’s tax deductible anymore.

If you got divorced after 2018, your alimony or your payments of any kind going to your ex are not going to become deductible.

If you divorced prior to 2018, you still have that deduction in play.

So if you’re looking at divorce and you’re the one that’s the breadwinner, you might want to take into account how much you’re gonna be paying in taxes because the other person will be paying zero. Very interesting way to work out a deal.

You need help on taxes? Come to us, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Let’s talk about charitable contributions for a minute. Remember, if you give cash or you give away clothes for $250 or less, really all you need is a basic receipt.

If it goes over that, and this would be a combination thereof, I had a gentleman that gave $40,000 worth of clothing. His father had passed away, they cleaned out the house, they gave it all to Goodwill.

Without an appraisal, he was not allowed to do that. It’s that simple.

So if you’re giving big chunks of things away thinking you’re gonna help them and put some money in your pocket, you need an appraisal done on anything over $500. And that’s if it’s a lump together or not.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

For all of you that are on Social Security, Social Security taxation has not changed. Up to 85% of your benefits will be taxed.

There is something called a QCD, though, for all of my listeners that are 70 and a half. If you give to charity, remember you can take that directly out of your IRA, your 401(k), any of them where you would normally have a required minimum distribution.

At 70 and a half, you can give it direct, save 100% of taxes on that money, and not worry about itemizing at all.

If you don’t know about that, you need to talk to your financial person. But you can also contact me at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

You can still put money into a Roth or a traditional IRA until tax day, and it may be something you want to think about.

Now, I am not a financial planner, so I’m not going to tell you it’s going to save you tax dollars or not, because I don’t know.

Every time we can put a few dollars aside and save tax dollars, it might be a good idea. But sometimes it may be better just to do Roth, let the money grow tax-free, and not worry about saving taxes today.

These are decisions you need to make. Your best bet is to contact an actual financial planner. They will then make up a plan and help you figure that out. But if you need help on the tax side of things, just go to my website and send me a note at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

This is for all new parents. Starting as of January 1, 2025, it’s called the Trump Savings.

For each child, he will put $1,000 into an account for children born during these years, and then a parent can put up to $5,000 a year into that account.

It will be a managed fund, and then at the age of 18 they will have access. It will be limited to IRS taxes, as far as an IRA kind of situation.

But hey, it’s a thousand free dollars and you can also put money aside. Why not put more money aside to help for college and other things? If you need help understanding tax law, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The Saver’s Credit, you know, I don’t think a lot of people talk about that.

Under the SECURE Act 2.0, the Saver’s Credit is scheduled to transition into a federal savings match. You heard that right, that they are actually going to be setting up a retirement account within the IRS where they will help match some of your savings.

Now remember, savings credits are really for people in the much lower income bracket, especially young people, because they’re just getting started.

This is a way for them to have some money set aside and a way to start. Every dollar counts. If you need help, all you have to do is go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Student loan interest is still deductible, up to $2,500 per year per qualified taxpayer.

There are income limitations, so you have to make sure you understand what those are. You also need Form 1098-E that will tell us exactly how much interest you paid.

You can’t do it on your own without documentation. It needs to have been turned into the IRS, otherwise it will be disallowed.

So if you need help, or you’re filing your own taxes, just make sure you’re looking at what’s being filed and you understand the boxes that you’re saying yes and no to. If you need help, go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The American Opportunity Tax Credit and Lifetime Learning Credit continue unchanged under current law to help benefit students and families.

Annual inflation rates have increased, and it’s one of those things where you do need to have a form called a 1098-T from the college or school to see if you qualify. Very important.

Also, with rising tuition prices, you might need that credit to help offset costs.

If you need help doing taxes, or maybe you just have a question, you can try to reach us at 615-367-0819 or send us an email at friday@drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Premium tax credit rules for the marketplace. Again, guys, I am not a fan of the marketplace.

Mainly because a large number of my clients in it are self-employed, which means we can’t always control our income, and therefore we end up making too much money and get penalized.

That is never a good day when you have to tell somebody that expected to owe maybe a thousand or two that they owe five or six because of the penalty of not paying enough in the marketplace.

Make sure you have told them how much money you’re making, and if it’s going up throughout the year, you can change the amount in the system. Don’t get caught having to pay a big fine at the end.

If you need help, check us out on the web at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Happy St. Patrick’s Day. Hopefully you’re going to enjoy something green, maybe even putting more green in your pocket by doing your taxes and saving tax dollars.

What a great way to celebrate St. Patrick’s Day. You might not think so, but I would think it’s a great way to put more money in your pocket.

One way to do that is to make sure you have taken all of your tax deductions. Tax laws are changing all the time. Make sure that you understand what you are entitled to and what’s available to you.

If you need help filing taxes, just call our office at 615-367-0819, or you can send a message right through the internet at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points

• Business filing deadlines: Single-member LLCs file as sole proprietors on April 15 and do not need to file a March 17 extension; multi-member LLCs and S-corps (1120-S / 1065) do. Tennessee business owners should also register with TNTAP.tn.gov ahead of the April 1 business license deadline.
• Tips, overtime, and Social Security taxation: Despite popular assumptions, tips and overtime may still be taxable depending on overall income. Social Security must be reported on every return, and only qualifies for the new $6,000 per-person deduction (for those 65+) when filing jointly or as a single filer below the income threshold — not when filing married separately.
• Estimated tax payments and penalties: To avoid underpayment penalties, taxpayers must pay at least 100% of prior-year liability (110% for higher earners) in four equal, on-time installments. The IRS offers a one-time penalty waiver (the “get-out-of-jail-free card”) but it’s a limited resource.
• IRS debt resolution options: Taxpayers who haven’t filed or can’t pay have several paths: payment plans, partial payment plans, or an offer in compromise — but the IRS considers all assets (home equity, retirement accounts, etc.) before accepting reduced settlements.
• Inherited assets and home sales: Property and artwork inherited at death receive a stepped-up basis to fair market value at the date of death, often eliminating capital gains. Homeowners selling a primary residence can exclude up to $500,000 of gain (married) without needing to reinvest the proceeds.
• IRS going paperless: The IRS is no longer mailing refund checks — taxpayers must provide banking information for direct deposit or risk having their refund held. Electronic payments are also increasingly required for balances due.

Episode FAQ

Q: I’m 79 and file married separately. Why don’t I get the $6,000 Social Security deduction? A: The new $6,000 per-person deduction for taxpayers 65 and older is not available to those who file married filing separately. Because the IRS can’t verify both spouses’ income on separate returns, the deduction is disallowed entirely for that filing status.

Q: My father-in-law recently passed away and we sold his artwork for $70,000. Do we owe capital gains tax? A: Most likely not, or very little. Inherited property receives a “stepped-up” basis equal to its fair market value on the date of death. So unless the artwork appreciated significantly after he passed, any gain above that stepped-up value would be small — and the gain period would be short-term or long-term depending on how long the estate held it before selling.

Q: I’m required to take a one-time lump sum from a deferred pension plan. Is there any way to spread out the tax hit? A: Possibly. Before signing anything, consult a financial planner — it may be possible to do a custodial (trustee-to-trustee) transfer to an IRA or another deferred account and then take withdrawals over time. A lump sum taken all at once will push you into a higher tax bracket and make up to 85% of your Social Security taxable, so it’s worth exploring every option first.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Today is a big day for anyone that is a partnership, an S corporation, and many LLCs filing Form 1065, because today is your tax day.

If you have not filed, or your tax person hasn’t communicated with you, you need to make sure and confirm that the extension is filed.

The IRS is now saying if you haven’t confirmed that the extension is filed, you may be liable for penalties. It’s very important.

All you have to do, if you’re one of my clients, is call our office at 615-367-0819 or send an email to friday@drfriday.com, and they can confirm filing or extension.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Child and Dependent Care Credit continues to offer non-refundable tax relief for qualified child care, with eligible percentages and expense caps adjusted over time.

All I’m trying to say is maybe you have a kid in daycare, maybe you have a child in private school, and there are some tax credits that could apply. A lot of this depends on your income.

Now, if you have a 529 plan, you could be taking money out of that and you won’t even have to worry about the taxes.

If you need help understanding how you might be able to put money aside, or maybe even help your kids or grandkids because you have some money you want to help with, just go to drfriday.com and ask a question.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Child tax credit, wonderful thing. It’s now permanent, so we’re getting $2,000 per child.

The child must be a U.S. citizen and must have a Social Security number. Other than that, you don’t have many other limitations besides income.

Income for a single person, anything over $200,000 will phase you out. A married couple, anything over $400,000 will phase you out.

That’s what you need to know, and make sure your child is under the age of 17. If they’re older than that, they will not qualify for that credit.

If you need help, or you just want to know more about who I am or what I can do to help you, pick up the phone and give us a call.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Small business health insurance credit. To claim the credit, businesses generally must purchase insurance through a SHOP marketplace, through available varieties by the state.

The credit remains limited to two consecutive tax years, requiring employers to plan strategically, and rising health care costs make the credit particularly valuable.

It’s really important for you to understand that we’re always looking for ways to give more to our employees without having to up their taxes. One of those ways would be benefits, and one would be health insurance.

That way, you get a credit for doing it. It may not zero out the cost, but it does give something back to the employees as well as put money in your pocket. If you need help, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And this is really for people that are in partnerships, which would also be LLCs.

The IRS is expanding its partnership audit regime against the Bipartisan Budget Act framework, which allows adjustments to be assessed at the partnership level rather than partner level.

That means the partnership can actually end up with the partner being in trouble, so you need to make sure proper documentation is in place.

The partnership must maintain clear records supporting basis calculations, income allocations, and distributions. These are important words, and you need to make sure your tax person and accountant are doing them. You need help? drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The permanency of the one big beautiful bill comes into play when it comes to business entity selection.

One of the big things that people weren’t sure about is how long the 21% corporate tax rate would stay in play. Should I be an LLC, a C Corp, an S Corp, a partnership? It’s a lot.

Really, your best bet is to sit down with two important people. One would be a tax person. We can give you all the advantages and disadvantages of the entities. The second is a good attorney, because without that person you’re never gonna have it set up properly.

You need to make sure you’ve got all those people working together as a team. If you need help, first go to the web, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Vehicle depreciation limits continue to adjust annually for inflation, impacting deductions for business owners’ cars, SUVs, and trucks.

Luxury auto vehicle depreciation treatment is an important thing to understand.

If your vehicle is not used 100% for business, and if you only have one vehicle that would be impossible, you do not qualify for full depreciation.

You need help with your car, taxes, anything, just check us out on the web at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Self-employment tax obviously continues under the current tax law. Social Security wage base increases annually, and the Medicare surcharge applies to higher earners.

2025 self-employed taxpayers must plan for potential higher tax burdens due to inflation. Again, everyone loves the idea that they’re making more money because, well, last year I made 20, this year I made 25.

That’s great, but you also have higher tax rates you’re going into because they’re not adjusting them for the higher dollar amounts people are making. It’s a great way for the government to make more money.

If you’re self-employed, you need to review your tax stuff before you file. 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And it’s not really about current taxes, but I wanted to bring up employee retention tax credit. It really was about 2020 and 2021.

But in 2025, audit and compliance reviews remain very aggressive. A number of people have come to my office and we’re having to deal with audits because somebody else filed the ERC.

Now they’re like, well, I don’t know how we got that number, and we spent the money, and we don’t know where the money went. This is important to be able to track.

If you haven’t done it, you might want to go ahead and get it set up in your system because the IRS is aggressively reviewing these numbers. If you need help, check us out on the web, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Business meals and entertainment. Currently, business meals remain a 50% deduction while entertainment continues to be a 0% deduction.

That’s right. If you’re taking someone to a football game or you’re taking them out to the clubs, whatever, to entertain them, that is not a tax deduction.

Sometimes people seem to be confused on what is or what isn’t. A meal needs to be a meal, not just hors d’oeuvres and liquor. It needs to be a meal and you need to be able to write that off for business purposes, which means you need to have discussed something about business.

You still need names, receipts, and who you had that bill with. If you need help, just check us out on the web, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points

• Dr. Friday explains that overtime tax relief applies to the overtime portion, not the entire hourly wage, and taxpayers should use employer records instead of estimates.
• A caller asking about an inherited property sale gets guidance on stepped-up basis at date of death, documentation options, and reporting gains on Schedule D.
• She notes that Tennessee residents who sell property in other states may still need to file a return in that state if taxable gain exists.
• Listeners are urged to review prepared returns carefully, ask line-by-line questions, and avoid ignoring IRS letters requesting support for amendments.
• During multiple calls, she clarifies that the age-based $6,000 amount is a deduction, not a refundable payment, and tax impact depends on income.
• Additional call-ins cover primary-home gain exclusions, family-related payment questions, and how rental sales can trigger both capital gains and depreciation recapture.

Episode FAQ

Q: Do seniors automatically avoid capital gains tax when they sell property? A: Not automatically. Age alone does not remove capital gains, though primary-home exclusions and lower-income capital-gain rates may help.

Q: Is the new $6,000 amount a direct refund check? A: No. It is a deduction that can reduce taxable income, not a dollar-for-dollar refundable payment.

Q: If I sell a former rental property, what can be taxed? A: The gain can be taxed as capital gains, and prior depreciation may be recaptured at ordinary tax rates.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Gig workers and freelancers face increased tax reporting requirements as the platform economy expands with Form 1099-K and Form 1099-NEC. In 2025, enforcement efforts focus on accurate income reporting.

Many gig workers are newly exposed to self-employment tax, and they’re not sure exactly how they’re supposed to be doing it, especially paying estimated tax.

Understanding current gig economy tax rules is essential to avoid penalties, and that includes making estimated tax payments. If you need help doing taxes, or maybe you just got some love letters and you’re like, I have no idea what the IRS is talking about, give our office a call, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Home office deduction remains available for self-employed who work part-time from their home exclusively and regularly for business. With remote or hybrid working becoming more common, many taxpayers are seeking clarification on how this works.

Well, basically what you have to make sure is, A, you’re working from home for the benefit of the company you’re doing it for. If you’re self-employed, well it’s for your own self.

Documenting the essential parts of square footage, utilities, how involved the landscape and cleaning services are.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Section 179: it’s a depreciation, it’s a bonus depreciation concept, but you have two things. You have Section 179 and you have bonus depreciation, and sometimes you need to figure out which one is going to be better for you.

Bonus depreciation rate, 40%, decreasing over the years. Now it’s 100% again. And then you have Section 179, which is 100, but you need to figure out sometimes bonus is better than Section 179 and sometimes Section 179 is better than bonus.

You need to understand the different percentages and how that’s going to affect you. If you need help, just check us on the web, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Step-up in basis for inherited properties: seems to be a misconception out there of how this works. Because a lot of times I talk to someone and they’re like, oh no, I quitclaim my property to my children, so I knew they would get it. That is not a good tax decision.

It may be a mental or physical or some other kind of decision, but you know, there’s a five-year look back from Medicare or Medicaid. Therefore, unless it’s gonna be something that happens after that, you really just want to let them inherit.

And you know that also applies if a husband and wife own joint property, half of them dies, the other half can get a step-up. Need help? Call me.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points

• Reminder that S corporations and many LLC/entity returns are due by March 15, and extensions should be filed if records are incomplete.
• Discussion of overtime reporting issues on tax documents and why taxpayers should use accurate employer-provided figures whenever possible.
• Caller conversation on the additional age-based standard deduction and using IRA withdrawals or conversions strategically within tax brackets.
• Breakdown of home-sale basis and capital gains factors, including inherited/spousal history, added land costs, and documentation needs.
• Clarification that employees paid through block-grant-funded organizations are still generally subject to normal income tax rules.
• Guidance on self-employment side work reporting on Schedule C, including tracking income and legitimate business expenses.

Episode FAQ

Q: Should I wait to file if I am missing key business tax documents? A: File an extension before the due date to avoid unnecessary penalties while you gather complete records.

Q: If my job is funded by a block grant, are my wages tax-free? A: The episode explains that employee wages are generally still taxable even when an organization receives grant funding.

Q: How should I report money from side jobs? A: Side income is typically reported on Schedule C, with income and eligible expenses documented carefully.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Adoption tax credit is in play, and I always think it’s pretty awesome. My parents had eight children, so I don’t think adoption was ever on the table, but I have a number of clients that have adopted children.

And there’s also a credit that you can get, and it can be carried forward up to five years. It may not all be refundable, in fact, very little is it now, but it is still something that can go towards paying your taxes.

So if you have adopted a child, then you might want to think about making sure that you’ve gotten all the documentation and you must have a Social Security number for that child. Otherwise, we are not able to report them on the tax return.

If you need help with taxes, check us out, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The IRS has put some new deadlines for filing W-2s and 1099s, and again, those deadlines should have already passed. January 31st would have been the last day they should have given you an email, unless they file for an extension and they should have notified you of that.

If you have not received your W-2, 1099, 1099-K, 1099-B, 1099-Rs, and all the other ones, then you need to make sure you’re contacting the companies. Do make a list, because sometimes you forget you work for somebody and you have two W-2s, not just one.

Then you have to amend the return, which takes longer. You need help? All you have to do is check us out on the web, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

You are now ready to prepare your taxes. You are doing everything you can to prepare your taxes, and now you’re ready to move forward.

And this is the time when you need to think about what do I need to understand? Have I taken all of my tax deductions? Maybe you can’t itemize, meaning there’s not a lot of room for deductions, right? Maybe you have the ability to start putting some money into charity.

Well remember, in 2026 we have that extra thousand dollars this year that will be coming in. So sometime during this year you might want to set aside a thousand dollars for charity so you can get that above the line. So if you need help, go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. If you’re looking for someone to do your taxes, make sure they are enrolled agents. We are the only tax person that is licensed by the IRS. We have been tested by the IRS. This is what we do. We do taxes.

If you’re looking for someone to audit your financial statements, to do a compilation, go to a CPA. But there are awesome CPAs too. Don’t want to knock them, but there’s a lot of tax preparers. Those are people that just prepare taxes. They’re not gonna help you with tax audits though. They’ll throw numbers in the return.

You need help? You need to check us on the web, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The IRS enforcement priorities for 2021: the IRS expanding enforcement in several key areas. Higher income taxpayers, not a surprise, they always like them.

Large pass-through entities, that would be like 1065s, 1120-S’s, complex partnerships facing heightened scrutiny. Again, 1065s usually are one of the areas that they like to audit, prioritizing audits related to digital assets and offshore holdings.

This is all those kind of things. You want to make sure you have good documentation. You’re not in trouble if you’re doing these things. All you need to do is make sure you document right. You need help with taxes? 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

So you’re sitting there thinking, I haven’t received my W-2, I haven’t received my 1099s. It’s halfway through February almost, and we do not have our documents, so I can’t do my taxes.

Well beginning in twenty-five, employers and payers face extended rules of electronically issuing W-2s and 1099s. They do have the ability to just file them electronically to you, making you print out those forms.

So if you have not updated your email, not just your address, but your email with an old employer or someone else, then you need to contact them because it could be your responsibility to get that form. If you want to check out more about us, go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

IRS digital correspondence update in 2025: this is actually a positive. Just like everything else in the world, we’re getting more AI and getting more computerized, and the IRS is finally catching up to this.

There is a portal now that you can use to upload your communication for a number of different IRS letters that you might receive. So if you’ve received a CP504B for your business, you can go on there and you can upload your correspondence, which you don’t have to worry about snail mail, which means it should get responded to faster.

If you need help with any of your IRS issues, call me, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

IRS protocol updates: IRS relief options in 2025 may include expanded criteria for taxpayers impacted by economic hardship, natural disasters, or just delay in IRS processing.

Keep in mind the IRS is basically closed for almost two to three months, and even now it’s difficult to get information. Now they will not say if you can’t reach someone on the phone that that’s a good reason for hardship, but you could put together a decent case of explaining how many times you called, how many times you got misinformation, or maybe no information because the person answering the phone doesn’t know.

You need help with that? 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And yes, the IRS is expanding. In fact, I can probably say five, maybe even eight of my people got love letters saying something like, you need to verify your information. A tax return was filed, but we need to confirm it is you who filed it. This is the kind of information you’re getting.

Those are not fraudulent letters. And if you have not responded, they will not process that tax return, which means if you filed it, you get a letter and you don’t respond to them, you’ll never get the refund, or you’ll not get proof that it was received on time.

You need to respond, and if you need help, go to our website, which is drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The IRS is significantly expanding oversight of digital assets through the rollout of a form called a 1099-DA. All of my crypto people, all of my people into virtual currency need to listen. 1099-DA is new and it begins in 2025.

This form will functionally simulate the 1099-B for stock trades, but guess what? It’s going to be showing all that for cryptocurrency and digital assets.

If you do not have this or understand what this is, you need to talk to us because this is new and they’re gonna know where your money is. 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Making sure that you are paying taxes on all the income you earn. 1099-K thresholds have gone up. So they originally planned for $600, then they went up to $5,000. $5,000 isn’t much in a year if you’re selling items on the internet or you’re doing a small business through the internet.

This is merchant fees. 1099-K is, if you’re an Uber driver, you get a 1099-K. If you don’t understand and you’re getting these forms, or you’re ignoring them thinking, well, no one knows about them, guess what? The IRS does.

I’ve had a number of people come in my office that have prepared their own taxes but did not report that. Guess what? They now are reporting it.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points

• Dr. Friday opened with overtime and tip confusion, stressing that not everyone qualifies and itemizing is not required for this treatment.
• A caller with two IRA accounts asked about a missed RMD amount; Dr. Friday discussed filing with added explanation when a distribution was corrected after year-end.
• For standard RMDs, she said reporting is generally through Form 1099-R, and she also highlighted QCD options for eligible charitable giving from retirement funds.
• She emphasized compliance first: file missing returns, verify all 1099s are included, and confirm IRS payments actually clear your bank.
• Business owners were reminded to keep receipts and mileage logs, avoid guessing deductions, and separate commuting miles from true business miles.
• Caller Q&A covered airline base-travel deductions, construction-truck mileage from a qualifying home office/shop, gifting to family, and savings-interest filing questions.

Episode FAQ

Q: Do I need special paperwork for a normal RMD withdrawal?A: Not usually; the episode explains that standard RMDs are reported with Form 1099-R, with extra documentation mainly discussed for late corrections.

Q: Are miles from home to work deductible if I use a work vehicle?A: The episode distinguishes commuting from business travel; miles can be deductible from a qualifying business location (like a valid home office/shop) to clients.

Q: If I give a child or grandchild a few thousand dollars, does it go on their tax return?A: In the call, Dr. Friday said that amount was under gifting thresholds and did not need to be reported as taxable income by the recipient.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

This comes from the IRS. The IRS continues a multi-year modernization effort and expands electronic filing capacities and digital communication tools. In 2025, taxpayers benefited from the faster processing speeds.

I’m gonna kinda stop right there, because we all live in the real world. You can’t reach an agent on the phone, and you have a difficult time confirming if something’s been e-filed, where the money is actually at. They may be able to get it into the system faster, they still need to expand the telephone system.

So if you need help and you need help contacting the IRS, as an enrolled agent I can represent you. All you have to do is call 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Because of the OBBA permanent extension, the higher estate and gift tax exclusion continues to rise annually with inflation. In 2025, the exemption reaches its highest level ever, providing substantial protection for family wealth and transfers that money onto the beneficiaries.

It helps us plan, finalize the valuations due to certain favorable tax environments, and makes it easier for surviving spouses and children and married couples. Anybody that has an estate is gonna benefit from these higher rates, and it also keeps the government out of our pocket, which is what we’ve done after working so hard to build up these assets.

You need help with an estate tax return? Just call our office.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And personally, this is one of the most confusing tax things we have. It’s the premium tax credit. It has to do with the Marketplace, and how much money you’re paying for your insurance and how much money you’re actually earning.

Remember the Marketplace bases this all on your taxable income, and the problem is sometimes people don’t know how much money they’re making. They sell something, they get a second job, they increase their income, and don’t tell the Marketplace.

And guess what? I had a couple last year that had to pay $21,000 back, another one that paid $16,000, and another one that had to pay. That’s a lot of money. Make sure you’re keeping up with these taxes with the Marketplace.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Qualified transportation fringe benefits, including mass transit passes and workplace parking allowances, continue to offer tax-free benefits to employees when offered by an employer. For 2025, inflation adjustments may increase monthly limits, providing greater tax savings for commuters.

Employers offer these benefits mostly to upgrade the payroll system and help benefit their employees. This is a great way.

If you’re a small business owner and people have to pay for parking or they have to pay to come in and they’re willing to use transit, you can give them those passes for nothing, and that actually increases their payroll. If you need help, give us a call, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Social Security wage base continues to rise due to the national average wage income inflation, increasing the amount we have to pay. So as employees, we pay 6.2% in Social Security tax. As employers, we pay 6.2% in Social Security tax.

Higher wage earners will eventually threshold out. It’s around $200,000 this year. And then after that, you’ll still continue to pay your Medicare, but it will continue to go up.

The remaining Medicare tax will stay uncapped, which means you will always be paying your Medicare tax. Again, something you should be working and planning on. If you’re in the higher income, you may be able to maximize some other taxes. If you need help, give me a call.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points

• Tips and overtime deductions must be backed by employer-provided numbers; do not make up figures or pay preparers based on refunds.
• Senior Schedule 1A means testing can reduce the deduction to zero; negative values do not carry.
• Energy credits and vehicle interest deductions require documentation like manufacturer IDs and VIN/FIN.
• Gift tax basics: large gifts may require Form 709; recipients generally do not report the gift.
• IRS resolution and amendments can be slow; choose qualified representation and keep records.
• Business and investment call-ins cover HELOC interest limits, capital gains/loss netting with $3,000 annual loss limits, and 1099 deadlines.

Episode FAQ

Q: Is it okay for a preparer to charge a percentage of my refund?A: No. Fees should not be tied to refund size.

Q: If a parent pays off my mortgage, do I owe tax?A: The recipient generally does not report it; the giver may need to file Form 709 if over the annual exclusion.

Q: How do capital losses work against gains?A: Losses offset gains first; up to $3,000 of net loss can offset ordinary income, with the rest carried forward.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Long-term capital gains structure remains intact due to the one big beautiful bill, and those three rates are 0%, 15%, and 20%.

But I do want to throw in there, there is a 3.8% net investment income tax that came with Obama, and that is still also in play, which means that those rates of 0%, 15%, and 20% most of the time go 0%, 15%, 18.8%, and 23.8%. We really do not have a 20% capital gains.

If you’re selling, you need to understand taxes because if you don’t, you’re gonna pay more money or be surprised when tax day comes. You need help? Check us out, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And the last one for the month of January, which means we are fully into tax season. If you haven’t, you should be receiving your final W-2s and your 1099-Rs.

You should have an envelope on your kitchen table, or someplace where you’ve written all the forms you need. So if you prepare your own taxes, or you’re coming to us or some other tax person, you’ve got everything organized.

And if you’re coming to us, remember we have the SmartVault. So you should be uploading those documents so that we can get your taxes done as fast as possible. And if you have no idea what I’m talking about, you need to call our office: 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Maximizing your earned income tax credit. Thresholds help taxpayers maximize the value they get under the tax law.

Understanding your tax numbers: so often people are like, I don’t know how much my earned income is. I don’t know how much I’ve made in investments. You need to at least keep those numbers somewhat in your head. I get it, none of us know exactly, especially as self-employed people. Sometimes that’s a moving target, right?

But you do need to know if you’re going to do any kind of tax planning, not just throw numbers on a tax return and hope you don’t owe money, but actually plan. Because sometimes paying taxes today will be lower than paying them later, with penalties. If you need help, go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

You know, when life happens, sometimes people get married, sometimes people get divorced, sometimes you have children, sometimes the children grow up and move out. All these things are life-affecting and mostly tax-affecting events.

So if you are divorcing, I have to reiterate what people I thought knew but I have found out don’t: it doesn’t go into effect the day you divorce, it goes into effect the year you divorce. So if you divorce any day today or December 31st, you are considered divorced the entire year.

It’s not a half-year thing, it’s not a quarter-year thing. So that means if you’ve been claiming married, you may end up with a huge tax problem. If you need help, call me.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The earned income tax credit amount for 2025 hasn’t really changed. It has remained the same.

One thing you do need to know: the IRS has specifically put out that it remains the most frequently audited part of a tax return. One of the reasons that’s happening is because a lot of times people are not keeping record of the residency of where that child is living.

If that child is not living with you for more than six months and one day a year, and you’re not the primary custodian, and you’re claiming your girlfriend’s child or something else, you may be breaking the law. drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points

• Form 4547 election for the Trump account can apply to children 17 and under; contributions are optional and may come from parents, grandparents, or employers.
• Tips and overtime totals must come from employers (box 14 or a statement); do not guess amounts when filing.
• New car loan interest deduction requires a new vehicle, lien-secured loan, VIN/FIN, US final assembly, and purchase after 12/31/2024; income phaseouts apply.
• Cost basis matters; without records the IRS can treat basis as zero.
• Mileage and expense deductions require logs and generally apply only to self-employed/1099 income, not W-2 wages.
• Red flags: preparers who will not sign the return or charge a percentage of the refund.

Episode FAQ

Q: What is the Trump account and how do I elect it?A: It is a child savings account elected on Form 4547 with the 2025 return; participation is optional and contributions are not required every year.

Q: What do I need for the car loan interest deduction?A: A qualified new vehicle, lien-secured loan, VIN/FIN, US assembly, and proof of interest paid for that year.

Q: Can I deduct mileage if I am a W-2 employee?A: No. Mileage deductions require business use and logs and generally apply to self-employed or 1099 work.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I do not sell insurance. I’m putting that at the beginning of this because I am a huge advocate for health savings accounts.

HSA contributions increase with inflation, and if you happen to be blessed where you don’t need to use it, you don’t have to. You don’t lose it. It just grows and grows. It’s another way of increasing your retirement.

And you’ll need it, let’s be honest. Statistically, you’re going to have to have 200,000 to 400,000 in retirement just for medical expenses. Imagine if you had that sitting in your HSA, so you could take your other retirement and live off it or pass it down, whatever works for you.

If you need help, check out the video. Check us on the web, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Preparing taxes is what I do. I’m Dr. Friday, an enrolled agent, licensed by the Internal Revenue Service to do taxes and representation.

When you’re doing your taxes, right now it’s tax time, guys, and all you’re thinking about is preparing your 2025 taxes. And you’re not thinking about what do I need to be looking towards in 2026? When you’re working on your ’25s, put a thought in your mind about what might be happening.

Do you want to do a conversion? Are you selling real estate? Are you taking money out of an IRA? Are you doing a bad thing, a backdoor IRA? All these things affect your taxes, and if you know in advance what the tax bill is, you can plan for it.

If you need help, go to the web drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Retirement plan contribution limitations for 401(k)s, 403(b)s, and 457 plans continue to rise with inflation. The SECURE Act 2.0 enhancements remain in effect, expanding those catch-up contributions for all of us that are over the age of 55, and in some cases, some of the catch-ups that qualify for over 50. Then you can actually start putting more money aside.

They understand a lot of times when you’re raising your family and doing things, you don’t have the ability to maximize retirement. But sooner or later we will have to retire. So putting your money into a retirement plan is a good idea.

If you need help with taxes, go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Taxpayers should evaluate how inflation changes thresholds, especially for credits like the child tax credit and earned income tax credit. High inflation years can meaningfully increase brackets, and reduce effective tax rates.

What I’m basically saying is everyone’s making more money. But when you’re making more money and they’re not adjusting those thresholds, you could be getting yourself outside of earned income credit because you made too much money. You may not qualify for the child tax credit because you’ve made too much money, even though all those raises help you feed your family and do good things.

It doesn’t always help you when it comes to taxes. You need to plan. If you need help, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

One of the things we all like about the one big beautiful bill is, plain and simple, it gives us the tools to do long-term planning. Under the last couple passes of tax law, there’s been four years, five years, and then they expire. A lot of expiring, and that leads to a difficult time for us as tax people and also just as taxpayers to sit down and say, hey, in the next five years I’m going to do this, this, and this.

If you don’t have that kind of window, it’s difficult to do good planning. And remember, tax preparers are preparers. Enrolled agents help you plan as well as prepare your taxes, and also represent you if you need help. drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points

• The extra $6,000 senior deduction ($12,000 married filing jointly) applies with income limits and requires joint filing if married.
• Tips and overtime deductions are claimed when filing 2025 returns; W-2 withholding does not change and employers must provide totals.
• Tip deductions are limited to tip-based occupations and net income; Form 4137 and W-2 reporting matter for compliance.
• Employers and employees should keep signed records to avoid audits and mismatched tip reports.
• Caller Q&A covers overtime premium calculations, hobby vs business rules for flipping/egg sales, head-of-household status for widows, vehicle loan interest requirements, and step-up basis for inherited homes.

Episode FAQ

Q: Do tips or overtime reduce tax automatically on my paycheck? A: No. The deduction is applied at filing time, and you need employer-provided totals to support it.

Q: Who qualifies for the senior additional deduction? A: Taxpayers age 65+ with required SSN and income limits; married couples must file jointly to qualify.

Q: How do I keep a side gig from being treated as a hobby? A: Separate business and personal payments, show a profit motive, and keep records; repeated losses can make it a hobby with limited write-offs.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Cash contributions were 50%, went up to 60%, and now that is permanent under the one big beautiful bill.

The years of having 100% of our charitable deductions deductible probably isn’t going to be on the table for a long time, especially with the standard deduction going up every year. It’s harder and harder for individuals to actually itemize under the current tax law unless you have a very healthy mortgage, or unless you do bunching.

Bunching is basically taking your sales tax, adding it up, buying bigger things in the year, and you also pay your property taxes. Remember here, we don’t have a state income tax. If you need help, just go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

AMT thresholds remain the same under the new current one big beautiful bill. Alternative minimum tax. Many of you guys aren’t sure what I’m talking about, but this is a tax code within the tax code.

If you were to talk to someone at the IRS, they would say this is a way they try to level the playing field so that the rich can’t get richer and the poor stay the same as they are. So I don’t know if I agree with that, but either way, middle income people are going to get hit, ever since 2017. Higher incomes have ways of avoiding it.

So make sure if you’re selling and you’ve got a lot of capital gains, you need to talk to someone: 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Today is tax day. Not the day we’re going to file our final tax returns, but it is the day you’re going to make your final estimated tax payment.

And if you haven’t made any, remember we made the first three estimated payments in 2025, and then the last one is due today. And if you don’t make that payment, there are penalties.

I don’t care what people say, it’s not elective. If you don’t want to pay penalties, you want to understand where your money’s going and give the IRS less money, make your estimate today. Or check us out on the web at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. That’s all I do. 31 years of doing it here in the Nashville, Brentwood area.

If you don’t know how to get out of that with the IRS, if you need help, or just basically need some tax help, completing your 2025 taxes or planning for your 2026, I am your person. Maybe you’ve inherited money. Maybe you have a situation where you need to sell your primary home.

All you have to do is go to the web drfriday.com. Or maybe you want to talk face to face or on the phone, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The estate and gift tax exemption is permanently extended, so there isn’t a drop in 2026. That’s right.

In 2025, this means estate planning and large gifts can continue operating under the favorable higher exemption threshold. Wealthy families have long-term certainty on how they can structure their gifts and their wealth, and making sure that they’re able to give.

Because a lot of people, you know, they give a lot of money to charities and they gift a lot to other individuals. This isn’t just making the rich richer. This is a way to help the world be a better place by helping us manage the money in a better way. 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The QBI 20% deduction is permanent, yes. All small business owners, all people with rental income, and anyone dealing with investments that may have QBI are going to be extremely excited, as I am, because this is 20%.

That means if I have $100,000, I could get a $20,000 deduction if it’s done correctly. Understanding QBI is something I find a lot of times people don’t, but it is permanent, which means now you can do some planning and you can do some investing.

If you’ve got rental properties, you’ve got a small business, or a big business, QBI may be a way to put more money in your pocket. drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Mortgage interest deduction remains at the $750,000, reflected as a permanent extension with the one big beautiful bill. Now some taxpayers could qualify as grandfathered under $1 million, that was back in 2017. So if you haven’t refinanced your home in a number of years, then you may still have the $1 million situation.

But most of you are at $750,000, and believe it or not, I see people with mortgages for one, one and a half, two million, and they’re trying to deduct all that interest. It is not all tax deductible. You must amortize the portion that isn’t.

If you need help with tax questions, just go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The SALT tax. You guys have heard talk about this many times. That’s where you put in your property tax, and your state income, or for us, sales tax, and it’s always had, these last few years, a limit of $10,000.

Well, guess what? It’s going up to $40,000. So for many of you that used to do bunching, where we’d pay our property taxes twice, we’d do our sales tax, and we’d add it all up, and we’d buy the bigger things in the years we’re doing this bunching, that’s the way we’re going to start putting more money in our pocket.

Now remember, you still have to meet the itemization before you can take a dollar off your tax return. Check us out, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The Child Tax Credit. The child tax credit remains at the level of $2,000 per qualified child, with $1,600 currently refundable, and it will adjust with inflation.

Under the one big beautiful bill, it did not revert back to the earlier 2017 numbers, which is good because that was like $500 a child, or $1,000 depending on what year.

There are limitations, guys: $200,000 if you are single and $400,000 if you’re married. If you need help or you just want to book a tax appointment with me, Dr. Friday, just go to drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The personal exemption remains eliminated under the current tax law. For many of you that have been filing taxes as long as I have, almost 30-plus years, you know that at one point we had a personal exemption. Now that is zero, and for the foreseeable future.

But the standard deduction is now permanent, which is actually better because they doubled the typical standard deduction. And there’s some more wonderful things coming in if you’re over the age of 65.

If you keep listening to these tax moments, you’re going to hear all kinds of ways you can save tax dollars. But if you need help today, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Key Summary Points

• The Goal is Risk Elimination: ISTT’s primary objective isn’t just fixing computers; it’s identifying hidden risks in a network and eliminating them before the “bad guys” find them.
• The 30-Minute Assessment: Dennis explains their entry-level scan, which takes about 30–45 minutes. If their simulation software can run on your system, it means a hacker’s malware can too.
• Good “Cyber Hygiene”: Matt shares simple but effective tips, such as the “toothbrush rule” (never share your password) and the “sniff test” (if an email looks off, it probably is).
• Ransomware is a Business: Modern hackers aren’t just locking your data; they are stealing it to sell. Matt shares a cautionary tale of a business owner whose retirement plan was ruined after a breach forced him to pay for identity protection for every employee from the last seven years.
• Hidden Entry Points: Your computer isn’t the only way in. Hackers often use “Internet of Things” (IoT) devices like office thermostats, printers, and security cameras to bridge into a company’s main server.
• The “Good Guy” Support: Beyond security, ISTT discusses the importance of professional IT support to prevent “jerry-rigged” solutions that accidentally open security holes during emergencies like payroll processing.

Episode FAQ

What is ISTT? ISTT stands for Innovative Solutions Through Technology. They are a Kentucky and Tennessee-based IT and cybersecurity firm that provides technical assessments, end-user training, and managed IT support.

What happens during the free evaluation? Dennis Buzard visits your office for 30–45 minutes to run a sample scan on a few workstations. About a week later, they provide a 25–30 page detailed report (in layman’s terms) explaining where your security holes are.

I’m a small business with only a few computers. Do I really need this? Yes. Dr. Friday notes that many small businesses rely on outdated setups from decades ago or “big box store” Wi-Fi solutions that aren’t secure. Hackers often target smaller firms because they lack the robust IT departments of major corporations.

Does ISTT use offshore support? No. All ISTT employees are based locally in Kentucky and Tennessee, though they serve clients across the majority of the United States.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Standard deduction in 2025, under permanency from the TCJA extension. Again, we were expecting a lot of these things to expire at the end of ’25 and then go back to the 2017 levels. That would have been a bad situation for many of us.

Now the standard deduction is permanent. It simply reduces the number of taxpayers who itemize, which simplifies the compliance for most households. However, taxpayers with substantial mortgage interest and charity will still be able to take advantage of itemizing.

It is a great way to make sure you’re putting more money in your pocket and not paying the IRS too much money.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Current 2025 tax brackets, after the one big, beautiful bill permanently extended the TCJA rates. I know I’m talking about a lot of things, but tax rates are now permanent, and that’s great because we can now make plans.

We know that the 10% is staying in play. We know the 12%, the 22%, 24%, 32%, 35%, and 37%. So now we can look into the future, because if we had not passed the one big beautiful bill, these would have been expiring at the end of ’25.

So this is awesome news for all of us. If you need help, just go to the website drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The QBI 20% deduction is permanent, yes. All small business owners, all people with rental income, and anyone dealing with investments that may have QBI are going to be extremely excited, as I am, because this is 20%.

That means if I have $100,000, I could get a $20,000 deduction if it’s done correctly. Understanding QBI is something I find a lot of times people don’t, but it is permanent, which means now you can do some planning and you can do some investing.

If you’ve got rental properties, you’ve got a small business, or a big business, QBI may be a way to put more money in your pocket. drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I’m Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. You’re gonna need someone to be doing taxes in just a day or two because—you know what—we’re at the end of the year.

So anything that you’ve done for 2025 had better have been finished up. If you were doing conversions, if you were buying that truck to save tax dollars, it better have closed, because at this point most people do their taxes on the cash basis.

Meaning if it didn’t happen by today, it’s not going to happen for the tax year of 2025.

If you’ve got questions, or you haven’t done any tax planning and need some help with that—or just help with the tax preparation—give us a call at 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

It’s almost the end of the year. We need to make sure our tax documents are in order. Get ready—if you haven’t already put together your list for subcontractors and 1099s, go ahead and get those W-9s out there.

We need to get those all out by January 31. Now is the time so you can make sure you have W-9s completed, you know the dollar amounts, you have the information.

There are serious fines—$500 for each 1099 you do not issue. So let’s make this year 2026, for the tax year of 2025, the year that we actually file all the proper forms.

And again, this isn’t just for people in business. People in real estate rentals also have to do this. 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

As we head into the new year, Hank and Dr. Friday discuss how to maximize your retirement income without triggering unnecessary taxes. They cover complex topics like IRMA surcharges on Medicare, the strategic timing of Roth conversions, and how to turn high medical costs, such as assisted living, into tax-saving opportunities. If you want to ensure you aren’t leaving money on the table or paying the IRS more than your fair share, this is a must-listen episode.

Episode Summary Points

• The Team Approach: Why it is vital for your financial planner and tax preparer to communicate to prevent costly mistakes and amended returns.
• Understanding IRMA: How selling property, stocks, or doing large Roth conversions can spike your Adjusted Gross Income (AGI), triggering higher Medicare Part B and D premiums (Income-Related Monthly Adjustment Amount).
• Roth Conversions: Strategies for converting traditional IRAs to Roths over time to manage tax brackets and avoid “tax shock.”
• Medical Deductions & Assisted Living: How to use the high costs of memory care or assisted living to offset taxes on IRA withdrawals, effectively allowing for tax-free “spend downs” of assets.
• Qualified Charitable Distributions (QCDs): A strategy for those 70½ and older to donate directly from an IRA to a charity (tax-free) rather than withdrawing the cash first.
• Estate Planning: The “10-Year Rule” for inherited IRAs and how to plan for your heirs.
• Workshops & Evaluations: Information on Hank Parrott’s upcoming educational workshops and how to get a comprehensive financial evaluation.

Episode FAQ

Q: What is IRMA and how does it affect my retirement?A: IRMA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds (e.g., over $212,000 for a married couple filing jointly). Dr. Friday and Hank warn that one-time events like selling a house or a large Roth conversion can accidentally trigger this extra cost.

Q: Can I deduct assisted living costs on my taxes?A: Yes, in many cases. If a resident is in assisted living or memory care primarily for medical safety and requires assistance with daily living activities (like dressing or medication management), a large portion of the monthly fee may be considered a medical expense. This can create a significant itemized deduction on Schedule A.

Q: What is a QCD?A: A Qualified Charitable Distribution (QCD) allows individuals aged 70½ or older to transfer money directly from their IRA custodian to a qualified charity. This counts toward your Required Minimum Distribution (RMD) but does not count as taxable income, offering a tax advantage over withdrawing the money and then donating it.

Q: Why shouldn’t I just pay off my mortgage with my retirement funds when I retire?A: Hank Parrott advises caution here. Taking a lump sum from a tax-deferred account (like a 401k or IRA) to pay off a mortgage creates a massive taxable event in a single year, potentially pushing you into the highest tax brackets and triggering other costs like IRMA. A staggered distribution strategy is often more tax-efficient.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

So all of you that are listening that are my already existing tax clients—hopefully you have already set up your tax appointments. If not, you need to be going to drfriday.com, clicking on “schedule,” and making your appointment ASAP.

If you don’t see an appointment available, please call our office at 615-367-0819. One of us will answer the phone, and we’ll get you put on the schedule because it is booking up fast.

I want to make sure I have all my returning clients. If you’re a new client, we’ll also be trying our best to get you in—but returning clients, number one.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Happy Boxing Day. I know you guys don’t do that in the United States, but all of us Aussies do. And so basically just, you know, enjoy the day. Meanwhile, think about taxes. We have like four days left.

And if you’re gonna do anything to save taxes, you have to write the checks pretty much now to reduce your taxes. Holding back people’s checks doesn’t really work. I’ve had a couple cases where people get 1099s for the total amount—even if they didn’t put it in the bank. There are ways around that, but make sure you understand your numbers.

Make sure you know when you’re saving tax dollars and when you might not be. If you have questions, you need to make the appointment ASAP at 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Christmas. Oh my goodness. We love Christmas. And it always remembers a lot about my mom. My mom always did this thing where she would take cash and, you know, go pay people’s layaways and do that. She had heard about it. She enjoyed it. It was something that she would enjoy doing for people.

And I think that’s what Christmas is all about—basically spending time with the people we love, helping those that maybe, to be honest, have a little rougher time. Maybe they don’t have all the support that we all get to have. So think about those that you can help. Love those that are around you today.

And I hope that you have a very Merry Christmas. Don’t forget the reason, the cause behind Christmas. Go to church. Put a little prayer in. This is Dr. Friday. Love y’all.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And we probably are pushing it close, but for all of you that are employees that have 401(k)s and you’re sitting there thinking, “Wow, my income may just be a little higher. I can afford to put a little bit more.”

Maybe you need to think of taking that last paycheck that may be coming up here and giving more of it to your 401(k). It will save more money today—well, I should say it will reduce your income. And then obviously later you’ll have to pay taxes, but you know, it’s a 401(k). That’s what we do.

So think about doing that. And of course, it doesn’t hurt if you have IRAs or Roth IRAs. Those are all tax-related decisions. Talk to your financial planner, see what works out best for you.

But from a tax standpoint, reducing your income always saves us tax dollars.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And right now there’s a mad rush of a bunch of people saying, “I’m gonna go out there and buy myself a big truck over 6,000 pounds so I can actually write that vehicle off and get that tax deduction.”

Okay. First, doesn’t it sound crazy when I say that out loud—just like I just said that? Because you’re gonna go spend sixty, seventy, eighty thousand dollars to get a tax deduction that, if you’re in the 20% tax bracket, is gonna save you—if it’s $80,000—what, $16,000?

So you’re still paying the rest out in money. I mean, if you need a vehicle, it’s a legitimate tax deduction, and you’re gonna make money by having a new truck, go out there, buy it before the end of the year.

Otherwise, think twice before you go spend thousands of dollars to save hundreds.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Episode Summary Points

• Year-End Deadlines: While it is late in the game for 2025, there is still a small window for Roth conversions or maximizing 401(k) contributions before the final paycheck of the year.
• Historical Tax Perspective: A look back at tax rates from 1913 to present, noting that despite current complaints, we are historically in a lower tax period compared to the 92% rates of the 1940s.
• 2025 Tax Brackets: A breakdown of the new brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) and the elimination of the marriage penalty for couples earning under $600,000.
• Mortgage Interest: Clarification on the $750,000 mortgage cap (post-2017) and confirmation that interest on second homes is deductible if the combined loan value is within limits.
• New SALT Cap (OBBBA): The State and Local Tax (SALT) deduction cap has increased from $10,000 to $40,000 for 2025, bringing “bunching” strategies back into play.
• Medical Deductions: Tips on deducting medical expenses (over 7.5% of AGI), including essential assisted living costs.
• The Trump Fund: Details on the new government-seeded investment accounts ($1,000) for children born after Jan 1, 2025, and contribution rules for families.
• Social Security Taxation: Advice for retirees on the “Provisional Tax” calculation—if your combined income exceeds $25,000 (single) or $32,000 (married), your benefits are taxable.
• Charitable Giving: The benefits of using Qualified Charitable Distributions (QCDs) for those over age 70½ to give directly from IRAs tax-free.

Episode FAQ

Q: Did the limit for State and Local Tax (SALT) deductions change for 2025?A: Yes. Under the new legislation (OBBBA), the SALT cap has increased from $10,000 to $40,000. This allows taxpayers to deduct significantly more for property taxes and sales tax, making itemizing deductions beneficial for more people.

Q: Do I need to have taxes withheld from my Social Security checks?A: It is highly recommended if you have other sources of income (like a pension or investment interest). If your combined income (Adjusted Gross Income + 50% of Social Security) exceeds $25,000 for individuals, up to 85% of your Social Security benefits becomes taxable.

Q: What is the “Trump Fund” mentioned in the show?A: This is a new program for children born on or after January 1, 2025. The government opens a $1,000 investment account for the child. Parents and grandparents can contribute up to $5,000 annually until the child turns 18. It functions similarly to an investment fund with penalties for early withdrawal.

Q: Can I deduct the mortgage interest on a second home?A: Yes, provided the combined mortgage debt of your primary and secondary homes does not exceed $750,000 (for loans originated after Dec 16, 2017).

Q: What is a QCD and who should use it?A: A Qualified Charitable Distribution (QCD) allows individuals aged 70½ or older to donate directly from their IRA to a qualified charity. This money is not counted as taxable income, making it a more tax-efficient way to give than writing a personal check.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Very soon we need to be issuing our 1099 miscellaneous or 1099 NECs for anyone that provided services for us. That would include all of you that have rental properties—your lawn man, your repairman, your handyman, your roofer.

If he’s an LLC—anyone that is operating as LLCs or partnerships or sole proprietors—the only person we do not 1099 is if their company has an Inc.

Only way we really know that is to have them complete a Form W-9. Have that on file at your office so if there is ever a question on what you need to do, then you have that right there to prove you did not need to 1099 them.

Get your numbers together so you can do that on time. Call us at 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Using a tax software is great, but using an accounting software may be better for most self-employed individuals. First thing you need to do is have good numbers—tracking your expenses.

If you’re ever worried about the IRS coming knocking—which, let’s be honest, all of us are always worried about it—having good tax records is the secret to defending yourself against an audit.

I had a gentleman we went through an audit with just a few weeks ago, and to be quite honest with you, we went through with no problems. His documents were in good order. The questions they had, we had exact numbers.

They didn’t dig very far because the answers that we gave them stopped them pretty much. Where if you’re not organized, they’re gonna keep digging to get more information. You have questions, just call me.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

What can we do to save taxes? That’s the first thing most people ask when we’re working on their taxes. Nothing wrong with it—it’s a great question, I love it.

But you have to figure out that what advice I give you is based on your situation, because what happens often is they say, “Well, you know, my neighbor doesn’t pay this kind of money in taxes. My friend just did their taxes and they got this big refund and they’re making about the same as we are.”

One, most people never share exactly what they’re making. Two, you don’t know if they have losses—maybe they lost some money, maybe they have more children. You’re not sure what the situation is.

So if you really want to know how to save tax dollars, you need to make a tax appointment and let’s talk about your taxes.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Talking about losses, client came in, they had some losses of a vehicle due to accidents. It was not to do with a federal disaster. And they were sure that they should be able to write off the losses of these vehicles because, well, they lost them.

The answer is no. So keep in mind, nowadays, under the current tax law, at one point there was casualty loss and disaster loss available on your taxes—years ago, back in the 2000s, 2007, 2008.

Now we have to have a federal disaster to be able to claim any loss of property. If you need a question, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary

• Essential Documents: Every adult should have a Durable Power of Attorney (financial), a Healthcare Power of Attorney, and a Living Will to ensure decisions are made if they become incapacitated.
• The Joint Account Trap: Russ advises against adding children’s names to bank accounts. Doing so exposes your money to your child’s creditors, lawsuits, or divorce settlements. Use a Power of Attorney instead.
• Will vs. Trust: A Will must go through probate—a public, court-supervised process. A Revocable Trust remains private, avoids probate, and allows for a seamless transition of assets.
• Special Needs Planning: Learn the difference between Third-Party Supplemental Needs Trusts (which protect government benefits for heirs) and First-Party “Payback” Trusts.
• Tax-Saving Trusts: Discover how a Tennessee Community Property Trust provides a full “step-up in basis” on assets after the first spouse passes, potentially saving survivors thousands in capital gains taxes.
• When to Update: Review your estate plan every 2 to 7 years, or immediately following life changes like marriage, divorce, or the acquisition of new real estate.
• Business Protection: Business owners should ensure their LLC or corporate interests are correctly titled in their trust to avoid legal gridlock or forced liquidations upon death.

Episode FAQ

Q: Why shouldn’t I just put my child’s name on my bank account to help me pay bills?A: If that child gets sued, files for bankruptcy, or goes through a divorce, your bank account becomes an asset their creditors can seize. Filing a Power of Attorney with your bank grants them the ability to help you without the legal risk to your funds.

Q: Does a Revocable Trust change how I use my money day-to-day?A: No. A revocable trust is not a separate tax entity during your lifetime; you remain the trustee and beneficiary. You can buy, sell, or refinance assets just as you did before.

Q: Can I put my IRA or 401(k) into my trust?A: You shouldn’t transfer ownership of a retirement account to a trust while living, as the IRS will view it as a total distribution and tax it immediately. Instead, you should name the trust as the beneficiary of the account.

Q: How does a “Spendthrift Trust” work?A: This is designed for heirs who may struggle with addictions or poor financial choices. The money is managed by a trustee who doles out funds for the heir’s needs rather than giving them a lump sum that could be lost quickly.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Inheriting property—in most cases, it’s a parent’s house or something like that. And so when you inherit, it’s very, very important to find out what was the value of that home within 30 days of the death of the person you inherited from.

Now, you can get comps, you can get appraisals depending on the value of this property. Sometimes it’s very smart to get an appraisal if there’s a number of people, because that number is what we’re going to use.

So if you inherit a house worth $500,000 and you sell it for $500,000, guess what? You’re paying zero tax. And that’s all tax-free. Proper documentation puts money in your pocket. 367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Home office expense. Wow—we’re getting close to the tax season, getting ready to end December, getting ready to go into 2026, and we’re thinking about: is this home office a true tax deduction?

Keep in mind, if you are self-employed, it is your only office—home office—as long as it’s not your kitchen table or a dining room where there’s something else. It has to be a specific room in which you have your office equipment and your ability to do your work.

It cannot have a bed. Nowadays I don’t know if the IRS is as picky about TVs—at one point it could not have a TV in it, but now people use that for their screens.

So if you’ve got questions on this call the firm, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Tracking miles. So I tell people all the time—you’ve got to have miles. If you’re in a business, you’re self-employed, you use your vehicle, miles are big—70 cents a mile adds up pretty quick.

But you can’t just come in and say, “I did 30,000 miles. I did 20,000.” For one, what’s the odds of you doing a full, even number of miles? Two, you need a log.

If you are ever audited, the IRS specifically asks for a log. It’s a specific log: Who did you go see? How far was it from your office? What was the purpose of the meeting? All these different details.

If you don’t have that, they can disallow those miles—and that can be tens of thousands of dollars out of your pocket just for not keeping the proper paperwork.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

On February 4th, 2025, President Trump signed in the HR1—commonly known as the One Big Beautiful Bill Act, or the OBBB. And that extended a lot of the Tax Cuts and Jobs Act that was in there, but it also added a lot of new tax laws.

So now is the time. We’re getting ready to go into 2026. 2025 is almost over. A lot of these went into effect in 2025. If you have not already sat down, talk to your tax person.

How are you gonna do this? Are you gonna get more money back? Should you be taking out less on your paycheck? These are the kinds of questions you need to ask. If not now, when you sit down to do your taxes—make your tax appointment today.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com . This is a one-minute moment.

Figuring out our taxes, trying to track our taxes, and we’re getting to the end of the year. It’s important to also think about—if you are a husband and wife that are divorced but you have children. I had a situation that came in the office the other day.

And you know, good news is both of them came—they’re divorced, but they’re trying to figure out who benefits most from the children. Because sometimes it’s like, I’m taking the children no matter what. They’re with me, but you’re basically 50–50 caregivers.

And sometimes one makes a lot less and qualifies for a lot better benefits than the other. Sometimes they don’t get any benefit—but it’s all a personal situation. Take that out of it. Put more money in your pocket. Know your taxes.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Episode Summary Points:

• Year-End Retirement Planning: Reminders to maximize 401(k) contributions before the final paycheck of the year and utilizing Spousal IRAs.
• The “SALT” Cap Increase: The State and Local Tax (SALT) deduction cap has increased from $10,000 to $40,000 for the 2025 tax year.
• Social Security Taxation: Clarification that Social Security is not tax-free, but seniors (65+) now receive a qualified deduction ($6,000 for individuals, $12,000 for couples).
• Service Industry Tax Breaks: New exemptions for federal withholding on tips (up to $25k) and overtime pay (up to 250 hours).
• Auto Loan Interest Deduction: A new ability to deduct up to $10,000 in interest for new, U.S.-assembled vehicles purchased for personal use after Dec 31, 2024.
• Student Loan Updates: Warning regarding the expiration of forgiveness programs in July 2026 and hardship deferments in 2027.
• Estate & Gift Tax: The annual gift exclusion rises to $19,000 per person for 2025.
• The “Trump Account” for Children: Details on the $1,000 government contribution for U.S.-born children starting in 2025.

Episode FAQ:

Q: Is Social Security income tax-free in 2025?A: No. Social Security can still be taxed up to 85%. However, under the new bill, there is an additional standard deduction for those age 65 and older ($6,000 for singles, $12,000 for married couples) which may reduce your overall tax liability.

Q: Can I deduct the interest on my car loan on my 2025 taxes?A: Yes, but there are strict requirements. The vehicle must be new, assembled in the U.S. (VIN starting with 1, 4, or 5), purchased after Dec 31, 2024, and used solely for personal reasons. The deduction is capped at $10,000 in interest and phases out for high-income earners.

Q: I have a teenager who is working. Can I put money into an IRA for them?A: Absolutely. As long as the child has earned income, you (or a grandparent) can contribute to a Roth IRA in their name. You can contribute up to the amount they earned or the annual limit ($7,000), whichever is lower.

Q: Are there stimulus checks coming for seniors in 2026?A: There are discussions about a potential payment (rumored around $1,390) for low and middle-income individuals in 2026, but this is not yet confirmed. If it happens, Social Security recipients likely won’t need to file extra paperwork to receive it.

Transcript:

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

As an individual that’s been doing taxes for over 30 years as an enrolled agent, I’m here to basically help first—make you think. That’s what these moments are all about.

Maybe there’s something one day you’re like, “That doesn’t apply to me at all.” The next day you’re like, “Oh, I didn’t even know that happened.” That’s the reason I try to do these—just make you think and apply.

Because a lot of times people just get into this monotony. They just keep doing the same thing over and over and they don’t realize they should have been getting better tax deductions, they should have been tracking different expenses.

Tax law is always changing, and sometimes those changes actually put more money in your pocket. So pay attention. Make sure you know what’s going on. If you’ve got questions, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

What about dependents? Your standard deduction amount may differ if you can be claimed as a dependent on another person’s tax return.

In 2025, standard deduction for dependents is limited to $1,350 and the sum of $450 plus the dependent’s earned income, whichever is greater.

So this is gonna be big for some people that may be able to claim their children. Normally if they have small income that comes in on W-2s, we can wash it. A lot of times you don’t get that with this new standard.

So you’re going to need to revisit if you’re a small business owner paying your children. You have questions: 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Getting prepared for 2025. Let’s talk about our standard deductions. Married filing jointly and surviving spouses: $31,500, up about $2,300 from 2024. Single and married filing separately: $15,750, up about $1,150.

And head of household: $23,000. If you’re over the age of 65, there will be some additional deductions that you’ll be able to claim.

But the important number is if you had your standard deduction prior to the OBBB, you’ll see that they’ve gone up again. So it’s important to stay on top of your tax questions—and also your tax answers.

615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

We are getting close to the end of the year and now is the time. Time to start getting organized, right? We don’t want to wait until the first of the year and run around like crazy chickens.

We want to have our documents in line. So first I would say get yourself a manila envelope. Put on there what you may be expecting—especially if you’re a person that’s self-employed. You may have 1099s that need to be coming in.

Go ahead and take all those receipts that are on the kitchen table that you’ve spread out, start adding them together, put them in Excel, get the numbers together so you only have to add the last few weeks here.

Earlier you get in, the sooner you know how much money you might owe, and the easier it is to ease any kind of penalties or interest. Check us out at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Legislation has passed by Congress last year that eases the tax for people that have been devastated by a federal disaster from 2018 through 2020. The relief is going to take place in 2021 through 2024.

You’re going to be able to take some of the damages from Hurricane Ian and some of the other ones that have—I mean goodness gracious—we have a whole list here of disasters that’s hit Nashville from that time period.

But what you want to do is if you were affected by those and you did not get to claim those losses, you need to sit down and talk to a tax expert. See if you qualify for any additional tax credits that may have come across the board.

You can catch me on the internet. You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

For all people that are age 65 and older, you have Social Security and you earn less than $75,000 or $150,000 as your AGI, there is an additional deduction that’s going to happen to your standard deduction of $6,000 for each person over that age that has Social Security.

So this is something you’re going to want to make sure—if you do your own taxes, nothing wrong with that, perfectly cool. But make sure that when you’re doing them that you’re using not just paper and pen… maybe you’re using software nowadays.

Keep in mind, the IRS isn’t going to be mailing your refunds in a check form this year. So you’re going to have to put your bank, or you’re going to have to get a card—either way—to get your refund.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Most people who sell timeshares sell them at a loss. That’s just the way it is. The loss of the sale of a timeshare held for personal use is not deductible.

So when you’re dealing with timeshares—and I’ll be honest, guys, I am not a fan of a timeshare. I like visiting, I like to travel, but it seems like they always lock you into something that 20 years later you’re still paying and it’s increased and you don’t have any asset really.

So you sell it, you have a loss. We can’t claim the loss because it’s a personal loss. And therefore, think about what you’re investing into so that you won’t end up putting money into something that us tax people cannot deduct off your tax returns.

Check us out on the web at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

First, Happy Thanksgiving. I’m hoping that all of you guys have the time to spend with family and friends, get to eat a lot of turkey. And I know some of you guys make those things where they take the pig and they put the chicken inside and all these different layers and they have this amazing food.

I hope you enjoy the time that you get with your family. It is limited sometimes. So this moment is just dedicated to families and being able to spend time with our family.

So from my family to yours, I’m really wishing you a very Happy Thanksgiving. And then hopefully you’ll make some time—if you have questions, just check us out on the web at drfriday.com or email Friday at drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com . This is a one-minute moment.

Donald Trump signed an executive order earlier this year mandating that the Treasury Department get rid of paper checks. That’s right—recipients of any benefits, tax refunds, and other payments, effective October 1st.

So this is in effect. He has ordered all federal departments and agencies to use electronic fund transfers, including direct deposits, prepaid cards, or other digital options.

That means that after September 30th, you will no longer be receiving tax refunds in the form of paper checks. So if you filed your tax return recently and you have a refund, be surprised—there’s not going to be a check coming in the mail.

If you’ve got more questions, just check us out on the web.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

1099-MISC, 1099-NECs—this is where we report our subcontractors or services that we have, and we need to send them the 1099 so that they then can file their taxes.

Keep in mind: if you do not receive a 1099, but you did receive money from somebody, it is your responsibility to file that money even if you did not receive the form.

But those forms are going to be changing in 2026. For 2025, you still have $600—anything that’s made over $600, you should be issuing a 1099 for any services that were performed, be it your lawn man or anything else.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

This is one of those things you don’t hear a lot about—the qualified opportunity zone. It’s been made permanent and it’s been enhanced, which is for people that may have a large capital gain from the sale of a business or personal asset.

By investing into a qualified opportunity fund that will help develop struggling communities, a lot of those capital gains can physically disappear—and in like five, ten years you’re able to take the money out tax-free because you are basically using the money to help an underprivileged community.

So if you have a situation like that, you might want to talk to us at 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Back in 2023 and early 2024, many employers were doing the ERC/ERTC—Employee Retention Tax Credits—and some people had no issue. But there was so much fraud that they found during an audit that if you’re still waiting…

In fact, I saw something from like ADP or something saying that it was still out there available. You need to just basically wait. If your account is out there, they may eventually process it. They have put a hold—they’re doing an audit.

It’s gonna take a while for you to see any of that ERTC money at this time. But if you need help with doing your accounting or taxes, just give me a call, 367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Interest deduction on business debts of larger companies is tweaked a little bit. After 2024, adjusted taxable income is figured without regard to the deduction of depletion, depreciation, and amortization, thus allowing higher interest deductions.

So it’s just giving us a way—because for a long time we weren’t able to take all of the interest in that year, especially if you buy a hotel or something. You’ve got some pretty high interest rates right now at nine and ten percent.

So if you have that in your business, there are ways. Laws are changing—you need to make sure you’re taking advantage of them.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Full expense of domestic R&D cost is fully restored. We were getting it downward like 15 and 20 percent. Businesses can now elect to amortize R&D costs over five years, which to be honest, was over fifteen before.

So this is great because now again, a lot of this money’s coming out—we’re doing these repairs, we’re doing these investments, we’re doing this and we don’t have the cash flow. Normally then we end up having to pay tax on a percentage because we didn’t get to deduct it all.

Now, if you do your taxes right, you can take big chunks of that, spread it over a shorter period of time, put more money in your pocket. That’s what we all love about taxes.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points:

• Inheritance & IRS Levies: If you owe back taxes, the IRS can place a levy on your inheritance. Dr. Friday stresses the importance of dealing with tax issues proactively before they become a family matter.

• Choosing a Tax Resolution Firm: Beware of companies promising settlements for “pennies on the dollar.” Dr. Friday explains how to identify legitimate help and avoid firms that delay and overcharge without delivering results.

• W-4 Withholding Issues: An employee questioning why federal taxes aren’t being withheld may not be earning enough to meet the threshold. For those with multiple jobs, it’s crucial to either have extra money withheld or make quarterly estimated payments to avoid a large tax bill.

• Quarterly Estimated Taxes are a Must: For the self-employed, paying quarterly taxes is not optional. Dr. Friday warns that failing to do so can result in penalties, which are calculated monthly.

• Vehicle Deductions (Section 179): Purchasing a large vehicle for your business doesn’t guarantee a 100% deduction. It must be a necessity for your industry, and you cannot claim 100% business use if it’s your only vehicle.

• Business vs. Hobby: If you consistently lose money in a side business while working a full-time job, the IRS may reclassify it as a hobby, disallowing your loss deductions.

• The Importance of Record-Keeping: Dr. Friday emphasizes the need for small businesses to maintain accurate profit & loss statements and mileage logs. For homeowners, keeping receipts for all improvements is vital to increase your cost basis and reduce capital gains tax when you sell.

• Year-End Financial Coordination: This is the time to speak with your financial planner, tax professional, and estate attorney. Discuss Roth conversions, portfolio adjustments, and review your will or trust to ensure it reflects your current life circumstances.

Episode FAQ

Q1: I’m inheriting some property, but I owe the IRS from previous years. What should I expect? A: You should expect the IRS to find out about the inheritance and place a levy against the estate for the amount you owe. This can delay the distribution of assets and make your financial issues known to your family. It is crucial to contact a tax professional to address the debt before this happens.

Q2: My employer isn’t taking out any federal income tax, even though I requested extra withholding. Why is this happening? A: Your income from that specific job may be below the federal threshold where withholding is required. The extra $20 you requested is being taken out, but there is no base withholding to add it to. If you have multiple jobs or other income sources, you are likely being under-withheld and should significantly increase your extra withholding or start making estimated tax payments to avoid a surprise tax bill.

Q3: Can I buy a G-Wagon for my real estate business and take a full Section 179 deduction? A: It’s risky and likely to be challenged by the IRS. To claim a vehicle as a 100% business expense, you must prove it is a necessity for your work and not used for personal activities. This typically requires you to have a separate vehicle for personal use. Unless you can prove that a luxury vehicle is an essential part of your business image for selling multi-million dollar homes, the deduction could be disallowed in an audit.

Q4: I run a small side business that loses money every year. Is that a problem? A: Yes, it can be. If you show losses for three or more years, especially while holding a full-time job, the IRS may classify your venture as a hobby rather than a business. If this happens, you can no longer deduct your business expenses and losses.

Q5: Why is it so important to save receipts for home improvements? A: Saving receipts for significant home improvements allows you to add those costs to your home’s original purchase price (its “cost basis”). When you sell the home, a higher basis reduces your taxable capital gain, potentially saving you a substantial amount in taxes.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The Section 179 has soared, meaning we now in 2025 have $2.5 million of assets that can now expand that and get a 100% deduction on over $4 million.

I don’t think any of us—or very few of us—will be spending $4 million on assets, which means if you go out, you buy a new piece of equipment, you buy a new dozer, you buy something, we can take 100% in the first year.

Which is great, because that’s a way of paying back some of that money you had to take out to get that piece of equipment—to give a little less burden on your business, making it a little easier.

If you have questions, now’s the time. 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Businesses get lots of tax breaks—most of them are maybe more permanent than others. Some are going to disappear. But one that we did like, that was made permanent, was the 20% qualified business income deduction for us self-employed independent contractors, S Corps, LLCs.

This is where we get a percentage of the profits that we make kind of as a deduction on our return so we can reinvest that back into our businesses.

It’s a great way for us to get a little bit of an incentive to be more profitable, to make more money, pay a little more taxes, and get a rebate. 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The 1099-K—we all know that’s been coming around. The last couple of years they kept threatening to do it if you made more than $5,000, and then $20,000, and then over $600 was going to be the current year.

It was appealed to send 1099-Ks out to anyone that made over $600. That has been changed. It has to now be over 200 transactions or over $20,000 to get a 1099-K. That’s good news!

Doesn’t mean you don’t need to report it, doesn’t mean it’s not important to have on your taxes—it just means you won’t have a report that you’re going to be giving us. 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN .

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Many of the clean energy breaks that we had in 2021 are going to expire as of September 2025; many of them end on June 30, 2026.

So if you are looking at doing something that may qualify under those particular tax brackets, you may want to first make sure it’s still in existence. And if not, then you may have to figure if there’s another way of doing it.

Because right now, getting things under the Clean Energy Act isn’t probably going to be a very big tax advantage to you. That’s why you need to do tax planning now—to know what you can and can’t do.

You should call us at 615.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday with Dr. Friday’s Tax and Financial Firm. I’m an enrolled agent licensed by the Internal Revenue Service, which really means all I do is taxes, right?

So if you’re dealing with a tax issue, if you’ve got the IRS, or maybe you just haven’t filed taxes—you’d be amazed how many people come in and haven’t filed for like 20 years. And it doesn’t mean the IRS is even after them.

They’ve left money on the table in many cases because we can only get refunds for three years. So by you not filing, sometimes you have reasons, sometimes it just becomes a habit.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

This is a moment I hear very rarely talked about—the qualified small business stock. It is an enhancement under the current rules: individuals who acquire qualified small business stock after September 27, 2010, and sell over five years later can deduct 100% of their capital gains from the sale.

I mean, that seems pretty simple—up to, I think, $10 million, which won’t be a problem for most of us. This is a small break, and it’s something not a lot of people take advantage of.

You have to be a C corporation, set it up properly, and move forward doing it right. Got questions? 367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The OBB created a new tax-advantaged savings account. This is kind of interesting—many people may not have heard of it. This is accounting for young children. Up to $5,000 can be contributed to an account each year.

The federal government will automatically put $1,000 for each child born after 2024 through 2029. Contributions are not tax deductible, but the fact is you’re starting to save for their retirement.

We all know Social Security is a little questionable. Your little ones may need it extra and get $1,000 a year from the government to put into that account.

615-365-2500.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

529 plan—it’s a wonderful plan. It’s a great way for family to help others put their kids through kindergarten or first grade, second. Now it goes through K to 12, right?

Normally, we could only take out $10,000. But now starting in 2026, you can use $20,000 per year tax-free for K–12. This is wonderful.

This is a great way for people to get tax-free withholding and use it to pay for college as well, which is where it used to start out. So now you can use it all the way from kindergarten through college. Great way to help fund this thing.

615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

There has been some helpful easing of the adoption credit. First, I’d like to thank anyone that’s ever adopted a child. I think that’s an awesome thing to do, and to be able to get some financial help from your taxes—another financial wonder.

So beginning in 2025, up to a $5,000 credit, adjusted for inflation, is refundable when you’re dealing with an adoption. Sometimes we didn’t have that, right? Sometimes you could take off your expenses, you got reimbursed for them, it would roll over.

This is pretty straightforward, and this way you get a little extra money to help put in your pockets and raise those perfect little babies. 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Bad news for gamblers. Starting in 2026, they can deduct only ninety percent of the losses against their taxable winnings. Right now, gamblers can report total winnings on Schedule 1 of the 1040 and deduct losses on Schedule A up to the amount of their winnings.

So this is going to mean a higher tax for many people that are actually going to win—I don’t know, the Super Bowl or whatever you might gamble on. Just one of those things. So be sure that you’re tracking that information.

A lot of times, the casinos will do a pretty good job of providing us the proper forms, but it is your responsibility to turn that in. If you have any questions, just check me out on the web.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And today is D-Day for taxes of 2024. This was our final time. You need to be sending in any payments that you owed for first, second, and third quarter of 2025—those estimates are due today.

Whatever balance you may have had for 2024, those balances are due today. Otherwise, you’re looking at quite a bit more penalties, interest, and even for those that may have extended 941 payments or any other payments that were delayed, everything is due today, guys.

So now is the time. Hit the button, file your taxes. 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment and happy Halloween.

I happen to be one of those people that love Halloween. Not only because I’m in a profession, which is very scary, but also because let’s be honest. Where else can you run around in a costume and scare people and be allowed to do that? Normally you can’t.

And get out free candy. I mean both of those are win-win situations. But if you’re thinking about doing your taxes on this day, I would say probably wait till Monday—just because you know you don’t want to jinx anything.

But if you haven’t filed your 2024 taxes, you only have a few days left. November 3 will be the deadline. And don’t be scared, that would be the time. If you wait till November 4, you’ve got huge penalties—failure to file, failure to pay, and all other failures that will happen.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, an enrolled agent licensed with the Internal Revenue Service to do taxes and representation. I’ve been doing this for over 30 years here in the Brentwood area.

And if you have questions—maybe you haven’t filed taxes, maybe you have a friend that just keeps getting these love letters, they’re concerned they’re gonna lose their house, they could take my car, they can whatever. There’s a lot of myths out there about what the IRS can do, but there’s also a lot of things the IRS can do.

I had an employee that came in the other day, and a friend of theirs was getting their paycheck levied. It’s not something we can’t help with. In fact, it’s something we do every day.

So if you’re having these kinds of problems, why don’t you just give us a call and set up an appointment? 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

GOP lawmakers get their wish to expand school choice for K through 12 students. There’s a new income tax credit for donating to scholarship organizations, giving a non-refundable federal tax credit up to $1,700 to individuals who donate cash to qualified organizations providing scholarships to K–12 students.

Additionally, scholarship recipients won’t be taxed on the funds. Note this is a credit, and a portion of it will be refundable. This is going to begin in 2027, so start thinking—how can you start helping the scholarships?

615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

We’re always talking about taxes because that’s what I do, but also organizing your taxes. Again, we are between two years where if you haven’t filed your 2024, you still have time, and if you’re getting prepared to file your 2025.

So it’s time to think—is there any kind of tax planning I should be looking at? Is there anything that’s happened new this year? I got married. I got divorced. I had a baby. I purchased a house. Is any of this going to have an effect on your tax return?

If so, are you prepared to know? Because sometimes if you’ve gotten divorced in a year that you are claiming married on your W-2, many times you’re going to owe more money.

So if you’ve got questions, just check us out on the web, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Auto loans can deduct up to ten thousand dollars of interest, but there’s always a but—it has to be new. It has to be a new car, minivan, SUV, pickup truck, or motorcycle after the year of 2024.

And you need to have, again, limitations to income: $100,000 for individuals and $200,000 if filing joint. If your income is above that, you will not be able to qualify. If it’s under, you might be able to qualify.

So maybe this is a good time to think—do I need a car now or within the next few months? Because if you don’t buy at the right time and the right car, you may not be able to deduct this interest, which normally we can’t.

Check me out, drfriday.com.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Key Summary Points

• Approaching 2024 Tax Deadline: Time is running out to file 2024 tax returns. Due to a disaster extension in Tennessee, taxpayers have until November 3, 2025, to file returns and make payments.

• New Overtime Pay Deduction (2025-2028): A new law allows employees to deduct the “premium” portion of their overtime pay (the “half” in time-and-a-half). The deduction is capped at $12,500 for single filers and $25,000 for married couples, with phase-outs for higher earners. Employers will need to track and report this, and employees should update their W-4s to adjust withholding.

• New Deduction for Seniors (2025-2028): Taxpayers aged 65 and older will be eligible for an additional $6,000 deduction ($12,000 for married couples). This is available whether you itemize or take the standard deduction but is phased out for those with higher incomes. This may create an opportunity for strategic IRA withdrawals or Roth conversions.

• Capital Gains on Home Sales: Dr. Friday reminds listeners that the old rule of deferring taxes by reinvesting home sale profits into a new property no longer exists. Gains exceeding the primary home exclusion ($250,000 for single, $500,000 for married) are taxable.

• Medicare IRMAA Surcharges: A large, one-time income event, such as selling a home, can lead to an Income-Related Monthly Adjustment Amount (IRMAA), causing higher Medicare premiums two years later. Dr. Friday notes that successfully waiving this for a home sale under a “life-changing event” is very difficult.

• Business Mileage Deductions: To claim mileage, you must have a clear business purpose for traveling from a specific Point A to Point B. The IRS requires a detailed and timely log including the date, destination, purpose, and mileage for each trip.

• Taxes and Divorce: Filing jointly means both parties are responsible for the tax debt, regardless of what a divorce decree says. If you lack trust in your spouse’s financial reporting, consider filing as “Married Filing Separately” to protect yourself.

• W-4 Withholding Accuracy: Dual-income households should review their W-4s. If both spouses claim “Married” and also claim the children without checking the box indicating their spouse also works, it can lead to significant under-withholding and a surprise tax bill.

• Estimated & Payroll Taxes: Self-employed individuals are reminded that estimated tax payments are mandatory. Due to the disaster extension, the first three quarterly payments for 2025 can be made by November 3rd without penalty. This extension also applies to certain payroll tax deposits, offering a crucial window for businesses to catch up and avoid penalties.

Episode FAQ

Q: What is the new overtime tax deduction for 2025?

For tax years 2025 through 2028, employees can deduct the “premium” portion of federally mandated overtime (e.g., the “half” in time-and-a-half pay). The deduction is limited to $12,500 for individuals and $25,000 for married couples filing jointly and is phased out for higher-income earners.

A: Is there a new tax break for seniors?

Yes, from 2025 to 2028, individuals 65 and older can claim an additional $6,000 deduction ($12,000 for a married couple if both qualify). This can be added to either the standard or itemized deduction but is subject to income limitations.

Q: I sold my house for a large profit. Can I avoid taxes by buying a new one?

No, the rule that allowed you to roll over profits from a home sale into a new property to defer taxes no longer exists. You can exclude up to $250,000 (if single) or $500,000 (if married) of the gain on the sale of your primary home. Any profit above that amount is subject to capital gains tax.

A: What is IRMAA and how could selling my house affect it?

IRMAA is the Income-Related Monthly Adjustment Amount, a surcharge on Medicare premiums for individuals with higher incomes. Because the Social Security Administration uses your tax return from two years prior to calculate it, a large, one-time income event like selling your home can trigger significantly higher Medicare premiums two years later.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

One of the other things we’re looking at is the $12,500 of overtime pay that is deductible. Again, this can only be what’s on the time and the half—the half that’s above. They’re not taking and including that in the $12,500.

If you’re married and you both get overtime, $25,000. Again, you cannot exceed $150,000 if you’re single, $300,000 if you’re married. If you are self-employed, you’d have to have a W-2. I had someone ask me that earlier, and I’m like, that’s not gonna happen.

You do have to make sure you’re following all the proper technologies that they’re allowing for us to deduct and calculate this. If you’ve got questions, just give my firm a call.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

There are a few things we want to go over. First, there’s a new senior deduction. I keep talking about it, but I want everyone to understand that’s $6,000 per person that’s 65 and older, deduction part of your standard deduction.

Second would be up to $25,000. Qualified tips are deductible. Again, this has to be reportable. Your AGI cannot exceed over $300,000 if married, $150,000 if single. And it has to be something that has been reported on your income tax. It’s not something you can just say, “Oh yeah, I’m sure I collected $25,000.” It’s not gonna fly.

Questions? 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment, and this is a moment that I’m very excited about.

2025 through 2029, many of you know we had SALT that is on the Schedule A, where we were deducting our sales tax and our property taxes, and there was a limitation of $10,000. People from other states like California and New York, where their income tax was more than that, had a cap of $10,000.

Now starting in 2025, we’re gonna have $40,000 available there. So more opportunities to be able to itemize fully your state withholding along with your property taxes for any state that you have.

You can call us 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The higher lifetime estate and gift extension is now permanent and bigger. I don’t know about a lot of you, but we were concerned when they started saying that it was going to be like a million or two million dollars, which I know sounds like a lot, but when you’re talking a lifetime, it isn’t as much.

But it’s going to be $15 million starting in 2026, up from about $13.9 million that we had in 2025. And if you exceed that—if you’re fortunate enough to have an estate larger than that—then you will be paying a 40% gift tax on anything above that. But for most of us, let’s be honest, lifetime or not, we’ll have no worries.

If you got questions, all you have to do is call us 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary

• 1099-K Thresholds Clarified: After some initial confusion, Dr. Friday clarifies the final 1099-K reporting rule under the “One Big Beautiful Bill.” For 2025, the threshold is $20,000 in gross revenue or 200 transactions. Most everyday users of platforms like PayPal and Venmo will not meet this threshold.

• New Tax Deduction for Seniors: A temporary deduction is available from 2025 through 2028 for individuals over 65 receiving Social Security. The deduction is $6,000 per person ($12,000 for a married couple) and is added to your standard or itemized deduction. Income phase-outs begin at $75,000 for single filers and $150,000 for joint filers.

• Tennessee Tax Deadline: A reminder for all Tennessee residents that the deadline to file 2024 taxes and make any associated payments is November 3, 2025.

• Strategic Roth Conversions: Dr. Friday suggests that the new senior deduction may create an opportunity. The resulting tax savings could be used to fund a Roth IRA conversion, potentially allowing you to move money into a tax-free account at a lower cost.

• Filing Status After a Spouse’s Death: For the tax year in which a spouse passes away, the surviving spouse can still file as “Married Filing Jointly.” If a refund is due, Form 1310 will be required to issue the check to the surviving spouse.

• Gifting Rules Explained: The annual gift tax exclusion for 2025 is $19,000 per person ($38,000 for a married couple). For larger gifts, you can utilize the lifetime gift exemption, which is set to be $15 million per person starting in 2026, without incurring gift tax, though a gift tax return must be filed.

Episode FAQ

Q1: I use Venmo to pay my dog sitter and split dinner bills with friends. Will I get a 1099-K and have to report this as income?

A: No, not unless you receive over $20,000 and have more than 200 transactions for goods and services in 2025. After some confusion, the “One Big Beautiful Bill” reverted the threshold to this higher amount, meaning most individuals using payment apps for personal transactions or small side jobs will not receive a 1099-K.

Q2: I’m 68 and on Social Security. Am I getting a $6,000 check from the government with the new senior tax break?

A: It is not a check or a direct payment. It is a new $6,000 deduction that lowers your taxable income. The actual tax savings depends on your tax bracket. For example, if you are in the 10% tax bracket, a $6,000 deduction would save you about $600 in taxes. This deduction also has income limits and begins to phase out for single filers with a modified adjusted gross income over $75,000.

Q3: My husband passed away in April of this year. What is my filing status for my 2025 tax return?

A: For the year in which your husband passed, you are still considered married for tax purposes and should file as “Married Filing Jointly.” This allows you to use the joint tax brackets and standard deduction. In subsequent years, your filing status will change to Single or potentially Qualifying Surviving Spouse if you have a dependent child.

Q4: I want to give my son a large cash gift to buy a house. Do I have to pay taxes on that?

A: The giver of the gift is responsible for any tax, not the recipient. In 2025, you can give up to $19,000 to any individual without filing a gift tax return. If you give more than that, you must file a gift tax return (Form 709), but you likely won’t pay tax. The amount over $19,000 will simply be subtracted from your substantial lifetime gift exemption ($15 million per person in 2026).

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The child tax credit will be up to $2,200. That’s up from $2,000 that we had at the beginning of 2024 or in 2024. The refundable portion for people with lower income would be about $1,700 per child. The child does have to have a Social Security number. It cannot be a non-resident, it has to be a U.S. citizen.

So if that helps you, I hope you’re going to be able to do that. I hope it does, because anytime we can put more money in our pocket, that’s what we want you to do. We want you to understand that that’s the way you’re going to keep your taxes in the right place.

If you need help just doing your taxes, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I had a conversation the other day with a client about keeping his business either as a sub-S corporation, which is a pass-through, or a C corporation. Because the top rate for an individual could be 37% and a corporation is 21%. Sounds great.

But then when you take money out of that corporation, you’re still paying tax on the profits if you’re getting a distribution. So you need to sit down and really do the math.

Either you’re gonna be drawing out all the money through payroll, which again you’re gonna have to pay the tax rate on that at 37% if your income’s that high, or you’re gonna have to figure out if there’s a better way of doing the distributions.

Call us 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Qualified charitable deductions. I still don’t think enough people understand those. Now, given that they keep changing the dates when people have to take the required minimum distributions, but in many cases, people pay money out of their pocket every month to their charity or their church, and that’s after-tax dollars.

Whereas if you are receiving qualified required minimum distributions, you can then take that money, have it directly sent to your charity, and pay zero tax. Called a QCD.

You need to know more about this? Talk to us at 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I’m gonna talk a lot about the OBBB, because especially for seniors, Social Security, there’s a lot of myths and things going on out there that you’re gonna get $6,000 if you have Social Security. It’s not going to be the same thing.

This is a deduction, right? Deductions mean we get to reduce our income. Credits mean we get to put the money in our pocket dollar for dollar.

So if we have a $6,000 deduction that you’ll be able to add if you have taxable Social Security and your income source is trackable, that’s great. But you’re not going to be $6,000 in your pocket. That is not a refundable credit.

If you got more questions, call us 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Summary Points

• Upcoming Tax Deadline: The deadline to file 2024 tax returns is November 3rd, 2025, due to a federal disaster extension.

• New $6,000 Senior Deduction Explained: For 2025, individuals over 65 receiving Social Security may qualify for a $6,000 deduction ($12,000 for married couples). Dr. Friday clarifies this is a deduction, not a credit, which reduces your taxable income. For someone in the 10% tax bracket, this equates to about $600 in tax savings.

• Applying the Senior Deduction: This deduction can be added on top of either the standard deduction or your total itemized deductions, offering flexibility for all filers.

• Tax Strategy for Seniors: The new deduction may create enough “taxable income room” for some retirees to perform a strategic IRA-to-Roth conversion at a very low or even 0% tax rate.

• Selling Rental Property: When you sell a rental, you must calculate tax on two components:

  • Recapture of Depreciation: The total depreciation you claimed (or were entitled to claim) over the years is taxed as ordinary income.

  • Capital Gains: The remaining profit is taxed at capital gains rates, which can be 15%, 18.8%, or as high as 23.8% for high-income earners.

• Estate Planning Warning: Dr. Friday strongly advises against putting your children’s names on your house deed or bank accounts to avoid probate. This can lead to significant capital gains taxes for them later and exposes your assets to their potential financial or legal troubles, such as lawsuits, divorce, or IRS levies. A power of attorney is a safer alternative.

• Hobby vs. Business: A listener’s question prompts a discussion on the IRS rules for distinguishing a hobby from a business. To be considered a business, you must operate in a business-like manner with a clear intent to make a profit, not just for personal enjoyment.

Episode FAQ

Q: Is the new $6,000 tax break for seniors a check from the government? A: No, it is not a refundable credit or a check. It is a deduction that lowers your total taxable income. The actual tax savings depends on your tax bracket; for example, a person in the 10% bracket would save approximately $600 in taxes.

Q: I never claimed depreciation on my rental property. Do I still have to worry about “recapture” when I sell it? A: Yes. The tax law requires you to recapture depreciation that was “allowed or allowable.” This means that even if you never took the deduction, the IRS calculates the sale as if you did, and you will have to pay tax on that amount.

Q: My father wants to add my name to the deed of his house so I get it when he passes. Is this a good idea? A: According to Dr. Friday, this is generally a bad idea. While it may avoid probate, it could create a massive capital gains tax bill for you down the line. If you inherit the property, you receive a “step-up in basis” to the home’s value at the time of death, often eliminating capital gains tax entirely.

Q: I’m a W-2 employee pilot. Can I deduct the costs of additional flight lessons I’m taking to advance my career? A: No. Under current tax law, W-2 employees cannot deduct unreimbursed employee business expenses. The deduction is only potentially available if you were operating as a self-employed (1099) contractor.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

For all of my people that drive their car for making money—meaning your Ubers, or if you’re a real estate individual and you’re tracking your miles—this is a perfect time. We get 70 cents a mile for true business miles.

Now that does not include commuting. So if you’re at home and you’re going to your office and then you’re coming back home, even if you have a home office, in some cases you cannot deduct two offices. If you’re working from home for your own purpose, that’s not gonna be a deduction.

If you’re doing it because the boss says, “Hey, we don’t have room in the office, you work from home,” then that home office may qualify as long as you’re on a 1099.

You have any more questions, just give our office a call.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

When we’re talking about taxes and we’re looking at 2024 tax filings still on the table, as well as the tax year of 2025, which we’re only a few months from the end of, we need to be thinking both years.

Even if you’re delaying your preparation or filing—physically hitting the button to do your 2024—you’ve only got a few more months to make changes. So if you’re thinking Roth conversions, you’re thinking about contributing money to your 401k, that has to be done through paychecks if you’re an employee.

These are the kinds of times now. Tax planning is what you should be doing for 2025. Otherwise you may miss that window.

615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Under the OBBB, the One Big Beautiful Bill, credits and deductions are going to be expiring for energy credits. So if you have a clean energy credit that you would normally get for putting something in your house, most of those are all expiring by December 31st, 2025.

So if there is something you want to get—if you’re looking for a new AC unit or something like that—and we have the credit, it’s gonna expire now as of December 31st, 2025. This may be something you do not want to delay into 2026 and still put money in your pocket.

Questions? 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com.

This is a one-minute moment. Under the One Big Beautiful Bill, you have one thing that’s going to help people that are over the age of 65 and receiving Social Security.

People are a little confused. What’s this $6,000? What’s this $12,000? So it’s going to be added to your standard deduction. So if you’re 65 and you have a certain dollar amount, your standard deduction, and you have Social Security, you make less than $75,000 as an individual, less than $150,000 as a married couple, you will qualify.

If you’re both on Social Security, up to an additional $12,000 as a deduction. It is not additional money in your pocket per se, but it will reduce your taxes.

Got questions? Just call my office. You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN .

Summary Points

• Final 2024 Tax Deadline: The deadline to file your extended 2024 tax return is November 3, 2025, due to a federal extension granted to all Tennessee counties.
• Estimated Tax Penalties: Dr. Friday clarifies that even with the filing extension, penalties can still apply for not making required estimated tax payments throughout 2024.
• 2025 Estimated Payments: For 2025, the first, second, and third quarter estimated tax payments are all due by the November 3rd deadline.
• Government Shutdown & IRS: A potential government shutdown could delay IRS tax refunds and halt progress on resolution cases, like offers in compromise, as many IRS divisions would be short-staffed.
• SALT Deduction Increase: The “One Big Beautiful Bill” increases the State and Local Tax (SALT) deduction from $10,000 to $40,400, a significant benefit for those with high property or state income taxes.
• Major Deduction Increase for Seniors: Seniors over 65 receiving Social Security will see a substantial standard deduction increase. A married couple will see their deduction rise to $46,700, and a single person’s will increase to $23,750.
• Tax Planning Opportunities: These larger deductions create room for strategic tax planning, such as performing larger Roth IRA conversions or selling stocks with capital gains at a lower tax impact.
• Inherited IRAs: A caller’s question highlights that inheriting an IRA now falls under new rules requiring the funds to be withdrawn within 10 years, which can create a higher tax burden for the beneficiary.
• Estate Planning for Your Home: Dr. Friday advises a caller not to put children on the deed to a house. Instead, using a will or, preferably, a trust ensures children inherit the property at a stepped-up basis, saving them from paying capital gains taxes if they sell it.

Episode FAQ

Q1: What is the final deadline to file my 2024 taxes if I filed an extension? Due to a federal disaster extension covering Tennessee, the final deadline to file your 2024 taxes is November 3, 2025.

Q2: I’m over 65. How much is my new standard deduction under the proposed “One Big Beautiful Bill”? If you are over 65 and receiving Social Security, the new standard deduction will be $23,750 for a single individual. For a married couple where both spouses are over 65 and on Social Security, the deduction will be $46,700.

Q3: I inherited my brother’s IRA. Do I have to take all the money out at once? Under the new laws, you are required to withdraw the entire balance of the inherited IRA within 10 years. This differs from the old rules that allowed you to stretch distributions over your lifetime.

Q4: Should I add my children to the deed of my house to make things easier when I pass away? No. Dr. Friday strongly advises against adding children to your deed. Doing so can eliminate the “step-up in basis,” which could create a large tax bill for your children if they sell the home. A will or a trust is the proper way to pass the property to them tax-free.

Transcript

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com.

This is a one-minute moment. New tax, new laws, new year. From 2025 through 2028, no tax on overtime. So this is a little more complicated than what a lot of people thought.

They were thinking every dollar I make in overtime, I’m not going to pay tax on. It is only the halftime or the part that is truly overtime that we’re going to be able to get credit for, up to $25,000.

And it has to be on your tax W-2. It cannot just be a number you put together. It has to be reported to the IRS.

You know, if you want to know more, you need to give our office a call. Set up an appointment or call us at 615-367-0819. You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com.

This is a one-minute moment. I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. I’ve been doing this for over 30 years.

If you’ve got questions, maybe you haven’t filed taxes for a number of years, maybe you’re just behind or you’re getting love letters and you’re like, I’m just putting them in a drawer. I don’t know what to do. I’m afraid if I do something and they’re gonna trigger and come back at me. I’m unsure.

Well, let me tell you something. If you want to have help, all you need to do is come to me. I can give you a path of how we can get the IRS straight with you, and that way you can move forward—maybe with a little less stress.

Call me at 615-367-0819. You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN .

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com.

This is a one-minute moment. We are in the middle of still filing for 2024 and preparing for 2025 taxes. With the One Big Beautiful Bill, there’s gonna be a lot of changes for 25.

But don’t forget we have only until November 3 to file for 2024. I know some of you are scrambling and you’re saying, wait, it’s October 15th. Normally it will be, usually it is, but this year, final payment, final filing, November 3rd. So we have time to get everything done and paid without almost any penalty.

If you’ve got questions, just call me. 367-0819. You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

We have a new tax deduction effective 2025 through 2028. Individuals may deduct interest paid on loans used to purchase a qualified vehicle. This is not part of your itemizing.

The tricky part is it is what is a qualified vehicle. It has to be assembled here in the United States. Lease payments do not qualify. This must be a new purchase. It has to be a minimum purchase of $10,000.

If you’ve got more questions or you just have to, you know, want to get to know me, 615-367-0819.

You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The OBBBA is in effect, which means the one big beautiful bill is going to be what we’ll be a lot, a lot of talking about. So one of the big things, no tax on tips. What does that really mean? In very short time, I’m gonna tell you it’s basically based on a specific statement, qualified tips, which means voluntary cash or charge tips that you receive. It has to be put on either a 4137 or on your W-2. It can’t be part of your normal ordinary income. If you’ve got more questions, you know the number 615-367-0819.

You can catch the Dr. Friday Call-in-Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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

Then, she unpacks the massive changes coming in the 2025 tax year, including the highly anticipated tax credits for overtime and tips, and a new deduction for car loan interest. What do these changes really mean for your paycheck and your refund? Dr. Friday breaks down the rules, income limits, and what you need to do now to prepare. Plus, she answers listener questions on dealing with back taxes when selling property and the tax pitfalls of inheriting money.

Episode Summary

• 2024 Tax Deadline Reminder: For those on extension, the deadline to file your 2024 taxes is November 3rd. Dr. Friday stresses the importance of completing your 2024 return to know your financial standing (e.g., carryovers) before planning for 2025.
• Understanding the New 2025 Tax Credits: Big changes are coming, but they will affect your tax return, not your regular paycheck withholding.
  • No Tax on Overtime: This is a tax credit, not an exemption. It applies to the “time-and-a-half” portion of your overtime pay. It’s capped at $12,500 for single filers (income up to $150k) and $25,000 for married filers (income up to $300k).
  • No Tax on Tips: A similar credit structure applies to reported tip income, with the same income thresholds and credit limits. It will be crucial for this income to be properly documented and reported on your W-2.
• New Car Loan Interest Deduction: Starting in 2025, you may be able to deduct interest on a loan for a new qualified personal vehicle purchased after December 31, 2024. This deduction is available even if you don’t itemize.
• Retirement & Investment Payouts: A cautionary tale: when taking money from a retirement account, ensure enough is withheld for both the 10% penalty (if under 59 ½) and your ordinary income tax rate. Under-withholding can lead to a massive surprise tax bill.
• Inheritance Tax Traps: Inheriting an IRA or 401(k) can create a large, immediate tax liability if you cash it out. Dr. Friday advises rolling it into a beneficiary IRA and spreading distributions over the allowed 10-year period to manage the tax impact.
• Back Taxes and Asset Sales: If you’re in a deal with the IRS (like an Offer in Compromise) and sell a major asset like a condo, do not try to hide it. The IRS will likely find out via a 1099-S form and can revoke your deal for nondisclosure.

Episode FAQ

Q1: Is my overtime pay going to be completely tax-free in 2025?

A: Not exactly. It’s a tax credit, not a complete exemption from tax. You will still have taxes withheld from your paycheck as usual. When you file your 2025 return, you can claim a credit based on the “half” portion of your time-and-a-half overtime pay, up to a maximum credit of $12,500 for single filers and $25,000 for married couples, subject to income limitations.

Q2: My friend is selling a condo but owes the IRS back taxes. His banker said he could hide the money. Is that a good idea?

A: No, this is a very risky idea. The sale of real estate generates a Form 1099-S, which is reported to the IRS. If your friend has an agreement with the IRS (like an Offer in Compromise), a sudden influx of cash from an undisclosed asset can cause the IRS to review and even revoke the deal, demanding the full original amount owed. Transparency is key.

Q3: I inherited an IRA. Should I just cash it all out now?

A: Cashing out an inherited IRA in a lump sum is often not the smartest tax move. The entire amount becomes taxable income in that year, which can push you into a much higher tax bracket. As a non-spousal beneficiary, you generally have 10 years to empty the account. Spreading the withdrawals over several years can result in significantly lower taxes paid overall.

Transcription

Summary Points

• De-Mystifying the “One Big Beautiful Bill”: Dr. Friday breaks down the key provisions of the new tax law passed on July 4th, focusing on what you need to know now to prepare for the 2025 tax year.
• The New Social Security Tax Credit: Learn about the new credit of up to $6,000 (single) or $12,000 (married) for Social Security recipients. Dr. Friday explains the income phase-outs and the many unanswered questions about how it will be applied on your tax return.
• A Big Change for Tipped and Overtime Workers: A new deduction of up to $25,000 (for joint filers) for income from tips and overtime could mean big refunds. This also creates new reporting responsibilities for employers and highlights the need for employees to be vigilant about their pay stubs.
• Advice for Employees and Employers: Dr. Friday stresses the importance of checking your pay stubs now to ensure tips and overtime are tracked correctly. She advises employers to get their payroll systems ready for the new W-2 reporting requirements.
• Planning for 2025 and Beyond: Discover other OBBB provisions like government-seeded “Trump Accounts” for newborns and the impending phase-out of the electric car tax credit in September 2025.
• Warning on IRS “Pennies on the Dollar” Schemes: Dr. Friday cautions listeners about misleading ads for tax settlement. She explains the reality of IRS negotiations and that the IRS will look at all your assets—including 401(k)s and home equity—when determining your ability to pay.
• Caller Q&A: Listeners get answers on how to avoid estimated tax penalties, the specifics of the new Social Security credit, and the strict rules of a 1031 property exchange.

Episode FAQ

Q: The government sent a notice saying my Social Security benefits won’t be taxed anymore. Is that true?

A: Not exactly. While a new tax credit has been introduced for 2025, it’s not a complete elimination of the tax for everyone. Under the new law, taxpayers with a Modified Adjusted Gross Income (MAGI) under $75,000 (single) or $150,000 (married) may receive a credit of up to $6,000 or $12,000, respectively, to offset the tax on their Social Security benefits. The standard calculation of taxing up to 85% of your benefits still applies; this credit then works to reduce or eliminate that tax liability. The credit phases out completely at higher income levels ($175k for single, $250k for married).

Q: How does the new tax deduction for tips and overtime work?

A: For the 2025 tax year, workers can take a deduction for up to $12,500 (single) or $25,000 (joint) of their combined income from tips and overtime. To claim this, the income must be properly reported on your W-2 form by your employer. This is a new requirement, so it’s crucial for employees to check their pay stubs throughout the year to ensure accuracy and for employers to update their payroll systems to track and report this income separately.

Q: I sold an investment property and want to use the money to buy another one to avoid capital gains tax. Can I do that?

A: You can only defer capital gains tax on a property sale if you follow the strict rules of a Section 1031 Exchange. This must be set up at the time of the sale. The proceeds from the sale must go directly into an escrow account held by a qualified intermediary and cannot be touched by you. You then have a limited time to identify and purchase a “like-kind” replacement property using those escrowed funds. If you have already received the money from the sale into your personal account, it is too late to perform a 1031 exchange.

Transcript

Listen in as Dr. Friday discusses the most significant updates, including a huge increase in the SALT deduction, the potential return of the car loan interest deduction, new tax credits for tip and overtime workers, and a major change to how Social Security benefits are taxed for many Americans. While the ink is barely dry and the IRS is still scrambling to create the new forms, Dr. Friday provides the essential information you need to start preparing now. Plus, she answers listener calls about the home sale exclusion, the nuances of the new Social Security deduction, and a crucial update on the Beneficial Ownership (BOI) reporting requirement for businesses.

Episode Summary

Here’s a breakdown of what we covered in this episode:

Breaking Down the New 2025 Tax Bill:

• SALT Deduction: The State and Local Tax (SALT) deduction cap is set to increase from $10,000 to $40,000 for most taxpayers, with a phase-out for individuals earning over $500,000.
• Tax-Free Tips & Overtime: A new credit is being introduced for income tax on tips (up to $1,300) and overtime pay (up to $1,400), primarily for workers in the 12% tax bracket. Social Security and Medicare taxes will still apply.
• Social Security Tax Relief: A new deduction or credit of 4,000−6,000 will be available for Social Security recipients, with income phase-outs starting around $75k for singles and $150k for married couples.
• Child Tax Credit: The credit is expected to be renewed at the $2,000 level, preventing the scheduled drop to $1,000.
• Car Loan Interest: The deduction for interest paid on car loans is back on the table, though specific details (like whether itemization is required) are still unknown.
• Charitable Deduction: An “above-the-line” deduction for charitable contributions for non-itemizers (similar to the one during COVID) is expected to return.

Caller Questions & Key Clarifications:

• A caller’s question prompts a crucial update on the Beneficial Ownership Information (BOI) report: As of March 2025, filing is voluntary for domestic companies with no foreign owners.
• The primary home sale exclusion ($250k single / $500k married) remains unchanged by the new bill.
• Dr. Friday confirms all these new tax provisions are effective for the 2025 tax year, which you will file in 2026.

IRS & Tax Filing Advice:

• Dr. Friday explains why 2024 tax refunds might be delayed, citing increased IRS fraud checks and return complexity.
• A reminder about the federal disaster extension, which pushes the filing deadline to November 3rd for affected taxpayers.
• The critical importance of staying in compliance by making quarterly estimated tax payments to avoid penalties and interest with the IRS.

Episode FAQ

Q: Will my tips and overtime pay be completely tax-free now?

A: Not entirely. The new law creates a tax credit against your federal income tax for tips and overtime pay, up to a certain limit ($1,300 for tips, $1,400 for overtime). This benefit is aimed at lower-income earners, likely those in the 12% tax bracket. You will still owe Social Security and Medicare taxes on this income. Dr. Friday stresses the importance of keeping detailed pay stubs as documentation will be required.

Q: Do I need to file that Beneficial Ownership Information (BOI) report for my small business?

A: This was a key clarification. As of March 21, 2025, the requirement to file the BOI report is voluntary for domestic companies that do not have any foreign owners or partners. If your company has foreign beneficial owners, you are still required to file.

Q: When do all these new tax changes take effect?

A: All the changes discussed from the new bill are effective for the 2025 tax year. This means they will apply to the income you earn in 2025, which you will file on your tax return in early 2026. They do not apply to your 2024 taxes.

Q: Is the deduction for car loan interest definitely back?

A: Dr. Friday mentioned this is included in the bill, but details are still emerging. We do not yet know if it will be an “above-the-line” deduction available to everyone or if it will require you to itemize your deductions.

Transcript

• Tax-efficient strategies for paying for nursing home care using IRA funds.
• Understanding the 10-year rule for inherited Traditional and Roth IRAs.
• A “dollar-for-dollar” strategy to offset taxes on inherited IRA distributions.
• The importance of using a will or trust to transfer property to preserve the step-up in basis.
• The tax pitfalls of adding a child’s name to a property deed (quitclaim deeds).
• Using IRAs as a vehicle for charitable donations.

• Qualifying for the Child and Dependent Care Credit with summer day camps.
• Claiming aging parents who live with you as dependents.
• Rules for claiming grandchildren or other relatives living in your home.
• Warnings about improperly claiming a significant other’s children.

• The 3-year statute of limitations for claiming an IRS tax refund.
• How to appeal to the IRS for a late refund based on extenuating circumstances (COVID, death of a spouse).
• How to handle tax debt with the IRS and state tax authorities (Alabama).
• What assets the IRS considers during collections (home equity, extra vehicles, second homes).
• The importance of compliance before making an Offer in Compromise.
• The risks of having your name on a minor child’s bank account when you have tax debt.

• The tax implications of gifting money to an adult child (annual gift exclusion).
• Managing capital gains tax on the sale of company stock through payroll withholding vs. quarterly payments.
• Calculating the tax basis of a primary home after making major improvements.
• Understanding the primary home sale exclusion ($250,000 single / $500,000 married).

Episode FAQ

Transcript

Summary Points

• The Power of Planning Ahead: Dr. Friday shares a client story illustrating how planning a stock sale across two tax years (2025 and 2026) can keep you in a lower capital gains bracket and save thousands of dollars.
• Navigating Capital Gains: Learn the difference between short-term and long-term capital gains and how you might qualify for a 0% tax rate on long-term gains if your income is below certain thresholds.
• Understanding Real Estate Tax Implications: Dr. Friday discusses often-overlooked taxes like the “recapture of depreciation” on rental properties and how rezoning an inherited property after the owner’s passing can create a massive, unexpected tax bill.
• Big News for Tennesseans: Due to a federal disaster declaration, the deadline for filing 2024 taxes and making the first three 2025 quarterly estimated payments has been extended to November 3, 2025. This also extends the deadline for 2024 contributions to IRAs, SEPs, and HSAs.
• IRS Compliance is Key: You can’t make a deal or payment plan with the IRS unless you are in compliance. Dr. Friday explains how this applies to offers in compromise and what to do if you receive a CP-2100A notice about incorrect 1099 information.
• Listener Questions Answered: Can you do a 1031 exchange for an overseas property? Do you need to make estimated payments after a Roth conversion? Can you contribute to both a Traditional and a Roth IRA? Dr. Friday answers these and more.
• Common Pitfalls to Avoid: Are you and your spouse filling out your W-4 forms correctly? A simple mistake on the “spouse also works” checkbox is a common reason W-2 employees end up owing taxes.

Episode FAQ

Q: If I do a Roth IRA conversion this year that will cause me to owe taxes, do I need to make a quarterly estimated payment to avoid a penalty?

A: Not necessarily. The IRS requires you to pay in either 90% of the current year’s tax or 100% of the prior year’s tax liability. If your regular income and withholdings already meet 100% of what you owed last year, you can typically pay the extra tax from the conversion when you file without a penalty.

Q: Can I sell a property in the U.S. and use a 1031 “like-kind” exchange to buy a property overseas and defer the tax?

A: No. A 1031 exchange is only permitted for properties located within the United States. You would have to pay capital gains tax on the sale of the U.S. property.

Q: Do I need to report large vacation expenses to the IRS, like if I take my whole family on a trip?

A: No. Spending your own money on a family vacation is not a taxable or reportable event. It is considered a personal expense, not a gift or income.

Q: I contribute to a traditional IRA for the tax break. Can I also start and contribute to a Roth IRA?

A: Yes, you can contribute to both a traditional IRA and a Roth IRA, subject to income limitations for the Roth. However, only the traditional IRA contribution will give you an immediate tax deduction. The Roth IRA contribution uses after-tax money but grows tax-free for retirement.

Full Transcription

Topics Covered:

• Potential new federal bill: “No tax on overtime and no tax on tips” – likely a deduction, income limits, and only for income tax (not Social Security/Medicare).
• Caller Question: Determining if tax filing is necessary based on Social Security and other income.
• Primary Home Sale Exclusion: The two-out-of-five-year rule, $250,000 (single) / $500,000 (married) exclusion, and capital gains tax (including the 3.8% net investment income tax).
• 1031 Like-Kind Exchanges: Not applicable for primary residences; rules for converting investment properties.
• Inherited Property: The benefit of “step-up in basis.”
• IRS Issues: November 3rd tax deadline (due to disaster), estimated tax payments, penalties, first-time abatement, and strategies for resolving tax debt (OIC, payment plans, asset considerations).
• Estate Planning: Importance of wills and trusts, dangers of quick-claiming property (loss of step-up in basis), and having a team of professionals.
• Caller Question: Clarification on home sale capital gains and inheritance.

Episode FAQ:

1. Q: What’s this new bill about no tax on tips and overtime?

   A: It’s a proposed federal bill (not yet law as of May 31, 2025) that might make income from tips and overtime non-taxable for income tax purposes. Social Security and Medicare taxes would still apply. Dr. Friday suspects it will likely be a deduction on your tax return, potentially with income limits.

2. Q: I’m selling my house. Will I owe a lot of tax?

   A: If it’s your primary home and you’ve lived in it for at least two out of the last five years, you can generally exclude up to $250,000 of profit if you’re single, or $500,000 if you’re married, from capital gains tax.

3. Q: What’s a “step-up in basis” for inherited property?

   A: When you inherit property, its cost basis for tax purposes “steps up” to its fair market value at the date of the original owner’s death. This means if the heir sells it relatively soon after inheriting, there’s often little to no capital gains tax to pay. This is why Dr. Friday advises against quick-claiming property to children before death, as that can negate this benefit.

Transcript: Dr. Friday Radio Show – May 31, 2025 (Segments 2, 3, & 4)

Dr. Friday:

[00:02] All right, we are here live in studio.

Dr. Friday:

[00:05] And if you want to join the show, you can at 615-737-9986, 615-737-9986. I know we’ve had a little bit of a test going on this morning, but I think we’re good to go.

Dr. Friday:

[00:20] I’m not too sure if you guys were able to hear everything that I was saying earlier, but just wanted to make sure that if there was any questions, we are talking a little bit about the new bill that could be passing about. It’s the one big, beautiful bill, I believe it’s what it’s called now, you know, with Donald Trump. But, you know, are your taxes, are you going to have no tax on overtime and no tax on tips? Big question.

Proposed Tax Bill: No Tax on Overtime and Tips

Dr. Friday:

[00:50] Everything I’ve said, even if it passes and it goes into law, which I’d say we have a 50-50 chance, it looks like that it’s going to become a deduction on your tax return. So it looks like you’ll still be paying the tax throughout the year. You’ll still be claiming and reporting all of your tips and everything. And then you’re going to have a deduction available on your personal tax return where you’ll get that money back potentially.

Dr. Friday:

[01:22] I think it’s going to be all based on dollar amounts of how much money you earn. They’ve already basically said overtime for anyone that’s getting overtime over 160 will not get any credits for overtime. But then again, I’m not too sure. Most people that are making $160 or more are probably salary-based, not really based on am I clocking in every hour and then being paid overtime? I don’t think that’s something.

Dr. Friday:

[01:47] There are some states, several of them had no tax on tips in overtime. Some say, like Alabama, North Carolina, New Jersey have also proposed similar legislation. So if you’re in some of those states, Alabama being next door, obviously, it may be able to get it in either state. So we’ll just have to figure out which one will accept. First, we got to get the federal to pass, and then we’ll see if the states will follow suit or if they will not.

Dr. Friday:

[02:17] So if you have a question, because I’ve gotten a lot of emails on this, actually, you know, and I wasn’t too sure if it was going to be something most people were curious, but I have gotten quite a few. And a lot of people think it’s already passed. It has not. We have not gotten that through yet.

Dr. Friday:

[02:33] So one of the things I did see on one of the bills said the tax deduction amount is for $25,000 or under if you’re making tips. Again, this has not passed. This is just a lot of people guessing on what will pass or how it will affect individuals.

Dr. Friday:

[02:51] So I think it’s going to be really interesting because the Fair Labor Act, The Department and Federal and State Departments of Labor have worked so hard to get people to reporting tips so that they can actually see how much money people have been being paid. And now, if this is some sort of change, now will people not be reporting it or not be reporting as much on that or not? I’m not absolutely sure.

Dr. Friday:

[03:19] So we’ll let’s go ahead and hit Matt in Donaldson. Thank you for calling because they’re crazy morning. What can I do for you, bud?

Caller Question: Tax Filing Threshold with Social Security Income

Caller:

[03:30] federal income tax can i give you some numbers and tell me i did good

Dr. Friday:

[03:35] I’ll do my best yes

Caller:

[03:37] total amount was 30 700 social security was 28 000 of that and pbc was another 2 000

Dr. Friday:

[03:48] okay so the 28 000 is that the 85 or 100 of your social security

Caller:

[03:54] It was actually 28,704. That was the total.

Dr. Friday:

[04:00] So taxable amount would be 24,4 for simple math. And did you actually file taxes or are you thinking that you’ll be under with this dollar amount?

Caller:

[04:12] I did not file. I just want to know if you think…

Dr. Friday:

[04:15] I don’t think you should have. I think you did the right thing.

Caller:

[04:20] I’ll go with that.

Dr. Friday:

[04:21] You got it buddy. I think you’ll be just fine.

Caller:

[04:25] Bye-bye.

Dr. Friday:

[04:26] Bye-bye. Thanks. So that’s a great question. He was just basically wanting to see if, you know, again, there are very few times in life that we don’t have to file taxes. I can’t tell you how many people in their 80s and 90s come in my office and say, hey, Friday, when can I stop filing taxes? Thinking that age would be the determining information and that is not you, you know, death and taxes. We’ve all been raised on that comment, two things you have to do or two things that will be done, pay tax and die.

Dr. Friday:

[04:59] And you will be paying taxes until you die, unless you get fortunate enough to plan your income where you either have Roth IRAs or other sources of income that are completely non-taxable. And then obviously like social security, social security itself is not taxable. It only becomes taxable when you have other things that come into play. And that’s why with this gentleman with 24,000 or only 28,000 of the 31 that he actually earned being social security, he didn’t earn enough to qualify for taxes. So it’s a nice thing. It’s a, it’s a beautiful thing if it happens. Unfortunately, most of us will not have that happen. So we just don’t know which way we’re going to go with that and make sure that we’re, you know, on track or whatever. So we’ll just keep moving.

Dr. Friday:

[05:46] I’m not too sure if I should be taking a break or we’re just going to go straight through to the next one because the commercials let me know. So I’m going to keep talking. But anyway, so if you have questions, you can join the show. 615-737-9986. 615-737-9986 in the studio.

Primary Home Sale Exclusion and Capital Gains

Dr. Friday:

[06:05] So maybe you have a situation where you’ve either had some inheritance. Maybe you’re thinking about selling some property. Maybe it is not your primary or maybe it is your primary. You’re not sure if you have taxes due. This last few years, we’ve had a number of people that have had their primary home because of the exclusion. They still have ended up having to pay tax. And that’s, thanks guys, I got it. That’s the important part.

Dr. Friday:

[06:35] So let’s talk about that exclusion really quick because I know a lot of times, first thing, you have to meet the two out of five years, which means unless there is some reason, a medical, a working, something that comes up that creates a reasonable reason for you, divorce, then you have to have lived in this house two out of the last five years. Then you have to take whatever you purchased it and then the difference of whatever you sell it for.

Dr. Friday:

[07:01] So let’s use some basic numbers. Let’s say you purchased it at 200 and you sold it for $450,000, then as a single person, you would pay zero tax on the additional $250,000. That’s your exclusion. And that’s doubles when you’re married. So it’s a $500,000 exclusion when it comes down to knowing what you have, right? So again, if you brought a house for $200,000 and you sold it for $700,000 and you’re married, then you’d also be in a zero tax situation.

Dr. Friday:

[07:34] But I have had a number of people that either they’ve married someone and the second spouse has not lived in that house two out of the last five years. So they don’t qualify for the exclusion. Yet the house is purchased at $200 and sells for $700. You cannot claim your spouse lived in the house for two years if she didn’t or your husband or whatever. So in those cases, you know, you have $200,000 investment. The one person would get the exclusion of $250. So 450 of the 700 would be tax-free. The remaining difference would be taxable income or $250,000. And that would kick you into not only past the 15% tax bracket, most likely hitting the 18.8.

Dr. Friday:

[08:20] And I know people will go, there’s no 18.8 in capital gains, but there really is. Anytime people tell you that the capital gains tax is 15 and 20, they are totally bypassing the 3.8 tax that we have on investment income. And it kicks in basically once a single person hits 200,000, including everything, all of their income, or a married couple making 250,000, a little marriage penalty there. So, you know, and then it kicks in. So then you have another 3.8, which makes capital gains tax at that point, 18.8. So let’s let the numbers be what they are.

Dr. Friday:

[08:56] So anyway, so that’s the kind of ways we want to sit down. We want to calculate, make sure that we have prepared for that tax because then what happens is a lot of times people go out and they, this happens in multiple things, but they go buy another home and they think, well, as long as I’ve invested all my gains into another house, I don’t have to pay tax. That is not the tax law. If you buy a house and you sell that house, you have to either pay tax or you meet the exclusion. And then you can, if you wish, buy another house. It is not mandated. That was back, goodness, 20 years ago, I think, when I first started, even before that. But where the tax law basically said you had two years to reinvest the gains from your home and it wasn’t taxed. That is not the tax law. You do not have to buy another home. But what you do have to do is report the sale and either pay tax or get the exclusion. So making sure you’re on the current tax law and making sure you understand.

1031 Exchanges and Inherited Property

Dr. Friday:

[09:55] And also you cannot do what a lot of people, I heard a gentleman talking the other day and he’s like, well, as soon as I sell, because he brought a home back in Franklin 25 years ago, it’s now worth like 1.5 million. He paid like 250,000. And he’s done some improvements and things, but all in all, it’s the land, it’s the property that’s going to be worth that money. And so he’s turning around and he’s like, well, I’m just going to do a 1031. This is his primary home. And he cannot do a 1031 or a like-kind exchange on your primary home. That’s specifically in the law.

Dr. Friday:

[10:32] And you cannot take an investment home, buy a like-kind, and turn it into your primary. At the time that you decide to make it or you report it as your primary home, you have to now pay the tax that you deferred during a like-kind exchange or what we refer to as a 1031 exchange.

Dr. Friday:

[10:51] So there are ways of deferring tax on investments, and then there are ways of deferring tax on your primary home, but they don’t really work together. You can’t do a 1031, but you don’t get the step-up-in basis or the exclusion of the tax $250,000 or $500,000. So making sure you understand, A, what you have, and then you can do certain things.

Dr. Friday:

[11:17] I mean, obviously, if you inherit a piece of property, that’s always nice because you have normally the step up in basis. So what I mean by that is that if I inherited something today from a family member and that person passed away, whatever that property was worth at the time that I inherited it, then you’ll be able to deal with what you want to do and go for it. Got it.

Dr. Friday:

[11:46] So again, just making sure that we know how the taxes are going to work. So you know, if I sell this or if I exchange this, what is going to be taxes and what is not going to be taxes and how you’re going to make it work. So you put more money in your pocket. I mean, that’s really what the game is. You need to understand the tax law. So that way you can keep more of the money and be prepared to pay because I’ve had a number of people that were not prepared to pay when they actually had it come up. And then next thing you know, it’s there on top of it. And you’re like, oh my gosh, I owe this much money. Where am I going to get? Because now the money’s tied up in something.

Announcer:

[12:21] All right. We’re going to take a break here. You can join the show at 615-737-9986. 615-737-9986. We’ll be right back with the Dr. Friday show.

Announcer:

[12:31] We are back here live in studio. You can join us at 615-737-9986.

Clarification on “No Tax on Tips/Overtime” Bill

Dr. Friday:

[12:43] 615-737-9986 is the number here live in studio. And I did get an interesting email where someone says, well, will I not have to pay any tax on my tips if this goes through? And I do want to clarify, you’re not going to pay income tax. They will still be charging you Medicare and Social Security on tips and overtime. These bills are only talking about income tax.

Dr. Friday:

[13:12] So just keep in mind that you’re still going to have 7.65% of your wages going towards your Social Security and Medicare. So I just think that was important to point out because a lot of times people are thinking, oh, I’m going to get this money free. It’s just going to be completely without any tracking and, you know, now people can go with it and what, you know, what’s going to change. So it’s going to change a bit.

Dr. Friday:

[13:31] So, you know, you must be able to report that tips without paying tax have to be making as much as $20 or more in tips or something. There’s some, I haven’t got the details yet. And again, this has not passed law. So we’re going to keep you in the loop as things go and make sure we understand exactly, you know, what’s going to happen. And they’ll give us a, they’ll give us a lowdown once, once it actually passes, we’ll have a much better idea of what it is.

Dr. Friday:

[14:00] But I do know a lot of people work for tips and, uh, you know, a large number of people get overtime. Um, and you know, again, without being taxed, I don’t know if that’s still going to require, because I mean, the whole reason for overtime was to make sure people were getting paid, um, you know, for their time, right. Anything over 40 hours, time and a half. And then there’s holiday pay and different things. And that’s part of the federal department of labor. And then them saying not being paid on overtime, does that mean just that half, you know, there’s still, you’ll still be responsible for paying tax on all of the ordinary income. And then over time, the time, the half, just that half, or are they talking all of the overtime, the time and a half? I don’t know. These are questions that are being asked and I do not have the answers yet. So we’ll just keep you the loop.

Tax Deadlines and Estimated Payments

Dr. Friday:

[14:49] If you’ve got questions or something on your mind thinking about how this is going to work, feel free to join us here live. I know it’s never too scary or maybe it’s a little scary to call a radio station, but trust me, we’re not tracking or doing anything. You can just reach us at 615-737-9986, 615-737-9986, taking your calls, talking about my favorite subjects.

Dr. Friday:

[15:18] We all know that we have a little different deadline. November 3rd is the deadline here. Now keep in mind that also does not change for states. So if you happen to have to pay a Kentucky state or if you’re a business owner here in Tennessee and not really directly affected by the storms, but you’re under the federal disaster situation, then you need to make sure that you filed your business license and especially your franchise excise because the extensions already come by. So you need to really just file and you’ll be getting some wonderful love letters on that if you haven’t already filed it. So that way you can make sure that you’re getting and staying in compliance. That’s the important part of all this.

Dr. Friday:

[15:58] And I’m telling people, this is a great year to really play catch up. Normally, you know, if you don’t pay your first estimate by April, your next one by June 15th, the last, you know, the next one in September and the last one in January, you know, there’s penalties, right? We all get hit with some decent sized penalties if we don’t pay these on time. And I know a lot of people think that making estimated tax payments is an option. It’s a choice. It is not a choice. It is tax law. And there are penalties if you choose not to do it. And that’s your choice. Again, that is where the choice comes in. Your choice is if I don’t want to pay taxes until April 15th, then that’s perfectly fine, but you’re going to pay penalties and interest.

Dealing with IRS Penalties and First-Time Abatement

Dr. Friday:

[16:41] I had a gentleman, we resolved his tax issue as a 2021 issue and it took us forever. And he kept getting, he said, they haven’t resolved it. They haven’t resolved it. And finally, I saw the letters they were sending him and they had resolved his tax issue, but the penalties and interest on the issue was another $10,000. And so he was thinking he still was getting collected on for not doing the correction. But it wasn’t. I mean, he only owed like 20 and it’s a 50% penalty by this point, because it’s like three years old. And he didn’t find the mistake until last year or whatever, or the IRS found the mistake for him. And of course, at that point, the penalties and interest had already started. We’re going to see if we can reduce the penalties.

Dr. Friday:

[17:24] And you can do that yourself. If you get a love letter. Now, the problem is a lot of times people kind of start, I don’t want to say freaking out, but they basically get all wound up about a $50 penalty. And I get it. No one should have to pay a penalty, period. But it’s fact of life. But when you have a $4,000 or $5,000 or $6,000 penalty, and that can also happen, you don’t want to waste your one-time, you know, first-time abatement is what they refer to it as. I call it the one-time get-out-jail-free card. But either way you want to look at it, that first-time abatement, you don’t really want to waste that on a $50 deal. Okay?

Dr. Friday:

[18:00] you know you might want to just see what you can do because it just seems like in life you’re most likely going to have something more than $50 that is your problem now if you’ve never had a problem and that $50 is the one time you’ve ever had well yeah sure go for it and all you have to do is call the IRS and and I will have to say I’ve called them a couple times this last week and it could be an hour hour and a half before you get through to somebody but there is I had the I mean I hate to say this, but I had the nicest revenue officer the other day on the phone and she actually acted like she liked her job. She did not make me, and I mean, a lot of times when, because I’m a representative, you know, they make it a little harder sometimes. She’s, you know, she was all about resolution and about trying to figure out how to get it done and making sure that we had the tools to get everything done. It was a refreshing situation. I will be quite honest with you.

Dr. Friday:

[18:57] office in Tennessee is great. Um, you know, I have used them for gosh, 20 years. Um, and they have, you know, most of the time been able to deal and resolve the issues, but I was able to do something. So I’m going to say call, if you don’t like the person that you get on the phone with the IRS, they always say, hang up and try again. Cause the likeliness of you actually getting the same person twice is pretty rare. So this way you’d be able to at least see if what you have or where you’re going with it or whatever.

IRS Resolution and Asset Considerations

Dr. Friday:

[19:24] So, um, but yeah, so if you have love letters and you’re not sure what to do, you can certainly come to us. I’m an enrolled agent licensed by the internal revenue service to do taxes and representation. I’ve been doing this for about 30 years here in Tennessee. And so if you need help or you’re just not too sure where to start, you know, sometimes people hear about all these ads on the radio and they’re like, oh, we can resolve all your issues for 10 on the dollar and all of this. And I’ll be honest, I’m probably the most truthful you’re going to get.

Dr. Friday:

[19:56] There’s a lot of people that think just because they don’t want to pay the IRS, they shouldn’t have to pay the IRS. It doesn’t work that way. It truly is based on your assets. How much money do you have in the bank? How much money? I have a case right now. The guy has four cars. He’s a single guy. The IRS values those cars and they come back and basically say, well, you got $60,000 worth of extra vehicles, you know, that you could sell. And, you know, in his case, he didn’t have a lot of others, but these cars, which are very nice cars, and he’s got them all paid off, you know, have become, well, the IRS is basically saying, hey, you purchased these four cars, but yet you couldn’t afford to pay us. So, you know, give us our share of those cars. So in essence, sell those cars or get loans because you’re going to owe us the equivalent of blue book value if you decide to make a deal with us. And that’s the kind of thing I like a lot of people don’t know about.

Dr. Friday:

[20:54] I mean, even your 401k and IRA, even though you, the IRS cannot force you to take the money out of those accounts. The IRS does look at it as if those monies are theirs because you put money aside in a retirement account when you had a balance due with the IRS. Most of the people that come into my office, even though they say they can’t afford to make payments to the IRS, most of them are making 401k payments on their paychecks. They’re having money come out and depositing that into their 401ks. And so it’s like, okay, that’s probably a bit of a problem, right? Because if you’re making payments to the IRS or into a retirement account and you’re not making payments to the IRS, they’re sitting there going, well, that money is ours. So we need you to take the equivalent of that and either take a loan against your 401k and pay us off, or you need to, you know, take the cash out of the 401k and pay the taxes and then give us our share. So that way we are not your loan officers because we don’t want to be, you know, and penalties and everything that goes with that are very healthy, much worse than if you just went to the bank.

Dr. Friday:

[22:10] And again, houses. I have a large number of people that come in my office and they have one, two, $300,000 worth of equity. They owe the IRS 50 grand. You can do all you want. I mean, there are certain things, certain criterias that the IRS may waive some of that on, being that you have no other money and that you’re 70 years old and your house is your retirement account, you may be able to argue some of that, maybe, really depending on your personal assets and things. But just want to make sure that you are in a good place, right?

Compliance and Lifestyle Choices in IRS Negotiations

Dr. Friday:

[22:50] I mean, so reality needs to sink in. If you have your kids in private school and it’s not for medical or health reasons of some sort where you might be able to say, well, they’re special needs. They need to be in this school because it’s the only one and my doctor suggested it and it’s a healthy place for them or whatever. That’s a choice, right? You’re choosing to spend 12, 15, $20,000 a year for a private school. And yet you owe the government $50,000. Well, it doesn’t really make sense. They’re not going to give you credit for that. So, you know, you have to make these smart decisions. You have to understand the system. If you can understand the system, you then can understand how are you going to keep things going and making sure things are going to be the way you want them, right?

Dr. Friday:

[23:36] So when you’re looking to figure out how to get yourself back on track with the IRS, first thing is compliance. You need to be in compliance, which means you have to have at least filed the last seven to eight years of taxes. You need to make sure there are no, If you’re making quarterlies, again, which started this whole conversation, if you’re self-employed or you’re an individual that has multiple jobs and you’re not having enough taxes come out, you are going to need to either, if you’re a W-2 person, you just need to make an adjustment. Have the money coming out every week or every two weeks or once a month, whenever you’re getting paid, is a smarter idea than to have the IRS contact your employer and say, this person has to claim single and zero. That’s the highest and that’s what they can mandate. And they can mandate that. I’ve got a number of married people that right this second are claiming single and zero on their tax returns because the IRS has went to their employers and they’re having to do that, which means they’re creating a very healthy refund. And by doing that, they’re trying to make the things work for them. You know what I mean? So again, making sure that you understand how that works and what you’re going to do with it is so important because if you don’t understand what the IRS is looking at, you don’t understand the whole thing’s going to turn out. Then you end up turning around and saying, oh, wait, well, why aren’t they giving me credit for this?

Dr. Friday:

[25:03] And, you know, I had, again, I have a number of people that come in and they want to make a deal with the IRS. And they’re like, we’re living off credit cards. We barely have anything. But yet the balance on those credit cards, they still have 30 or 40,000 that they can charge. Guess what? The IRS says you charge that 30 or 40 and pay us. Then you can worry about how you’re going to make the payment to the credit card companies.

Dr. Friday:

[25:24] these are facts of how the system works and what you want to do with that system but um you know as an enrolled agent and what we do is we basically shield you know one we’re a shield between you and the irs but more importantly we’re a resolution right we’re trying to help you figure out what’s going to be the easiest way for you to get resolution is it going to be an offer and compromise partial payment plan a full payment plan non-collectible you know there is different for different people and not any one plan is going to work for everybody. So I need you to make sure that you understand. And before you go and pay somebody 500 or a thousand or $1,500, make sure you understand what they’re going to do for you.

Dr. Friday:

[26:11] I mean, I never understand. I mean, if anyone comes in, you guys will all know if you’ve ever used my services. One, we basically collect a small fee to pull transcripts to even see what you apply for. If, if, if you can’t have an offer in compromise and you’re not sure if you’re going to be able to stay with a payment plan, then there’s nothing I can do for you. I mean, there’s really only a handful of things. We can try to reduce penalties on something we can, you know, but all in all, the reason you’re trying to get your life back together, especially if you’ve got children and they need to go to college and all these different things and you cannot have this open, um, debt to the IRS. Cause sooner or later, I mean, I have people that have reached retirement and have levies against their social security, right? I mean, they’re taking money out of these people’s social security checks because they can, and that they haven’t had resolution. And this is the last straw for a lot of them. I mean, this is what, you know, and yes, there are hardship filings, but in some cases it’s not really a hardship. I mean, you know, So the government will find a way to try to find the way to pay your debt to them. And that’s the important part. So understanding how it goes and what you’re going to do with it and why you’re going to make it happen, that’s where it really comes into play. And I just want to make sure you can understand.

Announcer:

[27:31] Okay, so we’re going to be taking another break here. You can join the show live. We’re going to be going into our last break, I think. You can join the show live at 615-737-9986, 615-737-9986. We’re live here in studio. So if you want to join us, this is the Dr. Friday show and we’re going to be right back.

Estate Planning: Wills, Trusts, and Step-Up in Basis

Dr. Friday:

[27:55] Alrighty, we are back here live in studio and hopefully you guys are enjoying this wonderful Saturday. It is absolutely beautiful outside. I got a chance to go out and play with my bees. I have beehives now, so I’m enjoying having my first pool of honey. So we’ll see how that all goes. Kind of exciting when you have bees. And also a field of lavender, which is actually growing. So I’m win-win right this second. I think all that rain has really helped me at least. So we’ll see how it keeps going. And hopefully you guys are enjoying this weather and being able to think of different things to be able to do out there.

Dr. Friday:

[28:32] But when it comes to taxes and finance and all of that, the only other thing I wanted to bring up really, someone sent me a notice asking me if I knew anybody that did estate planning and I do not do that I’m not a financial planner and I’m not an attorney but Russ Cook is a very good estate attorney and right there in the Brentwood area and has handled my stuff for 30 plus years and you know one of the things I always loved about Russ is that he is a pretty down-to-earth guy and And he knows how to deal with pretty much all the uniqueness that goes with a lot of different estates.

Dr. Friday:

[29:11] Because one of the biggest things I always ask people when they come in, nothing to do with taxes, guys. I get it. But do you have a will? Do you have estate planning? If something were to happen, gosh forbid, and this does not have an age on it. I know a lot of times people think, oh, wait, I’m not old enough. I don’t really need, I don’t really have anything. But you’d be amazed. At least a will would be very. And if you have children, you’ve got to think of them because a lot of times, I mean, I think a lot of people realize this, but, you know, a lot of times people think, well, my mom will take care of them if something happens to us or this. But if that’s not in a will, if that is not in a legal document, your mom may not have the authority to take care of your children, even if that is your wish, because the courts may have a whole different plan. And that’s what’s going to win the battle is the legal language, you know.

Dr. Friday:

[30:05] And so, again, if you’re thinking, what can I get done this year and accomplish something, no matter your age, it should start out with a simple, it may just be a very simple will. You can do that on probably legal Zoom for almost nothing. And, again, I’m not an attorney. I’m not saying that that’s the best way. But as you get older and you have more assets, there are ways that you can help your children by doing it the right way.

Dr. Friday:

[30:31] And there’s some, I mean, I can’t tell you again. I had a case that just came in a little while ago, about four or five weeks ago. And the mother had signed over her house to her daughter because she wanted to make sure her daughter got it. And then mom ended up in a nursing home and then eventually passed away. And so then the daughter was thinking she was going to get a step up in basis, right? This house was, again, a very nice house, but mom was so afraid. So when mom quick claimed that house over to her daughter, she then eliminated what we call a step up in basis.

Dr. Friday:

[31:12] So now when mom did that, she basically said, I paid $200,000 for this home. I’m quick claiming it at that exact value to my daughter. And if you don’t know what that person paid, that value could be physically zero because you don’t have any documentation showing what the par value or the value of that home was at the purchase price. So unless you can find that, you could end up. And then she sold this home for like $800,000. And now she’s paying tax on $600,000 in this particular case. Where if mom had just set it up in a trust and then been able to just leave it to her daughter at the time of her passing, it would have been a zero tax. So we had almost a $200,000 tax bill go from 200 to zero by just understanding how taxes work and how you should be using it to better your tax situation.

Importance of a Financial Team and IRMAA

Dr. Friday:

[32:12] And, you know, again, having a team of experts, a financial planner, a good estate attorney, a good tax attorney or a tax accountant, an EA like myself, then you will then have a team that will help you. Because sometimes estate planners will say, well, we need to do this. But sometimes that’s not always the best for taxes. And sometimes that’s fine. I know I deal with Hank Parrott a lot. A lot of you guys probably know him as well. He’s been on the station and things. But state and financial strategies, Hank Parrott, he is one that will often put together this plan. And so for a couple of years, we may end up paying decent taxes, doing conversions and things like that for the big picture of paying little to no taxes, because now all the monies are in Roths or less, and therefore they maintain being in like the 22% instead of the 30% tax bracket as they hit retirement.

Dr. Friday:

[33:07] Again, understanding how those brackets affect you. Also understanding what happens if right now you’re married, but if you lose one, because again, we often have a situation where somebody’s getting a pension, but that pension will not go, sometimes people elect to make it go to the last person, which would be the spouse that’s still living, or it ends with the person that had the pension. They just took the 100% pension for themselves. Now that person that’s still living doesn’t have the pension, loses a portion of the social security because you usually had two people getting social security. Now you’re getting one, even if it’s a step up. And so the cost of living hasn’t really changed. You still live in the same house, still have the same utilities, still have the same cost. But what you don’t have is the same income. So making sure that all that is done with a good estate planning and good attorneys that can help you understand what you want to do and how and making sure that if you’re selling and dealing things that your Irma is not going to be messed up because that’s what you pay in medical. So you end up with a lot of money that can go into Irma and then taking that out of the way and making sure you have that situation.

Dr. Friday:

[34:18] So there are so many little things you can think, oh, okay, I’m going to keep my tax down. And the next thing you know, you get hit with something for Irma, or I’m going to just pay everything and get it all into this one hit. And again, you can end up with something that will change on the other side of it. So making sure you understand your, your personal situation is the way it’s going to make it best.

Dr. Friday:

[34:42] All right, guys, we have about four minutes. Let’s see if we can get Karen on now, if you don’t mind. All right. Hey, Karen. What can I do for you?

Caller Question: Home Sale Capital Gains and Inheritance Clarification

Caller:

[34:50] Okay, my question is, if I own a house and I bought it at $200,000, but it’s now worth $600,000, and I go to sell it, and I have to pay a capital gains tax, when does that come in first and who made that legal? And is it legal? I think that’s just so ridiculous. You pay property tax? You pay marriage tax?

Dr. Friday:

[35:12] Well, I mean, yes, you do pay capital gains. Now, are you married or single, Karen?

Caller:

[35:17] I’m married.

Dr. Friday:

[35:19] Okay, so theoretically if you guys sell it, you brought it for $200,000, you’d have a $500,000 exclusion. So you could sell that house for $700,000 and pay zero tax.

Caller:

[35:30] Okay. So it’s only when it exceeds those numbers that you’ll pay capital gain.

Dr. Friday:

[35:33] So right now you guys would pay no tax.

Caller:

[35:37] Okay, and like you were saying, if we wanted to leave that to one of our children, because we’ve got a rental home and a regular house. Right. If we wanted to leave that to one of the kids, what were you talking about? Quit claiming it?

Dr. Friday:

[35:48] Do not do that. I said what you want to do is leave it in a trust or a will so they get what’s called a step-up in basis. A lot of people like to do quick claims, but quick claims eliminate step-up in basis.

Caller:

[36:01] Okay, what’s a step-up in basis? I don’t understand that.

Dr. Friday:

[36:03] That means that you pay $200, and let’s say when you die the house is worth $700, your children will inherit it at $700 and not pay any gains.

Caller:

[36:13] Okay, perfect. Got to understand. Okay. All right, well, thank you.

Dr. Friday:

[36:17] All right, bye. Thanks, Karen. Bye. Great questions, actually. That was great. And so, yeah. And so you have to think about that and especially rental properties, because a lot of us have already depreciated. I know I love my rentals, but it would be better for your children to inherit than you to sell. Not always a choice. But right now, under the current tax laws, better for kids to inherit property and allow that step up in basis so they don’t pay the tax and you don’t pay the tax because we all have, you know, capital gains built into all of our rentals. So we want to make sure that we don’t have a situation where we have the rentals that are going to be, you know, coming back at us to be able to make sure we know what we’re doing or whatever.

Closing Remarks and Contact Information

Dr. Friday:

[37:04] All right. So, um, again, so if you have questions, you can certainly give us a call. I think we’re going to be at the end of the show here pretty much. So I don’t think we’ll be able to grab a second phone call, but, um, if you need help, you can always call my office on Monday morning at 6 1 5 3 6 7 0 8 1 9. 6 1 5 3 6 7 0 8 1 9.

Dr. Friday:

[37:30] And again, I’m an enrolled agent licensed by the Internal Revenue Service, so I’ve never, ever worked for the Internal Revenue Service. I am licensed. I’ve taken all their tests to represent you guys, my customers, in front of the IRS. And that’s really what I like doing. I mean, just to make sure that we have representation, making sure that you understand what your rights, as well as what your responsibilities are to dealing with the IRS, because that’s the important part, right? You need to make sure that you’re doing everything right so that you don’t have it come back at you and you’re like oh my gosh how i didn’t know that i thought i could do this and you know the internet is awesome but sometimes some of the things i’ve seen and heard out there it’s like where are these people getting their information you know some of it is just straight out wrong and some of it is more of a stretch um sometimes it could apply properly but other times maybe not quite so much.

Dr. Friday:

[38:21] So again if you want you need help you want to set up. Our consultations for first time visitors are always free because I want to make sure that A, I can help you and B, that the help I give you is what you need. So you can call the office Monday morning, 615-367-0819. You can also check us out on the web, drfriday.com. That’s D-R-F-R-I-D-A-Y.com. Or you can email me, Friday at drfriday.com. Again, Friday at drfriday.com. Hope you guys have a wonderful Saturday, beautiful day. And as we always say in Australia, cop you later.