The Dr. Friday Radio Show

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.

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.

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

With the November 3rd deadline for 2024 tax returns fast approaching, Dr. Friday is in the studio to tackle some of the most pressing tax questions. In this episode, she breaks down the new “one big beautiful bill,” specifically clarifying the $6,000 deduction for seniors over 65 and how it impacts your bottom line. Dr. Friday also dives into the complex tax implications of selling rental real estate, including depreciation recapture and capital gains. Plus, she answers listener questions about the difference between a hobby and a business for tax purposes and offers crucial advice on common estate planning mistakes.

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

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

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

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

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

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

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

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

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

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

Q: I never claimed depreciation on my rental property. Do I still have to worry about “recapture” when I sell i

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.

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

On this rainy Saturday, Dr. Friday jumps right into critical tax information, starting with an urgent reminder about the upcoming September 15th deadline for S-Corps, Partnerships, and LLCs, which is not covered by the federal disaster extension. She then unpacks the major tax law changes coming in 2025, including a new senior deduction, tax-free tips and overtime, and a deduction for auto loan interest. Throughout the show, Dr. Friday answers a wide range of listener calls on topics from 1031 exchanges and Social Security earnings limits to fixing W-4 withholdings to avoid a surprise tax bill.

Key points from the show:

Q1: I thought the federal disaster declaration extended all tax deadlines to November. Is my business tax return also extended? A: No. While the federal disaster extension moved the deadline for individual returns to November 3rd, it did not change the deadline for S-Corporations, Partnerships, and LLCs. Those returns are still due on September 15th.

Q2: I’m over 65. How do I get the new $6,000 tax credit for seniors? A: It is a $6,000 deduction, not a credit, and it begins with the 2025 tax year, not 2024. It will be added to the standard deduction for qualifying individuals over 65, which will lower your taxable income. You do not need to amend your 2024 return.

Q3: My wife started collecting Social Security at age 62 and still works. How much can she earn before her benefits are reduced? A: The annual earnings limit for those taking Social Security early is around $21,000. This limit applies only to earned income from a W-2 or 1099 job, not to distributions from pensions or 401(k)s.

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.

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

On this episode of the Dr. Friday Show, the doctor is in to dissect the massive new tax law, the “One Big Beautiful Bill” (OBBB). Have you heard that Social Security is now tax-free? Dr. Friday clarifies the misinformation and breaks down what the new $12,000 Social Security tax credit really means for retirees. Are you an employee who earns tips or overtime? She explains a new deduction that could put thousands back in your pocket and what this new reporting means for both employees and employers. Plus, she covers other surprising provisions like new “Trump Accounts” for newborns and the expiring electric car credit. Later in the show, she answers listener calls about avoiding estimated tax penalties, the specifics of the Social Security credit, and the strict rules for selling investment property. Tune in for essential, practical advice to help you navigate the 2025 tax year!

Q: The government sent a notice saying my Social Security benefits won’t be taxed anymore. Is that true?

A: Not exactly. While a new tax credit has been introduced for 2025, it’s not a complete elimination of the tax for everyone. Under the new law, taxpayers with a Modified Adjusted Gross Income (MAGI) under $75,000 (single) or $150,000 (married) may receive a credit of up to $6,000 or $12,000, respectively, to offset the tax on their Social Security benefits. The standard calculation of taxing up to 85% of your benefits still applies; this credit then works to reduce or eliminate that tax liability. The credit phases out completely at higher income levels ($175k for single, $250k for married).

Q: How does the new tax deduction for tips and overtime work?

A: For the 2025 tax year, workers can take a deduction for up to $12,500 (single) or $25,000 (joint) of their combined income from tips and overtime. To claim this, the income must be properly reported on your W-2 form by your e

The doctor is in, and she’s unpacking the “one big, beautiful bill” that was just signed into law. On this episode, Dr. Friday gives her first take on the massive tax changes set to take effect in 2025. What does this mean for your family, your business, and your retirement?

Listen in as Dr. Friday discusses the most significant updates, including a huge increase in the SALT deduction, the potential return of the car loan interest deduction, new tax credits for tip and overtime workers, and a major change to how Social Security benefits are taxed for many Americans. While the ink is barely dry and the IRS is still scrambling to create the new forms, Dr. Friday provides the essential information you need to start preparing now. Plus, she answers listener calls about the home sale exclusion, the nuances of the new Social Security deduction, and a crucial update on the Beneficial Ownership (BOI) reporting requirement for businesses.

Here’s a breakdown of what we covered in this episode:

Breaking Down the New 2025 Tax Bill:

Caller Questions & Key Clarifications:

IRS & Tax Filing Advice:

Q: Will my tips and overtime pay be completely tax-free now?

A: Not entirely. The new law creates a tax credit against your federal income tax for tips and overtime pay, up to a certain limit ($1,300 for tips, $1,400 for overtime). This benefit is aimed at lower-income earners, likely those in the 12% tax bracket. You will still owe Social Security and Medicare taxes on this income. Dr. Friday stresses the importance of keeping detailed pay stubs as documentation will be required.

Q: Do I need to file that Beneficial Ownership Information (BOI) report for my small business?

A: This was a key clarification. As of March 21, 2025, the requirement to file the BOI report is voluntary for domestic companies that do not have any f

Welcome to another episode of the Dr. Friday Radio Show! In this episode Dr. Friday Show emphasizes one key theme: planning ahead! Whether you’re considering selling stock, dealing with inherited property, or navigating retirement accounts, making decisions before the fact can save you thousands in taxes. Dr. Friday breaks down complex topics like capital gains, recapture of depreciation on real estate, and the rules around 1031 exchanges. Plus, she provides a critical update for all Tennessee residents regarding the federal disaster extension and what it means for your 2024 tax filing and 2025 estimated payments. Tune in to hear answers to listener questions on Roth conversions, overseas property, and IRA contributions.

Q: If I do a Roth IRA conversion this year that will cause me to owe taxes, do I need to make a quarterly estimated payment to avoid a penalty?

A: Not necessarily. The IRS requires you to pay in either 90% of the current year’s tax or 100% of the prior year’s tax liability. If your regular income and withholdings already meet 100% of what you owed last year, you can typically pay the extra tax from the conversion when you file without a penalty.

Q: Can I sell a property in the U.S. and use a 1031 “like-kind” exchange to buy a property overseas and defer the tax?

A: No. A 1031 exchange is only permitted for properties located within the United States. You would have to pay capital gains tax on the sale of the U.S. property.

Q: Do I need to report large vacation expenses to the IRS, like if I take my whole family on a trip?

A: No. Spending your own money on a family vacation is not a taxable or reportable event. It is considered a personal expense, not a gift or income.

Q: I contribute to a traditional IRA for the tax break. Can I also start and contribute to a Roth IRA?

A: Yes, you can contr

Welcome to another episode of the Dr. Friday Radio Show. In this episode, Dr. Friday gets into pressing tax topics, including a potential new bill affecting overtime and tip income, strategies for handling property sales, and essential advice on IRS dealings and estate planning. Listen in as she tackles caller questions live!

A: It’s a proposed federal bill (not yet law as of May 31, 2025) that might make income from tips and overtime non-taxable for income tax purposes. Social Security and Medicare taxes would still apply. Dr. Friday suspects it will likely be a deduction on your tax return, potentially with income limits.

A: If it’s your primary home and you’ve lived in it for at least two out of the last five years, you can generally exclude up to $250,000 of profit if you’re single, or $500,000 if you’re married, from capital gains tax.

A: When you inherit property, its cost basis for tax purposes “steps up” to its fair market value at the date of the original owner’s death. This means if the heir sells it relatively soon after inheriting, there’s often little to no capital gains tax to pay. This is why Dr. Friday advises against quick-claiming property to children before death, as that can negate this benefit.

Dr. Friday:

[00:02] All right, we are here live in studio.

Dr. Friday:

[00:05] And if you want to join the show, you can at 615-737-9986, 615-737-9986. I know we’ve had a little bit of a test going on this morning, but I think we’re good to go.

Dr. Friday:

[00:20] I’m not too sure if you guys were able to hear everything that I was saying earlier, but just wanted to make sure that if there was any questions, we are talking a little bit about the new bill that could be passing about. It’s the one big, beautiful bill, I believe it’s what it’s called now, you know, with Donald Trump. But, you know, are your taxes, are you going to have no tax on overtime and no tax on tips? Big question.

Dr. Friday:

[00:50] Everything I’ve said, even if it passes and it goes into law, which I’d say we have a 50-50 chance, it looks like that it’s going to become a deduction on your tax return. So it looks like you