Dr. Friday Radio Show – December 20, 2025

In this episode, Dr. Friday is wrapping up 2025 with critical updates on the “One Big Beautiful Bill” (OBBBA) and what the changing tax landscape means for your wallet. With the holiday season in full swing, Dr. Friday takes a break from her beehives to break down the new 2025 tax brackets, the major increase in the SALT deduction, and the newly established “Trump Fund” for children. Whether you are looking for last-minute year-end moves or planning for retirement distributions, this episode is packed with essential financial strategies.

Episode Summary Points

• Year-End Deadlines: While it is late in the game for 2025, there is still a small window for Roth conversions or maximizing 401(k) contributions before the final paycheck of the year.
• Historical Tax Perspective: A look back at tax rates from 1913 to present, noting that despite current complaints, we are historically in a lower tax period compared to the 92% rates of the 1940s.
• 2025 Tax Brackets: A breakdown of the new brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) and the elimination of the marriage penalty for couples earning under $600,000.
• Mortgage Interest: Clarification on the $750,000 mortgage cap (post-2017) and confirmation that interest on second homes is deductible if the combined loan value is within limits.
• New SALT Cap (OBBBA): The State and Local Tax (SALT) deduction cap has increased from $10,000 to $40,000 for 2025, bringing “bunching” strategies back into play.
• Medical Deductions: Tips on deducting medical expenses (over 7.5% of AGI), including essential assisted living costs.
• The Trump Fund: Details on the new government-seeded investment accounts ($1,000) for children born after Jan 1, 2025, and contribution rules for families.
• Social Security Taxation: Advice for retirees on the “Provisional Tax” calculation—if your combined income exceeds $25,000 (single) or $32,000 (married), your benefits are taxable.
• Charitable Giving: The benefits of using Qualified Charitable Distributions (QCDs) for those over age 70½ to give directly from IRAs tax-free.

Episode FAQ

Q: Did the limit for State and Local Tax (SALT) deductions change for 2025?A: Yes. Under the new legislation (OBBBA), the SALT cap has increased from $10,000 to $40,000. This allows taxpayers to deduct significantly more for property taxes and sales tax, making itemizing deductions beneficial for more people.

Q: Do I need to have taxes withheld from my Social Security checks?A: It is highly recommended if you have other sources of income (like a pension or investment interest). If your combined income (Adjusted Gross Income + 50% of Social Security) exceeds $25,000 for individuals, up to 85% of your Social Security benefits becomes taxable.

Q: What is the “Trump Fund” mentioned in the show?A: This is a new program for children born on or after January 1, 2025. The government opens a $1,000 investment account for the child. Parents and grandparents can contribute up to $5,000 annually until the child turns 18. It functions similarly to an investment fund with penalties for early withdrawal.

Q: Can I deduct the mortgage interest on a second home?A: Yes, provided the combined mortgage debt of your primary and secondary homes does not exceed $750,000 (for loans originated after Dec 16, 2017).

Q: What is a QCD and who should use it?A: A Qualified Charitable Distribution (QCD) allows individuals aged 70½ or older to donate directly from their IRA to a qualified charity. This money is not counted as taxable income, making it a more tax-efficient way to give than writing a personal check.

Transcript

00:01 No, no, no. 00:02 She’s not a medical doctor, but she can sure cure your tax problems or your financial woes. 00:07 She’s the how-to girl. 00:09 It’s the Doctor Friday show. 00:15 Question for Dr. Friday, call her now. 00:17 737-WWTN. 00:19 That’s 737-9986. 00:23 So here’s your host, financial counselor, and tax consultant, Dr. 00:27 Friday. 00:28 G’day, I’m Dr. Dr. Friday and the doctor is in the house on this absolutely beautiful Saturday. 00:35 I was actually able to go out to my beehives and make sure they were all happy. 00:38 Didn’t want to open them with 00:39 It’s too cold outside, but it is a pretty day. 00:42 So everybody is out flying around and hopefully you guys are out doing your last minute Christmas shopping. 00:48 Um, it’s probably almost too late 00:51 to think about any kind of