What happens when tax forms arrive in a deceased parent's name?
In this episode of the Dr. Friday Show from March 23, 2024, Dr. Friday and answers caller questions. As the tax deadline approaches, Dr. Friday provides valuable insights and advice for navigating the complexities of tax season.
Topics covered:
In this episode
- Eligible taxpayers could contribute to a Roth IRA for 2023 until April 15, 2024, even after filing their tax return.
- Report investment property sales on Schedule D, including purchase and sale dates, prices, and applicable costs used to calculate the gain.
- Reinvesting house sale proceeds does not automatically eliminate capital gains taxes; a qualifying 1031 exchange can provide tax deferral.
- Respond to IRS notices with supporting documentation, and ask the revenue officer to place collections on hold while resolving disputed amounts.
- Report inherited bank interest you personally received, and request corrected Forms 1099-INT when the bank incorrectly lists the deceased account holder.
Transcript
No, no, no, she’s not a medical doctor, but she can sure cure your tax
problems or your
problems or your
financial woes.
She’s the how-to girl.
It’s the Dr. Friday Show.
If you have a question for Dr. Friday, call her now, 737-WWTN.
That’s 737-9986.
So here’s your host, financial counselor and tax consultant, Dr. Friday.
[music]
G’day, I’m Dr. Friday and the doctor is in the house.
We are here, hopefully gonna get some fun.
The weather outside is so nice, but it is tax season, so we need to talk about
some
some
of the changes that are in play and also any questions that you might have
concerning taxes
concerning taxes
and the issues that we might be dealing with in doing our taxes.
Do not forget that if you are a small business owner, you also have your
franchise excise,
franchise excise,
your business tax, and your annual reports that are going to be changing, so
you need
you need
to make sure that you have all of that in play so that you don’t get a late
notice,
notice,
because many of those are due April 1st, which is just around the corner.
So just making sure that you’ve got everything that you need, because a lot of
times I know
times I know
people will call me and say, “Oh, I just got a notice.
Business tax wasn’t filed.
I thought you filed it.”
Well, business tax is only a state tax.
We don’t deal with that in our office unless you do our monthly bookkeeping
service, then
service, then
the bookkeepers will usually handle that.
Annual reports, again, are not really part of bookkeeping or taxes, so it’s
just a licensing
just a licensing
renewal for your charter every single year, but you need to make sure that you
either
either
have your person, that whoever’s dealing with it is there, or that you
understand what the
understand what the
choices are so you don’t get those love letters that say, “And most of the
time, I’m getting
time, I’m getting
them when they change … It’s changing when they try to get a mortgage or a
renewal line
renewal line
of credit or something like that.”
Then they get these notices saying that you’re not in good standing.
That’s never a good time to have that situation.
So we just want to make sure that we’re dealing with what we need to deal with
and that we
and that we
don’t end up with that kind of situation.
You can join the show if you want.
We’re live, 615-737-9986.
615-737-9986 is the number here in the studio.
So you can join us if you want.
Ask your questions, or at least I’ll try my best to give you the best answer.
Just remember that any time on this show, we’re doing our best to take a
situation in
situation in
a small situation and try to give you an answer, but always double check your
information with
information with
your tax professional or attorney, because we’re not attorneys, to just make
sure that
sure that
the information applies directly to you.
So I’ll do my best to help you, at least lead you in the right direction.
But sometimes you need to get an expert in itself because I can’t ask you
everything.
everything.
I don’t want everything on the radio that tells you to get you the exact same
situation.
situation.
But if you need help with anything, join the show, 615-737-9986.
615-737-9986 will take place, where we’re going to be doing and going from
there.
there.
So there has been, obviously, we get new numbers as far as inflation and all
of those.
of those.
So many of you, the marginal rate for 2024, the top rate is still going to be
37% for
37% for
any of you that income above 609,350.
Or if you’re married, 731,200.
Yes, you heard that marriage penalty again.
A single person, 609,000, married couple, 731.
Doesn’t quite seem fair.
But that’s the top bracket.
But the more important brackets are usually the ones that kind of fall within
the 22 to
the 22 to
24, and that would be a single individual hits the 22% bracket at 47,150 and a
married
married
couple makes it at 94,300.
You take your standard deduction, deduct that, and then that’s where your tax
bracket is.
bracket is.
So again, making sure you understand because the reason the numbers are so
important is
important is
if you’re doing conversions or you’re thinking about selling a piece of real
estate, if it’s
estate, if it’s
going to kick you into a different bracket, if you go out of the 12%,
theoretically, the
theoretically, the
15% tax bracket, capital gains tax kicks in.
And if you go into the 24%, you end up with the Medicare, the 3.8 investment
tax that
tax that
gets added to the capital gains rates.
And then of course, when you’re up in the 30, 35% or close to the 37, then you
start
start
getting into the highest tax bracket for capital gains plus the investment
tax.
tax.
All these numbers come in and they’re so important.
All right, we’ve got Rosie in Nashville.
We’re going to have her join the show.
Hey, Rosie.
Hey, Dr. Frey.
Thanks for taking my call.
First of all, I saw you on Hank’s show.
He should have let you do more talking, but I won’t go there.
He always hogs the show, but that’s all right.
I try to bring a little sense of humor, but you know, he always hogs that
show.
show.
But anyhow.
I saw you flipping your papers like, “This is what we didn’t get you because
you were
you were
talking so much.”
And I caught that flip, but anyway.
So question.
We’ve already done our taxes, got a refund for 2023.
And my husband received some inheritance.
Is it too late to do a custodial transfer to his and my Roth IRA for 2023?
You’re not too late because you have until April 15th to do that.
Even if you filed, you might want to amend the return, but it really have a
zero effect
zero effect
on the return as long as you qualify.
Yeah, we do qualify.
That’s what my question is.
I looked on the IRS.gov to see if I need to report it on the return, and it
didn’t look
didn’t look
like I did, but I think I do.
I mean, I think I have done that in the past.
There is a place.
I mean, we always report them.
It doesn’t show up on the basic 1040.
I want to say, and I think it’s an 8606, but it’s going to report on a back
form that just
form that just
shows that you took it because obviously if you make too much money in some
cases, but
cases, but
you’ve already checked that out.
So I mean, why not?
If you can put in a Roth and you qualify and you’ve got the ability to pay it,
why not
why not
maximize that account and let it grow tax free?
Yeah.
Do you think it’s like, is it okay if we amend it?
I mean, like is it a half?
I would just do it a 1040 X.
It’s going to be a zero change.
So under the explanation, you’re going to put contributed before April 15th to
Roth
Roth
IRA for the tax year of 2023.
And you may repeat that for husband and wife.
That’s all you’re going to send in.
And then you would attach behind the 1040 X, basically the form.
And again, I’m not sure of the form number, but you attach, if you go in, you
can, if
can, if
you use an online system, you should automatically get the form as well.
So 1040 X plus one more time.
We did the direct file through IRS, the free one.
Okay.
But if you were able to prop, well, you won’t be able to do a free one on that
one, but
one, but
you could download the 1040 X.
I mean, go to the IRS website, download it.
And let’s see, I think it’s the 8606 reporting.
I’m checking it out myself.
Roth.
I mean, again, this is really not going to big deal.
And when your company that you use, be it whatever company that you do your
Roth.
Roth.
Yes.
Non-deductible IRA on form 8606.
So you’re going to have a 1040 X and 8606 for you and one for your husband,
all of that
all of that
put in a package and you can just mail that out.
It’s really just the paper.
I’m going to ask you, can I mail it?
Okay.
Thank you.
Oh yeah.
You can mail it.
Okay.
Cool.
Thank you so much for your help.
Hey, no problem.
And we are on the Dr. Friday show.
If you’ve got questions, that’s a great one.
Actually.
We don’t sometimes we, we don’t think about that until after the case and I’ll
hate to
hate to
say it, but a lot of tax people, I’m not a financial planner, but obviously I
like Roth
like Roth
IRAs because sooner or later we’re going to all hit retirement and it’d be
nice to have
nice to have
money we can take out without having to pay tax on if you’re 59 and a half or
five years,
five years,
depending on which is longer, but you’re going to take it from there and do
what you need
what you need
to do.
Um, on that situation.
So, um, I think it’s always good if you can maximize it, but it doesn’t
really, most tax
really, most tax
people were selling standard IRAs because we’re looking for that instant
gratification.
gratification.
Uh, but we, you know, either way, whatever works best, but always, you know,
again, if
again, if
you’re in a certain situation, you may want to talk to a financial planner
cause they
cause they
can talk about, you know, backdoor IRAs.
They can talk about is a traditional IRA good for you.
Should you be maximizing something else?
Would you qualify?
Uh, all of those are important questions because sometimes, um, you make, you
know, you make
know, you make
too much money to qualify.
Um, but also if you’re in the lower tax bracket, if you’re in that 12% tax
bracket, you can
bracket, you can
actually get a saver’s credit by contributing to a Roth IRA or traditional IRA
or even to
or even to
a 401k.
So you know, again, if you have, um, I think it’s kind of a cool thing if you
have a young
have a young
person and instead of maybe giving them Christmas presents and birthday
presents and all that,
presents and all that,
maybe give them money to put into a retirement fund.
I know that’s exciting, right?
I’m sure the kids are going to love it, but if they’re working and they’ve got
earnings,
earnings,
theoretically you could gift them $6,000 a year and that money could go into a
Roth IRA
Roth IRA
when they file their taxes, they’re going to get the saver’s credit.
Plus they’re going to have a lifetime of growing tax free.
Again, back that up with a good financial planner, but that is a direction you
might
might
want to think about going.
All right, real quick.
Let’s hit Lynn before the break and that way she doesn’t have to wait for it.
Hey Lynn, what’s happening?
Hey Dr. Friday, I just have a quick question about a little over two years
ago, bought
ago, bought
a piece of property out of state.
Just a house, old house and didn’t really do anything to it, didn’t rent it or
anything,
anything,
but turned around and sold it last year, late last year and actually made
$22,000 on it.
$22,000 on it.
Since it really wasn’t, I guess it’s an investment, I was going to just do a
schedule D, I do
schedule D, I do
my own taxes.
I was going to do a schedule D and put it in that, but it don’t look right for
some
some
reason.
It’s definitely a tough way to do it.
It is, you’re a hundred percent correct.
Did you get a 1099S?
Yes, that’s correct.
Okay, so you’re going to run it through the schedule D under the form and then
you’re
you’re
going to put in there the closing cost fees, the property tax, anything you’ve
had to pay
had to pay
theoretically into the cost basis, even, you know, so then you’d show a
capital gains long
capital gains long
term, 22,000 or whatever that is, but you got to list the property.
You’re going to list the date you purchased, the date you sold, the purchase
price, the
price, the
sale price and any costs that went into it.
And that’s perfect, a hundred percent.
Okay.
It looks just for stock.
I haven’t normally done that on this software and it didn’t look right.
Like that’s for stock when to sell, but there should be a place to put the
1099S and then
1099S and then
put that in, right?
Should be, exactly.
There should be, at least in our software.
Yes, it will lead or fall back to the 1099, I’m sorry, to the schedule D, but
yes, there
yes, there
should be a place in your system to put the actual 1099S.
But the key is it should be on the D. I should look at my D and it should be
on there, right?
on there, right?
You should be looking at your D. Yep.
100%.
Thank you very much.
No problem.
All right.
We’re going to get ready here to take a quick break.
And when you come back, you can join us live.
Any question we’re trying to help out if people are doing their own taxes,
Hey, why not get
Hey, why not get
a little help and make sure it’s in the right place because there’s nothing
worse than getting
worse than getting
a love letter or thinking that you have it.
And then, oh my gosh, it’s all wrong.
And in the tax software is usually associated with those kinds of situations.
You can do it, but if you need help, obviously you can join the show at
615-737-9986.
615-737-9986.
615-737-9986 is the number here in the studio.
So we can help you if maybe you’ve inherited some property and you’re not too
sure how
sure how
that’s going to report or if it’s even taxable.
And then also there’s many times people rush to file their taxes and you did
inherit.
inherit.
And then people like me are still working on those tax returns and there’s a K
one and
one and
then you’ll have to do an amendment.
So just make sure you have the information.
We’ll be right back with the Dr. Friday show.
Alrighty.
We are back live here in studio.
And if you’ve got a question, you can join us here.
It’s a beautiful day outside.
I know you’re probably out there, but if maybe you’re driving around going
from store to
from store to
store and you’ve got a question cause you’re working on your taxes or maybe
you know someone
you know someone
that has had some tax issues because even though we do taxes, I’m an enrolled
agent
agent
licensed by the internal revenue service to do taxes and representation, which
means I
means I
do not represent the IRS.
I represent taxpayers like you.
So if you’ve getting love letters or you know someone that hasn’t filed taxes
at a number
at a number
of years, then you might want to give us a call.
See if we can’t help you out.
We are truly local.
We don’t just say that we are actually here in Brentwood.
It’s the only low office location we have.
So if you’re looking for someone that might be able to help you, 615-367-0819
is the office
is the office
number.
More importantly, if you’ve got a question, maybe you have someone that you
are, you know,
are, you know,
just met, or maybe you’re thinking about getting married and the person that
you’re marrying
you’re marrying
hasn’t filed taxes.
We had a situation.
We’ve actually had a couple of them, but recently we had a couple come in and
they were on the,
they were on the,
they had just gotten married and found out that she hadn’t filed taxes in a
number of
number of
years.
And I will tell you this, why not have that conversation before marriage?
I mean, it just seems like if you’re going to be merging your life at some
point, you’d
point, you’d
want to kind of know the financial situation.
Do you have student loans?
Do you pay off your credit cards every month or do you have $20,000 in credit
card debt?
card debt?
You know, what bills do you owe and what bills do you not?
Do you have a car payment?
What’s your insurance rating?
Cause it’s based on your credit score, right?
These seem like they would be questions that people ask, but apparently we get
married
married
and ask those questions after at least this couple and they seem to be great.
They’re well matched.
It seems like at least on other things, but we had to go back and deal with
some tax issues
some tax issues
and I think we’ll get it resolved relatively easily.
And one, in some cases she didn’t actually owe even though she had it filed,
but she
but she
then became self-employed, which means she owes for a few years as well.
Those will get resolved and life will be back on track.
All of that being said, it’s important to understand that if you don’t file
taxes, it’s
taxes, it’s
really hard to get things you might want.
Maybe if you want to buy a house or maybe you have children and they’re going
to go
to go
to college, right?
And then you got to go through FASFA.
FASFA requires tax returns.
So if you’re looking to get back on track, it doesn’t mean if you haven’t
filed taxes
filed taxes
in 20 years, we can help you get your tax documents.
We can help you get organized.
We can help you figure out how to move forward.
It’s not as complicated as you might think it is.
And so in some cases it could be file the taxes, do a simple fresh start and
get you
get you
back on track.
It could be more complicated that maybe you own a house or have 401ks or
multiple situations
multiple situations
and it may mean that it’s more of a negotiation than a simple fresh start.
It doesn’t make a difference.
We can help you either way.
And if you’ve got a question, maybe you know someone, then you can join the
show.
show.
615-737-9986.
It’s not as easy as you think to pick up the phone and call a radio show.
I know that.
I’ve been doing this now 15 plus years and it’s, you know, it’s always shocks
me and
me and
a pleasant shocking that, that so many of you guys do take the time to call
the show
the show
because a lot of times people listen, they, they come in this to the office
and they’ll
and they’ll
say, yeah, I heard this person asked this question.
It was just what I needed to hear, but they, you know, they weren’t in a
position to call.
position to call.
So it’s always appreciated if you want to call and ask a question.
We do have many, many people that are dealing with different situations.
For any of you that are maybe self-employed and you’re looking at what we have
available
available
in 2023 possibly for depreciation, we were hoping are still waiting.
Many of my clients have actually filed an extension because bonus depreciation
isn’t
isn’t
as high as we would like it.
And there’s a bill that’s still waiting to see if it is going to actually get
approved.
approved.
So you may not be getting a hundred percent or you’re not.
If you file your taxes right now, you will not get a hundred percent of it.
And so we, you know, it’s going to really possibly make it where you actually
owe more
owe more
money than you might have thought.
It did get extended, but we didn’t get a hundred percent with the extension.
So again, if you are a person that has a lot of vehicles or trucks or things
like that,
like that,
that we usually are able to take a hundred percent of bonus depreciation,
there is a
there is a
train of thought that estimate your taxes, go ahead and pay in what may be
qualified
qualified
because there’s no guarantee that it’s going to go there and then go into the
next phase,
next phase,
which is an extension and then wait and see if they actually do go through and
increase
increase
the depreciation.
Because right now it’s extended.
It’s just the phase out in 2026.
But as we know, every year it drops down more and more and more.
So at this point, you know, we’re at a point where it’s not a hundred percent.
So if we need to deal something like that, then we’ll be good.
But again, if you’re self-employed, you might want to talk to your tax person.
I know I’m working on one now, and this is a difference of hundreds of
thousands of dollars
thousands of dollars
worth of equipment deduction that we can’t take if it is not, if it’s not
extended, which
extended, which
means the difference of these people paying a lot more money in taxes than
what we’ve
what we’ve
had to pay in the past, because every year they have to upgrade their
equipment.
equipment.
So if you’ve got questions on that, or maybe you’ve got questions concerning
other tax
other tax
issues, one of the biggest things we deal with at this time of the year again
is usually
is usually
inheritance.
Someone inherited a house, but if you inherited that house, let’s say you
inherited two years
inherited two years
ago and now you finally sold it, you may end up with additional capital gains.
It’s a possibility.
So you can’t just say, well, I inherited, so it’s a complete tax deduction
because it
because it
may not be.
Also I have found that we’ve had more than one case where somebody has gotten
and sold
and sold
a house and they think if they reinvest the money on that house, that they
will not have
will not have
to pay taxes.
That tax law ended a long time ago, guys, we do not work on the reinvestment
unless
unless
you’re dealing with a 1031 exchange.
Under that circumstance, the answer is yes.
But if it is not, then you have to deal with the fact that you have capital
gains.
gains.
It’s that simple.
So you want to make sure that you’re reporting all that.
I’ve got a case where back in 2020, apparently there was a 1031.
We reported it, but it looks like maybe it was reported twice to the IRS.
So we ended up with a double closing and now the IRS is looking for 60 grand
because they’re
because they’re
saying, well, there’s capital gains, but there isn’t.
But these are the kinds of letters you’ll get.
And it’s hard to understand sometimes why the IRS, but in this case, we’re
finding out
finding out
that they actually had two closing documents submitted for the same house.
And so it created a double entry.
So the IRS, you think they could look at the address and see that the same
house was on
house was on
both closings, but the IRS is looking at the 1099 S’s and all they care about
is that’s
is that’s
reported twice.
And so they’re saying, nope, this person sold that house twice for the same
dollar amount.
dollar amount.
And obviously it didn’t happen, but this is a 2020 issue and they’re getting
aggressive
aggressive
in collections because we just found out about it.
So we maybe found out a little in February.
Anyhow, so if you’ve got something like that going on, there is some
situations where it’s
situations where it’s
very time sensitive and you may need to go directly to the IRS or the tax
advocate office,
advocate office,
which is where we’re going to see if we can get someone to help address this
situation
situation
before they start doing liens, levies, seizures, and all the other nasty
things that they put
things that they put
in their love letters to tell us about.
So, but again, it, the, you know, the IRS is there to be dealt with.
You do not want to ignore the IRS.
That’s the one thing I want to point out is if you’re getting love letters, if
you’ve
you’ve
got tax issues, if you have a situation, you do not want to ignore them
because if you
because if you
try to do that, then you have a situation where you’re like, oh my gosh, I
already told
already told
the IRS about why are they still collecting?
Why is this happening?
You know, I have another one that came in less than Friday and she’s been
trying to
trying to
get 2019 refund.
And when we went through the documents, we found out that there might not be a
refund
refund
for the year of 2019 because of the way the money was rolled from 2018.
If 2018 doesn’t have it.
So it’s not always black and white and the IRS isn’t going to send back
something to
something to
you.
It just says, well, you know, we, we didn’t in her letter, it says we’re
working on it.
working on it.
The next letter says, well, there’s, you know, we’re not refunding the money,
but there’s
but there’s
no explanation.
Why are you not refunding?
Why did you only give us this?
What’s the correction?
We have we wish there was a little bit more communication on that aspect so
that they
that they
could tell us why do we have this situation?
Where’s it going?
But you know what?
It’s our job to make sure that we to explain to the IRS, not the other way
around, which
around, which
kind of seems sort of silly, but it is true.
The IRS is not there to make the explanation.
It’s going to be us explaining to the IRS why we think this is wrong.
Document why it’s wrong.
Figure out what the situation might be and then take it from there.
If you don’t do that, the IRS is going to win the case no matter what, right?
Because it’s your job to prove that the IRS is incorrect.
It’s not the IRS’s job to prove that they are correct.
It’s kind of like you’re guilty before you’re proven innocent.
That’s the way I look at it.
Now I’m not sure the IRS may feel a different way.
And you know, just the point of thing, when you deal with the IRS on the
phone, remember,
phone, remember,
you’re not dealing, you’re dealing with a human being, not, um, and most of
the time
the time
I have found that many of those that are, um, I don’t want to say human
because they
because they
are human beings, but they’re only going by what they can see in a computer
and the computer,
and the computer,
they only have so much access.
So, you know, again, if you’ve been dealing with an issue for a period of the
tax advocate
tax advocate
office is the way to go.
Seriously, they are great.
The Tennessee tax advocate office does an awesome job.
Um, we probably always have one or two cases with them.
Um, and, and 90% of the chance, one way or the other, they get it resolved.
But sometimes it may come down to where we were wrong.
The information we were providing to them didn’t balance or match with the IRS
showed.
showed.
So therefore they’re sitting there going, Oh wait, yeah, that’s right.
We didn’t have this or that rollover didn’t happen because of this reason, or
they did
they did
a conversion and we didn’t know about all those come into play.
Right?
So again, just really important to make sure you have good documentation to
explain why
explain why
you think you’re in the right with the IRS.
If you need help with that, you can always call the show right now.
615-737-9986.
615-737-9986 is the number here in the studio.
And we’re going to be taking another quick break and then we can go to the
phone lines
phone lines
or the email, which is Friday@dtrfriday.com.
If you just want to text or email something over real quick, you can do that,
but we’re
but we’re
going to take a break and we get back.
We’re going to answer more of your questions, talk a little bit about maybe
some of the
some of the
things that you might want to consider before you send off your tax return and
making sure
making sure
you’ve got all the documentation.
Nothing worse than having to amend a tax return.
For one, it could take the IRS almost six months longer to get you whatever
your refund
your refund
or whatever your situation is, then it would be immediately.
All right, we’re going to be right back with the Dr. Friday Show.
Alrighty, we are back here live from the show.
And if you want to join us, you can 615-737-9986.
615-737-9986 is the number here in the studio.
So if you’ve got questions or you want to just maybe give a, maybe something’s
come
come
up and you’ve like, Oh wait, this would be good for people to know.
Maybe something you’ve experienced.
You know, we have constantly have situations that we’re all going through.
Again, just got an email this morning, a 2020 tax return that we filed an
amendment back
amendment back
in October of 2021.
The IRS now is trying to do nasty grams and we’ve been responding for two
years on.
years on.
So again, this will be a case that will be opened up with, you know, tax
advocate because
advocate because
it’s the only way I can usually get somebody in the IRS to be able to help us
do what we
do what we
need to do.
Because we’ve filed everything that we can file.
But back at that time I wasn’t able to e-file amended return.
So it was done by mail and according to the IRS, they did receive it.
So we don’t know why.
I never do really understand why sometimes it just seems to go in circles.
So if you have one of those situations and you need some help, we can help you
do that.
do that.
You know, but we will, you know, keep moving forward.
It’s, I mean, once you get a good person, they’ll resolve the issue and
everything will
everything will
move forward.
But until then we have to deal with whatever and collections.
Keep in mind, you could be talking to somebody on accounts and they could be
doing everything
doing everything
they can to help resolve it.
But yet collections could be sending you love letters saying that they’re
collecting one
collecting one
hand does not communicate with the other hand.
You get lucky.
And sometimes the person handling the case will put a hold on the case until
they get
they get
some sort of resolution.
But that doesn’t always happen.
So whenever you’re talking to a revenue officer and you’re dealing with
something like that,
something like that,
ask them to put a hold on the case.
It’s very important because last thing you want is collections still thinking
there’s
there’s
a case out there and you’re trying to get resolution on the other hand.
So you know, again, it’s really important that you deal with each of these
love letters
love letters
that come in because you know, it’s not, it’s, it’s not always, and you could
be dealing
be dealing
with something for years.
It’s not something that’s just going to happen.
Oh, wait, I just responded.
That should take care of the problem.
Sometimes they’ll send you a letter saying they need another 45 days, another
60 days.
60 days.
And then after that, they send back saying, well, you know, we didn’t like
this amended
this amended
return because you didn’t respond to this part of it, but you don’t understand
what
what
they’re saying sometimes.
I mean, I do taxes and for almost what, 28 years.
And sometimes I look at the letters and say, this doesn’t make sense.
What do you mean?
You know, this doesn’t balance.
It’s specifically right here on, on the situation.
So that being said, just making sure you have all your information.
Again, documentation is the key to all these conversations.
And then you have the ability to get resolution.
So if you need help, or if you know someone that does right now, though, we’re
all concentrating
all concentrating
on our 2023, or maybe you’re even done with 23 and you’re prepping or
preparing for 24.
preparing for 24.
We have two years left.
And so that’s why it’s so important that this election, no matter how you want
to vote,
to vote,
just make sure it’s going to go the direction, you know, tax code that we know
today, the
today, the
12%, the 22, the 24 will expire at the end of 2025, unless otherwise told.
So, you know, keep in mind that if you like the lower tax rates, maybe you’re
talking
talking
to someone or you’re dealing with someone that you, you know, when you’re
looking at
looking at
the candidates, are they going to be dealing with the issues you want to go
with, whatever
with, whatever
that is, I’m far from a politician.
Really what I want is just to basically be able to live my life, do, go with
where you
where you
want to go and do what you want to do.
But it’s important that we keep taxes low so that people can actually keep
some of their
some of their
money with inflation and higher taxes.
That means even less money in our pockets to try to pay the bills, keep the
mortgage,
mortgage,
keep the water on all that good stuff.
So if you have questions concerning any of that, also individuals that are
doing, again,
doing, again,
business owners do a ton of you guys.
So just trying to put some thoughts in your head a little bit.
Remember you have your gross business receipts that are due now.
I think basically the deadline is April 15th.
And on those gross receipts, you have a situation where you may not owe
anything, but the renewal
anything, but the renewal
fee, which is the $22.
If you have less than 3000 or less than a hundred thousand in any one county
or situation,
or situation,
then you can just click that button and it will just automatically calculate
the money.
the money.
So I mean, some of my clients’ cases, I could have somebody that has a million
dollars in
dollars in
sales, but they have 40 counties that they work in and they’re licensed, and
it’s just
it’s just
like contractors and things.
So they may not owe any business tax in Tennessee, but they do have to file
those to actually
those to actually
keep their permits.
Auto sales, all of you have that same situation.
So you just want to make sure that you have that going on.
And so that way you don’t have to worry about dealing with that issue.
So either way you got that happening, but make sure you file those and they’re
due now,
due now,
guys, just go out there and get them filed.
All right, we got Linda has a tax question.
Hey, Linda.
Hi, Dr. Friday.
Thank you for taking my call.
Thanks for calling.
Yes.
I was getting started early with my taxes and every time things would come in,
I was
I was
sticking them in a folder and I’m putting in my 1099 INTs.
And I realized that two of them had my dad’s name on them.
They were his bank account.
He passed away in November of 22.
22.
Okay.
But I mean, you may want to go back for one, you’re going to put it on yours
because I’m
because I’m
assuming you received the interest.
Obviously dad couldn’t.
Second part with it, you might want to go back to those locations because
somehow they
somehow they
didn’t get the date of passing correct because 2022, he would have had
interest from January
interest from January
to November or whatever.
And then all of 23 would have been under you or his estate.
Was it POD to you at the time of his passing paid on death or did it go to his
trust or
trust or
estate?
One of them, it paid to me.
And then the other one, they could not find, there was a bunch of CDs and they
could not
could not
find the two of the CDs that he had done that.
But so, um, but yet they sent you an interest.
They sent me checks and the interest was in the check.
And so I was surprised by that.
Um, yeah, I mean, so again, just for the paper trail purposes, you know, in
all honesty,
all honesty,
you don’t, I mean, cause the IRS may be looking at a, I mean, at a deceased
individual, they’re
individual, they’re
going to see that come up under his social security number, which has already
been turned
been turned
off.
So, um, you know, you’re going to do the right thing and put it on yours just
because eventually
because eventually
it will circle around back to you.
But it would be nice to have the form in, I mean, in the right name, just so
you have
you have
the proper documents.
Cause in theory, the IRS has no idea you received that money.
Um, even though, you know, since you do know that you did receive it, then I
would just
would just
contact them and say, you guys have this in the wrong place.
Reissue.
You can move forward with filing your taxes that cause I’m assuming it would
make no dollar
make no dollar
difference, but I would try to get them to reissue them.
It may be impossible.
But sometimes some of those companies just will not correct something even
when they’re
when they’re
in the wrong.
Yeah.
Okay.
It’s not going to be your air.
Cause if you ever had, if it ever comes back, you’ve got on your tax return
and you’re,
and you’re,
you’ve done the right thing, but it would be perfect if they would just
correct it.
correct it.
Yeah.
Um, yes.
So the one was definitely closed out in like April of 23, but it’s okay.
I’m just going to put them on my taxes for right now.
And I will contact them and try to get them to put my name on the 10 99.
Right.
As long as you, I mean, let me clarify, Linda, you want to make sure you did
receive that
receive that
money that they are just sending you something that you have no idea, because
then I would
then I would
hold off and make sure, because you said they couldn’t find some of the CDs,
but you know,
but you know,
they may turn around and 10 99 you for something you didn’t receive or, you
know, they sent
know, they sent
it to your father theoretically.
But, um, so just, I mean, just double check, but if, as long as you know, you
physically
physically
received or the estate received, hopefully through you, that information, then
go ahead
go ahead
and put it on your return and get it corrected if you can, like I said, but
if, if you don’t
if, if you don’t
think you received the money, do not put that on your return because they need
to correct
to correct
whatever they do.
You know, I don’t want you paying taxes on money you never received.
Right.
I know I did receive it.
The total of the interest was under $200.
Okay.
So we’re not looking at a huge effect.
And as long as you know, you received it, then yeah, there’s no, there’s
nothing wrong
nothing wrong
with putting it on your return just the ways you should, but just wanted to
make sure that
make sure that
you weren’t just picking up interest that went to the estate or something.
Yes.
Thank you.
I am happy to just put it on mine and not have to file for him.
No, they won’t accept a return in the next year.
I mean, sometimes we do, but they’ll, they could send it back.
I’ve had issues with that in the year after sometimes people die in December
and obviously
and obviously
things go into the new year, but it’s more work than you think.
So just put it under you and don’t bring back that tax return would be my, my
two cents.
two cents.
Thank you very much.
No problem.
Thanks.
Appreciate you.
All right.
That was a great question.
And again, even though in Linda’s case is not, but sometimes we have a States
or trust
or trust
and the money might’ve went into those, but they should never have in the new
year.
year.
There should never have been a 10 99 under a deceased individual, unless it
happened
happened
where maybe they sent something in December and it actually didn’t pass
through or didn’t
through or didn’t
get posted till January.
Sometimes I’ve had that, but most of it, if you passed away in November, there
should
should
not have been anything issued to the deceased individual in in January or
February or whatever
February or whatever
April of the next year, because the inherited individual should have gotten in
which this
which this
company is completely wrong.
But but you don’t want to hold up your taxes sometimes too.
And I, like I said even with death certificates and power of attorney, I’ve
had a challenge
had a challenge
getting some of those organizations to be willing to correct themselves
because it’s
because it’s
more work I guess, than it’s supposed to be.
All right.
We’re going to take our last break here.
So if you’ve been holding your breath and you’re not too sure what you want to
do, or
do, or
you’re just confused or you’re like, Oh man, I really like to know the answer,
but I don’t
but I don’t
know if I want to call a radio.
I totally understand.
But if you do want to join us, 615-737-9986, 615-737-9986 number here in the
studio.
studio.
And we’re going to be right back with the Dr. Friday show.
All righty guys, we’re at the last part of the show.
So if you want to join the show now would be the time 615-737-9986,
615-737-9986 taking
615-737-9986 taking
your calls, talking about my favorite subject, at least taxes.
It is that season guys.
We have about, I don’t know, less than three weeks before you either need to
file an extension
file an extension
or get your taxes filed.
It’s going to be crazy right here.
We have a very tight schedule and it just seems like days are flying by, but
make sure
make sure
that if you cannot finish your tax return, I’m going to start telling you now
you need
you need
to file an extension.
Also you need to be dealing with business owners.
Again, annual reports, gross business receipts, F&E, all of those are required
now pretty
now pretty
much just get it done, pay the fee, get it done.
And that way you don’t have to worry about getting things reinstated, dealing
with other
with other
problems when you’re busy and just trying to get other things done.
You know what I mean?
It’s just hard.
So you just want to make sure that when you’re dealing with your tax issue, do
your very
your very
best.
Make sure if you have questions, you know, find someone that you can ask the
question.
question.
Don’t just guess.
And probably one of the emails that came in, and I get this question a ton.
One of the biggest questions comes in, it just says, can I file single head of
household
household
or married filing separately?
What’s my choices?
And you do need to consult with a tax person.
It’s very important because if you make the wrong choice, one of the biggest
reason people
reason people
want head of household is because they get a much better tax deduction.
And that is not always going to be the number one situation.
All right, Vegas, let’s see if we can get James on the line.
Hey James, what can I do for you?
Hey, Dr. Friday, thanks for taking my call.
We spoke one time before on the phone.
I called your office actually, and you were very gracious and talked to me.
I have a question.
This concerns my wife.
She has sort of like a joint savings account at a bank, and it was opened with
her and
her and
her mother’s name on it.
And I didn’t really know like about statements.
I was never given like a 1099 or anything in the past.
It’s been about five years since she’s been a permanent resident of the United
States.
States.
She moved here from Mexico.
And I think the origin of the account is, can I say what bank it is?
I don’t know.
I think it’s in Mexico, but it’s got some money in it.
Her interest earned on it was about $750 or so for the year.
And I’m curious, since it was sent to her, to our address with her name on it
and her
and her
mother’s name, how do we handle that?
I mean, because she’s a W-2 employee.
How do we deal with that?
You’ve got two things you need to deal with.
One would be whoever’s name or social security number is on that statement is
the person
the person
that needs to be claiming it, unless she wants the 1099 interest to the other
person, which
person, which
means you’d have to issue that.
And it’s a lot harder than you think.
So if her name is first, your wife’s name is first on the paper, it’s most
likely that’s
likely that’s
who they have listed as the person that’s responsible.
Second, we also have what’s called F-bar, your financial.
And if there’s more than $10,000 in the conversion in this account, and this
account was opened
account was opened
overseas, now it may have been relocated here to the United States.
So I don’t know this, but anyone that does have a bank account overseas, it
has more
has more
than 10,000 in any one day has to file an F-bar.
And that is due pretty quickly here.
Most of the time we file them with the tax return, but there is a F-bar site
you can
you can
go to and file it separately.
That being said, so James, you need to look at the statement and first find
out if your
out if your
wife or her mother’s name is, or the social security number is on it.
If it’s your wife’s, I mean, you haven’t received love letters.
So I’m going to assume in the past, at least this hasn’t become an issue as
far as under
far as under
reporting, you know, and then I’d be more concerned with F-bar because if you
don’t
don’t
file F-bar, they can take 50% of the money in that bank as a penalty.
It’s a very drastic penalty.
So you might want to talk to a tax person if you’re not sure, but it’s
important to
important to
first find out if mom’s responsible for this or your wife, that would be the
first question.
first question.
And then from there, making sure that it’s being handled properly in the
United States,
United States,
since they have relocated here and now are living here in the United States.
I think the account was originally open sort of as a nest egg or some kind of
an endowment
an endowment
about 10 years ago, and it was like 40,000, but it’s grown to about 45,000,
you know,
you know,
over the years.
So, yeah.
So if it, I mean, if it’s, the biggest question is, has it been relocated here
to the United
to the United
States if they’re all living here, or if, was it open, even if they lived over
in Mexico,
in Mexico,
was it open in the United States?
Then you don’t have to worry about F-bar.
If it was open in Mexico or someplace else, in, even though it’s a national
bank, theoretically,
bank, theoretically,
then that bank, wherever it was open is now not on US soil.
And we have to talk about that on a tax return under F-bar.
We have to tell them about it.
So either mom or daughter, someone needs to be, get the answer to that first.
Was it actually open in a US bank account, even though they lived overseas,
possibly
possibly
they’re in Mexico, whatever, or was it open in Mexico, transferred to a US
bank, or is
bank, or is
it actually still on a foreign bank that they can access through a US bank?
I know I’m asking a lot of questions, but it’s kind of important, James, to
get to the
get to the
bottom line of that.
Yeah.
I think Wells Fargo operates in Mexico and I, and her mother lives in Mexico
city.
city.
So it could be that it’s just been sort of maybe the, the information’s being
sent to
sent to
the, you know, the US address.
And if this is mom’s money in a foreign bank and mom is a foreign citizen,
then that’s
then that’s
a whole different conversation.
She doesn’t have to file in the US, but if somehow the daughter, the now wife
living
living
here in the United States, it’s in her name, that opens F-bar.
And even if she, even if she consider it’s mom, if she’s got her name on that
account,
account,
we have to do F-bar no matter what.
Okay.
I’m going to look into that.
Thank you so much.
No problem.
Thanks for the call.
All right, really quick.
Let’s see if we can hit Tom in Nashville.
We got about three minutes.
Talk fast, Tom.
I think I can do that.
The company I worked for last year folded up in November.
Somehow my, my exemptions got filed, married two dependents.
I did not see it.
I ended up owing $4,500 to IRS.
I have 2,500 saved.
And of course I draw full social security and because I can and my age, but I
don’t
don’t
pay taxes on it.
So my question would be, is it better to file an extension and get the money
together or
together or
send them 2,500 and hope that I can accomplish the other 2,300 or whatever it
is, but now
is, but now
in the end of the year and how long before they say, Oh, you got to go on
payments.
payments.
Well, bottom line is your best bet would be to file the taxes, pay what you
can pay, and
can pay, and
then maybe even set aside, maybe not pay all 25, maybe pay 1,500, set up a
bank account
bank account
and set up payment plan where they can auto draft it.
It gives you five years to pay it off.
And that would just be a horrible little payment and you don’t have to worry.
You can always pay it faster.
Okay.
You can always throw more money at it as you go.
You don’t have to wait and make the payments, but I’m just saying that way
they don’t come
they don’t come
after you because without payment plan, they can come back and take money out
of your bank
of your bank
and anything else.
That’s what I wanted because I mean, I can probably come up with a thousand
say in 90
say in 90
days and the rest of it, another 90 days.
That puts me in.
You could probably get away with that if you actually did, but they only
really give you
really give you
a window of 90 days.
But theoretically, if you can send them 25, it’s going to take them 30 or 40
days to get
days to get
you the next love letter.
If you throw another thousand at them, it doesn’t mean they won’t stop
collections,
collections,
but you’ll be at a lower dollar amount.
Most scenarios you say, call them and say, Hey, in 90 days I’ll have another
thousand.
thousand.
They may put a hold on it and just get it paid in full.
And if you know, there is a fee for setting up payments, but it’s not real
high, right?
high, right?
Correct.
And if you do it online, I think the fees like 30 bucks.
I mean, it’s pretty minimal.
Okay.
Well, I like that idea.
I like that idea.
Put the money, it’ll go a little interest on it too.
Right.
Not much, but at least I can, and I can just add to it.
And then if I get enough by the end of the year, just pay it off.
You got it.
You know, I’m not going to say theoretically it’s best to pay it as fast as
possible, less
possible, less
penalties, less interest, but just go for it and take it from there.
But you’ve got the right idea.
All right.
That sounds like a plan.
Thank you then.
Okay.
No problem.
Thanks bud.
All right.
We’re down to the last minute here.
So let’s talk about what you can do as far as going on the website.
You can look up drfriday.com, d r f r i d a y.com.
If you want to find out who I am, if you want to reach us at our office, I
will tell you
will tell you
we’re running a little slow on the phones, but 615-367-0819.
615-367-0819.
You can also email Friday at drfriday.com.
Friday f r i d a y at d r f r i d a y.
Lots of Friday in that.
Dot com.
That is my first name for all of you that may just tuned in and you’re like,
cool.
cool.
And the heck is this Friday?
What’s she talking about?
Yes, that is my first name.
My parents were a bit fun loving and there you go.
They decided to make their eighth child’s name Friday.
So that makes it a pretty cool name now that I’m an adult.
But if you’ve got tax questions, you need help, you want to deal with some
issues.
issues.
I mean, at this point I will tell you we’re not taking in any new clients.
We can help with extensions and then we can probably get you in after the
initial tax
initial tax
season.
So if you need to file your taxes now, we will not be able to fit you into our
schedule
schedule
unless you already are on the schedule for our taxes.
Hope you guys are enjoying the show as we always say in Australia, call you
later.
later.
♪ ♪