The 2024 Child Tax Credit has reverted to $2,000 per child after the temporary increase under the American Rescue Plan in 2021. Children over 17 qualify for only $500. Dr. Friday highlights the importance of adjusting withholdings in January to avoid surprises when filing your tax return. These changes could significantly impact families relying on prior years’ expanded credits.

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. We all know the ARP, the American Rescue Plan that came in in 2021, temporarily expanded the tax credit, right? It was up to $3,000 and $3,600 depending on the age of the children. But in 2024, remember, that is only $2,000. And if they’re over the age of 17, it drops to $500. That can make a huge difference. If you’ve been using these other numbers and kind of calculating your withholding and now you’ve lost up to $1,600 on a child, that can make a difference on you owing taxes. Again, making sure now in January that you’re making these adjustments so you’re not going to feel the pain when the tax returns are being e-filed.

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.

The 2024 Adoption Tax Credit offers adoptive parents up to $16,810 as a dollar-for-dollar reduction of their tax liability. Unlike deductions, this credit directly lowers the taxes owed, provided expenses are documented. Ensure you have your adopted child’s Social Security number to claim this benefit and avoid filing delays. Dr. Friday emphasizes the importance of proper paperwork for a seamless filing process.

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 2024 adoption tax credit is $16,810. The tax credit is not a deduction that reduces your income for the purpose of determining tax liability. Rather, it’s a tax refund that is based on a dollar-for-dollar reduction of your tax liability. So it’s a credit, right? Simply put, an adoption credit in, and you will save $16,810 if you have spent that. You need to make sure you have a Social Security number for the child that you have adopted. We’ve had to file extensions more than once just to make sure we had the paperwork in line. You need help, 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.

The Alternative Minimum Tax (AMT) can be confusing, especially when selling stocks or participating in employee stock ownership plans (ESOPs). Dr. Friday explains how AMT kicks in when W-2 forms only show the basis, leaving capital gains unreported. Avoid IRS troubles by learning to account for both AMT and capital gains in your tax filings. Stay ahead with these essential tips.

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 Alternative Minimum Tax (AMT)—people often forget about this. It often kicks in when you sell stocks from a business, such as through an ESOP program. You might think the W-2 includes everything, but it only shows the basis. Capital gains still need to be reported. This is when AMT often applies and lands people in my office dealing with the IRS. Don’t forget to file your capital gains and account for AMT. Need help? 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.

Are you maximizing deductions for charitable donations? Dr. Friday explains the challenges of itemizing under the higher standard deduction, especially for married couples. Learn how to properly document contributions—whether cash, clothing, or food—and ensure compliance to claim your deductions. Stay informed on the rules for charity-related tax savings.

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.

Charity deductions—it’s so much harder now, especially for married couples, to reach the nearly $30,000 threshold for itemizing. You’ve got the SALT tax (state and local taxes) limit of $10,000, and mortgage interest may only add $5,000 or $6,000 with today’s low-interest rates. That’s only halfway there. Charitable donations play a significant role. Make sure you have proper documentation for cash contributions, clothing, food, or other items. Proof is essential to claim those deductions. Need help? 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.

Thinking about selling real estate? Dr. Friday breaks down the tax implications for primary homes, investment properties, and 1031 exchanges. Learn about exclusion limits for primary residences—$250,000 for individuals and $500,000 for married couples—and capital gains rates for investments. Don’t forget to understand tax advantages before spending the profits. Stay informed and prepared with these real estate tax tips.

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.

If you’re thinking about selling real estate, let’s categorize them. First, your primary home. Taxes on that can include some exclusions—$250,000 for individuals and $500,000 for married couples. Then there are investment properties, subject to capital gains. Rates start at 0% but can go up to 15%, 18.8%, and even 23.8%. There’s also the option of a 1031 exchange, which involves swapping like-kind properties to defer taxes. It’s crucial to understand your tax advantages and pay taxes before spending the money. If you need help, 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.

Wondering if there’s an age when taxes stop? Dr. Friday busts the myth that seniors can avoid filing taxes based on age. Tax obligations depend on income, not age. Whether you’re in your 40s or 90s, filing is necessary if you meet the income threshold. Plus, Medicare taxes always apply to earned income, no matter your age. Tune in to learn more about age, income, and taxes!

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 can’t tell you how many times people come into my office and ask, “When will I not have to pay taxes? Is there an age when the IRS will stop taking my taxes? I don’t have to file no matter what?” Let’s clarify—no, there is no age. It’s all based on income. I have people in their 90s that file taxes, and people in their 40s that don’t file because they don’t have income. Taxes depend on income, not age. Remember, for working individuals, Medicare tax applies to every earned dollar with no cutoff. If you need help understanding taxes, give our office 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.

Did you know that gifting money to your children doesn’t offer a tax deduction? In this episode, Dr. Friday clarifies common misconceptions about monetary gifts. While your children won’t pay taxes on the money you give, any applicable taxes are your responsibility. Learn how gifting up to $18,000 per person annually—or $36,000 for married couples—can help, and understand the tax implications for these transactions.

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.

Gifting money to individuals. People often think that if I gift my children money, I can deduct it as a way of gifting. Let’s just put that to bed. No, that’s never going to happen. That would be transferring money to your kids, and everyone would love to do that for a way of saving tax dollars. You can gift your children money, and they will not pay tax. You, the giver, will pay any tax if any is due. If it’s just sitting in your checking account, you’ve already paid tax. You give the money to your children; they do not pay tax. You can do that $18,000 per person. So if you’re a husband and wife, $36,000. Need help? 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.

Dr. Friday outlines the key differences between flex savings accounts (FSA) and health savings accounts (HSA). While FSAs allow a rollover of only $640, HSAs offer the benefit of accumulating funds year after year. Both options help you save on taxes, but understanding their limitations and advantages is crucial for smarter financial planning.

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.

Flex savings accounts and health savings accounts are both wonderful tools to save money and defer some income. However, remember that with a flex savings account, you can only roll over $640 into the next year. Health savings accounts, on the other hand, allow you to accumulate funds year after year.

There are pros and cons to each. While I’m not an insurance expert, I can tell you that if you want to save tax dollars, an HSA is a fantastic option. If you’re looking for immediate benefits, an FSA might be the way to go. Either way, both are excellent for keeping more money in your pocket.

If you have questions, give our office a call at 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.

Dr. Friday discusses capital gains tax under current laws, explaining how rates differ from ordinary income taxes. She highlights the zero-percent capital gains rate for single filers earning $55,000 or less and married couples earning $100,000 or less. Learn how understanding these thresholds can help you keep more money in your pocket.

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.

Things that we need to think about that may change: capital gains tax, for example. It’s kind of unusual. It used to go right along with the ordinary income tax. Under the current tax laws, it doesn’t. Right now, we have a 12% ordinary income tax, but capital gains kick in at 15%.

But don’t forget that free, zero-percent capital gains rate that’s available for people with smaller gains. For a single person earning $55,000 or less, including all income, you could qualify for the zero tax. For married couples, it’s $100,000 or less.

These are the kinds of things you want to know to put more money in your pocket by understanding 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.

Dr. Friday emphasizes the importance of early adjustments to your W-4, 401(k), or 403(b) to maximize your tax benefits. Starting early in the year allows you to make meaningful changes, whether you’re fine-tuning your withholdings or increasing retirement contributions. Avoid the rush and financial strain of last-minute adjustments by planning now.

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 a brand new year, and it’s time right now to start thinking about W-4 forms. That’s how much money is going to be coming out of your W-2s. Also, do you want to put a little more money into a 401(k) or 403(b)? Now’s the time to think, so you have the whole year to make these adjustments.

So often, when people come into my office, it’s already April or even as late as September or October. Then we’re scrambling to make changes, which doesn’t leave much time to adjust for the current year.

Now is the time to ask: Are you withholding enough? Are you in the middle of a divorce? Make the adjustments today, so it doesn’t hurt so much 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.