July 7, 2025 • 43 mins
Is it income, is it taxable, diving deep into the rules of the IRS taxable and nontaxable money! Trucking, small business, Gifts, Bartering
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Tax Talk 4 U is broadcast live Mondays at 10AM ET and Music on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com). Tax Talk 4 U is viewed on Talk 4 TV (www.talk4tv.com).
Tax Talk 4 U Podcast is also available on Talk 4 Media (www.talk4media.com), Talk 4 Podcasting (www.talk4podcasting.com), iHeartRadio, Amazon Music, Pandora, Spotify, Audible, and over 100 other podcast outlets.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The topics and opinions express in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
or products mentioned on air or on our web. No
liability explicitor implies shall be extended to W FOURCY Radio
or its employees are affiliates. Any questions or comments should
be directed to those show hosts. Thank you for choosing
(00:21):
W FOURCY Radio.
Speaker 2 (00:27):
Barry G.
Speaker 3 (00:28):
Fowler EA brings you tax talk for you right here
on W four CY Radio and Talk for TV. As
an enrolled agent and a national leader in tax resolution
as well as Trucker bookkeeping and tax planning. With over
thirty years of experience, Barry will break down taxes, bookkeeping,
(00:49):
tax planning, and tax relief for individuals and businesses just
like you. So let's have some tax talk for you
with your host, Barry G.
Speaker 4 (00:59):
Foul Hey, welcome in its great Monday morning after a
wonderful holiday weekend Independence Day. I hope everybody had a
great weekend celebrating this countries founding and spending the next
year let's really think about what independence really means, you know,
(01:25):
to this country and our freedoms and the rights that
we have provided by the constitution that was put in
place by the founders of this wonderful and great country.
And as we go into our two hundred and fiftieth year,
which we'll get to celebrate next year, it's just amazing
(01:46):
where this country is, how far it's come, and you know,
the freedoms that we get and many many other people
across this world do not get in their own country,
and we should celebrate, you know that fact.
Speaker 2 (02:02):
You know. But then we got rules to live by.
Speaker 4 (02:04):
You know, what's in the constitution, what has been written
by our congressman, signed into law by our presidents, and
then you know the wonderful executive orders that come out
interpreting supposedly those laws as well. You know, I've always
(02:26):
mentioned that sometimes I felt like if I could have
run for president, been king, like some past presidents felt
like they were, you know, hey, I would have run myself,
but you know, hey, I had no desire to leave
this great nation. Leave it up to other people. Support
those that should be there, or support those that are
(02:48):
in office.
Speaker 2 (02:48):
Currently.
Speaker 4 (02:50):
What we're talking about today is now I RIS rules.
You know, what guidance do you have on what's taxable,
what's not and the different rules that the IRS has
that you should not be ignoring as far as income
and what is considered to be taxable by the wonderful
(03:12):
i RS. You know, I R S is that be
all and all badass election company that's out there that
forces the rules and the laws of this country to
get taxes paid in so that we can pay for protection,
(03:32):
defense of this great country and you know, everything else
this country does. And you know, maybe if we go
back to those those founders originally created and put the
federal government only in charge of the things that we're
in that constitution and let them not let them get
outside of their bounds, we wouldn't need as much in
(03:53):
taxes today that we have to support this great nation.
But we also are tremendously in debt because free giveaways
seem to continue regardless to get the votes to keep
people in office and you know, basically taking money from
one person or everybody in giving out to others. Hey,
(04:15):
that's my soapbox for to day. Let's get off the
soapbox and let's get back to what's income.
Speaker 2 (04:21):
You know, if you receive a gift.
Speaker 4 (04:22):
From family member, you know, those are not taxable to you,
but it could be taxable to the person giving it.
So receiving a generous cash gift, yeah, RS isn't going
to tax you for it. It's the giver who needs
to worry about filing Form seven h nine. If the
gift exceeds that eighteen thousand per person four, and that's
(04:45):
going to go up a little bit in twenty five
and continue to go up six.
Speaker 2 (04:50):
You person that.
Speaker 4 (04:52):
Receives it are not going to owe anything unless that
gift was secretly a payment for income versus something from you,
then that gift could be taxable.
Speaker 2 (05:05):
You know, we're gonna take questions here today.
Speaker 4 (05:07):
If there are questions about the big Book, big one
big beautiful bill, we're gonna address all those questions next week,
and we are going to interpret a lot of the
tax code and that one big, beautiful, beautiful bill next week. Harold,
I'm gonna answer this question today, But if we've got
(05:28):
more questions on this, you know, we're gonna go in
a little bit more in depth on this. We're gonna
spend the time this week studying this one big beautiful
bill that we didn't spend the time studying over the
weekend because it was our holiday weekend and we were
kind of enjoying them with family. Had a lot of
family in town staying with us, and we were concentrating
(05:48):
that there. But Harold was asking, with this new thing
that passed about each child born in the US gets
a thousand dollars put into a fund for them that
is going Is that going to be taxed and the
parents have to pay? How's that going to work?
Speaker 2 (06:04):
I do not believe it's going to be taxed.
Speaker 4 (06:06):
But again, I'm going to get into this bill in
depth over this next week so that we can spend
a whole show talking about one big beautiful bill. What's
in it for you and I and others? What tax
surprises did they spring upon us? What are they doing
to save you and I money? One good thing that
(06:29):
I can say that I know about this bill is
that it made permanent the Trump tax cuts. We don't
have to worry about reverting back to the old tax
code from twenty twenty six. But that I know was
in this bill, and that is a wonderful thing for
you and I tax prepayers taxpayers everybody across the board.
(06:50):
So you know we're talking about a income. Now, let's
say you're doing some work on the weekends or a
side hustle. Is that taxable income? So does your we
can gig count as taxable work? If you are over
the six hundred dollars threshold for ten ninety nine k's,
then yes, you're going to have possible taxable income. You
(07:13):
know it includes you know, if you got money coming
in from Venmo, they'll PayPal.
Speaker 2 (07:18):
You know that is it possibly be all income?
Speaker 4 (07:21):
Now, if you're transferring, you know, between family, somebody's reimbursing
your gifts and stuff, you may have to track it
depending on how much money you have moving through these
things like Venmo paypals, tholl because certain reports are going
to go to the I r S. We have seen
ten ninety nine k's going to the IRS and then
(07:43):
the I R S coming back and saying, hey, you
haven't reported this income. Then you'd have to go back
to the I R S and say, hey, this is
show proof of transfers family or whatever. But if you're
making money and you have money coming in, you'll need
to report it, and then not only report it, then
you'll be able to write off the write offs against it. Now,
(08:04):
remember it could be just a hobby. And if it's
a hobby, if you make ant money, it's still taxable.
If you're losing money, you only get to write off
up to what you've made. You don't get to write
the losses off there as well. So keep a record
of what you have going on so that you don't
have to scramble when it comes to tax time. Hey, Francis,
(08:25):
thanks for the question. Our gifts taxable? As we were
talking right at the start of this thing, gifts could
be taxable to the giver, but not the receiver.
Speaker 2 (08:37):
Now, something that I would recommend is make.
Speaker 4 (08:41):
Sure that you keep documentation of gifts that you received,
because if you happen to go through an audit, the
IRS will ask proof of gift, proof of information. So
if they're giving you, let's say a check, and it's
for a gift, make sure you keep a cop of
that check so that you have support so you know,
(09:05):
you want to keep it with your tax return, so
that you have the information there and handy. If the
IRS chooses to you for some reason as an audit,
now you know, and that doesn't matter what the dollar
amount is. Because if you go through an audit, what
the IRS does is it goes through and gets all
(09:25):
your bank statements for the year that they're auditing, adds
up all your deposits, and then they check it against
maybe your W two income, and then anything that's above that,
they all of a sudden decide it is taxable income.
It's amazing how this works. See, this is not a
core of law where you're innocent until proven guilty. You're
guilty until you prove yourself innocent with the I R S.
(09:47):
And that's the way basically the IRS.
Speaker 2 (09:49):
Looks at it.
Speaker 4 (09:50):
Here's all the money that came into your account, here's
what you had reported as income, and then this is
the difference to therefore it must be tax So you'll
need to show them, Hey, I needed a grass sale,
I did this, I had a gift given to me.
These are the things that you'll make this money taxable
because these are not the items that should be on there. Hey,
(10:13):
you may have kids in college. Are kids scholarships taxable income?
We're going to discuss that right after this break.
Speaker 3 (10:22):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. If you owe the IRS
or are going through an IRS audit, don't go at
it alone. Called Taxation Solutions tax Relief at eight eight
(10:42):
eight nine three zero one zero one six, we are
your solution for IRS debts, audits, back taxes, garnishments, leans
and levees. Whether you're an individual or business, you need
a solution and a straw, an aggressive tax resolution. Don't
(11:03):
let the IRS walk all over you. Stop the IRS
now call eight eight eight nine three zero one zero
one six or go to Taxationsolutions dot net now for
a free no obligation consultation. Let's get back to tax
(11:23):
stock for you with more tax tock once again, here's
your host, Barry G.
Speaker 2 (11:29):
Feller.
Speaker 4 (11:32):
Scholarships Scholarships, scholarship man. You know, when you get kids
in college, really appreciate every dollar that your child gets
in scholarships. It really helps offset some of the costs
of sending a kid, you know, to school for their education.
Speaker 2 (11:52):
You know, my daughter is going.
Speaker 4 (11:53):
To Texas Tech and she gets some good scholarships because
of the grades as she pulls rds that she had
in high school as well, and as long as she
continues to pull those grades, she continues to get those scholarships,
which is fantastic. Have another son is going to physical
therapy school for his doctorate. He gets a little bit
of scholarship money, but every dollar of scholarship money that
(12:15):
he gets, he appreciates because it helps offset some of
the costs of going to school and you don't have
to possibly come out in debt, especially when you are
in a doctorate program and looking to come out and
become a physical therapist in the future. And it's the
same with my daughter at Texas Tech. You know, in
(12:37):
her undergraduate the scholarships, you know, provide a good basis
to pay for a lot of the expenses that are
at the school. But are these taxable now? The scholarships
you receive as a candidate for a degree at an
eligible educational institution. These funds for qualified education expenses, which
(13:00):
include tuition fees required for enrollment horse related expenses like books, supplies,
equipment that are required as a student in the courses
that they're taking. Those funds used for those expenses. Qualified
education expenses are tax free now if you receive scholarships
(13:23):
greater than those tuition and fees and books that are required.
You get enough money to help pay for accommodations or travel,
it gets taxed just like regular income. So that means
if your award covers your dorm, your meal plan, you'll
need to report a chunk of that on the taxes
(13:47):
as income. So kind of got to remember that it
could be taxable income for those scholarships based on what
they receive. So that means, you know, if you're if
your tuition and fees were let's say seven thousand dollars
for the semester, and you only receive five thousand, you
know there is no taxable income. But if the twition
(14:09):
and fees were seven thousand and you received twelve thousand,
five thousand of that taxable income, So you know, there
may be things there where you've got to report income
based on the scholarships that you have received. Hey, good question,
and matter of fact, one of the things that we're
going to get out here eller, when I sell random things,
(14:35):
do I have.
Speaker 2 (14:36):
To pay tax on it?
Speaker 4 (14:38):
Well, you know, if you're getting rid of personal items
like clothes or both tech things like cell phones, those
aren't taxable provided you sold them for less than what
you paid for. You know, that caveat that the IRS
puts on there. If you're making a profit off the
item selling it for more than what you paid for,
(15:00):
then you've got taxable income. But you know, if you're
getting things and automatically reselling them all the time and
basically running a business selling odds and stuff, you may
be treating it like a business and it may be income.
So i RS is going to look at, you know,
some patterns that you have as well. What do you
(15:21):
consistently do Are you consistently you know, buying items, maybe
you wear them once or twice and then turnaround and
sell them, and you're selling them for more than what
you paid for them, then obviously you're probably in a
business if you're continually just selling them for less than
what you paid for. You know, you may keep track
(15:42):
of what you're buying and the expense of it so
that you can prove to the I r S if
they came out and added you that you were selling
them for.
Speaker 2 (15:50):
Less than what.
Speaker 4 (15:53):
It's all things to think about as you're going through this.
If you're consistently doing this and you're showing a pattern
of you know, buying and selling things, then you're probably
in business. Something you've got to really take a look at,
not to your tax for prayer, show them what you're doing,
show them the income that you're making, maybe showing the losses.
(16:14):
Maybe it's just a little hobby you've got going on.
You're not making money, and you may only be able
to deduct, you know, up to the income that you're
have coming in because you know, a hobby is is
only subject to losses up to you or so, you know,
little things that are out there, Hey, bartering, you know,
(16:34):
people barter meaning.
Speaker 2 (16:35):
You're basically trading one thing for another.
Speaker 4 (16:39):
Uh. You know, maybe you're trading your haircut for doing
some design work on their website.
Speaker 2 (16:48):
You know.
Speaker 4 (16:48):
Maybe you know somebody is doing some landscaping for you
and you've done some bookkeeping for them. Or maybe somebody
else is providing you a service and you're turning around
and providing them goods or services in return. Or you
run a restaurant and you you know, somebody comes and
takes care of cleaning or landscaping and you're giving them
(17:12):
some free food and they were giving.
Speaker 2 (17:13):
You free service. And that's bartering. And guess what as
taxable income?
Speaker 4 (17:19):
You know, you both parties are going to owe taxes
on what they receive and the value of that service
swap is treated like income even if no money changes hands.
You should track those trades. Now you get the expense
to write off against it. So if you're providing the
service and you're paying for the labor on it, you know,
(17:40):
you still deduct that cost of the labor, but you
report the income that would have been generated for them
if you would have charged them, as well as as
say you were doing this for a restaurant and they
gave you food, they still deduct their labor and they
deduct the cost of food and report what would have
been or should have been income from that. So bartering
(18:03):
does have possible income as well, So you know, it's
one of the things that you've got to look at
all right.
Speaker 2 (18:12):
Another great question about what is.
Speaker 4 (18:15):
Taxable Jimmy credit card points are those taxable income? I
received a bunch of points from a credit card company
when I signed up?
Speaker 2 (18:27):
Is that going to be taxable when I use it? All? Right?
Speaker 4 (18:31):
So basically it goes like this. When rewards come as
a percentage of spending, like cash back points for purchases,
they are not taxed. Those are actually viewed as rebate.
Now you get some trouble when you start and you
receive a bonus just simply signing uh an opening signing
(18:52):
up for opening a credit card without meeting kind of
spending requirements. So if you signed up for a new
credit card and they immediately gave you ten thousand points
or one hundred thousand points, you didn't have any spending
requirements to get it, then you possibly have taxable income.
But if you had to spend money, Let's say you
opened up a new credit card and you had to
(19:15):
spend five thousand dollars within six months on the card,
and then they reward you with the points, again, that's
considered to be a rebate, and that's not taxable.
Speaker 2 (19:25):
Now here's the thing.
Speaker 4 (19:27):
If you're in business and you're using these points to
reduce the cost of goods that you're buying, you've just
reduced the expense of that goods, so it lowers the
right off amount. Points aren't technically taxable, but the cost
of those goods was then nothing. So it's better to
(19:49):
use those points to pay for things that are personal.
Maybe you can you do this to buy lower cost
of travel, maybe buy lower cost of a gift card
or something at the gift card and then you can
use that. So we sometimes use gift cards from our
points in the business to reward employees, give them a
(20:10):
gift card for birthday, holiday or work or something like that.
Speaker 2 (20:15):
So you know, you've.
Speaker 4 (20:16):
Kind of got to look at how this is going
to be reported or how it's going to be looked at,
how you're earning it. If it's just a rebate and
we don't worry about it, if you just signed up
for those cards and you've got that extra huge bonus
just for signing up, you may.
Speaker 2 (20:34):
Want to report it as taxable out there. You found money.
Speaker 4 (20:38):
Does the IRS call that taxable income or not. We're
going to address that right after the spring.
Speaker 3 (20:45):
We have only scratched the surface of today's show. Please
stand by as Barry chief Dower, we'll be right back
with tax talk for you. As an owner operator, you
already spend too much much time away from your family.
Trucker tax tools handles all your bookkeeping and taxes. No
matter what level trucker you are, Life on the road
(21:08):
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the tools to never worry about your taxes again. Call
Trucker Tax Tools eight seven seven nine sixty six two
(21:31):
four seven seven or go to Trucker tax Tools dot
com now and let the experts keep you trucking. Let's
get back to tax stock for you with more tax
stock once again.
Speaker 2 (21:46):
Here's your host, Barry G. Foller.
Speaker 4 (21:51):
Hey, speaking of Trucker Tax Tools this week. Last week,
we were working with a couple of carriers out there that.
Speaker 2 (22:00):
Do a lot of least on drivers.
Speaker 4 (22:02):
So if you a carrier that has a bunch of
least on owner operators, hey, give truck or Tax Tools
a call. We've got a special program for your drivers.
Give us a call it eight seven seven nine six
six two four seven seven. If you're leased on somewhere
and you're looking for a great bookkeeping company, truck or
(22:22):
Tax Tools is a great company to work with to
get your bookkeeping and your tax is done. Me being
the president founder of truck or Tax Tools. You know
I write for a great magazine called Landline Magazine. Do
articles all about trucking and taxes. If you get in
(22:44):
the magazine, make sure that you go back and read
that article that we put out each each and every magazine.
They keep those even on their website for many many
years and you can find our articles there everything from
discussing bookkeeping, taxes, per diems, corporations. Should I be an escort?
(23:07):
All that is covered in magazine by us. And then
I also go to oid A Owner Operator Independent Drivers
Association and speak at the Truck to Success Seminar, talking
to truckers about their bookkeeping, taxes, entity formation, least purchase depreciation,
(23:31):
you name it, we're talking about it affects you financially
and on your taxes. Be back there in October up
near oida's headquarters in Blue Springs, Missouri. So if you're
looking to get out and be an owner operator, is
one of the great events you should actually attend. And
(23:51):
whenever questions you don't get answered in the seminar, I'm
usually ad in the lobby of the hotel every evening.
You're talking to truckers.
Speaker 2 (24:02):
That want to learn more and know more about.
Speaker 4 (24:05):
Their finances, bookkeeping, taxes and everything else that's around trucking.
And I need to learn more about you guys in
the trucking business. But again, if you're running a company
and you've got at least drivers, whether it's one, ten,
twenty fifty, give us a call. We've got a program
for your owner operators eight seven seven nine sixty six
(24:29):
two four seven seven. It benefits you as well because
you know that your owner operators getting their taxes and
bookkeeping taken care of and helps them with their finances
to know that, hey, they're going to be around for
a good while working for your business, taking care of things.
Speaker 2 (24:48):
The right way.
Speaker 4 (24:50):
We were talking about found money. Does the IRS call
it income? Stumbled upon five hundred dollars, thousand dollars, Maybe
you got a surprise pay out from a class action lawsuit.
That's all considered taxable income. I'm sorry, my friends, it's
taxable income. Even gambling winnings, no matter how small, should
(25:13):
go on your return. I RS does not ignore in
any way, shape or form any unexpected cash. Neither should you.
How many people do I know that found money are
going to tell their tax guy that I found one
thousand dollars laying on the side of the road. Not
many they go spend the cash.
Speaker 2 (25:33):
Should you?
Speaker 4 (25:34):
According to the irs. Absolutely, you had gambling winnings. Hey,
you got to report your gambling winnings the casino depending
on how much money you made, or the lottery, depending
how much money you made, it's going to report it.
Speaker 2 (25:46):
And so if you've gotten that W two G.
Speaker 4 (25:51):
And you've got reported gambling winnings and stuff, guess what
you're gonna have to put it on your tax return.
Now you can ride off if you are itemizing gambling
losses up to your winnings per event. There are different
ways of being able to write off what is out there.
Speaker 2 (26:10):
So talk to your tax guy or gal.
Speaker 4 (26:14):
And get the lowdown on what you've got to report
for gambling winnings. Life insurance we get this question quite
a bit. Somebody has passed away and there's life insurance payouts.
Those generally will skip being taxable, as some that lump
sum you get is typically tax free. There are things
(26:36):
that will shift. If you're getting delayed payouts and getting interest,
the interest is going.
Speaker 2 (26:41):
To be taxed on that. The principle is not.
Speaker 4 (26:46):
If the policy was transferred to someone else before death,
and parts of it could be taxable.
Speaker 2 (26:51):
There's a lot of specific rules to this.
Speaker 4 (26:54):
If you've got in life insurance policy through your business,
and you've been deducting the life insurance premiums that may
be taxable income to business or the person receiving it.
So you don't want to be deducting life insurance premiums
that are paid out on behalf of the owners or
(27:16):
key members of your staff or de man in the organization.
So you need to watch what you're doing, how you're
doing it, and you know whether you're making taxable not
to your tax guy and see is this going to
be taxable if I do it this way? Especially operating
(27:39):
in a business. Now we get questions about court settlements
and getting payouts and maybe you've been involved in a lawsuit.
Are they taxable? Yes, they could be taxable. So money
from personal injury cases for physical harm is going to
(27:59):
be generally from tax However, payments for things like emotional
distress payouts punitive damages are usually considered taxable income. Now
it all depends on why the money was awarded. So
you've kind of got to look at your breakdown of
your settlement to these companies when they go through and
(28:22):
settle want to make sure that this is deductible for
them a tax to you because they want if they're
going to settle, they're going to want the deduction, so
they're going to be more apt to put it for
emotional distress and possibly punitive damages because it's taxable to
you and deductible for them. But personal injury physical harm,
(28:49):
you know, is not going to be deductible as the
business side, so you know they're not looking for the
settlement to go that way.
Speaker 2 (28:55):
Now.
Speaker 4 (28:55):
You know, if they're paying an addition for let's say
medical expenses and stuff like that, yes, it's going to
be deductible for them as the party paying it out
and not reportable income to you.
Speaker 2 (29:10):
Hey, your employer just gave you a gift to taxable
or not.
Speaker 4 (29:15):
Now you know you as the employee, don't really want
it to have extra taxable income. Would rather be tax free.
So the holiday bonus or a gift card you get
from your boss, you know, maybe he's not just cheerful.
It could be taxable compensation. So in the IRS's eyes,
(29:37):
if it has monetary value, it's income. Now non cash
gifts under twenty five, like maybe a ham, turkey, chicken,
fruit basket, cookies, you know that's.
Speaker 2 (29:52):
Going to go through.
Speaker 4 (29:53):
You know and you receive that as a gift. Anything
suspendable should be hitting your W two. So we may
give out a gift card, you know of like twenty
five dollars or something to our staff, or hey, if
we did gift cards through our credit card company with
our cash back points, then you know it is could
(30:14):
we just give it to our staff and it can
be fifty dollars value or something like that because it
didn't cost us anything, We're not deducting anything. Therefore, you
know to us it's non monetary value. It was just
a rebate at the points that got so you kind
of got to.
Speaker 2 (30:32):
Look at it.
Speaker 4 (30:32):
If you are an employer and you're going to give
your staff some money, then it most likely needs to
be a bonus rough W two. Hey, they're new trends,
new things that are going out there, Kickstarter, crowdfunding, things
like that. Is this free money or is it income?
(30:54):
We're going to answer that question right after this break.
Speaker 3 (30:58):
We have only scratched a surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. As an owner operator, you
already spend too much time away from your family. Stop
spending time doing paperwork. Go to Trucker tax tools dot
(31:18):
Com a solution built specifically for truckers. Trucker tax Tools
dot Com makes your life run smoothly. Let's get back
to taxtok for you with more tax talk once again.
Speaker 2 (31:34):
Here's your host, BARRYG. Fallow.
Speaker 4 (31:39):
All right, so you raised money through some crowdfunding, go fundme,
bick starter, I don't know the other ones that are
out there.
Speaker 2 (31:47):
Is that income? Yes?
Speaker 4 (31:48):
No, maybe that's really the answer. If it's truly a
gift to help you get started, or let's say GoFundMe,
it may not be taxed. But if you're us a
kickstarter or crowdfunding somewhere out there, and you're offering perks
or services in return to be treated as business income.
Do you use a kickstarter and you're having a product
(32:10):
out there and you get these people to put up
money and they're going to get the product back income.
All they did was pre buy the product that helps
you get started, get your inventory, and now you're giving
them inventory. So therefore that is income. You use crowdfunding
and they get shares of your business or something through this,
(32:34):
then it's not income. It's an investment. So you kind
of get to look at what is What is the
person that's giving you money getting back in return? If nothing,
or an investment, then it is not income. It may
be a gift, it's an investment. If they're getting a
perk or service or discounts because they are out there,
(32:56):
it could be considered income. Do you need to watch
sure what you need to do?
Speaker 2 (33:02):
Hey?
Speaker 4 (33:03):
The next one, we got health savings accounts? Is that
taxable income when I withdraw it? Technically no, As long
as you are using those health savings accounts HSA funds
reproved medical expenses, it is completely tax free. Now, the
beauty of this is you've put the money into your
(33:25):
health savings account tax free, and you withdraw the money
use it to pay for medical expenses tax free. But
if you take that same money for something unrelated or
you turn sixty five, then you're facing income and it's
taxed plus a twenty percent penalty. But if you strictly
(33:46):
use it to stick to your health related spending, it's
tax free. Hey, it's a beautiful way. If you've got
a family plan and you can put money into an
HSA and it's an HSA qualified medical plan and you're
putting that eight thousand plus into this plan. Every year,
you can save that money and use it towrdure deductibles
(34:08):
at future dates, and if you don't use it, it continues
to accumulate out there before you, so that you can
use it at a future time when you need to
pay medical expenses. And you got the tax deduction in
the current year, and as long as you're using it
for medical expenses, it's not considered to be taxable income,
(34:29):
and then you can apply the rules. Once you hit
sixty five that may have changed into one big beautiful bill.
Speaker 2 (34:36):
I don't know yet.
Speaker 4 (34:36):
We'll double check that and have that on here next week.
But if you use it for medical expenses, you know
you're going to be able to do that. Debt forgiveness
you know that can trigger a tax bill. Yeah, if
it isn't bad enough. You were in debt insolvent and
you got debt given. Nothing like kicking you when you're down,
(34:58):
and now it's to be uh taxable income. So if
a lender cancels your debt, you might owe tax on
the forgiven amount that includes your credit cards, unpaid loans,
for closure differences. You know there are exceptions out there,
you know, like you went through bankruptcy or if you've
(35:21):
got qualifying mortgage relief. In most cases those can be
avoided being taxable income, but canceled debt is treated like
income you kept. Right now, you might be able to
prove that you're insolvent and you were completely insolvent at
the time of that and be able to get around it,
but you need to talk to your tax preparer and
(35:43):
make sure that you get the IHS doted tes criss
and get the income to where it's not taxable. Rental income, well,
we all know rental income if you're renting out of house,
or you're renting out you have of maybe office buildings
or whatever. You're running a business you have around. But
(36:04):
let's say you got guests staying with and you're charging
them income. You know, whether it's in your second home.
You know, you have a small home outside of your
home out there in your basement ye, or you're doing
it as an airbnb. It is taxable even for short stays.
(36:25):
You know, that includes your cleaning fees and extra guest charges.
But there's Chario's catches. If you rent out your home
fewer than fifteen days a year, you may own nothing
may not be taxable income. So there are differences in
different ways to be able to get income from your home.
Let's say you're going on vacation for a couple of
(36:46):
weeks and you lease out your home through Airbnb for
those same fifteen days that you're gone. Let income is
not possibly not taxable to you, and it just helped
pay for your vacation as well, so you're gonna win win,
So something to look at. I know my sister has
done that before when she's gone on vacation. She's managed
(37:07):
to rent her home up in Indiana for a couple
of weeks. She's right near Lake Michigan, so she's got
a beautiful home, beautiful view, and she was able to
rent it out for fifteen days tax free income for
that period of time. But maybe you've got somebody you're
helping out and they're paying you a little bit of
(37:30):
income and they're staying with you for most of the year,
or for six months, three months, whatever it may be. Yes,
you technically should be reporting that and then you'll be
able to write off what expenses you have against it.
You know that's not all inclusive of everything. What the
irsme account is income. You know, we tell you to,
(37:51):
you know, look at what you're doing, talk about your
tax issues and what could be happening with your tax prepayer,
tax advisor. If you are generating income or money coming
in in any way, shape or form, always sit down
and talk to you your tax advisor and get some
int what you need to do to be able to
(38:12):
write off expenses against this.
Speaker 2 (38:15):
Income that you have coming in.
Speaker 4 (38:18):
You know, and I say this also because we've got
many people that have come to us that have been
gambling and maybe big gamblers and to gamble consistently, and
they want to write off all their losses. Well, you know,
and they have a lot of winnings, and when you
have to look at the irs rules and how do
you write off gambling winnings versus the losses? And then
you're trying to do it on itemize because you've got
(38:40):
to itemize these deductions and you're not getting above the
standard deduction. And well it doesn't necessarily do you any
good to do it. But maybe you're now a professional
gambler and this is what you do. Then maybe you're
running a business as gambling and you may have to
write it off in a different but you need to
(39:01):
talk to your tax advisor to make sure that you're
doing this right. Let's say you're breeding your dog because
you have pure bread labs, and you get into breeding
your lab and selling the puppy, you know that is
taxable income to you. Now, the beautiful part is is
you get to write off the expenses of the dog
(39:23):
that had puppies, of food and veterinarian bills and things
like that become a right off if you're running this
as a business. Now, if it's a hobby, you only
get to write it off up to the amount of
income you receive. But again it's income that you receive
and you do have the tax right off.
Speaker 2 (39:40):
So if you are in the breeding.
Speaker 4 (39:42):
Business, then even if it's considered be part time maybe
a hobby, it's still income and you still got to
report it, but you get the benefit of running off
many of the expenses that apply to the dog that
is there. We used to breed dogs and to breed labs.
It was really fun for us and we enjoyed doing that,
(40:05):
and we would sell off the puppies, but it gave
us the right off of the expenses of maintaining the
mamas there at our house and We were keeping them
for breeding purposes and they were family members as well,
so it was more of a hobby right off.
Speaker 2 (40:21):
Hey, truckers, truckers, trucktor truckers.
Speaker 4 (40:24):
You know there are certain things in taxes and stuff
that you get ride offs of. Make sure whatever you do,
you find somebody.
Speaker 2 (40:31):
That knows the ins and out's.
Speaker 4 (40:34):
Make sure somebody knows all the ride offs or truckers
asking what a lumper is out there, and make sure
you get.
Speaker 2 (40:42):
Good bookkeeping and taxes.
Speaker 4 (40:44):
Hey, are the great sponsor is taxation solutions? Tax relief?
IRS problems, they're not a problem for taxation solutions, tax
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Speaker 2 (40:56):
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Speaker 4 (40:58):
It's a program done by the IRS and not a
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(41:19):
to make sure you're going to qualify. But the only
way to do that is to pick up the phone
and call us at eight eight eight nine three zero
one zero one six again eight eight eight nine three
zero one zero one six. Whether it's your business going
through tax problems, whether you're personally going through tax problems,
or it's a combination of you and your business. Don't
let the irs walk all over you. Stop the irs
(41:42):
now by calling us at eight eight eight nine three
zero one zero one six, or go to Taxations Solutions
dot net and you can put in your information and
get a free no obligation consultation. Hey, I appreciate you
being with us. Tax Talk for you. Go to tech
talk for you dot com. Follow us there, go to
(42:03):
Facebook follow us there. I thank you for being with us.
Have a god bless and awesome, glorious week. I look
forward to seeing you next week when we talk about
President Trump's One Big Beautiful Bill and the tax changes
that are going to affect you and I, everything from
no tax on tips tack, no tax on Social Security,
(42:28):
and how it's going to impact you in your life
with the rules and regulation of the One Big Beautiful Bill.
Speaker 2 (42:37):
See you next week.
Speaker 4 (42:38):
Right here a text talk for you W four cy
Radio every Monday, ten am Eastern time. See you next week,
God bless you. Have a great week.
Speaker 3 (42:50):
Are you an individual or business that wants to understand
taxes and how they affect you. Are you looking for
specific tax advice for self employed business owners and truckers.
Are you behind on taxes and your bookkeeping? Are you
dealing with dirs and ready to have some relief, Then
(43:11):
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and past episodes at tax TALKFORU dot com. See you
(43:31):
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(00:21):
W FOURCY Radio.
Speaker 2 (00:27):
Barry G.
Speaker 3 (00:28):
Fowler EA brings you tax talk for you right here
on W four CY Radio and Talk for TV. As
an enrolled agent and a national leader in tax resolution
as well as Trucker bookkeeping and tax planning. With over
thirty years of experience, Barry will break down taxes, bookkeeping,
(00:49):
tax planning, and tax relief for individuals and businesses just
like you. So let's have some tax talk for you
with your host, Barry G.
Speaker 4 (00:59):
Foul Hey, welcome in its great Monday morning after a
wonderful holiday weekend Independence Day. I hope everybody had a
great weekend celebrating this countries founding and spending the next
year let's really think about what independence really means, you know,
(01:25):
to this country and our freedoms and the rights that
we have provided by the constitution that was put in
place by the founders of this wonderful and great country.
And as we go into our two hundred and fiftieth year,
which we'll get to celebrate next year, it's just amazing
(01:46):
where this country is, how far it's come, and you know,
the freedoms that we get and many many other people
across this world do not get in their own country,
and we should celebrate, you know that fact.
Speaker 2 (02:02):
You know. But then we got rules to live by.
Speaker 4 (02:04):
You know, what's in the constitution, what has been written
by our congressman, signed into law by our presidents, and
then you know the wonderful executive orders that come out
interpreting supposedly those laws as well. You know, I've always
(02:26):
mentioned that sometimes I felt like if I could have
run for president, been king, like some past presidents felt
like they were, you know, hey, I would have run myself,
but you know, hey, I had no desire to leave
this great nation. Leave it up to other people. Support
those that should be there, or support those that are
(02:48):
in office.
Speaker 2 (02:48):
Currently.
Speaker 4 (02:50):
What we're talking about today is now I RIS rules.
You know, what guidance do you have on what's taxable,
what's not and the different rules that the IRS has
that you should not be ignoring as far as income
and what is considered to be taxable by the wonderful
(03:12):
i RS. You know, I R S is that be
all and all badass election company that's out there that
forces the rules and the laws of this country to
get taxes paid in so that we can pay for protection,
(03:32):
defense of this great country and you know, everything else
this country does. And you know, maybe if we go
back to those those founders originally created and put the
federal government only in charge of the things that we're
in that constitution and let them not let them get
outside of their bounds, we wouldn't need as much in
(03:53):
taxes today that we have to support this great nation.
But we also are tremendously in debt because free giveaways
seem to continue regardless to get the votes to keep
people in office and you know, basically taking money from
one person or everybody in giving out to others. Hey,
(04:15):
that's my soapbox for to day. Let's get off the
soapbox and let's get back to what's income.
Speaker 2 (04:21):
You know, if you receive a gift.
Speaker 4 (04:22):
From family member, you know, those are not taxable to you,
but it could be taxable to the person giving it.
So receiving a generous cash gift, yeah, RS isn't going
to tax you for it. It's the giver who needs
to worry about filing Form seven h nine. If the
gift exceeds that eighteen thousand per person four, and that's
(04:45):
going to go up a little bit in twenty five
and continue to go up six.
Speaker 2 (04:50):
You person that.
Speaker 4 (04:52):
Receives it are not going to owe anything unless that
gift was secretly a payment for income versus something from you,
then that gift could be taxable.
Speaker 2 (05:05):
You know, we're gonna take questions here today.
Speaker 4 (05:07):
If there are questions about the big Book, big one
big beautiful bill, we're gonna address all those questions next week,
and we are going to interpret a lot of the
tax code and that one big, beautiful, beautiful bill next week. Harold,
I'm gonna answer this question today, But if we've got
(05:28):
more questions on this, you know, we're gonna go in
a little bit more in depth on this. We're gonna
spend the time this week studying this one big beautiful
bill that we didn't spend the time studying over the
weekend because it was our holiday weekend and we were
kind of enjoying them with family. Had a lot of
family in town staying with us, and we were concentrating
(05:48):
that there. But Harold was asking, with this new thing
that passed about each child born in the US gets
a thousand dollars put into a fund for them that
is going Is that going to be taxed and the
parents have to pay? How's that going to work?
Speaker 2 (06:04):
I do not believe it's going to be taxed.
Speaker 4 (06:06):
But again, I'm going to get into this bill in
depth over this next week so that we can spend
a whole show talking about one big beautiful bill. What's
in it for you and I and others? What tax
surprises did they spring upon us? What are they doing
to save you and I money? One good thing that
(06:29):
I can say that I know about this bill is
that it made permanent the Trump tax cuts. We don't
have to worry about reverting back to the old tax
code from twenty twenty six. But that I know was
in this bill, and that is a wonderful thing for
you and I tax prepayers taxpayers everybody across the board.
(06:50):
So you know we're talking about a income. Now, let's
say you're doing some work on the weekends or a
side hustle. Is that taxable income? So does your we
can gig count as taxable work? If you are over
the six hundred dollars threshold for ten ninety nine k's,
then yes, you're going to have possible taxable income. You
(07:13):
know it includes you know, if you got money coming
in from Venmo, they'll PayPal.
Speaker 2 (07:18):
You know that is it possibly be all income?
Speaker 4 (07:21):
Now, if you're transferring, you know, between family, somebody's reimbursing
your gifts and stuff, you may have to track it
depending on how much money you have moving through these
things like Venmo paypals, tholl because certain reports are going
to go to the I r S. We have seen
ten ninety nine k's going to the IRS and then
(07:43):
the I R S coming back and saying, hey, you
haven't reported this income. Then you'd have to go back
to the I R S and say, hey, this is
show proof of transfers family or whatever. But if you're
making money and you have money coming in, you'll need
to report it, and then not only report it, then
you'll be able to write off the write offs against it. Now,
(08:04):
remember it could be just a hobby. And if it's
a hobby, if you make ant money, it's still taxable.
If you're losing money, you only get to write off
up to what you've made. You don't get to write
the losses off there as well. So keep a record
of what you have going on so that you don't
have to scramble when it comes to tax time. Hey, Francis,
(08:25):
thanks for the question. Our gifts taxable? As we were
talking right at the start of this thing, gifts could
be taxable to the giver, but not the receiver.
Speaker 2 (08:37):
Now, something that I would recommend is make.
Speaker 4 (08:41):
Sure that you keep documentation of gifts that you received,
because if you happen to go through an audit, the
IRS will ask proof of gift, proof of information. So
if they're giving you, let's say a check, and it's
for a gift, make sure you keep a cop of
that check so that you have support so you know,
(09:05):
you want to keep it with your tax return, so
that you have the information there and handy. If the
IRS chooses to you for some reason as an audit,
now you know, and that doesn't matter what the dollar
amount is. Because if you go through an audit, what
the IRS does is it goes through and gets all
(09:25):
your bank statements for the year that they're auditing, adds
up all your deposits, and then they check it against
maybe your W two income, and then anything that's above that,
they all of a sudden decide it is taxable income.
It's amazing how this works. See, this is not a
core of law where you're innocent until proven guilty. You're
guilty until you prove yourself innocent with the I R S.
(09:47):
And that's the way basically the IRS.
Speaker 2 (09:49):
Looks at it.
Speaker 4 (09:50):
Here's all the money that came into your account, here's
what you had reported as income, and then this is
the difference to therefore it must be tax So you'll
need to show them, Hey, I needed a grass sale,
I did this, I had a gift given to me.
These are the things that you'll make this money taxable
because these are not the items that should be on there. Hey,
(10:13):
you may have kids in college. Are kids scholarships taxable income?
We're going to discuss that right after this break.
Speaker 3 (10:22):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. If you owe the IRS
or are going through an IRS audit, don't go at
it alone. Called Taxation Solutions tax Relief at eight eight
(10:42):
eight nine three zero one zero one six, we are
your solution for IRS debts, audits, back taxes, garnishments, leans
and levees. Whether you're an individual or business, you need
a solution and a straw, an aggressive tax resolution. Don't
(11:03):
let the IRS walk all over you. Stop the IRS
now call eight eight eight nine three zero one zero
one six or go to Taxationsolutions dot net now for
a free no obligation consultation. Let's get back to tax
(11:23):
stock for you with more tax tock once again, here's
your host, Barry G.
Speaker 2 (11:29):
Feller.
Speaker 4 (11:32):
Scholarships Scholarships, scholarship man. You know, when you get kids
in college, really appreciate every dollar that your child gets
in scholarships. It really helps offset some of the costs
of sending a kid, you know, to school for their education.
Speaker 2 (11:52):
You know, my daughter is going.
Speaker 4 (11:53):
To Texas Tech and she gets some good scholarships because
of the grades as she pulls rds that she had
in high school as well, and as long as she
continues to pull those grades, she continues to get those scholarships,
which is fantastic. Have another son is going to physical
therapy school for his doctorate. He gets a little bit
of scholarship money, but every dollar of scholarship money that
(12:15):
he gets, he appreciates because it helps offset some of
the costs of going to school and you don't have
to possibly come out in debt, especially when you are
in a doctorate program and looking to come out and
become a physical therapist in the future. And it's the
same with my daughter at Texas Tech. You know, in
(12:37):
her undergraduate the scholarships, you know, provide a good basis
to pay for a lot of the expenses that are
at the school. But are these taxable now? The scholarships
you receive as a candidate for a degree at an
eligible educational institution. These funds for qualified education expenses, which
(13:00):
include tuition fees required for enrollment horse related expenses like books, supplies,
equipment that are required as a student in the courses
that they're taking. Those funds used for those expenses. Qualified
education expenses are tax free now if you receive scholarships
(13:23):
greater than those tuition and fees and books that are required.
You get enough money to help pay for accommodations or travel,
it gets taxed just like regular income. So that means
if your award covers your dorm, your meal plan, you'll
need to report a chunk of that on the taxes
(13:47):
as income. So kind of got to remember that it
could be taxable income for those scholarships based on what
they receive. So that means, you know, if you're if
your tuition and fees were let's say seven thousand dollars
for the semester, and you only receive five thousand, you
know there is no taxable income. But if the twition
(14:09):
and fees were seven thousand and you received twelve thousand,
five thousand of that taxable income, So you know, there
may be things there where you've got to report income
based on the scholarships that you have received. Hey, good question,
and matter of fact, one of the things that we're
going to get out here eller, when I sell random things,
(14:35):
do I have.
Speaker 2 (14:36):
To pay tax on it?
Speaker 4 (14:38):
Well, you know, if you're getting rid of personal items
like clothes or both tech things like cell phones, those
aren't taxable provided you sold them for less than what
you paid for. You know, that caveat that the IRS
puts on there. If you're making a profit off the
item selling it for more than what you paid for,
(15:00):
then you've got taxable income. But you know, if you're
getting things and automatically reselling them all the time and
basically running a business selling odds and stuff, you may
be treating it like a business and it may be income.
So i RS is going to look at, you know,
some patterns that you have as well. What do you
(15:21):
consistently do Are you consistently you know, buying items, maybe
you wear them once or twice and then turnaround and
sell them, and you're selling them for more than what
you paid for them, then obviously you're probably in a
business if you're continually just selling them for less than
what you paid for. You know, you may keep track
(15:42):
of what you're buying and the expense of it so
that you can prove to the I r S if
they came out and added you that you were selling
them for.
Speaker 2 (15:50):
Less than what.
Speaker 4 (15:53):
It's all things to think about as you're going through this.
If you're consistently doing this and you're showing a pattern
of you know, buying and selling things, then you're probably
in business. Something you've got to really take a look at,
not to your tax for prayer, show them what you're doing,
show them the income that you're making, maybe showing the losses.
(16:14):
Maybe it's just a little hobby you've got going on.
You're not making money, and you may only be able
to deduct, you know, up to the income that you're
have coming in because you know, a hobby is is
only subject to losses up to you or so, you know,
little things that are out there, Hey, bartering, you know,
(16:34):
people barter meaning.
Speaker 2 (16:35):
You're basically trading one thing for another.
Speaker 4 (16:39):
Uh. You know, maybe you're trading your haircut for doing
some design work on their website.
Speaker 2 (16:48):
You know.
Speaker 4 (16:48):
Maybe you know somebody is doing some landscaping for you
and you've done some bookkeeping for them. Or maybe somebody
else is providing you a service and you're turning around
and providing them goods or services in return. Or you
run a restaurant and you you know, somebody comes and
takes care of cleaning or landscaping and you're giving them
(17:12):
some free food and they were giving.
Speaker 2 (17:13):
You free service. And that's bartering. And guess what as
taxable income?
Speaker 4 (17:19):
You know, you both parties are going to owe taxes
on what they receive and the value of that service
swap is treated like income even if no money changes hands.
You should track those trades. Now you get the expense
to write off against it. So if you're providing the
service and you're paying for the labor on it, you know,
(17:40):
you still deduct that cost of the labor, but you
report the income that would have been generated for them
if you would have charged them, as well as as
say you were doing this for a restaurant and they
gave you food, they still deduct their labor and they
deduct the cost of food and report what would have
been or should have been income from that. So bartering
(18:03):
does have possible income as well, So you know, it's
one of the things that you've got to look at
all right.
Speaker 2 (18:12):
Another great question about what is.
Speaker 4 (18:15):
Taxable Jimmy credit card points are those taxable income? I
received a bunch of points from a credit card company
when I signed up?
Speaker 2 (18:27):
Is that going to be taxable when I use it? All? Right?
Speaker 4 (18:31):
So basically it goes like this. When rewards come as
a percentage of spending, like cash back points for purchases,
they are not taxed. Those are actually viewed as rebate.
Now you get some trouble when you start and you
receive a bonus just simply signing uh an opening signing
(18:52):
up for opening a credit card without meeting kind of
spending requirements. So if you signed up for a new
credit card and they immediately gave you ten thousand points
or one hundred thousand points, you didn't have any spending
requirements to get it, then you possibly have taxable income.
But if you had to spend money, Let's say you
opened up a new credit card and you had to
(19:15):
spend five thousand dollars within six months on the card,
and then they reward you with the points, again, that's
considered to be a rebate, and that's not taxable.
Speaker 2 (19:25):
Now here's the thing.
Speaker 4 (19:27):
If you're in business and you're using these points to
reduce the cost of goods that you're buying, you've just
reduced the expense of that goods, so it lowers the
right off amount. Points aren't technically taxable, but the cost
of those goods was then nothing. So it's better to
(19:49):
use those points to pay for things that are personal.
Maybe you can you do this to buy lower cost
of travel, maybe buy lower cost of a gift card
or something at the gift card and then you can
use that. So we sometimes use gift cards from our
points in the business to reward employees, give them a
(20:10):
gift card for birthday, holiday or work or something like that.
Speaker 2 (20:15):
So you know, you've.
Speaker 4 (20:16):
Kind of got to look at how this is going
to be reported or how it's going to be looked at,
how you're earning it. If it's just a rebate and
we don't worry about it, if you just signed up
for those cards and you've got that extra huge bonus
just for signing up, you may.
Speaker 2 (20:34):
Want to report it as taxable out there. You found money.
Speaker 4 (20:38):
Does the IRS call that taxable income or not. We're
going to address that right after the spring.
Speaker 3 (20:45):
We have only scratched the surface of today's show. Please
stand by as Barry chief Dower, we'll be right back
with tax talk for you. As an owner operator, you
already spend too much much time away from your family.
Trucker tax tools handles all your bookkeeping and taxes. No
matter what level trucker you are, Life on the road
(21:08):
can be taxing, but that doesn't mean that your wallet
or time with your family should suffer. Trucker tax Tools
makes your life run smoothly. Go to Trucker tax Tools
dot com for a free guide that will give you
the tools to never worry about your taxes again. Call
Trucker Tax Tools eight seven seven nine sixty six two
(21:31):
four seven seven or go to Trucker tax Tools dot
com now and let the experts keep you trucking. Let's
get back to tax stock for you with more tax
stock once again.
Speaker 2 (21:46):
Here's your host, Barry G. Foller.
Speaker 4 (21:51):
Hey, speaking of Trucker Tax Tools this week. Last week,
we were working with a couple of carriers out there that.
Speaker 2 (22:00):
Do a lot of least on drivers.
Speaker 4 (22:02):
So if you a carrier that has a bunch of
least on owner operators, hey, give truck or Tax Tools
a call. We've got a special program for your drivers.
Give us a call it eight seven seven nine six
six two four seven seven. If you're leased on somewhere
and you're looking for a great bookkeeping company, truck or
(22:22):
Tax Tools is a great company to work with to
get your bookkeeping and your tax is done. Me being
the president founder of truck or Tax Tools. You know
I write for a great magazine called Landline Magazine. Do
articles all about trucking and taxes. If you get in
(22:44):
the magazine, make sure that you go back and read
that article that we put out each each and every magazine.
They keep those even on their website for many many
years and you can find our articles there everything from
discussing bookkeeping, taxes, per diems, corporations. Should I be an escort?
(23:07):
All that is covered in magazine by us. And then
I also go to oid A Owner Operator Independent Drivers
Association and speak at the Truck to Success Seminar, talking
to truckers about their bookkeeping, taxes, entity formation, least purchase depreciation,
(23:31):
you name it, we're talking about it affects you financially
and on your taxes. Be back there in October up
near oida's headquarters in Blue Springs, Missouri. So if you're
looking to get out and be an owner operator, is
one of the great events you should actually attend. And
(23:51):
whenever questions you don't get answered in the seminar, I'm
usually ad in the lobby of the hotel every evening.
You're talking to truckers.
Speaker 2 (24:02):
That want to learn more and know more about.
Speaker 4 (24:05):
Their finances, bookkeeping, taxes and everything else that's around trucking.
And I need to learn more about you guys in
the trucking business. But again, if you're running a company
and you've got at least drivers, whether it's one, ten,
twenty fifty, give us a call. We've got a program
for your owner operators eight seven seven nine sixty six
(24:29):
two four seven seven. It benefits you as well because
you know that your owner operators getting their taxes and
bookkeeping taken care of and helps them with their finances
to know that, hey, they're going to be around for
a good while working for your business, taking care of things.
Speaker 2 (24:48):
The right way.
Speaker 4 (24:50):
We were talking about found money. Does the IRS call
it income? Stumbled upon five hundred dollars, thousand dollars, Maybe
you got a surprise pay out from a class action lawsuit.
That's all considered taxable income. I'm sorry, my friends, it's
taxable income. Even gambling winnings, no matter how small, should
(25:13):
go on your return. I RS does not ignore in
any way, shape or form any unexpected cash. Neither should you.
How many people do I know that found money are
going to tell their tax guy that I found one
thousand dollars laying on the side of the road. Not
many they go spend the cash.
Speaker 2 (25:33):
Should you?
Speaker 4 (25:34):
According to the irs. Absolutely, you had gambling winnings. Hey,
you got to report your gambling winnings the casino depending
on how much money you made, or the lottery, depending
how much money you made, it's going to report it.
Speaker 2 (25:46):
And so if you've gotten that W two G.
Speaker 4 (25:51):
And you've got reported gambling winnings and stuff, guess what
you're gonna have to put it on your tax return.
Now you can ride off if you are itemizing gambling
losses up to your winnings per event. There are different
ways of being able to write off what is out there.
Speaker 2 (26:10):
So talk to your tax guy or gal.
Speaker 4 (26:14):
And get the lowdown on what you've got to report
for gambling winnings. Life insurance we get this question quite
a bit. Somebody has passed away and there's life insurance payouts.
Those generally will skip being taxable, as some that lump
sum you get is typically tax free. There are things
(26:36):
that will shift. If you're getting delayed payouts and getting interest,
the interest is going.
Speaker 2 (26:41):
To be taxed on that. The principle is not.
Speaker 4 (26:46):
If the policy was transferred to someone else before death,
and parts of it could be taxable.
Speaker 2 (26:51):
There's a lot of specific rules to this.
Speaker 4 (26:54):
If you've got in life insurance policy through your business,
and you've been deducting the life insurance premiums that may
be taxable income to business or the person receiving it.
So you don't want to be deducting life insurance premiums
that are paid out on behalf of the owners or
(27:16):
key members of your staff or de man in the organization.
So you need to watch what you're doing, how you're
doing it, and you know whether you're making taxable not
to your tax guy and see is this going to
be taxable if I do it this way? Especially operating
(27:39):
in a business. Now we get questions about court settlements
and getting payouts and maybe you've been involved in a lawsuit.
Are they taxable? Yes, they could be taxable. So money
from personal injury cases for physical harm is going to
(27:59):
be generally from tax However, payments for things like emotional
distress payouts punitive damages are usually considered taxable income. Now
it all depends on why the money was awarded. So
you've kind of got to look at your breakdown of
your settlement to these companies when they go through and
(28:22):
settle want to make sure that this is deductible for
them a tax to you because they want if they're
going to settle, they're going to want the deduction, so
they're going to be more apt to put it for
emotional distress and possibly punitive damages because it's taxable to
you and deductible for them. But personal injury physical harm,
(28:49):
you know, is not going to be deductible as the
business side, so you know they're not looking for the
settlement to go that way.
Speaker 2 (28:55):
Now.
Speaker 4 (28:55):
You know, if they're paying an addition for let's say
medical expenses and stuff like that, yes, it's going to
be deductible for them as the party paying it out
and not reportable income to you.
Speaker 2 (29:10):
Hey, your employer just gave you a gift to taxable
or not.
Speaker 4 (29:15):
Now you know you as the employee, don't really want
it to have extra taxable income. Would rather be tax free.
So the holiday bonus or a gift card you get
from your boss, you know, maybe he's not just cheerful.
It could be taxable compensation. So in the IRS's eyes,
(29:37):
if it has monetary value, it's income. Now non cash
gifts under twenty five, like maybe a ham, turkey, chicken,
fruit basket, cookies, you know that's.
Speaker 2 (29:52):
Going to go through.
Speaker 4 (29:53):
You know and you receive that as a gift. Anything
suspendable should be hitting your W two. So we may
give out a gift card, you know of like twenty
five dollars or something to our staff, or hey, if
we did gift cards through our credit card company with
our cash back points, then you know it is could
(30:14):
we just give it to our staff and it can
be fifty dollars value or something like that because it
didn't cost us anything, We're not deducting anything. Therefore, you
know to us it's non monetary value. It was just
a rebate at the points that got so you kind
of got to.
Speaker 2 (30:32):
Look at it.
Speaker 4 (30:32):
If you are an employer and you're going to give
your staff some money, then it most likely needs to
be a bonus rough W two. Hey, they're new trends,
new things that are going out there, Kickstarter, crowdfunding, things
like that. Is this free money or is it income?
(30:54):
We're going to answer that question right after this break.
Speaker 3 (30:58):
We have only scratched a surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. As an owner operator, you
already spend too much time away from your family. Stop
spending time doing paperwork. Go to Trucker tax tools dot
(31:18):
Com a solution built specifically for truckers. Trucker tax Tools
dot Com makes your life run smoothly. Let's get back
to taxtok for you with more tax talk once again.
Speaker 2 (31:34):
Here's your host, BARRYG. Fallow.
Speaker 4 (31:39):
All right, so you raised money through some crowdfunding, go fundme,
bick starter, I don't know the other ones that are
out there.
Speaker 2 (31:47):
Is that income? Yes?
Speaker 4 (31:48):
No, maybe that's really the answer. If it's truly a
gift to help you get started, or let's say GoFundMe,
it may not be taxed. But if you're us a
kickstarter or crowdfunding somewhere out there, and you're offering perks
or services in return to be treated as business income.
Do you use a kickstarter and you're having a product
(32:10):
out there and you get these people to put up
money and they're going to get the product back income.
All they did was pre buy the product that helps
you get started, get your inventory, and now you're giving
them inventory. So therefore that is income. You use crowdfunding
and they get shares of your business or something through this,
(32:34):
then it's not income. It's an investment. So you kind
of get to look at what is What is the
person that's giving you money getting back in return? If nothing,
or an investment, then it is not income. It may
be a gift, it's an investment. If they're getting a
perk or service or discounts because they are out there,
(32:56):
it could be considered income. Do you need to watch
sure what you need to do?
Speaker 2 (33:02):
Hey?
Speaker 4 (33:03):
The next one, we got health savings accounts? Is that
taxable income when I withdraw it? Technically no, As long
as you are using those health savings accounts HSA funds
reproved medical expenses, it is completely tax free. Now, the
beauty of this is you've put the money into your
(33:25):
health savings account tax free, and you withdraw the money
use it to pay for medical expenses tax free. But
if you take that same money for something unrelated or
you turn sixty five, then you're facing income and it's
taxed plus a twenty percent penalty. But if you strictly
(33:46):
use it to stick to your health related spending, it's
tax free. Hey, it's a beautiful way. If you've got
a family plan and you can put money into an
HSA and it's an HSA qualified medical plan and you're
putting that eight thousand plus into this plan. Every year,
you can save that money and use it towrdure deductibles
(34:08):
at future dates, and if you don't use it, it continues
to accumulate out there before you, so that you can
use it at a future time when you need to
pay medical expenses. And you got the tax deduction in
the current year, and as long as you're using it
for medical expenses, it's not considered to be taxable income,
(34:29):
and then you can apply the rules. Once you hit
sixty five that may have changed into one big beautiful bill.
Speaker 2 (34:36):
I don't know yet.
Speaker 4 (34:36):
We'll double check that and have that on here next week.
But if you use it for medical expenses, you know
you're going to be able to do that. Debt forgiveness
you know that can trigger a tax bill. Yeah, if
it isn't bad enough. You were in debt insolvent and
you got debt given. Nothing like kicking you when you're down,
(34:58):
and now it's to be uh taxable income. So if
a lender cancels your debt, you might owe tax on
the forgiven amount that includes your credit cards, unpaid loans,
for closure differences. You know there are exceptions out there,
you know, like you went through bankruptcy or if you've
(35:21):
got qualifying mortgage relief. In most cases those can be
avoided being taxable income, but canceled debt is treated like
income you kept. Right now, you might be able to
prove that you're insolvent and you were completely insolvent at
the time of that and be able to get around it,
but you need to talk to your tax preparer and
(35:43):
make sure that you get the IHS doted tes criss
and get the income to where it's not taxable. Rental income, well,
we all know rental income if you're renting out of house,
or you're renting out you have of maybe office buildings
or whatever. You're running a business you have around. But
(36:04):
let's say you got guests staying with and you're charging
them income. You know, whether it's in your second home.
You know, you have a small home outside of your
home out there in your basement ye, or you're doing
it as an airbnb. It is taxable even for short stays.
(36:25):
You know, that includes your cleaning fees and extra guest charges.
But there's Chario's catches. If you rent out your home
fewer than fifteen days a year, you may own nothing
may not be taxable income. So there are differences in
different ways to be able to get income from your home.
Let's say you're going on vacation for a couple of
(36:46):
weeks and you lease out your home through Airbnb for
those same fifteen days that you're gone. Let income is
not possibly not taxable to you, and it just helped
pay for your vacation as well, so you're gonna win win,
So something to look at. I know my sister has
done that before when she's gone on vacation. She's managed
(37:07):
to rent her home up in Indiana for a couple
of weeks. She's right near Lake Michigan, so she's got
a beautiful home, beautiful view, and she was able to
rent it out for fifteen days tax free income for
that period of time. But maybe you've got somebody you're
helping out and they're paying you a little bit of
(37:30):
income and they're staying with you for most of the year,
or for six months, three months, whatever it may be. Yes,
you technically should be reporting that and then you'll be
able to write off what expenses you have against it.
You know that's not all inclusive of everything. What the
irsme account is income. You know, we tell you to,
(37:51):
you know, look at what you're doing, talk about your
tax issues and what could be happening with your tax prepayer,
tax advisor. If you are generating income or money coming
in in any way, shape or form, always sit down
and talk to you your tax advisor and get some
int what you need to do to be able to
(38:12):
write off expenses against this.
Speaker 2 (38:15):
Income that you have coming in.
Speaker 4 (38:18):
You know, and I say this also because we've got
many people that have come to us that have been
gambling and maybe big gamblers and to gamble consistently, and
they want to write off all their losses. Well, you know,
and they have a lot of winnings, and when you
have to look at the irs rules and how do
you write off gambling winnings versus the losses? And then
you're trying to do it on itemize because you've got
(38:40):
to itemize these deductions and you're not getting above the
standard deduction. And well it doesn't necessarily do you any
good to do it. But maybe you're now a professional
gambler and this is what you do. Then maybe you're
running a business as gambling and you may have to
write it off in a different but you need to
(39:01):
talk to your tax advisor to make sure that you're
doing this right. Let's say you're breeding your dog because
you have pure bread labs, and you get into breeding
your lab and selling the puppy, you know that is
taxable income to you. Now, the beautiful part is is
you get to write off the expenses of the dog
(39:23):
that had puppies, of food and veterinarian bills and things
like that become a right off if you're running this
as a business. Now, if it's a hobby, you only
get to write it off up to the amount of
income you receive. But again it's income that you receive
and you do have the tax right off.
Speaker 2 (39:40):
So if you are in the breeding.
Speaker 4 (39:42):
Business, then even if it's considered be part time maybe
a hobby, it's still income and you still got to
report it, but you get the benefit of running off
many of the expenses that apply to the dog that
is there. We used to breed dogs and to breed labs.
It was really fun for us and we enjoyed doing that,
(40:05):
and we would sell off the puppies, but it gave
us the right off of the expenses of maintaining the
mamas there at our house and We were keeping them
for breeding purposes and they were family members as well,
so it was more of a hobby right off.
Speaker 2 (40:21):
Hey, truckers, truckers, trucktor truckers.
Speaker 4 (40:24):
You know there are certain things in taxes and stuff
that you get ride offs of. Make sure whatever you do,
you find somebody.
Speaker 2 (40:31):
That knows the ins and out's.
Speaker 4 (40:34):
Make sure somebody knows all the ride offs or truckers
asking what a lumper is out there, and make sure
you get.
Speaker 2 (40:42):
Good bookkeeping and taxes.
Speaker 4 (40:44):
Hey, are the great sponsor is taxation solutions? Tax relief?
IRS problems, they're not a problem for taxation solutions, tax
res get the IRS settlement that you qualify for.
Speaker 2 (40:56):
You heard about the Fresh Start program.
Speaker 4 (40:58):
It's a program done by the IRS and not a
lot of these other companies did not create the program
that they make it sound like they did. We all
work within the programs of the IRS to best settlement,
the best deal possible allowed by law. Now, we hope
you redo your finances and work with you to try
(41:19):
to make sure you're going to qualify. But the only
way to do that is to pick up the phone
and call us at eight eight eight nine three zero
one zero one six again eight eight eight nine three
zero one zero one six. Whether it's your business going
through tax problems, whether you're personally going through tax problems,
or it's a combination of you and your business. Don't
let the irs walk all over you. Stop the irs
(41:42):
now by calling us at eight eight eight nine three
zero one zero one six, or go to Taxations Solutions
dot net and you can put in your information and
get a free no obligation consultation. Hey, I appreciate you
being with us. Tax Talk for you. Go to tech
talk for you dot com. Follow us there, go to
(42:03):
Facebook follow us there. I thank you for being with us.
Have a god bless and awesome, glorious week. I look
forward to seeing you next week when we talk about
President Trump's One Big Beautiful Bill and the tax changes
that are going to affect you and I, everything from
no tax on tips tack, no tax on Social Security,
(42:28):
and how it's going to impact you in your life
with the rules and regulation of the One Big Beautiful Bill.
Speaker 2 (42:37):
See you next week.
Speaker 4 (42:38):
Right here a text talk for you W four cy
Radio every Monday, ten am Eastern time. See you next week,
God bless you. Have a great week.
Speaker 3 (42:50):
Are you an individual or business that wants to understand
taxes and how they affect you. Are you looking for
specific tax advice for self employed business owners and truckers.
Are you behind on taxes and your bookkeeping? Are you
dealing with dirs and ready to have some relief, Then
(43:11):
you need Tax Talk for You, hosted by tax and
trucker expert Barry g. Fouer EA. Tune in ten am
Eastern Time every Monday right here on W four CY
Radio and Talk for TV. Don't forget to check this
and past episodes at tax TALKFORU dot com. See you
(43:31):
next week at W four cy dot com
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