The Dr. Friday Radio Show

Dr. Friday uses this final live radio broadcast to focus on tax planning before major life events, especially selling property, inheriting real estate, transferring family homes, and updating estate documents. She explains why basis, appraisals, trusts, POD designations, and powers of attorney matter before a family is forced to sort things out after the fact. The episode also includes caller questions on inherited property and prize winnings, plus reminders about marketplace insurance, Medicare IRMA, IRS identity checks, and business recordkeeping. Summary Points Home sale basis: Dr. Friday reviews the primary residence exclusion, explains that the old rollover rule is gone, and reminds homeowners to document major improvements that increase basis. Inherited property: She explains step-up in basis, why the date-of-death value matters, and why appraisals can be stronger support than rough comparable sales after repairs are made. Final live radio show: Dr. Friday tells listeners the show is moving off 99.7 and toward DrFriday.com, where she plans to keep answering questions and sharing tax education. Family property transfers: A caller asks about homes titled in her parents’ names, a long-running purchase arrangement, quitclaiming property, and how inherited homes differ from property she has been buying. Estate documents and gifting: The episode covers trusts, wills, POD designations, powers of attorney, probate risk, and situations where beneficiaries used gifts after taxes to honor a parent’s wishes. Prize taxes and records: Dr. Friday discusses lottery withholding, St. Jude home raffle tax questions, 1095-A marketplace repayment surprises, Medicare IRMA, IRS identity checks, mileage logs, receipts, and home-office rules. Episode FAQ Q: Do I owe capital gains tax just because I inherit real estate? A: Dr. Friday explains that inherited property generally receives a stepped-up basis, so capital gains usually become an issue when it is sold for more than its date-of-death value. Q: Do repairs after inheriting a home increase the inherited value? A: She says the inherited value is based on the condition and value at death, so later improvements should be tracked separately and the original value should be well documented. Q: Why should estate documents and POD designations be updated? A: Dr. Friday explains that courts and financial institutions follow the paperwork, so outdated documents can leave beneficiaries trying to fix things later with gifts and tax filings. Transcript 00:01 No, no, no. She’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Doctor Friday show. If you have a question, 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. Dr. Friday and the doctor is in the house. We are here today to take calls talking about taxes, talking about maybe making some planning. You know, taxes are great, but normally we’re doing taxes after everything’s already happened. So if you’re really thinking about taxes, you’re probably thinking about 2026. You need to put some plans into play to say, how am I going to pay less in taxes? Can I pay less? Is it better to pay more today and pay less later? If I sell this, if I inherit this, if I convert this, will any or all of these be good or bad things? Again, I don’t really have the perfect answer for you because I don’t know what you’re going to buy, sell, or trade. But if those are things that you’re thinking about, then those are the kinds of things you do need. 01:18 to make sure that you’re accounting for. I’ve had more than one person come in and they have sold their primary home or they’ve sold a piece of real estate Or even inherited property. And they’re like, well, I I shouldn’t owe any taxes,

Kick off the 2025 filing season with Dr. Friday as she walks through the additional senior deduction and how the new tips and overtime deduction works at year end. She stresses documentation, correct W-2 reporting, and the importance of keeping business and personal records separate. Callers ask about overtime calculations, hobby vs business income, filing status after a spouse’s death, car loan interest rules, and selling inherited property. 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 00:00 have some questions today it’s a beautiful saturday uh it’s a little nippy outside to be quite honest the 17th and we’re getting ready to go into a full-blown tax season we’re gonna cover a little bit of the questions that keep coming in i know the last couple weeks We’ve had um some different shows on, but let’s get into the 2025 tax season. We file in 26. 00:21 Some people refer to it as the 26th tax season, but We are filing the year of 2025. If you want to join the show, you can. 615-737-9986. 615-737-9986. So we’re going to do a quick run through of some of the changes and that people keep calling and requesting more information on. 00:42 Let’s talk about first What they refer to as the senior or anyone over the age of 65. You have an additional $6,000 deduction. This is only going to be for the years that you filed 25 through 28 at this time. 00:59 In addition to your standard deduction. So whatever your standard deduction is or itemized deduction, whatever that is, you will have an additional $6,000 deduction. If you’re married, $12,000 deduction. 01:13 This does have a income limitation. So if you are single, that income limitation is going to to be um 75,000 it will work its way up from there and married couples it will be 150,000. 01:28 The good news in that conversation basically is there’s no penalty for being married. And we have talked about that over and over. You must be a U. S. citizen. You have to include your social security number. and filing jointly if married. So if you’re married filing separately and you’re over the age of 65, you will not qualify for this deduction. So again, if you’ve got questions, you can join the show. 01:52 615-737-9986. 615-737-9986. And that way we can deal with your situation. So again, one more time, really quick, standard deduction, which the standard deduction basically for what single person. is going to be 14,000. Then you’re going to add another

In this episode, Dr. Friday is joined by her long-time friend and colleague, Hank Parrott of Estate and Financial Strategies. Together, they dive deep into the critical importance of the “Team Approach”—ensuring your financial planner and tax professional are working in unison rather than in silos. 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 Dr. Friday 00:00 Alrighty, we are here on the Doctor Friday show. The Doctor is in the house, and today

Is your estate plan a “cure” or a “woe” for your family? In this episode, Dr. Friday is joined by board-certified estate planning attorney Russ Cook of the Cook Telman Law Group. With over 30 years of experience, Russ dives into the critical steps every family should take to protect their assets from creditors, minimize taxes, and avoid the public headaches of probate. From the dangers of putting children on bank accounts to the massive tax benefits of Tennessee Community Property Trusts, this episode is a masterclass in financial peace of mind. 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 00:01 No, no, no. 00:02 She’s not a medical doctor, but she can sure cure your tax problems or your financial woes. 00:07 She’s the how-to girl. 00:09 It’s the Doctor Friday show. 00:15 If you have a question for Dr. Friday, call her now. 00:17 737-WWTN. 00:19 That’s 737-9986. 00:23 So here’s your host, financial counselor, and tax consultant, Dr. 00:27 Friday. 00:29 Alrighty, the doctor is in the house. 00:32 W

On this episode, Dr. Friday dives into critical year-end tax planning strategies and offers expert advice for listeners facing tough IRS issues. From the tax implications of an inheritance to navigating W-4 withholding for multiple jobs, Dr. Friday provides actionable steps to protect your finances. Learn the pitfalls of dealing with national tax resolution firms, the strict rules for vehicle deductions, and the importance of diligent record-keeping for your business. Plus, get crucial advice on coordinating with your financial planner and attorney to ensure your estate plan is sound and your assets are protected. 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

On this beautiful Saturday, Dr. Friday tackles some confusing tax changes and answers crucial listener questions. The show kicks off by clearing up the chaos around the 1099-K reporting thresholds, explaining exactly what the “One Big Beautiful Bill” means for individuals using payment apps like PayPal and Venmo. Dr. Friday also dives deep into a significant new tax deduction for seniors, outlines key tax strategies for year-end, and provides guidance on navigating taxes after major life events like the death of a spouse or a divorce. 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

Dr. Friday is back in the house! After a couple of weeks away, she returns to tackle the most pressing financial questions. In this episode, Dr. Friday breaks down the crucial November 3rd tax deadline for 2024 returns and clarifies the rules around estimated tax payments for 2025. She also discusses the impacts of a potential government shutdown on IRS refunds, dives into the major changes from the “One Big Beautiful Bill,” including a massive increase in the SALT deduction and new, larger standard deductions for seniors. Later, she answers listener calls on everything from investing in mutual funds and inheriting IRAs to the best way to handle estate planning for your home. 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

She’s not a medical doctor, but she can cure your financial woes! On this episode, Dr. Friday dives into the most pressing tax topics for today. With the November 3rd extension deadline for 2024 taxes looming, she explains why it’s crucial to get those returns filed before you can effectively plan for the new year. 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