Dr. Friday Radio Show – November 15, 2025

On this episode, Dr. Friday dives into critical year-end tax planning strategies and offers expert advice for listeners facing tough IRS issues. From the tax implications of an inheritance to navigating W-4 withholding for multiple jobs, Dr. Friday provides actionable steps to protect your finances. Learn the pitfalls of dealing with national tax resolution firms, the strict rules for vehicle deductions, and the importance of diligent record-keeping for your business. Plus, get crucial advice on coordinating with your financial planner and attorney to ensure your estate plan is sound and your assets are protected.

Summary Points:

• Inheritance & IRS Levies: If you owe back taxes, the IRS can place a levy on your inheritance. Dr. Friday stresses the importance of dealing with tax issues proactively before they become a family matter.

• Choosing a Tax Resolution Firm: Beware of companies promising settlements for “pennies on the dollar.” Dr. Friday explains how to identify legitimate help and avoid firms that delay and overcharge without delivering results.

• W-4 Withholding Issues: An employee questioning why federal taxes aren’t being withheld may not be earning enough to meet the threshold. For those with multiple jobs, it’s crucial to either have extra money withheld or make quarterly estimated payments to avoid a large tax bill.

• Quarterly Estimated Taxes are a Must: For the self-employed, paying quarterly taxes is not optional. Dr. Friday warns that failing to do so can result in penalties, which are calculated monthly.

• Vehicle Deductions (Section 179): Purchasing a large vehicle for your business doesn’t guarantee a 100% deduction. It must be a necessity for your industry, and you cannot claim 100% business use if it’s your only vehicle.

• Business vs. Hobby: If you consistently lose money in a side business while working a full-time job, the IRS may reclassify it as a hobby, disallowing your loss deductions.

• The Importance of Record-Keeping: Dr. Friday emphasizes the need for small businesses to maintain accurate profit & loss statements and mileage logs. For homeowners, keeping receipts for all improvements is vital to increase your cost basis and reduce capital gains tax when you sell.

• Year-End Financial Coordination: This is the time to speak with your financial planner, tax professional, and estate attorney. Discuss Roth conversions, portfolio adjustments, and review your will or trust to ensure it reflects your current life circumstances.

Episode FAQ

Q1: I’m inheriting some property, but I owe the IRS from previous years. What should I expect? A: You should expect the IRS to find out about the inheritance and place a levy against the estate for the amount you owe. This can delay the distribution of assets and make your financial issues known to your family. It is crucial to contact a tax professional to address the debt before this happens.

Q2: My employer isn’t taking out any federal income tax, even though I requested extra withholding. Why is this happening? A: Your income from that specific job may be below the federal threshold where withholding is required. The extra $20 you requested is being taken out, but there is no base withholding to add it to. If you have multiple jobs or other income sources, you are likely being under-withheld and should significantly increase your extra withholding or start making estimated tax payments to avoid a surprise tax bill.

Q3: Can I buy a G-Wagon for my real estate business and take a full Section 179 deduction? A: It’s risky and likely to be challenged by the IRS. To claim a vehicle as a 100% business expense, you must prove it is a necessity for your work and not used for personal activities. This typically requires you to have a separate vehicle for personal use. Unless you can prove that a luxury vehicle is an essential part of your business image for selling multi-million dollar homes, the deduction could be disallowed in