January 27, 2025 • 51 mins
Live show recorded 1/11/25
In this episode, Mr. Money discusses the upcoming tax deadlines, including the January 15th quarterly estimated tax payment. He provides valuable information on how to make these payments, the penalties for not paying, and the exceptions that can help you avoid or minimize the penalties. Additionally, Mr. Money covers the tax relief measures announced by the IRS for individuals and businesses affected by the recent California wildfires, including extended deadlines and exclusions for disaster relief payments.
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Transcript
Episode Transcript
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Unknown (00:00):
The Information and opinions presented are for
(00:01):
general information only and arenot intended to provide specific
advice or recommendations forany individual you should
contact your investmentprofessional, attorney,
accountant or tax advisorregarding your individual
situation. The opinions of thepresenter do not necessarily
reflect those of independentFinancial Group LLC, its
affiliates, officers ordirectors. Mark Rothstein, aka
Mr. Money, is the owner of tristar financial LLC and Tristar
Income Tax Services LLC. Mr.Money is a marketing name only
(00:23):
and is not intended as anythingother than a marketing name for
entertainment purposes.Securities and advisory services
offered through independentFinancial Group LLC are
registered investment advisormember, F, I N, R, A, S, I p, c,
tri star financial LLC, tri starIncome Tax Services, LLC and
independent Financial Group LLCare unaffiliated entities. Good
afternoon. This is Mr. Moneylive in the K I do talk radio
(00:46):
studios here with you to talkabout money. Here to talk to you
about the economy, what's goingon in the world right now? Yes,
I'll refer to some of thosequestions you may have regarding
the fires in Los Angeles. I'vegot a whole segment on that I'm
going to chat with you abouttoday. We do have a whole lot of
(01:06):
Californians that have movedhere, and what I've heard they
may want to move here, havinglost their homes or their jobs
and maybe looking for a newplace to settle. Not sure, all
of us, Idaho people would likethat. Nonetheless, you may have
questions like, what happens ina fire? You lose everything?
(01:28):
I've got a whole segment onthat, and of course, I'll answer
that question that you all haveDo I still have to make my
mortgage payment if my house isgone. That's that's something
you may go Uh Huh. I wonderabout that one. So I've got a
whole list of those I'm going tomention today, and I guess it
applies to us. If there's ever adisaster like that, or disaster
declared by the government likethat here in Idaho, though, I'm
(01:51):
pretty happy that I'm an Idahoperson at this moment, you'd
like to talk about money orconcerns you've got about
disasters or about the taxramification, because there is
tax changes if you are in adisaster declared area, 5805436,
to go on the air. Live with me.Mr. Money here in the studios
(02:15):
today saw Mr. Kevin Miller,looks awfully good today. Saw
him as I walked in today,chatted a little bit so the K I
do talk radio studios are busytoday, if you'd like to be busy
with Mr. Money, the number5805436,
happy to talk about investments,retirement social security,
(02:36):
worries about outliving yourmoney. And what do if you really
have that worry, are therethings you can do? Answer Yes,
aside from listening to Mr.Money every Saturday at 2pm
there are many things you cando. Dial in and we can talk
about that. You can always go toMr. Money answers.com. In fact,
I invite you as Pete here at K Ido said to me, ask for what you
(03:00):
want on the radio. So I'm askingpeople if they'd like to hear
the show again. Mr. Moneyanswers.com
and of course, my articles, myinformation, is right there on
the website, also for you,
and happy to provide it all toyou. Let's talk about this last
week, what's going on in theworld. Oh my goodness. The Dow
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referring to the 30 biggestAmerican companies, and gives
you an idea how the market as awhole is doing. When you look at
the Dow, it sees that it hasstarted the worst start to a
year since the day or 2016
according to me, that's eight,nine years. So the Dow sees the
worst start to a year since 2016
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and you may say, no worries. Mr.Money, I have money in the
NASDAQ, the technology stocksindex. I own those stocks. I'm
okay, not true or Mr. Money, Iown the S p5 100, not the Dow
30, but the S P, large, 500 I'mokay there, nope. So all the
major indexes have beenstruggling in this year of 2025,
(04:10):
the Dow, as I mentioned, off toits worst start since 2016 as I
mentioned. And in addition, whatabout that S and p5 100? How are
they doing as of this lastFriday, all of them were down.
This last Friday, as in,yesterday saw its decline down
1.6%
and so there's a lot of not, howshould we say not good results
(04:34):
on Wall Street this last week?Of course, Mr. Money is going to
mention right now why that's thecase. But again, those are
simply the numbers. The S and p5100 saw nearly all of its
sectors. All of its 500 weredown in the red on this last
Friday. Year to date, loss ofpoint 9% which has marked its
(04:56):
worst performance over the firstsix trading days of a year.
Yeah, that's since the year2022.
And again, if you just look atthese numbers, things are down.
What's causing this? The US jobsreport released on Friday is
positive from an economicstandpoint. In other words, you
know how often Mr. Money talksabout jobs and the need for
(05:18):
that? We need people working. Weneed people having paychecks. We
need people consuming. It hasthem. Remanufacture the
products. It has them, thetransportation of the products.
It has all the raw materialsthat go into the products, the
people in the jobs connectedwith all of it. So the idea of
the jobs report very important.We need people working, and we
(05:41):
need people spending money. Butagain, what happened is the US
jobs report came out this lastFriday, as in yesterday, and
from its standpoint, the numberswere big. By the way it showed
us. Economy added 256,000
jobs in December, and theunemployment rate fell to 4.1%
(06:02):
from 4.2%
say, Mr. Money, I don't get it.It sounds like things are great.
People are working, thereforethey'll consume, they'll spend
money. Ain't that great. Butwhat it also did is these high
employment numbers solidifiedthe notion that at least near
term, the Federal Reserve won'tbe cutting interest rates. Wall
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Street likes the cutting ofinterest rates, and this good
news is said basically thatthere will not be a cutting of
interest rates at least in thenear term when we talked about
Feds dropping interest rates,which they did in December, 3
time, and they dropped them aquarter of a point. There was
talk that there'll be three orfour, maybe even five, more cuts
(06:47):
in the year 2025
but lo and behold, now WallStreet is thinking there may be
just one or two cuts possibly.Well, that wasn't so good, and
last month's gain in thisnumbers. Again, 256,000
jobs in December is way abovewhat the normal numbers are. And
(07:11):
again, all the numbers workedout so that unemployment rate
also dropped, as I justmentioned. So again, this, it
seems to be that the US labormarket is recovered from its mid
year stumble, might even begaining steam and having, again,
a very large number when theyreport January's figures. And
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basically, Wall Street is sayingwe feel it shut its door on
interest rate drops, of which welike. Interest rates drops, by
the way, the Fed will be meetingagain for their first meeting
this year to talk about droppingrates. That will be on january
28 january 29 they'll beannouncing it on the 29th if
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there's a rate drop. But itlooks to be at this moment that
that will not be it. Investorswill continue to watch the
economy. And of course, you hearMr. Money every single week I
talk about what's going on inthe economy. And again, I will
be there to talk about what do Ifeel will be happening. But
again, if people are working,there may be no need for
(08:16):
dropping interest rates to speedthings up, to get things going.
Again Again, we have one otherthing I should just mention. The
Fed Federal Reserve, have todecide what's going to happen
with the Trump change as Trumpcomes into office. What will
that mean? Exactly? Because,again, that could be very, very
(08:40):
good, or maybe it may not be sogood. A lot of people have said
that as a result of this,
how should we say immigrationthat he wants to have people
deported? Is that going to meanless than people available for
jobs, and therefore that will beinflationary, because those that
(09:02):
are here, we're going to have topay more to get them. We need
people that may be it. How aboutthe tariffs? All of that around
tariffs, of raising the costsfor our trading of China, our
trading with Canada, our tradingwith Mexico. Again, people think
that is inflationary, sincethey'll be an added cost to
(09:26):
anything that comes into thecountry. So lot of concerns
going on out there. And again,we're going to see what happens
here. So there is pricepressures, and we will see what
Donald Trump will do also withthe taxes, can, of course,
ignore that. That's going to bevery important to see. Will he
keep those 2017
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low taxes that we have rightnow? One other thing I should
mention is this, I still have aconcern, and you've heard me
talk about it with this debtthat we've got.
It, the Fed has not seemed tomind that the Biden
administration is running a $2trillion annual deficits, while
(10:08):
the economy seems to be growingat nearly 3% a year. Not so
good. Those numbers and just areminder of my concern about
this and many people's concern,will the United States of
America us lose its remainingtriple A credit rating. So
again, when you're looking toinvest somewhere you want the
(10:29):
safest of the safest places youcan invest for a portion of your
portfolio, will the UnitedStates lose its triple A credit
rating? I looked it up back inAugust of 2011
the S and P sent shock wavesthrough both the financial and
political spheres by loweringits ratings on us, government
(10:49):
debt obligations to A a plus.What was it previously A A?
That's the one that you want athe best there is. But this
rating company came and made itan AA plus the US Treasury
securities have always been andcontinue to be, the global
standard of risk feeinvestments, but S and P
(11:12):
observed at the time that theeffectiveness, quote stability
and predictability of Americanpolicy making and political
institutions have weakened at atime of ongoing fiscal and
economic challenges. That wastheir quote when they dropped
it. Fitch, which is anotherrating company and you want the
(11:34):
best rating you can get for yourcompany, meaning it's more safe.
Fitch Ratings followed suit inAugust of 23
also cutting its US creditrating to AA plus from AAA. What
did they say? Quote, steadydeterioration in standards of
governance over the last 20years, including on fiscal and
(11:57):
debt matters, of course, not tobe left out Moody's another
rating company still maintainsits top a A rating, but lowered
its outlook to negative in justthis past November. Of 2023,
again. What did they say? Quote,continued political polarization
(12:18):
within the US Congress raisesthe risk that successive
governments will not be ready toreach consensus on a fiscal plan
to show the decline in debtaffordability. So again, and
things have only gotten worse. Ihear the numbers 35 trillion
plus. I hear a Social Securityis not going to make it by the
(12:39):
year 2032 it will drop down to80% of what you're normally
getting. We certainly hear allthis, and this last years of the
Biden administration running ata 2 trillion annual deficit,
the size of this federal debt issurged beyond the size of the US
economy. Do you know that thesize of the total federal debt
(13:01):
has surged beyond the size ofthe US economy. It says match
the peak levels that we hadrelative debt to gross domestic
product that was around in WorldWar Two, when there was no price
that was too great to defeatfascism. In other words, World
War Two, we spent, spent becauseit was needed. We don't have
(13:22):
that. There is no war going on,etc. Yet our debt keeps
increasing. And by the way, canyou imagine what the debt
interest payment is per yearbased on the current interest
rates. The nonpartisanCongressional Budget Office
projects annual budget deficitscontinuing around the level
(13:45):
through the whole end of thedecade, then rising gradually to
2.9 trillion by 2034
and that assumes that the taxcut and Jobs Act of 2017
expires, which Trump has saidwill not expire. And by the way,
if he does renew those tax laws,which are low right now, and we
(14:08):
want them renewed, it would addan additional 4 trillion to the
national debt, says the CBOcongressional office. So again,
that is us. Treasuries continueto be treated as a a kind of
securities, very, very safe, butagain, not so good when you know
(14:30):
that it is so high. But Mr.Money, don't you worry. Mr.
Money, the soaring deficits,don't you worry. Haven't you
heard that Elon Musk is showingup and vivid Gramma Swami,
they've targeted, and they'regoing to be able to save 2
trillion in spending cuts. Sothey say this is according to
(14:53):
Department of governmentefficiency, not sure that's
going to get all our numbers inorder, not to mention.
All that it costs to keep thatdebt, keep that interest
payments where it is. Of course,I've heard the same as you, when
Trump gets in office, he's goingto handle it, so we'll see what
he handles or doesn't handle.But again, that's a lot of
(15:16):
trillions of dollars going outand just the interest alone, not
to mention that the rates 35trillion plus, keeps going
higher. When we come back, Mr.Money is going to talk about
income taxes, something thatturns everybody on. I know. I
hope your eyes don't glaze over.Going to give a couple key phone
numbers that you may need if youneed to work with the IRS or
(15:39):
Idaho. And then I'm going totalk about, what do you do if
you missed making payments tothe government for your tax
withholding? What do you do?Yes, there's going to be
penalties, but Mr. Money has ananswer all when we come back.
This is Mr. Money.
Let me tell you
how it will
(16:02):
be. There's one for you,
19 for me,
because I'm the tax
man.
This is Mr. Money, the tax manin this segment of the show
today. Thought I would give outsome phone numbers. So if you
(16:26):
have a pen you might want tograb these. Who knows, if you
ever may need a phone number todeal with the IRS. Of course,
the most important phone numberis you can dial in and talk to
Mr. Money if you'd like to. Andagain, that is every Saturday at
two o'clock you can dial in,5805436,
(16:46):
to talk to Mister Money. But ifyou need to talk to Idaho, you
want to talk to the state aboutsomething on your taxes, for
individual tax return questionsor needs? 208334, oh eight, 334,
766, 01. More time forindividual questions.
(17:08):
208-330-4766
zero. If it's a businessquestion. With your business,
you have some issues going onwith Idaho, 2083
34 dash, 7660,
again, 208-334-7660,
and it is HTTP, s dot forward,slash forward as tax.idaho.gov.
(17:35):
Tax.idaho.gov,
yes, I will have this with allmy show materials at Mr. Money
answers.com that you can alwaysre hear the show and access any
of my materials. Let's sayyou've got an issue with the
IRS, though. You just need themto advocate for you. You need
somebody to help you. 877774778,
(17:59):
again, if you need an advocateat the IRS to help with
something you just can't getresolved. 877-770-7477,
eight, Mr. Money, I've got anamended tax return I fixed, but
they won't process it. I don'tsee my refund. I asked for phone
number 866-460-4205,
(18:20):
24642050,
remember, if you can't grab thenumber, you can always re hear
the show Mr. Money answers.com,
let's say you're a businessperson listening to Mr. Money.
Mr. Money, I got to get an IDnumber. I'm becoming an LLC, or
I'm becoming a corporation, orsub chapter S corporation. I
(18:41):
need that ID number from theIRS. Phone number 800-829-4933
again, to get an E, I Nemployer, identification number
800-829-4933
Mr. Money, I need a transcript.I just don't know what I paid,
(19:03):
what I still owe. They charge meinterest and penalties, so I
probably owe more, but I don'tknow what the number is. Can I
get a transcript? Answer?1-800-908-9946,
for that. Mr. Money, identitytheft. I filed my return. I got
a note back that I alreadyfiled. But how could I already
(19:25):
file if I'm just filing now? Inother words, somebody may have
stolen your identity. Got to letthe IRS know that, and then have
them process your return, notthe fake tax return, identity
theft. Phone number 800 9084.0844901,
(19:45):
last one I'll give people may befalling asleep listening to
these numbers is the refundhotline. I just want my refund.
Just Where'd my refund?1-800-829-1954,
Yes. So knowing that today isJanuary 11, and knowing that the
(20:05):
next quarterly payment is dueJanuary 15, it's right around
the corner, then we got to gettalking about that. I have
previously talked about that,but yes, there is a payment due
to the government. Yes, it's duein four days. Yes, it's due for
those self employed people thatget paid but they haven't had
(20:28):
any income taxes taken out topay to the government. So if
you're an individual taxpayer,you can get hit with a healthy,
non deductible interest penaltyif you fail to pay them. So as
you're making money during theyear, you're supposed to pay the
IRS during the year. That's howit works, if you use the
calendar year, which most of usdo, the due dates for these
(20:51):
quarterly estimated tax whereyou're sending some money in to
the IRS and to the state,because, you know, you owe some
income taxes, so the governmentwants it paid to them during the
year as you're making it duringthe year. They're called
quarterly payments because youpay quote four of them. April 15
was your first one due in 24from January to April monies.
(21:15):
June 17 of 24 was number two.September 16 was your third one
due, and lo and behold, January15, right around four days from
now, is when your fourthquarterly is due. What's that
mean? You got to send in onjanuary 15 what you owe to the
IRS and a separate quarterlyvoucher. You send in money to
(21:37):
the state, and that's for allthe monies you made between
September 16 when you sent inyour third quarter for September
through December 31 that lastquarter of the year, got to send
money to the IRS for that and tothe state for that. Mr. Money, I
kind of missed one in the past.Make up for it. Make this fourth
(21:59):
quarter estimate a bigger numberto send into the government. Can
always send money thegovernment. They'll always take
it. I've learned that they'lldefinitely cash that check or
take that money out of your bankaccount if you're have moneys
owed. So Mr. Money, what's thebest way to pay them? The best
way to pay them is IRS, directpay irs.gov hit the button for
(22:23):
the you paying them directly,have it come directly out of
your bank account. Theadvantages of doing it's free to
use, and you get immediateconfirmation of your payment.
And by the way, you can schedulea future payment on there too.
IRS direct, or just go toirs.gov
and you'll see the button thereto push to do it. So for
(22:45):
taxpayers, is very simple andfast. It's secure, and the IRS
ever writes you a letter you didnot send a quarterly payment. We
do not show you sent money intous during the year. No problem.
You pull up your confirmationwhere you paid them on their
website. The IRS website, prettyeasy to prove another way you
could pay them is what's calledthe electronic federal tax
(23:08):
payment system, E, F T, P S, E,F T, P s.gov,
then make paymentselectronically, again from your
bank account, again, free.Service to use allows you
scheduling payments in advance.They can also give you a
comprehensive payment history ofall the times you've done it in
(23:28):
the past, for your recordkeeping. For those that would
like to not do that, I'm justnot telling the IRS my bank
account, you can go and pay viaIRS to go mobile app. That's
right, IRS, the number two geo,IRS, to go app and there can
make a direct pay, and you coulduse a credit card there, or a
(23:51):
debit card there, if you'd liketo. So this is for the tech
savvy taxpayers who prefer themobile way. Mr. Money also has
pay by debit or credit card ordigit to wallet. That's another
way. You just need to find anauthorized payment processor
listed on the IRS website. Soagain, go back to that irs.gov
(24:12):
it's where you start and lookfor authorized payment
processors. I've done it once,and that's where you simply pay
via that credit card. Yes,you're getting points because
you used your credit card. Ifyou've got the credit card,
that'll give you points, andthat may be great. What's the
disadvantage the service feesthat apply if you use a
processor, you know there'sgoing to be 123,
(24:35):
maybe 4% fee, service fees. Somay not be the best way, and the
last way, of course, write acheck simply that mail your
form, 1040, es, that's a littlevoucher that says the amount
you're saying with your name,address and social and just
simply use this little voucherwith a check or money order the
IRS. And it's how people havedone it for years and years. The
(24:59):
only negative would.
That risk of delays inprocessing. It gets lost in the
mail. You get no immediateconfirmation of payment. So
again, good idea to do that. I'mharping on it because it's due
in a couple days, and it'simportant for all of us to do
why? Because if you don't payit, you are simply going to have
(25:19):
additional interest and penaltycharges on you. So again, if
you're self employed, or youoperate your business as an S
corporation, you likely need tomake one of these quarterly
estimated payments. Rememberyour income minus your business
expenses. Business income minusbusiness expenses come to a net
(25:40):
income. That net income timesyour IRS, amount you may owe is
what you have to send in, andthat net income after expenses,
you use that number to figureout what to say to spend into
the state of Idaho, or whateverstate you're in. Remember, you
could have other income that wasintact, like pension money that
(26:01):
came to you, where you getSocial Security benefits, and
part of that's taxable on yourtax return, yet there was no
withholding, no tax withholdingon it. Maybe you had an RMD
required minimum distributionand you were forced to take some
money out of a retirementaccount, whether you wanted to
or not. Again, goes on your taxreturn, you may have to pay
(26:21):
income tax on that, so you needthese quarterly vouchers to send
a little money in. Maybe you'veeven got rental income or other
income or a sale of stocks withbig gains on your return. So
again, causes you to owe money,but you didn't have any taxes
withheld. So good to do for allof my clients that say to me,
Mr. Money, I can't be bothered.Don't want to do it. What is the
(26:44):
penalty if I choose to not pay?The penalty rate for
insufficient estimated taxpayments changes every quarter.
The annual equivalent rate forthe last year, 2024, was 8%
that was for the first, secondand third quarters, and it was
also 8% for the fourth quarter.So if you didn't pay in what you
(27:05):
needed to pay in, you can expectto see an 8%
added interest charge on there.May I mention this penalty fee,
this interest charge is notdeductible, so it hurts even
more because you can't deductit. And again, when do they
calculate it? When you go to doyour return, the government will
(27:27):
see when the money was sent in,quarterly, they'll figure out
from your tax return that it wasdue and that you did not send it
in till all of a sudden on onequarter at the end of the year,
or you never sent it in. Andthen they'll hit you with a fee,
taxes you owe, plus any fees youmay also owe. Is there a way to
(27:48):
get out of it? Mr. Money, ofcourse, there's a way to get out
of it. Some exceptions allow youto minimize or avoid the penalty
of not paying this estimated taxin full. Again, current year tax
exemption. There's no penaltywhen you pay at least 90% of
your current year's tax whatevershows on your form, 1040, your
tax return,
(28:10):
just make sure you got 90% ofwhatever your current tax year
liability is and get it in therethroughout the year. Very
important to get that 90% numberanother exception that may help
you reduce the interest orpenalty. There's no interest
charger penalty when you pay atleast 100%
(28:30):
of the tax shown on your form,1040 your tax return for the
previous year via timelyestimated payments. So again, if
you get some timely payments induring the year, but the only
amount you fully got in therewas 100% of what the prior year
taxes were. Again, that's anexception, and may help you.
(28:50):
It's another exception. You mayneed a tax man or tax woman for
which is called the annualizedincome installment, which is on
the return you show Mr.Government. Excuse me, you want
to charge me as if I made allthe money. January, February,
March, April, and then April,May, June for my June payment.
Then June, July, August,September, for my September
(29:12):
payment. The end, excuse me.Don't charge me all that. I made
all the money in December. Allthe money came to me in
December. I didn't make money topay you in April quarterly or
the June quarterly of September.So there is another way where
you actually show when youbrought in that money. And
therefore I only owed you anestimated tax based on when that
(29:33):
money came in and if it all camein the last quarter, all I need
do is pay the last quarterestimate and all is well.
Bottom line for Mr. Money is Thesure way to avoid underpayment.
Penalty is to make sufficient ontime estimated payments choose
the method that works best foryou. IRS, direct payment is
(29:54):
usually the best way to do it,and remember that deadline is
here.
Today, January 11, payment due,January 15.
When we come back, Mr. Money isgoing to switch hats, go back to
Mr. Money, financial hat andtalk about six barriers to
investment success. There's sixbarriers that many of us have.
(30:17):
We don't realize we have thesebarriers, but that's what's
stopping us from making money.Time for Mr. Money to handle
that together with you all whenwe come back, this is Mr. Money.
Welcome back to the Mr. Moneyshow on K, I do talk radio,
1075, FM and 580 AM.
Mr. Money is live here at K, Ido talk radio, and we have Eric
(30:41):
on the line. Eric, you are livewith Mr. Money. What can Mr.
Money do for you?
I can hear you. Go right ahead,Eric,
my call screener, since it'shard to hear you, my call
(31:03):
screener said you wanted to talkabout inherited IRAs. So let me
talk about that. If somebodypasses
okay and with an inherited IRA,key items I want to mention to
you are this number one is, whenyou inherit somebody's
(31:25):
retirement account, the bestthing to do, or a possible thing
you could do, of course, talk toyour financial planner. Is, if
you need the money and choose totake it, you've got to pay
income taxes on it. So if youinherited so much in an IRA,
traditional IRA, yes, reportedon your tax return, you may say,
(31:48):
but Mr. Money, I'm under age 59and a half. Can I do that
without a penalty? Answer is,yes, somebody passed away to
leave you the money. So yes, youcould take some or all of it.
Yes, you have to report it. Yes,you have to pay some income tax
on the piece that you took out.You could also choose not to
(32:08):
take all of it right now andspend it. Then you would open up
an inherited IRA where you putthe person who passed away name
on there and your name on there.Remember, don't forget to put
the deceased person's name wholeft it to you on the account
with your name, and you can rollover some money into that. And
(32:29):
therefore you did not have topay income tax on all of it,
because you did not take all ofit. And you're right. Eric, the
IRS did change the rules. Ifyou've inherited an IRA. It must
be depleted. You must take itout over a 10 year period. And
(32:50):
so some people say, Wait, let itgrow for nine years. Take it all
out in the 10th year. Yes,you'll report it in the 10th
year, but you got nine extrayears of growth. The catch is
you take out a big, big, bignumber, if you wait until the
10th year to take it out, awhole lot of taxes on that so
many others say, take somethingout each year. Look at your tax
(33:13):
bracket and try to guideyourself as to how much you're
going to take out over time. Butyou got to know you got to pay
taxes on it just a matter of youchoosing when to pay the tax and
trying to pay the least amountof tax. One other thought, Eric,
are you married?
(33:34):
Yes, I am married. So if this isyour spouse that passed away,
I'm hoping not, but if it isyour spouse that passed away,
then you inherit the money andyou can roll it over to again,
an inherited IRA. Account foryourself. Don't co mingle it
with other retirements.Inherited IRA has different
(33:55):
rules. So if a spouse inheritsan inherited IRA, then you can
roll it over and not be forcedto take it out over the next 10
years. So again, key item whenyou inherit it is, who'd you
inherited from? And then whenyou get the money, make sure you
title it property with theirname and your name on the
(34:17):
inherited IRA, keeping itseparate, choosing to take some
out over the next 10 years,knowing you'll pay tax, but no
10% penalty on it. So inside ofwhat Mr. Money said, Did I
answer Eric in there?
Yeah, but I had one actualquestion that was related to
that.
(34:37):
So one thing I've heard you cando with your own IRA is
charity, then you can avoid orreduce tax liability, but I'm
not, I haven't, I don't thinkyou could do that with an
inherited IRA. Do you know theanswer to that? Yeah, very good
question. So answer to that istwofold. One is, I'll say, but
(34:58):
Mr. Money could.
I take money out of an IRA orretirement account and give it
over to charity. And therefore Iwas forced to take it out
because I'm RMD required minimumdistribution. Mr. Money, I got
to take it out. I'm age 73 I gotto take it out, but I don't want
to pay income tax on it. So, Mr.Money, you know what? Since I'm
(35:21):
forced to take it out, I'll haveit done as a transfer. Keyword
there, Eric, transfer, whereI'll take the money out, and I
will have it go directly to thecharity, so it comes out of your
IRA, directly to the charity.Best not to take it into your
pocket and then send it there.Better to do it as a transfer.
(35:44):
Then you are right. It does notgo on your tax return. You did
not take the money. It goesdirectly over there. You don't
get a tax deduction for charitybecause you were forced to take
it out at age 73 it does nothave to go on your tax return,
because it never got to your taxreturn. It went straight over
there. So then you would say,but Mr. Money, I am not 73 I'm
(36:08):
not required to take it out. CanI just do it? Because I feel
like doing it directly tocharity. That's not normally a
question. Mr. Money hears. Butcould you do that? The answer is
yes, I would check with yourIRA, check with the charity, and
see if they allow for a directfor you to do it pre RMD and on
(36:30):
the question of its inheritedthough. Mr. Money, what about
when it's an inherited IRA? Am Iallowed to take that over and
roll it directly? I've read twothings. I've read one article
where it said, yes, I've readone article where it says, You
cannot. What I would do is, Iwould guess that you cannot do
it, having said that, I wouldsimply check with the
(36:52):
beneficiary, Eric, I would callthe nonprofit. I would check in
with the church, or check inwith wherever you'd like to give
it to and say, do you accept adirect transfer of some
inherited retirement money overthere? I think it can be done,
but I have seen some conflictinganswers on it, so I don't know,
(37:14):
Mr. Money got you to the finishline, but that's what I've seen
on it.
Yeah. Thank you. And can I askyou a related question? Sure, go
right ahead. Eric. So similarly,by the way, my father, who
passed away, and me and mysiblings are the inherit keys.
Got it. We also inherited hishome, which is in probate, which
(37:36):
will end soon. Yep, I don'texpect any,
you know any claims or anythingthat would mess that up? But my
question is, I know we don't paycapital gains from when my
father purchased it, but I don'tknow when the clock starts
ticking from us. Was it upon hisdeath, or is it when probate
ends? Or do you know the answer?Of course, I know the answer.
(37:57):
Mr. Money's here every Saturdayto clap with answers. So the
answer is, it is based on whenthe deceased person passed away.
So again, for all listeners, ifyou inherit a piece of property,
you get what's called a steppedup basis. So if Dad, in this
case, bought it for 200 grand onthe day Eric answered on the day
(38:21):
he passed away, it was worth600,000
you inherited it for 600,000
when you sell it, whether it's aweek later, a month later, eight
years later, when you sell it,you'll compare it to the stepped
up number of what it was worthwhen he passed away. So he may,
Dad May Have got it for 200 theday he passed away, it was worth
(38:43):
600 thou. You sell it for 600grand. There will be no taxable
gain, because your new cost,your new basis, is what it was
worth on date of death. Oneother thing to add to that,
let's say, when dad passed away,it was worth 600 grand, and you
sell it for 650,000
Mr. Money, it looks like I made50 grand. Not so fast. Yes, you
(39:07):
got it. Inherited it for 600grand. But you can add to that
all the money you did to fix itup in order to sell it. You can
also add all of the cost to sellit. So at the end of the day,
selling price, minus all theselling fees. You compare it to
the stepped up cost plus all theimprovements you had to make to
(39:28):
sell it. And as a result, theremay be minimal gain or no gain.
And one last thing, Eric, you'renot supposed to pay tax on all
of it. If there's some siblings,you would end up reporting your
piece only, take 1/3 of allthose numbers, or whatever it
is, and report your piece only,and then have your siblings
(39:49):
report their piece only ontheirs. Same with that inherited
IRA, hello, let's say it's aCharles Schwab. Charles Schwab,
here's the IRA, me and my.
Two siblings inherited. Wouldyou please move it over to an
inherited IRA with my name on itfor 1/3 of it, and my sister for
1/3 my brother for 1/3 and thenlet your brother and sister make
(40:12):
their decisions whether theywant to take out their piece or
not take out their piece.
Did you know what source is usedto determine the value of the
home the day after my father'sdeath? Yeah, very good. And
again, I don't mind spending allthis time with Eric for one big
reason. You're not the only onewhere somebody's lost someone,
and you've inherited property orinherit an IRA. And again, the
(40:37):
question of what do you value itat, etc, is that your question?
What do we value it at? Yeah,what sources use determine that
value for the tax purposes?Yeah,
I've always done is I've said toevery client, whoever is your
realtor, that may be selling it,ask them for an appraisal, do
(40:59):
based on comps, comparatives,and I would get an official
piece of paper from someone inthe real estate world based on
their REMAX paperwork, orwhatever their realtor company
name is, that says the propertylocated at this address on this
date is worth this amount, andput some comps with it, or at
(41:20):
least get me the cover letter,something that you and me can
prove that was the value. Andmay I say, I always try to make
it a large number if I can,because I want that basis. I
want to inherit it at thehighest number possible to
compare against what I sell itfor. So again, that Realtor with
some comps on a sheet of paperwritten a nice little letter on
(41:43):
that official document. Theirstationary is what I've used
forever. An IRS does accept it.I don't think so. Well, you're
going to get a great number ifyou just print the Zillow that
day. So I like a realtor towrite me up it, and if I had a
realtor sell it anyway, theydon't mind adding that page,
that letter to it, and then holdon to it. KC, IRS, ever asks you
(42:06):
about it, that's key also.
Okay, thank you so much. Ireally appreciate your time and
your show. Thank you forlistening, Eric. I'm going to
add one thought to Eric, if Imay, everyone. What's that extra
thought I'm going to add is thefollowing, Mr. Money, I didn't
make. I inherited it, but wedidn't make 500,000 profit,
(42:29):
because you can exclude that ifit's a married person selling
it, or it's a single personthat, quote, unquote, you get
this stepped up basis, and we'reshowing the sale. So the
question may be, Mr. Money, do Ineed to bother to show it? Mr.
Money, yes, we sold it. My dadsold under my dad's name or
under my dad's trust. We soldit. Do I got to report it on my
(42:52):
tax return? Mr. Money's answeris, I would, whether I'm
reporting a third of it or I'mreporting a half of it, I would
report it on my tax return. Soif the IRS ever wanted to talk
to me, I could say, Sure, Iinherited it. I put on my tax
return what my cost basis was,which is the stepped up basis.
When someone passed away, I putdown the sale price, my third of
(43:15):
it, or whatever my piece is, Iput down my selling expenses,
and lo and behold, I had notaxable gain. Ain't that great,
but at least I reported it. Whatyou don't want to have happen is
a 1090 9s that's a tax formwhere they report the sale,
where it's got reported, sent tothe IRS now as busy looking on
(43:35):
your tax return, where's thesale of the house. So even if a
1090 9s was never reported bythe real estate company to show
the sale I would nonethelessreport it on my tax return and
show my 1/3 numbers of the saleprice, my 1/3 selling expenses,
my 1/3 if it's I'm an owner of1/3 of it, my cost basis, etc.
(43:58):
And do it that way, that wouldbe what Mr. Money would do with
our time remaining. Mr. Money isgoing to answer what I started
with earlier, but I think I'mgoing to switch over instead of
my barriers to investmentsuccess, I just want to talk
about the California wildfires.It seems like so many
(44:19):
Californians may already havemoved here. They may have
property back there inCalifornia with all these fires
going. It's certainly on thenews, and breaks my heart to
hear about it. Yes, I've hadsome clients in California call
me and say My house is gone. Mr.Money, what do I do? Etc. So I
thought I would mention it, maybe of interest to some people
(44:41):
just what happens with that. TheIRS has already announced tax
relief for all the individualsand businesses in Southern
California that have beenaffected by the wildfires that
begin on January 7. So yes, theIRS has spoken out about it. The
government has stepped out.
What they've said is nowtaxpayers have until October 15
(45:05):
to file various federalindividual and business tax
returns and make their estimatedpayments. So again, what I just
said a moment ago, if you owesome money, got to pay your
quarterly payments in the nextone's due January 15, not if
you're subject to the disasterthat happened in California.
This tax relief that they'vejust said again, postpones any
(45:28):
payments due, postpones anypayments up until next, October
15 of 25
and it affects like everybody,it seems so the individual
income tax returns that arenormally due April 15. No longer
do taxes you owe on april 15 ifyou owe it, no longer do
everything is not due tillOctober 15. 2024
(45:52):
contributions to an IRA. I don'tknow if everyone knows the IRAs
and 2024, last year, you gettill April 15 of this year to
put it in, if you're in adisaster zone, you get until
October 15. Same with somethingcalled HSA health savings
accounts for eligible taxpayers.That's money you can put until
(46:15):
April 15 of this year. Get a taxdeduction for it. Now in
California, Los Angeles,declared area you get till
October 15. What I mentionedearlier, your 2024, quarterly
estimated income tax which isdue January 15 is not due until
October 15. Your payroll, eventhat one quarterly payroll and
(46:40):
excise tax returns which are dueJanuary, 31 April 30 or July 31
you get till October 15 of 25
How about this? Your calendaryear? Partnership and S
corporation returns that are dueMarch, 17 of 25 you now get till
October. So again, oh, taxexempt organization, returns
(47:03):
normally due on May 15 of 25 younow get till October. So in
additions, penalties for failingto make payroll, excise tax
deposits, all that you've nowgot longer. Mr. Money, what
about assistance that, disasterassistance and emergency relief
for individuals and businesses.There are pages on that, there
(47:26):
are FEMA. FEMA pages on thatagain, check it, see what monies
can come to you. The IRSautomatically will provide give
you penalty relief, becausethey'll see your address. But
Mr. Money, what if I last year'stax return I was in Idaho, and
this year I'm in California, andit burned down, then what you'll
(47:48):
their address on your returnfrom last year won't show you're
in the disaster area. You simplycall the IRS and let them know
you are in that area. They willabsolutely work with taxpayers
that that affects there is aphone number for it,
866-562-5227,
Mr. Money will put this on Mr.Money answers.com so we'll be
(48:11):
there additional tax reliefindividuals and businesses in
these federally declareddisaster errors who suffered
from uninsured or unreimburseddisaster related losses. So Mr.
Money, what are you going to doon the tax return? What I'm
going to do is you can choose toclaim them, these losses of your
(48:33):
home and your contents, yourcar, whatever, all those
expenses, all that disastercaused to you, you can claim
there as a casualty loss on yourtax return in the year it
happened, which is right now in25 or the IRS lets you go back
to your 24 tax return and goback a last year and amend it
(48:55):
and take a casualty loss for Allof your losses on there, again,
qualified disaster reliefpayments you may receive are
generally excluded from income,so you don't have to worry and
say, Mr. Money, I even got someextra I had this much damage,
and buy the insurance or by FEMAfrom the government, I got a
whole lot of money to help me,and didn't say you got to take
(49:19):
the money and reimburse inCalifornia. Certainly take your
money and move to Idaho or moveto anywhere. Use your moneys
wherever you'd like to. Butagain, it is generally excluded
from gross income. You do notreport the quality the qualified
disaster relief payments. Sothat's kind of interesting.
(49:39):
And again, Oh, Mr. Money. Whatabout if I'm just desperate I
need money? What then there isadditional relief may be
available to taxpayers whoparticipate in a retirement plan
or an IRA, for example, ataxpayer may be eligible take a
special disaster distributionbut.
(50:00):
That would not be subject to theadditional 10% early
distribution tax that's peopletake it out under age 59 and a
half allows the taxpayer tospread the income over three
years. In other words, you payincome tax over three years on
the amount that came out. Sothere's a whole lot there. One
last thing to mention, Mr. Moneygot to make my house payment.
(50:21):
Talk to your provider, talk toyour mortgage people. They'll
let you know if it's due orpostponed. So a whole lot of
good information there for allof us. Sorry to have to share
this news. Mr. Money will beback next week, two o'clock on
Saturdays. Thanks for listening.The Information and opinions
presented are for generalinformation only, and are not
intended to provide specificadvice or recommendations for
(50:42):
any individual you shouldcontact your investment
professional, attorney,accountant or tax advisor
regarding your individualsituation. The opinions of the
presenter do not necessarilyreflect those of independent
Financial Group LLC, itsaffiliates, officers or
directors. Mark Rothstein, akaMr. Money, is the owner of tri
star financial LLC and TristarIncome Tax Services LLC. Mr.
Money is a marketing name only,and is not intended as anything
other than a marketing name forentertainment purposes.
(51:04):
Securities and advisory servicesoffered through independent
Financial Group LLC, aregistered investment advisor
member, F, I N, R, A, S, I p, c,tri star financial LLC. Tri star
Income Tax Services LLC andindependent Financial Group LLC
are unaffiliated entities.
The Information and opinions presented are for
(00:01):
general information only and arenot intended to provide specific
advice or recommendations forany individual you should
contact your investmentprofessional, attorney,
accountant or tax advisorregarding your individual
situation. The opinions of thepresenter do not necessarily
reflect those of independentFinancial Group LLC, its
affiliates, officers ordirectors. Mark Rothstein, aka
Mr. Money, is the owner of tristar financial LLC and Tristar
Income Tax Services LLC. Mr.Money is a marketing name only
(00:23):
and is not intended as anythingother than a marketing name for
entertainment purposes.Securities and advisory services
offered through independentFinancial Group LLC are
registered investment advisormember, F, I N, R, A, S, I p, c,
tri star financial LLC, tri starIncome Tax Services, LLC and
independent Financial Group LLCare unaffiliated entities. Good
afternoon. This is Mr. Moneylive in the K I do talk radio
(00:46):
studios here with you to talkabout money. Here to talk to you
about the economy, what's goingon in the world right now? Yes,
I'll refer to some of thosequestions you may have regarding
the fires in Los Angeles. I'vegot a whole segment on that I'm
going to chat with you abouttoday. We do have a whole lot of
(01:06):
Californians that have movedhere, and what I've heard they
may want to move here, havinglost their homes or their jobs
and maybe looking for a newplace to settle. Not sure, all
of us, Idaho people would likethat. Nonetheless, you may have
questions like, what happens ina fire? You lose everything?
(01:28):
I've got a whole segment onthat, and of course, I'll answer
that question that you all haveDo I still have to make my
mortgage payment if my house isgone. That's that's something
you may go Uh Huh. I wonderabout that one. So I've got a
whole list of those I'm going tomention today, and I guess it
applies to us. If there's ever adisaster like that, or disaster
declared by the government likethat here in Idaho, though, I'm
(01:51):
pretty happy that I'm an Idahoperson at this moment, you'd
like to talk about money orconcerns you've got about
disasters or about the taxramification, because there is
tax changes if you are in adisaster declared area, 5805436,
to go on the air. Live with me.Mr. Money here in the studios
(02:15):
today saw Mr. Kevin Miller,looks awfully good today. Saw
him as I walked in today,chatted a little bit so the K I
do talk radio studios are busytoday, if you'd like to be busy
with Mr. Money, the number5805436,
happy to talk about investments,retirement social security,
(02:36):
worries about outliving yourmoney. And what do if you really
have that worry, are therethings you can do? Answer Yes,
aside from listening to Mr.Money every Saturday at 2pm
there are many things you cando. Dial in and we can talk
about that. You can always go toMr. Money answers.com. In fact,
I invite you as Pete here at K Ido said to me, ask for what you
(03:00):
want on the radio. So I'm askingpeople if they'd like to hear
the show again. Mr. Moneyanswers.com
and of course, my articles, myinformation, is right there on
the website, also for you,
and happy to provide it all toyou. Let's talk about this last
week, what's going on in theworld. Oh my goodness. The Dow
(03:22):
referring to the 30 biggestAmerican companies, and gives
you an idea how the market as awhole is doing. When you look at
the Dow, it sees that it hasstarted the worst start to a
year since the day or 2016
according to me, that's eight,nine years. So the Dow sees the
worst start to a year since 2016
(03:46):
and you may say, no worries. Mr.Money, I have money in the
NASDAQ, the technology stocksindex. I own those stocks. I'm
okay, not true or Mr. Money, Iown the S p5 100, not the Dow
30, but the S P, large, 500 I'mokay there, nope. So all the
major indexes have beenstruggling in this year of 2025,
(04:10):
the Dow, as I mentioned, off toits worst start since 2016 as I
mentioned. And in addition, whatabout that S and p5 100? How are
they doing as of this lastFriday, all of them were down.
This last Friday, as in,yesterday saw its decline down
1.6%
and so there's a lot of not, howshould we say not good results
(04:34):
on Wall Street this last week?Of course, Mr. Money is going to
mention right now why that's thecase. But again, those are
simply the numbers. The S and p5100 saw nearly all of its
sectors. All of its 500 weredown in the red on this last
Friday. Year to date, loss ofpoint 9% which has marked its
(04:56):
worst performance over the firstsix trading days of a year.
Yeah, that's since the year2022.
And again, if you just look atthese numbers, things are down.
What's causing this? The US jobsreport released on Friday is
positive from an economicstandpoint. In other words, you
know how often Mr. Money talksabout jobs and the need for
(05:18):
that? We need people working. Weneed people having paychecks. We
need people consuming. It hasthem. Remanufacture the
products. It has them, thetransportation of the products.
It has all the raw materialsthat go into the products, the
people in the jobs connectedwith all of it. So the idea of
the jobs report very important.We need people working, and we
(05:41):
need people spending money. Butagain, what happened is the US
jobs report came out this lastFriday, as in yesterday, and
from its standpoint, the numberswere big. By the way it showed
us. Economy added 256,000
jobs in December, and theunemployment rate fell to 4.1%
(06:02):
from 4.2%
say, Mr. Money, I don't get it.It sounds like things are great.
People are working, thereforethey'll consume, they'll spend
money. Ain't that great. Butwhat it also did is these high
employment numbers solidifiedthe notion that at least near
term, the Federal Reserve won'tbe cutting interest rates. Wall
(06:25):
Street likes the cutting ofinterest rates, and this good
news is said basically thatthere will not be a cutting of
interest rates at least in thenear term when we talked about
Feds dropping interest rates,which they did in December, 3
time, and they dropped them aquarter of a point. There was
talk that there'll be three orfour, maybe even five, more cuts
(06:47):
in the year 2025
but lo and behold, now WallStreet is thinking there may be
just one or two cuts possibly.Well, that wasn't so good, and
last month's gain in thisnumbers. Again, 256,000
jobs in December is way abovewhat the normal numbers are. And
(07:11):
again, all the numbers workedout so that unemployment rate
also dropped, as I justmentioned. So again, this, it
seems to be that the US labormarket is recovered from its mid
year stumble, might even begaining steam and having, again,
a very large number when theyreport January's figures. And
(07:32):
basically, Wall Street is sayingwe feel it shut its door on
interest rate drops, of which welike. Interest rates drops, by
the way, the Fed will be meetingagain for their first meeting
this year to talk about droppingrates. That will be on january
28 january 29 they'll beannouncing it on the 29th if
(07:53):
there's a rate drop. But itlooks to be at this moment that
that will not be it. Investorswill continue to watch the
economy. And of course, you hearMr. Money every single week I
talk about what's going on inthe economy. And again, I will
be there to talk about what do Ifeel will be happening. But
again, if people are working,there may be no need for
(08:16):
dropping interest rates to speedthings up, to get things going.
Again Again, we have one otherthing I should just mention. The
Fed Federal Reserve, have todecide what's going to happen
with the Trump change as Trumpcomes into office. What will
that mean? Exactly? Because,again, that could be very, very
(08:40):
good, or maybe it may not be sogood. A lot of people have said
that as a result of this,
how should we say immigrationthat he wants to have people
deported? Is that going to meanless than people available for
jobs, and therefore that will beinflationary, because those that
(09:02):
are here, we're going to have topay more to get them. We need
people that may be it. How aboutthe tariffs? All of that around
tariffs, of raising the costsfor our trading of China, our
trading with Canada, our tradingwith Mexico. Again, people think
that is inflationary, sincethey'll be an added cost to
(09:26):
anything that comes into thecountry. So lot of concerns
going on out there. And again,we're going to see what happens
here. So there is pricepressures, and we will see what
Donald Trump will do also withthe taxes, can, of course,
ignore that. That's going to bevery important to see. Will he
keep those 2017
(09:47):
low taxes that we have rightnow? One other thing I should
mention is this, I still have aconcern, and you've heard me
talk about it with this debtthat we've got.
It, the Fed has not seemed tomind that the Biden
administration is running a $2trillion annual deficits, while
(10:08):
the economy seems to be growingat nearly 3% a year. Not so
good. Those numbers and just areminder of my concern about
this and many people's concern,will the United States of
America us lose its remainingtriple A credit rating. So
again, when you're looking toinvest somewhere you want the
(10:29):
safest of the safest places youcan invest for a portion of your
portfolio, will the UnitedStates lose its triple A credit
rating? I looked it up back inAugust of 2011
the S and P sent shock wavesthrough both the financial and
political spheres by loweringits ratings on us, government
(10:49):
debt obligations to A a plus.What was it previously A A?
That's the one that you want athe best there is. But this
rating company came and made itan AA plus the US Treasury
securities have always been andcontinue to be, the global
standard of risk feeinvestments, but S and P
(11:12):
observed at the time that theeffectiveness, quote stability
and predictability of Americanpolicy making and political
institutions have weakened at atime of ongoing fiscal and
economic challenges. That wastheir quote when they dropped
it. Fitch, which is anotherrating company and you want the
(11:34):
best rating you can get for yourcompany, meaning it's more safe.
Fitch Ratings followed suit inAugust of 23
also cutting its US creditrating to AA plus from AAA. What
did they say? Quote, steadydeterioration in standards of
governance over the last 20years, including on fiscal and
(11:57):
debt matters, of course, not tobe left out Moody's another
rating company still maintainsits top a A rating, but lowered
its outlook to negative in justthis past November. Of 2023,
again. What did they say? Quote,continued political polarization
(12:18):
within the US Congress raisesthe risk that successive
governments will not be ready toreach consensus on a fiscal plan
to show the decline in debtaffordability. So again, and
things have only gotten worse. Ihear the numbers 35 trillion
plus. I hear a Social Securityis not going to make it by the
(12:39):
year 2032 it will drop down to80% of what you're normally
getting. We certainly hear allthis, and this last years of the
Biden administration running ata 2 trillion annual deficit,
the size of this federal debt issurged beyond the size of the US
economy. Do you know that thesize of the total federal debt
(13:01):
has surged beyond the size ofthe US economy. It says match
the peak levels that we hadrelative debt to gross domestic
product that was around in WorldWar Two, when there was no price
that was too great to defeatfascism. In other words, World
War Two, we spent, spent becauseit was needed. We don't have
(13:22):
that. There is no war going on,etc. Yet our debt keeps
increasing. And by the way, canyou imagine what the debt
interest payment is per yearbased on the current interest
rates. The nonpartisanCongressional Budget Office
projects annual budget deficitscontinuing around the level
(13:45):
through the whole end of thedecade, then rising gradually to
2.9 trillion by 2034
and that assumes that the taxcut and Jobs Act of 2017
expires, which Trump has saidwill not expire. And by the way,
if he does renew those tax laws,which are low right now, and we
(14:08):
want them renewed, it would addan additional 4 trillion to the
national debt, says the CBOcongressional office. So again,
that is us. Treasuries continueto be treated as a a kind of
securities, very, very safe, butagain, not so good when you know
(14:30):
that it is so high. But Mr.Money, don't you worry. Mr.
Money, the soaring deficits,don't you worry. Haven't you
heard that Elon Musk is showingup and vivid Gramma Swami,
they've targeted, and they'regoing to be able to save 2
trillion in spending cuts. Sothey say this is according to
(14:53):
Department of governmentefficiency, not sure that's
going to get all our numbers inorder, not to mention.
All that it costs to keep thatdebt, keep that interest
payments where it is. Of course,I've heard the same as you, when
Trump gets in office, he's goingto handle it, so we'll see what
he handles or doesn't handle.But again, that's a lot of
(15:16):
trillions of dollars going outand just the interest alone, not
to mention that the rates 35trillion plus, keeps going
higher. When we come back, Mr.Money is going to talk about
income taxes, something thatturns everybody on. I know. I
hope your eyes don't glaze over.Going to give a couple key phone
numbers that you may need if youneed to work with the IRS or
(15:39):
Idaho. And then I'm going totalk about, what do you do if
you missed making payments tothe government for your tax
withholding? What do you do?Yes, there's going to be
penalties, but Mr. Money has ananswer all when we come back.
This is Mr. Money.
Let me tell you
how it will
(16:02):
be. There's one for you,
19 for me,
because I'm the tax
man.
This is Mr. Money, the tax manin this segment of the show
today. Thought I would give outsome phone numbers. So if you
(16:26):
have a pen you might want tograb these. Who knows, if you
ever may need a phone number todeal with the IRS. Of course,
the most important phone numberis you can dial in and talk to
Mr. Money if you'd like to. Andagain, that is every Saturday at
two o'clock you can dial in,5805436,
(16:46):
to talk to Mister Money. But ifyou need to talk to Idaho, you
want to talk to the state aboutsomething on your taxes, for
individual tax return questionsor needs? 208334, oh eight, 334,
766, 01. More time forindividual questions.
(17:08):
208-330-4766
zero. If it's a businessquestion. With your business,
you have some issues going onwith Idaho, 2083
34 dash, 7660,
again, 208-334-7660,
and it is HTTP, s dot forward,slash forward as tax.idaho.gov.
(17:35):
Tax.idaho.gov,
yes, I will have this with allmy show materials at Mr. Money
answers.com that you can alwaysre hear the show and access any
of my materials. Let's sayyou've got an issue with the
IRS, though. You just need themto advocate for you. You need
somebody to help you. 877774778,
(17:59):
again, if you need an advocateat the IRS to help with
something you just can't getresolved. 877-770-7477,
eight, Mr. Money, I've got anamended tax return I fixed, but
they won't process it. I don'tsee my refund. I asked for phone
number 866-460-4205,
(18:20):
24642050,
remember, if you can't grab thenumber, you can always re hear
the show Mr. Money answers.com,
let's say you're a businessperson listening to Mr. Money.
Mr. Money, I got to get an IDnumber. I'm becoming an LLC, or
I'm becoming a corporation, orsub chapter S corporation. I
(18:41):
need that ID number from theIRS. Phone number 800-829-4933
again, to get an E, I Nemployer, identification number
800-829-4933
Mr. Money, I need a transcript.I just don't know what I paid,
(19:03):
what I still owe. They charge meinterest and penalties, so I
probably owe more, but I don'tknow what the number is. Can I
get a transcript? Answer?1-800-908-9946,
for that. Mr. Money, identitytheft. I filed my return. I got
a note back that I alreadyfiled. But how could I already
(19:25):
file if I'm just filing now? Inother words, somebody may have
stolen your identity. Got to letthe IRS know that, and then have
them process your return, notthe fake tax return, identity
theft. Phone number 800 9084.0844901,
(19:45):
last one I'll give people may befalling asleep listening to
these numbers is the refundhotline. I just want my refund.
Just Where'd my refund?1-800-829-1954,
Yes. So knowing that today isJanuary 11, and knowing that the
(20:05):
next quarterly payment is dueJanuary 15, it's right around
the corner, then we got to gettalking about that. I have
previously talked about that,but yes, there is a payment due
to the government. Yes, it's duein four days. Yes, it's due for
those self employed people thatget paid but they haven't had
(20:28):
any income taxes taken out topay to the government. So if
you're an individual taxpayer,you can get hit with a healthy,
non deductible interest penaltyif you fail to pay them. So as
you're making money during theyear, you're supposed to pay the
IRS during the year. That's howit works, if you use the
calendar year, which most of usdo, the due dates for these
(20:51):
quarterly estimated tax whereyou're sending some money in to
the IRS and to the state,because, you know, you owe some
income taxes, so the governmentwants it paid to them during the
year as you're making it duringthe year. They're called
quarterly payments because youpay quote four of them. April 15
was your first one due in 24from January to April monies.
(21:15):
June 17 of 24 was number two.September 16 was your third one
due, and lo and behold, January15, right around four days from
now, is when your fourthquarterly is due. What's that
mean? You got to send in onjanuary 15 what you owe to the
IRS and a separate quarterlyvoucher. You send in money to
(21:37):
the state, and that's for allthe monies you made between
September 16 when you sent inyour third quarter for September
through December 31 that lastquarter of the year, got to send
money to the IRS for that and tothe state for that. Mr. Money, I
kind of missed one in the past.Make up for it. Make this fourth
(21:59):
quarter estimate a bigger numberto send into the government. Can
always send money thegovernment. They'll always take
it. I've learned that they'lldefinitely cash that check or
take that money out of your bankaccount if you're have moneys
owed. So Mr. Money, what's thebest way to pay them? The best
way to pay them is IRS, directpay irs.gov hit the button for
(22:23):
the you paying them directly,have it come directly out of
your bank account. Theadvantages of doing it's free to
use, and you get immediateconfirmation of your payment.
And by the way, you can schedulea future payment on there too.
IRS direct, or just go toirs.gov
and you'll see the button thereto push to do it. So for
(22:45):
taxpayers, is very simple andfast. It's secure, and the IRS
ever writes you a letter you didnot send a quarterly payment. We
do not show you sent money intous during the year. No problem.
You pull up your confirmationwhere you paid them on their
website. The IRS website, prettyeasy to prove another way you
could pay them is what's calledthe electronic federal tax
(23:08):
payment system, E, F T, P S, E,F T, P s.gov,
then make paymentselectronically, again from your
bank account, again, free.Service to use allows you
scheduling payments in advance.They can also give you a
comprehensive payment history ofall the times you've done it in
(23:28):
the past, for your recordkeeping. For those that would
like to not do that, I'm justnot telling the IRS my bank
account, you can go and pay viaIRS to go mobile app. That's
right, IRS, the number two geo,IRS, to go app and there can
make a direct pay, and you coulduse a credit card there, or a
(23:51):
debit card there, if you'd liketo. So this is for the tech
savvy taxpayers who prefer themobile way. Mr. Money also has
pay by debit or credit card ordigit to wallet. That's another
way. You just need to find anauthorized payment processor
listed on the IRS website. Soagain, go back to that irs.gov
(24:12):
it's where you start and lookfor authorized payment
processors. I've done it once,and that's where you simply pay
via that credit card. Yes,you're getting points because
you used your credit card. Ifyou've got the credit card,
that'll give you points, andthat may be great. What's the
disadvantage the service feesthat apply if you use a
processor, you know there'sgoing to be 123,
(24:35):
maybe 4% fee, service fees. Somay not be the best way, and the
last way, of course, write acheck simply that mail your
form, 1040, es, that's a littlevoucher that says the amount
you're saying with your name,address and social and just
simply use this little voucherwith a check or money order the
IRS. And it's how people havedone it for years and years. The
(24:59):
only negative would.
That risk of delays inprocessing. It gets lost in the
mail. You get no immediateconfirmation of payment. So
again, good idea to do that. I'mharping on it because it's due
in a couple days, and it'simportant for all of us to do
why? Because if you don't payit, you are simply going to have
(25:19):
additional interest and penaltycharges on you. So again, if
you're self employed, or youoperate your business as an S
corporation, you likely need tomake one of these quarterly
estimated payments. Rememberyour income minus your business
expenses. Business income minusbusiness expenses come to a net
(25:40):
income. That net income timesyour IRS, amount you may owe is
what you have to send in, andthat net income after expenses,
you use that number to figureout what to say to spend into
the state of Idaho, or whateverstate you're in. Remember, you
could have other income that wasintact, like pension money that
(26:01):
came to you, where you getSocial Security benefits, and
part of that's taxable on yourtax return, yet there was no
withholding, no tax withholdingon it. Maybe you had an RMD
required minimum distributionand you were forced to take some
money out of a retirementaccount, whether you wanted to
or not. Again, goes on your taxreturn, you may have to pay
(26:21):
income tax on that, so you needthese quarterly vouchers to send
a little money in. Maybe you'veeven got rental income or other
income or a sale of stocks withbig gains on your return. So
again, causes you to owe money,but you didn't have any taxes
withheld. So good to do for allof my clients that say to me,
Mr. Money, I can't be bothered.Don't want to do it. What is the
(26:44):
penalty if I choose to not pay?The penalty rate for
insufficient estimated taxpayments changes every quarter.
The annual equivalent rate forthe last year, 2024, was 8%
that was for the first, secondand third quarters, and it was
also 8% for the fourth quarter.So if you didn't pay in what you
(27:05):
needed to pay in, you can expectto see an 8%
added interest charge on there.May I mention this penalty fee,
this interest charge is notdeductible, so it hurts even
more because you can't deductit. And again, when do they
calculate it? When you go to doyour return, the government will
(27:27):
see when the money was sent in,quarterly, they'll figure out
from your tax return that it wasdue and that you did not send it
in till all of a sudden on onequarter at the end of the year,
or you never sent it in. Andthen they'll hit you with a fee,
taxes you owe, plus any fees youmay also owe. Is there a way to
(27:48):
get out of it? Mr. Money, ofcourse, there's a way to get out
of it. Some exceptions allow youto minimize or avoid the penalty
of not paying this estimated taxin full. Again, current year tax
exemption. There's no penaltywhen you pay at least 90% of
your current year's tax whatevershows on your form, 1040, your
tax return,
(28:10):
just make sure you got 90% ofwhatever your current tax year
liability is and get it in therethroughout the year. Very
important to get that 90% numberanother exception that may help
you reduce the interest orpenalty. There's no interest
charger penalty when you pay atleast 100%
(28:30):
of the tax shown on your form,1040 your tax return for the
previous year via timelyestimated payments. So again, if
you get some timely payments induring the year, but the only
amount you fully got in therewas 100% of what the prior year
taxes were. Again, that's anexception, and may help you.
(28:50):
It's another exception. You mayneed a tax man or tax woman for
which is called the annualizedincome installment, which is on
the return you show Mr.Government. Excuse me, you want
to charge me as if I made allthe money. January, February,
March, April, and then April,May, June for my June payment.
Then June, July, August,September, for my September
(29:12):
payment. The end, excuse me.Don't charge me all that. I made
all the money in December. Allthe money came to me in
December. I didn't make money topay you in April quarterly or
the June quarterly of September.So there is another way where
you actually show when youbrought in that money. And
therefore I only owed you anestimated tax based on when that
(29:33):
money came in and if it all camein the last quarter, all I need
do is pay the last quarterestimate and all is well.
Bottom line for Mr. Money is Thesure way to avoid underpayment.
Penalty is to make sufficient ontime estimated payments choose
the method that works best foryou. IRS, direct payment is
(29:54):
usually the best way to do it,and remember that deadline is
here.
Today, January 11, payment due,January 15.
When we come back, Mr. Money isgoing to switch hats, go back to
Mr. Money, financial hat andtalk about six barriers to
investment success. There's sixbarriers that many of us have.
(30:17):
We don't realize we have thesebarriers, but that's what's
stopping us from making money.Time for Mr. Money to handle
that together with you all whenwe come back, this is Mr. Money.
Welcome back to the Mr. Moneyshow on K, I do talk radio,
1075, FM and 580 AM.
Mr. Money is live here at K, Ido talk radio, and we have Eric
(30:41):
on the line. Eric, you are livewith Mr. Money. What can Mr.
Money do for you?
I can hear you. Go right ahead,Eric,
my call screener, since it'shard to hear you, my call
(31:03):
screener said you wanted to talkabout inherited IRAs. So let me
talk about that. If somebodypasses
okay and with an inherited IRA,key items I want to mention to
you are this number one is, whenyou inherit somebody's
(31:25):
retirement account, the bestthing to do, or a possible thing
you could do, of course, talk toyour financial planner. Is, if
you need the money and choose totake it, you've got to pay
income taxes on it. So if youinherited so much in an IRA,
traditional IRA, yes, reportedon your tax return, you may say,
(31:48):
but Mr. Money, I'm under age 59and a half. Can I do that
without a penalty? Answer is,yes, somebody passed away to
leave you the money. So yes, youcould take some or all of it.
Yes, you have to report it. Yes,you have to pay some income tax
on the piece that you took out.You could also choose not to
(32:08):
take all of it right now andspend it. Then you would open up
an inherited IRA where you putthe person who passed away name
on there and your name on there.Remember, don't forget to put
the deceased person's name wholeft it to you on the account
with your name, and you can rollover some money into that. And
(32:29):
therefore you did not have topay income tax on all of it,
because you did not take all ofit. And you're right. Eric, the
IRS did change the rules. Ifyou've inherited an IRA. It must
be depleted. You must take itout over a 10 year period. And
(32:50):
so some people say, Wait, let itgrow for nine years. Take it all
out in the 10th year. Yes,you'll report it in the 10th
year, but you got nine extrayears of growth. The catch is
you take out a big, big, bignumber, if you wait until the
10th year to take it out, awhole lot of taxes on that so
many others say, take somethingout each year. Look at your tax
(33:13):
bracket and try to guideyourself as to how much you're
going to take out over time. Butyou got to know you got to pay
taxes on it just a matter of youchoosing when to pay the tax and
trying to pay the least amountof tax. One other thought, Eric,
are you married?
(33:34):
Yes, I am married. So if this isyour spouse that passed away,
I'm hoping not, but if it isyour spouse that passed away,
then you inherit the money andyou can roll it over to again,
an inherited IRA. Account foryourself. Don't co mingle it
with other retirements.Inherited IRA has different
(33:55):
rules. So if a spouse inheritsan inherited IRA, then you can
roll it over and not be forcedto take it out over the next 10
years. So again, key item whenyou inherit it is, who'd you
inherited from? And then whenyou get the money, make sure you
title it property with theirname and your name on the
(34:17):
inherited IRA, keeping itseparate, choosing to take some
out over the next 10 years,knowing you'll pay tax, but no
10% penalty on it. So inside ofwhat Mr. Money said, Did I
answer Eric in there?
Yeah, but I had one actualquestion that was related to
that.
(34:37):
So one thing I've heard you cando with your own IRA is
charity, then you can avoid orreduce tax liability, but I'm
not, I haven't, I don't thinkyou could do that with an
inherited IRA. Do you know theanswer to that? Yeah, very good
question. So answer to that istwofold. One is, I'll say, but
(34:58):
Mr. Money could.
I take money out of an IRA orretirement account and give it
over to charity. And therefore Iwas forced to take it out
because I'm RMD required minimumdistribution. Mr. Money, I got
to take it out. I'm age 73 I gotto take it out, but I don't want
to pay income tax on it. So, Mr.Money, you know what? Since I'm
(35:21):
forced to take it out, I'll haveit done as a transfer. Keyword
there, Eric, transfer, whereI'll take the money out, and I
will have it go directly to thecharity, so it comes out of your
IRA, directly to the charity.Best not to take it into your
pocket and then send it there.Better to do it as a transfer.
(35:44):
Then you are right. It does notgo on your tax return. You did
not take the money. It goesdirectly over there. You don't
get a tax deduction for charitybecause you were forced to take
it out at age 73 it does nothave to go on your tax return,
because it never got to your taxreturn. It went straight over
there. So then you would say,but Mr. Money, I am not 73 I'm
(36:08):
not required to take it out. CanI just do it? Because I feel
like doing it directly tocharity. That's not normally a
question. Mr. Money hears. Butcould you do that? The answer is
yes, I would check with yourIRA, check with the charity, and
see if they allow for a directfor you to do it pre RMD and on
(36:30):
the question of its inheritedthough. Mr. Money, what about
when it's an inherited IRA? Am Iallowed to take that over and
roll it directly? I've read twothings. I've read one article
where it said, yes, I've readone article where it says, You
cannot. What I would do is, Iwould guess that you cannot do
it, having said that, I wouldsimply check with the
(36:52):
beneficiary, Eric, I would callthe nonprofit. I would check in
with the church, or check inwith wherever you'd like to give
it to and say, do you accept adirect transfer of some
inherited retirement money overthere? I think it can be done,
but I have seen some conflictinganswers on it, so I don't know,
(37:14):
Mr. Money got you to the finishline, but that's what I've seen
on it.
Yeah. Thank you. And can I askyou a related question? Sure, go
right ahead. Eric. So similarly,by the way, my father, who
passed away, and me and mysiblings are the inherit keys.
Got it. We also inherited hishome, which is in probate, which
(37:36):
will end soon. Yep, I don'texpect any,
you know any claims or anythingthat would mess that up? But my
question is, I know we don't paycapital gains from when my
father purchased it, but I don'tknow when the clock starts
ticking from us. Was it upon hisdeath, or is it when probate
ends? Or do you know the answer?Of course, I know the answer.
(37:57):
Mr. Money's here every Saturdayto clap with answers. So the
answer is, it is based on whenthe deceased person passed away.
So again, for all listeners, ifyou inherit a piece of property,
you get what's called a steppedup basis. So if Dad, in this
case, bought it for 200 grand onthe day Eric answered on the day
(38:21):
he passed away, it was worth600,000
you inherited it for 600,000
when you sell it, whether it's aweek later, a month later, eight
years later, when you sell it,you'll compare it to the stepped
up number of what it was worthwhen he passed away. So he may,
Dad May Have got it for 200 theday he passed away, it was worth
(38:43):
600 thou. You sell it for 600grand. There will be no taxable
gain, because your new cost,your new basis, is what it was
worth on date of death. Oneother thing to add to that,
let's say, when dad passed away,it was worth 600 grand, and you
sell it for 650,000
Mr. Money, it looks like I made50 grand. Not so fast. Yes, you
(39:07):
got it. Inherited it for 600grand. But you can add to that
all the money you did to fix itup in order to sell it. You can
also add all of the cost to sellit. So at the end of the day,
selling price, minus all theselling fees. You compare it to
the stepped up cost plus all theimprovements you had to make to
(39:28):
sell it. And as a result, theremay be minimal gain or no gain.
And one last thing, Eric, you'renot supposed to pay tax on all
of it. If there's some siblings,you would end up reporting your
piece only, take 1/3 of allthose numbers, or whatever it
is, and report your piece only,and then have your siblings
(39:49):
report their piece only ontheirs. Same with that inherited
IRA, hello, let's say it's aCharles Schwab. Charles Schwab,
here's the IRA, me and my.
Two siblings inherited. Wouldyou please move it over to an
inherited IRA with my name on itfor 1/3 of it, and my sister for
1/3 my brother for 1/3 and thenlet your brother and sister make
(40:12):
their decisions whether theywant to take out their piece or
not take out their piece.
Did you know what source is usedto determine the value of the
home the day after my father'sdeath? Yeah, very good. And
again, I don't mind spending allthis time with Eric for one big
reason. You're not the only onewhere somebody's lost someone,
and you've inherited property orinherit an IRA. And again, the
(40:37):
question of what do you value itat, etc, is that your question?
What do we value it at? Yeah,what sources use determine that
value for the tax purposes?Yeah,
I've always done is I've said toevery client, whoever is your
realtor, that may be selling it,ask them for an appraisal, do
(40:59):
based on comps, comparatives,and I would get an official
piece of paper from someone inthe real estate world based on
their REMAX paperwork, orwhatever their realtor company
name is, that says the propertylocated at this address on this
date is worth this amount, andput some comps with it, or at
(41:20):
least get me the cover letter,something that you and me can
prove that was the value. Andmay I say, I always try to make
it a large number if I can,because I want that basis. I
want to inherit it at thehighest number possible to
compare against what I sell itfor. So again, that Realtor with
some comps on a sheet of paperwritten a nice little letter on
(41:43):
that official document. Theirstationary is what I've used
forever. An IRS does accept it.I don't think so. Well, you're
going to get a great number ifyou just print the Zillow that
day. So I like a realtor towrite me up it, and if I had a
realtor sell it anyway, theydon't mind adding that page,
that letter to it, and then holdon to it. KC, IRS, ever asks you
(42:06):
about it, that's key also.
Okay, thank you so much. Ireally appreciate your time and
your show. Thank you forlistening, Eric. I'm going to
add one thought to Eric, if Imay, everyone. What's that extra
thought I'm going to add is thefollowing, Mr. Money, I didn't
make. I inherited it, but wedidn't make 500,000 profit,
(42:29):
because you can exclude that ifit's a married person selling
it, or it's a single personthat, quote, unquote, you get
this stepped up basis, and we'reshowing the sale. So the
question may be, Mr. Money, do Ineed to bother to show it? Mr.
Money, yes, we sold it. My dadsold under my dad's name or
under my dad's trust. We soldit. Do I got to report it on my
(42:52):
tax return? Mr. Money's answeris, I would, whether I'm
reporting a third of it or I'mreporting a half of it, I would
report it on my tax return. Soif the IRS ever wanted to talk
to me, I could say, Sure, Iinherited it. I put on my tax
return what my cost basis was,which is the stepped up basis.
When someone passed away, I putdown the sale price, my third of
(43:15):
it, or whatever my piece is, Iput down my selling expenses,
and lo and behold, I had notaxable gain. Ain't that great,
but at least I reported it. Whatyou don't want to have happen is
a 1090 9s that's a tax formwhere they report the sale,
where it's got reported, sent tothe IRS now as busy looking on
(43:35):
your tax return, where's thesale of the house. So even if a
1090 9s was never reported bythe real estate company to show
the sale I would nonethelessreport it on my tax return and
show my 1/3 numbers of the saleprice, my 1/3 selling expenses,
my 1/3 if it's I'm an owner of1/3 of it, my cost basis, etc.
(43:58):
And do it that way, that wouldbe what Mr. Money would do with
our time remaining. Mr. Money isgoing to answer what I started
with earlier, but I think I'mgoing to switch over instead of
my barriers to investmentsuccess, I just want to talk
about the California wildfires.It seems like so many
(44:19):
Californians may already havemoved here. They may have
property back there inCalifornia with all these fires
going. It's certainly on thenews, and breaks my heart to
hear about it. Yes, I've hadsome clients in California call
me and say My house is gone. Mr.Money, what do I do? Etc. So I
thought I would mention it, maybe of interest to some people
(44:41):
just what happens with that. TheIRS has already announced tax
relief for all the individualsand businesses in Southern
California that have beenaffected by the wildfires that
begin on January 7. So yes, theIRS has spoken out about it. The
government has stepped out.
What they've said is nowtaxpayers have until October 15
(45:05):
to file various federalindividual and business tax
returns and make their estimatedpayments. So again, what I just
said a moment ago, if you owesome money, got to pay your
quarterly payments in the nextone's due January 15, not if
you're subject to the disasterthat happened in California.
This tax relief that they'vejust said again, postpones any
(45:28):
payments due, postpones anypayments up until next, October
15 of 25
and it affects like everybody,it seems so the individual
income tax returns that arenormally due April 15. No longer
do taxes you owe on april 15 ifyou owe it, no longer do
everything is not due tillOctober 15. 2024
(45:52):
contributions to an IRA. I don'tknow if everyone knows the IRAs
and 2024, last year, you gettill April 15 of this year to
put it in, if you're in adisaster zone, you get until
October 15. Same with somethingcalled HSA health savings
accounts for eligible taxpayers.That's money you can put until
(46:15):
April 15 of this year. Get a taxdeduction for it. Now in
California, Los Angeles,declared area you get till
October 15. What I mentionedearlier, your 2024, quarterly
estimated income tax which isdue January 15 is not due until
October 15. Your payroll, eventhat one quarterly payroll and
(46:40):
excise tax returns which are dueJanuary, 31 April 30 or July 31
you get till October 15 of 25
How about this? Your calendaryear? Partnership and S
corporation returns that are dueMarch, 17 of 25 you now get till
October. So again, oh, taxexempt organization, returns
(47:03):
normally due on May 15 of 25 younow get till October. So in
additions, penalties for failingto make payroll, excise tax
deposits, all that you've nowgot longer. Mr. Money, what
about assistance that, disasterassistance and emergency relief
for individuals and businesses.There are pages on that, there
(47:26):
are FEMA. FEMA pages on thatagain, check it, see what monies
can come to you. The IRSautomatically will provide give
you penalty relief, becausethey'll see your address. But
Mr. Money, what if I last year'stax return I was in Idaho, and
this year I'm in California, andit burned down, then what you'll
(47:48):
their address on your returnfrom last year won't show you're
in the disaster area. You simplycall the IRS and let them know
you are in that area. They willabsolutely work with taxpayers
that that affects there is aphone number for it,
866-562-5227,
Mr. Money will put this on Mr.Money answers.com so we'll be
(48:11):
there additional tax reliefindividuals and businesses in
these federally declareddisaster errors who suffered
from uninsured or unreimburseddisaster related losses. So Mr.
Money, what are you going to doon the tax return? What I'm
going to do is you can choose toclaim them, these losses of your
(48:33):
home and your contents, yourcar, whatever, all those
expenses, all that disastercaused to you, you can claim
there as a casualty loss on yourtax return in the year it
happened, which is right now in25 or the IRS lets you go back
to your 24 tax return and goback a last year and amend it
(48:55):
and take a casualty loss for Allof your losses on there, again,
qualified disaster reliefpayments you may receive are
generally excluded from income,so you don't have to worry and
say, Mr. Money, I even got someextra I had this much damage,
and buy the insurance or by FEMAfrom the government, I got a
whole lot of money to help me,and didn't say you got to take
(49:19):
the money and reimburse inCalifornia. Certainly take your
money and move to Idaho or moveto anywhere. Use your moneys
wherever you'd like to. Butagain, it is generally excluded
from gross income. You do notreport the quality the qualified
disaster relief payments. Sothat's kind of interesting.
(49:39):
And again, Oh, Mr. Money. Whatabout if I'm just desperate I
need money? What then there isadditional relief may be
available to taxpayers whoparticipate in a retirement plan
or an IRA, for example, ataxpayer may be eligible take a
special disaster distributionbut.
(50:00):
That would not be subject to theadditional 10% early
distribution tax that's peopletake it out under age 59 and a
half allows the taxpayer tospread the income over three
years. In other words, you payincome tax over three years on
the amount that came out. Sothere's a whole lot there. One
last thing to mention, Mr. Moneygot to make my house payment.
(50:21):
Talk to your provider, talk toyour mortgage people. They'll
let you know if it's due orpostponed. So a whole lot of
good information there for allof us. Sorry to have to share
this news. Mr. Money will beback next week, two o'clock on
Saturdays. Thanks for listening.The Information and opinions
presented are for generalinformation only, and are not
intended to provide specificadvice or recommendations for
(50:42):
any individual you shouldcontact your investment
professional, attorney,accountant or tax advisor
regarding your individualsituation. The opinions of the
presenter do not necessarilyreflect those of independent
Financial Group LLC, itsaffiliates, officers or
directors. Mark Rothstein, akaMr. Money, is the owner of tri
star financial LLC and TristarIncome Tax Services LLC. Mr.
Money is a marketing name only,and is not intended as anything
other than a marketing name forentertainment purposes.
(51:04):
Securities and advisory servicesoffered through independent
Financial Group LLC, aregistered investment advisor
member, F, I N, R, A, S, I p, c,tri star financial LLC. Tri star
Income Tax Services LLC andindependent Financial Group LLC
are unaffiliated entities.
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