It's all about the Benjamins, baby. You and your songs are amazing to me. That was Puff Daddy or Puppy or P.D.D. He changes his name from time to time, so I really don't know what to call him.
But it is all about the Benjamins today because guess what day it is? It is April 15th. It's Tax Day. This is the day some of us dread because we've got to write those checks.
It's the day that some of us are just relieved to get the whole process over with. I'll call you our special guest. Probably. But then some people are anticipating because they're ready to get that refund check.
Right, right. There's a lot of questions this year. Oh, yeah. And to help us sort through it all, we have a CPA because we just don't know anything about this to help people out.
We've got Joey Jeter with us today. Hi, Joey. How are y'all doing today? We are good.
Thank you so much for joining us. Next year, busy time. Yes. Yes.
This is your day. I mean, do you feel like the king of the world on Tax Day? In a few more hours a week. Oh, okay.
So it's almost done for you. So thanks for taking time out to hang with us. But I just have to say, it's been all over the news this year, back and forth. First of all, the refunds were down this year because of tax law changes.
Then we heard that the refunds came up a little bit. So it's kind of been all over the place. And we just want to get some answers to some questions. And some things that we can do to get ourselves ready for next year.
So it's too late to change the outcome for 2018 tax year. Right. But moving forward, there's things we can do. So to start off, people that did see a decrease in their tax refunds for this year, what can they start doing now to better themselves for next year?
Yeah. There are a number of things. First of all, you can change withholding system. The main reason folks lost their refunds is because they've got more money throughout the year in their paycheck.
Which is a good thing. It's a very good thing. It kind of helps. You've got more disposable income, so you spend it.
It's hard to have that discipline to put that $100 or $200 up a paycheck and then wait for it at the end of the year. And that's what people like to use a refund as just a savings account. Yeah, for lack of a better term, that's kind of what it is. I look at it as a tax rate loan to the government, so I'm not a big fan of refunds.
But, yeah, you can increase withholding. Also, the IRS, here in the next few months, you know how fast they work, they are putting out a new W-4 form where people, if they won't calculate your withholdings, that when the tax law came through, the IRS was fine, and the withholding tables were messed up. And now they're going back and fixing them. Oh.
So everybody was really excited to see more money in their paycheck. And nobody, I guess, was really thinking about what was going to happen when it was time to file taxes, and so there were some surprises. Correct. Okay.
The refunds were down, but for the most part, when I saw the taxes over much less, too. The withholdings just didn't keep up proportionately with the liability. Gotcha. So we've got new forms coming down the pipe eventually.
More red tape. Okay. More red tape for us. So, you know, I'm always looking for deductions, and I'm sure most people are.
So what are some of the most overlooked deductions that people don't realize that they could have? There's a number of deductions with the new tax law. If you're an individual, most of those deductions are probably gone. The standard deduction increased.
Gone? Not gone. You just don't reach the threshold. Oh.
It may not be as advantageous as it was before. Your typical deductions are going to be tithing to church or donations to, you know, not-for-profits, real estate taxes, medical expenses. Usually medical expenses won't apply unless you have something major happen, you know, which, God forbid, that happened, but those are things that allow that to be deducted. There's also your mortgage interest.
Those are pretty much your standard ones. If you own a business, you know, if you file Schedule C or Schedule F, you don't even have real property, excuse me. There's more, there are other deductions that are out there. So I guess most of us don't overlook deductions.
I guess most of us find all the deductions that we're eligible for, so. Right. Well, and then kind of jumping ahead here on some of our questions, but child care expenses and all that. Yeah, the child care expenses, that stayed the same.
That didn't change. So basically, if you're sending your child who is in a daycare or a nursery school, whatever the case may be, as long as that is legitimate business, has an EIN number, they'll give you a form at the end of the year, and then you'll get, the most you get $600 per child. So that's a credit directly gets. It's not a deduction.
It's a credit. So we still have that? That's still in place. Yes, it is.
Okay. So should most people be itemizing, or do you find that most of us come out best by taking the standard deduction? Of course, I know with the new tax law, standard deduction got much bigger. So this year, and it was just so much larger than, especially where we live in smaller towns, you know, the real estate taxes aren't as high, the property values, your mortgage notes aren't as high.
So if you're living in a more urban area, you're probably still itemizing, but then again, you're getting hit with your higher real estate taxes. They are kind of limited this year. So there's a give and take. Right.
So tonight, today, what if you still haven't together yet? We used to have together by now. It's like, what do you think? People don't.
Let's be around. The easy answer is you just file extension, and that gets you until October 15th. If you owe money, you'll still pay penalties and interest on not filing or not paying on time, but you don't get a penalty for late filing a tax return. So that keeps me out of trouble.
I'm not ready today. I filed that today, and I'm not in trouble with the IRS. That's correct. We don't want to be in trouble with the IRS.
That's our job to keep you out of there. Okay. We're keeping it on time. So I know you mentioned some of the charities that are tax deductible, and I've always been confused about how we know what our donations are worth.
Because when I give things to certain charities, and they give you this blank receipt, I'm giving them my old sweaters and my old coffee pot, and I get this blank receipt, and I don't know what that coffee pot is worth. I mean, it works, but it's 20 years old. Yeah, and they're not supposed to give you a blank receipt. I'm glad I didn't make a blank receipt.
I didn't have any, too, though. I was like, here. I noticed here recently that some of those, and I know the points of y'all talk about us here, some of them got better, and at least put the dollar amount on there. I usually would use, if I saw somebody give away a bunch of clothes and stuff, and I'd say, all right, so how much do you think you spent on those clothes at the time that you gave away?
And I'd take 20% of that amount, because what you paid for is not what you donated. So it's not worth the same thing, too. Right. It's worth something.
It's worth something. Oh, yeah. Well, I think it rolls on just 20% of what you think you pay for it. But hopefully, like I said, that's getting cleaned up, and those not-for-profits that are taking in those items are becoming more aware of how they should be reporting it.
Yeah, that's happened to both of us. That was the question. I wonder who it is. Yes.
So for next year, how early would we need to get all of our stuff together to you or any other CPA to kind of meet that deadline? So if I give it to you the 12th of April, can you get it all done and file the 15th? Oh, you need longer than that. We typically stay in our firm April 1st.
If you don't have April 1st, you're more than likely going to get an extension. Okay. So a couple weeks. Yeah.
And that's not to say that it won't get done. That's at least to let the client know that it may happen. Now, that's not to mean that we're going to sit up there and not do it until May or June or July. We won't get to it for soon.
Yeah. Well, I mean, that makes sense because you've been taking in different clients' information this whole time. Right, right. Well, I've got a question.
It's not very often for you to sit down with the CPA. How long do I have to keep these old W-2s and 1040s? Now, I'm just going to do some self-disclosure here. I've still got my forms for when we did the 1040 telephile.
I'm dating myself. When I first started working, we used to call a number and file our taxes over the telephone. And I still got my W-2s from that. And I still got my telephile form.
Sarah's acting like she doesn't remember the telephile. But when I started working as a teenager, we filed over the telephone. So the question is not about age. The question is about how long do we have to keep these old forms?
A good rule of thumb is seven years. Seven years. I rest statute with limitations on when they can go back and on enough return or anything. It's three years.
So on April the 15th of – whenever you file your return, it's three-year clock starts. But if you file it in, say, March, it doesn't start until April the 15th of that year. So today is the 19th, 2019. So the tax permit that you file this tax season, and April 15, 2022, it's for all the taxes and purposes closed.
So you think I'm good on the – from a high school record? I don't think they'll come looking for those. I can go on. Look, I just want to be safe.
I don't know what I'm saying, though. She's very organized, so I don't doubt this at all. Sometimes it just gets to be cluttered, and we want to just build a spring cleaning now that it's even pretty awesome. And, yes, we did a podcast on spring cleaning up just a little while ago, so.
That could have been included in there. I'll get the shredder out, and I will take care of that. I'll say, please make sure you shredded or burn it. I won't go in the trash.
It's too much personal information. I will take care of that. So, sir, I'm going to kind of hijack the conversation, because, again, I don't get much time. I'm in a different place in life, so I've got some burning questions.
I'm sure some of our listeners are at the same place in life. How long can you claim your child? Our son is 17 years old, and, of course, he's a high school student going into his senior year. He works a part-time job normally.
How long can we claim him? Well, as long as you're providing more than half of his income and he's living at your house. The technical answer is indefinitely. Now, what usually happens in the – He can't live in my house.
No, I'm getting into the family dynamics. He can't live in my house. So what typically happens is kids go off to college or go to work after they graduate high school. Once he starts making a living, you know, when he makes it more than the standard deduction, it's pretty much a good rule of thumb just when you can't claim him.
But he'll be in 17. When will he turn 18 this year? January. No, January.
Okay, so what you'll have again next year is you'll still get to claim him and get the child tax credit for $2,000. And if he goes to school the next year, if he's in college or whatever, or go to tech school, then maybe, then you'll get a $500 credit for him. Oh, wow. On top of the – no, no, no, $500.
Once he hits 18, he drops down. But he has to be in school or in the trade school. Well, that's good, though. So even if he works part-time while he's in college or in trade school or whatever, as long as we're still providing the bulk of his support, he's a dependent.
Now, what he needs to probably do with his part-time job is file his tax return as being a claimant as a dependent and get his withholding back. Oh, he did? I'm sure he did. I'm sure he did.
I'm sure he did. I'm sure he straights his pocket. But make sure that he does that and you still claim him as a dependent. He was amazed.
He said, you mean they're just going to give me money? He couldn't understand that it was already money. And I just finally said, yes, just take it. That's all right.
When you're young, you know you need his gas money to get around. That's a lot of money. There you go. Do you have any burning tax questions over there, sir?
Not at the moment. I'm not. My kids aren't this old yet. I'm going to be taking care of them for a while.
And claiming them for a while. That little $2,000 credit doesn't hold a candle to what you spend on. It's a daycare, honestly. We just say after school care and it's still.
It needs your life. It needs your life. So where can people go, Joey, to get dependable tax information? I know if they have a CPA, that's the best source for information.
Because I know you can go and Google anything. Everything's not good information. And it may not be right. Right.
So what's a good source? First of all, CPA is what I would say would be the number one source. There's good journal, accounting journals, tax journals that are out there to read. I get an accounting journal every year.
Am I not saying that? I know. I'm not going to fucking read that. But, you know, we get sick to classes.
I mean, I get 100 hours of continuing education every year, whether it be tax, audit, planning, whatever it is. So if you have a CPA or anybody who, I mean, I don't, that's right, I'm biased. So I'm going to say CPA is where you need to go. Right.
I'm going to go online because a lot of people. Some people can go online. You know, like I said, you can Google anything. If you're going to Google Answers, you need to go to the IRS website.
Right. And they probably need to, but that's where I go. I mean, if you take somebody's word of mouth or so-and-so did this for me, they may have, but you don't know if that's right or not. Right.
Everybody's situation is so different. Sarah can't call me and say, what did you guys do about this? Or I can't ask her about this because, you know, our households are different and, you know, we need to approach things differently. So probably leave it to the professionals to give us this type of advice.
Joey, we sure do appreciate you taking time out on your busiest day of the year. We certainly do wish you well. You still got a few more hours here. And then you'll be free.
What do accountants do after April the 15th? So what's your real life like when it's not tax season? You know, I'm lucky that our firm is real good in life, family balance, more family balance. And so, yeah, I work some hours this time, you know, right now, but I'm still coaching my kids' baseball team.
We're still, you know, our life gets changed during tax season, but, you know, we don't, I'll get to go home early. You know, I'll get to go home with five or five to eight dinner with the family. Oh, that's great. But, yeah, I'll go back to probably do a little fishing, maybe play with golf, and then coach me and raising kids.
That's what I'll do. Well, you've earned it. So all CPAs have earned it. They've been looking hard.
You know, too, his wife. Y'all need a vacation. She probably needs one more than that. But we do thank you for taking time now to join us on this edition of Bringing It Home with Sarah and S.
Neal. And we want to remind you, just like we do on every episode, in the words of Mr. Bob Marley, to live the life you love. And love the life you live.
We will see you next time. Bye-bye.