May 17, 2022
Dr. Friday Radio Show – May 14, 2022
Welcome to the Dr. Friday Radio Show! In this episode, we have host, John Haggard, and tax expert, Dr. Friday, take on the latest tax updates, answer caller's questions, and talk over the following topics:
* Counties That Have a Tax Extension Until May 16, 2022
* What Is Earned Income Tax Credit?
* Will Congress Pass This Huge Tax Increase?
* Earned Income Limits for Taxpayers Who Do Not Have Qualifying Children
* What You Should Know About the Build Back Better Plan
* What the IRS Considers as Earned Income
* How The People You Vote For Affect Your Taxes
* Do I Need A SSN To Be Eligible to Claim the Earned Income Tax Credit?
* Child Age Requirements for Earned Income Credit
* Gifting Property Away and Capital Gaines Tax Consequences
* Why You Should Trust Dr. Friday With Your Taxes
* How To Get Back On Track With the IRS
and much more! Transcript
Announcer 0:00 No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or 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. 615-737-9986. So here’s your host, financial counselor, and tax consultant, Dr. Friday.
John Haggard 0:28 Live from America's Music City. It may be Saturday where you are but it's Friday, all day, every day all the time with the tax doctor, the tax lady, the doctor of accounting, ladies and gentlemen, known in these parts of America as Dr. Friday. Right here she is. Dr. Friday, how are you?
Dr. Friday 0:49 I am awesome. What an intro. That's why I love having you do my shows. Because John, you really know how to bring in an intro.
John Haggard 0:57 Well, I'll tell you what, you are the one. And that's why we like to do this because folks who have questions who have been running from, who haven't, you know, filing an income tax return in 10 years, because they think, "Well, you know what, I ain't done it in 10 years, what's another 10 gonna be?"
John Haggard 1:13 They're gonna learn some things today from Dr. Friday, that could save you a lot of trouble. I'm going to just promo one thing folks, you're going to hear especially those of you who are new to Nashville. If you have not met or heard of Dr. Friday, and you're just tuning across the internet, or maybe hear on the radio, especially the folks from California and Chicago and New York and Philadelphia and other markets.
John Haggard 1:36 We're meeting new people, it seems like every week in Nashville, as people move here, I'm gonna give you something here that you might want to know. If you are one of those who hadn't filed an income tax return or let's say, you know, you've gotten the last as Dr. Friday would call it "love" letter. And now including taxes and interest and penalties, you owe a million dollars.
John Haggard 2:01 And you say, "You know what? I mean, forget it, you know, I'm just gonna go off the grid. There's no way." I'm going to tell you this. And we'll prove it later, in that particular case, Dr. Friday had client folks who owed over $1 million, not a typo. I said $1 million. And you settled it for about what Dr. Friday?
Dr. Friday 2:21 A little over 100,000. Just right around 102,000.
John Haggard 2:27 Now, you know, folks, I mean, every case is different. But imagine that? How would you like to be staring at that? Or maybe you're staring at a bill that's 500,000 or 100,000? Or it could be 25,000? Anyway, it's more money than you've ever got. You don't think you could ever make it? That's the type of work she does.
John Haggard 2:42 Do you know why? Here's one of the things you should know, and listen very carefully to what I say because some of you might run when you hear this. So let me tell you what the definition is. Dr. Friday is an enrolled agent with the Internal Revenue Service.
John Haggard 2:55 Now when you hear that, "John, I don't want to talk to nobody from the Internal Revenue Service." No, she does not work for the IRS, she works for you. An enrolled agent means she's basically a federally-authorized tax practitioner who can represent you just like an attorney would in a court of law.
John Haggard 3:15 So now that you know about Dr. Friday, that's only the beginning. We have a lot of questions and things that people want to know. So here's how the show works. And especially for you new folks out there.
John Haggard 3:26 This is a live program. When we say live, that means you can call in now and get an answer. But we're only here until three. So we got 53 minutes basically to go get that question together and jump on the phone. Here's the number to call: 615-737-WWTN. That's 615-737-9986.
John Haggard 3:48 Our best advice to you call now because a lot of people say, "Well, I'll call in a minute," and it doesn't get any better later. It just gets later. And then it's three o'clock and we're gone. So jump on the phones now. You know a lot of people, Dr. Friday, hear these terms when they're trying to do their taxes. We don't quite understand it. But we've heard him for years and years and years like, you know, "What is the Earned Income Tax Credit? Can I get it? It seems like people are getting tax credits. But I'm not."
John Haggard 4:17 Just start out with that one if you would, what is the Earned Income Tax Credit anyway?
Dr. Friday 4:23 Yes, and it is I mean, its changing taxes have been changed in the last couple of years, as we all know, but the earned income credit is actually going out to more and more Americans. Earned income credit is basically a tax credit that provides tax breaks to people making less than or the lower to moderate-income workers.
Dr. Friday 4:41 You know, maybe you're a single mom and you only make $20,000 a year. You'd be qualified as that so you'll get more money in your pocket. It's a way that the IRS has told us they try to level the playing field that for some individuals that may not be able to earn as much as other individuals this is a way to try to get everybody in a livable wage.
Dr. Friday 5:02 So earned income credit canal, you know, affects a lot of individuals. So you want to make sure if you're in that lower to moderate-income level, you know, if you do your own taxes or selling doing them, find out if you qualify.
John Haggard 5:16 Simple enough right there. And so, you know, here's another thing, Dr. Friday, people want to know, and I know you don't have a crystal ball, but there is so much going on in Congress. Do you have any indication? Are they going to, and I guess maybe nobody can answer this, but just sort of, you know, you travel in other circles that most of us don't, because you're in that business. But are they gonna pass this, you know, do you think they'll pass this really huge tax increase that's going to make it I mean, really, really bad on folks?
Dr. Friday 5:49 Well, last year, we kept following the Build Back Better plan in which they had tried to push through a higher tax on capital gains. We all know, in 2025, unless something is done, everyone across the board, everyone, no matter what income bracket you're in unless it happens to be zero, then you all are going to have an increase in taxes because tax rates will go back up to pre Trump rates.
Dr. Friday 6:19 And you know, and then, of course, in the Build Back Better. Another thing we've been watching is the step-up in basis, and a lot of people are sitting there going, "What is that, John?" But, you know, that's huge. When someone passes away, and we inherit, maybe the only asset that your parents had or parents had, and it's finally been passed down to you, because of the loss of your loved ones, we get what's called a step-up in basis.
Dr. Friday 6:42 And most likely, you're not going to pay tax on that home. They want to eliminate that they want to say, "Nope, we don't think that that's a fair situation. So we're not going to have..." you know, in the Build Back Better, they've eliminated the step-up in basis, which would change inh…