welcome to PBS for weighing the topic for our show tonight for Life Ahead is very interesting and very timely whether it's exactly this time or the middle of the year and I'll explain that in just a moment.

We're going to be talking about taxes so we can apply that to what you need to do yet this year or what you can be doing in preparation for next year.

So I do have a CPA here that will handle any questions on taxes and of course we have an attorney, one that you know well.

>> She's been on the show many times and that is Heidi Adare, the host of the show Sandy Thomson.

>> But they're the most important ones.

Let's meet them now.

First of all, Heidi Heidi Adare right here with the green on Heidi.

>> Welcome back.

Thanks, Andy.

Good to be here.

Good topic.

Yeah, thank you.

Very good topic.

And she has brought with her CPA.

This is Cindy Werner.

>> You've been on a couple of times with us.

We've talked finances and taxes .

>> Not my first time.

So yeah, you're an old pro by now and for the rest of you watching, I do want to remind you that this is really your show.

We want to talk about what you want to know and you can give us those ideas by giving us a call here at (969) 27 twenty .

If you put a one eighty eight in front of that it's toll free if you live out of the immediate area.

So get your phones ready.

Get your questions ready and meanwhile I'm going to ask him some things I want to know about until we get to our phone calls.

>> OK, let's start with you Heidi.

Why are we talking about taxes right now and how does taxes relate to estate planning which is an expertize of yours?

>> Well, we're talking about taxes right now because it's tax time.

So I thought everyone would find it interesting and if you're at the last minute having a question, you've got a CPA right here that you can call in and ask that question and how do taxes and estate planning interplay?

They interplay a lot because we have to kind of understand how the assets that you have are going to be taxed either while you're alive or at your death to help you plan for who's going to inherit them.

>> I say OK, that's a nice generic explanation and again we can get more specific if you would like to and if you have a question about that.

>> All right.

We're going to talk to you, Cindy.

As Heidi mentioned, you know it's getting in the crunch now of tax time.

But in our in our talk before the show I asked her a lot of people late in getting their information into a CPA if they do need help.

>> How did you answer that, Cindy?

Well, I told you basically for the last two years because of the pandemic flu pandemic which I can't even pronounce anymore we've had some extended deadlines but it's back to the normal deadline which is normally April 15th.

But because of holiday, our tax day this year is April the 18th.

>> So this is a busy, busy time of year for you is very busy this time of year but not too late if you do need help.

>> And how does how do you know if you're going to need help with taxes?

A lot of people are still trying to do it at home on their own but at what point do you need to seek help from a pro.

A lot of times we see first time clients maybe when they're transitioning so they have a life event that transitions maybe an older couple maybe has lost one of the spouses or a little bit younger than that.

You're looking at retirement are starting to plan for retirement.

I always tell people when they retire it's kind of a tough transition because when you're working for somebody you bring home is a net check all the taxes for the most part things are pretty gone.

The withholdings are there and when you retired you tend to get your money, all your money and then you God forbid you have to give some of back.

>> So what you have to do estimated tax payments.

So that's a transition right in your often dealing with pensions or Social Security or a lot of different things to deal with.

What about younger couple that maybe is in the process of selling the home and reestablishing someplace else?

>> Does that get complicated?

You do have to report a personal sale of your home but for the most part there's some pretty generous exclusions so that you rarely have to pay taxes on the game on the sale of your house unless of course somebody is coming from California and moving to Indiana.

>> California prices are just a tad bit higher.

Yeah, they're going to pay less in Fort Wayne for sure.

>> Oh yeah.

Isn't there a one time exemption for capital gains?

Is that is that right?

>> Yeah.

Well well go ahead.

Yeah you can have it you can exclude gains up two hundred and fifty thousand dollars single five hundred married right.

Yeah there we go.

Five married so really for most people in this area that's not going to be a problem but for instance there's some planning you can do there.

Some people have second homes.

Oh OK. And so sometimes it becomes it becomes smart to change your residence so that maybe you're more expensive home becomes your personal residence for a few years before you decide you're going to sell it.

So there's some timing and again there's like a lot of good reasons why you might need professional guidance.

>> We have a phone call already.

>> I knew that we would we always get a lot of calls when we have this topic here.

This is from Dave and it's about property taxes.

Dave, thank you so much for watching us tonight.

And what is your question for our experts?

>> Thank you.

I have a permanent residence that I live in.

I also own another residence with my daughter and it's listed as joint tenants.

OK, right survivorship.

How do I list the property tax that I pay on that house on that residence my daughter lives there but I pay no taxes and I just want to take a deduction on the property tax my federal tax return.

>> OK, so can you give me my council?

Well it's not your primary residence so the question becomes if it's a like an investment property how you want to deduct that then you could kind of get into maybe a little trickier thing if your daughter is living there rent free and you're paying a lot of her expenses, maybe we need to talk about gift taxes.

>> Oh, OK.

But for the most part if I see a lot of people that have they actually own the house and they will deduct that just in the same place that they deduct the real state taxes on their primary residence.

But you have to make sure that you noted that it's different because in Indiana the real estate taxes on your primary residence are deductible for your Indiana return.

OK, and then now that you itemize, I'm not sure it even does you much good, Dave, because with the higher standard deductions that we have now, many, many, many people no longer even itemize.

And because of the limitation for real estate for taxes in the portion of your itemized deductions, those are now limited to ten thousand dollars.

So by the time people get to houses they're in their state income taxes, they've already reached that limit.

So I'm not sure the real estate taxes might not do you any good.

And then if you're married filing joint you have twenty five thousand in some depending on your age for a standard deduction.

So it's deductible but I don't know it'll give you a lot of benefit.

>> Would it make a difference if his daughter paid him some rent for living in the house?

>> Would that make any difference?

Well, that's a whole other topic and he's got to report rent on his schedule and and the IRS has certain rules about renting to family members whether it has to be fair market rental and we get into a larger discussion hopefully we've answered your question, Dave.

I we've kind of gone down a rabbit hole for you but hopefully you got the question where it's deductible and then I don't know if it is deductible when you go through all the math and limitations you've got.

>> How smart of you, Dave, to call in here and ask some professional help, anything you want to add to that in terms of real estate?

>> OK, I want to ask dumb ask about documents.

A lot of people wonder how long they should keep tax information and you know what should they keep?

So we're going to talk about that in a minute.

But I want to go to you first, Heidi.

We're talking about documents and you and I talk about this a lot.

What are documents everyone should keep regardless of taxes of doing taxes?

>> You mean as far as estate planning?

Sure.

OK, so everybody should make sure they have a basic estate plan of a health care power of attorney who can make health care decisions for you if you're incapacitated, a financial power of attorney who can handle your finances if you're incapacitated in a will and those are three things that you just don't want to let get thrown away because they at some point in your life they are going to become very, very important documents.

No hiding secrets.

It's all in an orange folder.

It is that right?

Yes, you're right.

Yeah.

And all right.

Well what about that say we you know, we've done all of those things.

Is it good then to keep everything in one place and if so who do we tell where it is or what's in there?

>> So the way that that that we do it is that I send some originals home with my clients but I keep set as well and we electronically store everything too so that if you lose all of yours or have a house fire I have a set of originals you have you have paper copies and you have it the electronic storage as well.

>> So OK and then so it's good to have because if you're the only one who's got it you really probably should lock it up in a safe deposit box or a fireproof safe or something and let whoever is your key person know how to access those things if they need them.

>> OK, all right.

>> How about tax records, Cindy?

What should we keep in how long should we keep it?

>> I'm sure you get that question all the time we do and I always tell people they should keep their tax their tax returns forever.

But the supporting documents you keep for about seven years OK, unless it has to do something with how you've acquired like a piece of property or a stock.

So let's say you had a commercial you own a commercial property so you'd want to keep those but you bought it twenty years ago.

Well, you still want to have the original purchase documents OK there to do that.

But if you're talking about an individual return like you or I and and it's seven years have passed we don't have to keep copies of our TOS anymore or the ten ninety nine from the interest that we earned.

But we should keep broker statements if they show stock we purchased OK only stock repurchased or if it again any asset dividends no interest in dividends can go after after seven years.

I haven't ever seen them ask for that old yeah but there's also something that you should be doing with your tax returns and you should be checking with your Social Security report because Social Security has Social Security keeps track of your Social Security earnings every year that you've earned every year that you file tax returns they're usually a year or two behind in posting your earnings but then that determines what your Social Security benefits are upon your retirement.

So they used to send out paper paper things and now they're pretty much going online with those.

But every now and again you will find I had a client who found out that he'd been transposing a number on his social oh and he went to retire and it's like this isn't my stuff.

>> Yeah.

So it was it was very interesting, you know what I do because I'm not real good at this sort of thing.

>> You know, I get help with and actually doing the taxes but I have to to manila envelopes and in one I keep the tax return know from the CPA and I do keep the ten ninety nine thousand you know whatever.

>> But then I have another envelope that just has receipts and invoice basis for daily living and that kind of thing and and I labile one you know twenty twenty five on taxes twenty eight twenty invoices and receipts and then I can throw away the invoices and receipts.

>> That's a good idea a little earlier and then I have so much that I have to store for that seven years or 10 years or that kind of thing.

>> I don't know if I had a good idea or not.

Well I think it's a great idea.

Just remember you shred them, don't throw them away.

I'm going to replace mine going Oh OK let's go.

Yeah but that's that's exactly what you should be doing.

>> Let's do talk about how to protect yourself.

>> I want to address this to both of you.

Cindy how do we protect our protect ourselves from fraud or identity theft with our tax records?

>> Well it's changed substantially.

I mean when I first started preparing tax returns I'm not going to tell you how many years ago my Social Security number was on every single tax return I signed really it was so it was out there.

>> It's a lot it's out there and that's kind of scary now it's kind of scary because you know, there's some tax returns that are probably still floating around now we have what's called a PIN number on their pin.

Well it's called a PIN number so I don't know.

So we have numbers there so that kind of protects me.

This number that's my number.

>> That's my assigned number.

And then the taxpayers if they think they've been the victim of identity theft, they can get a special PIN number from the IRS and that's why I have that.

>> That's what I thought.

It's the six digit six digit number right?

You can get a six digit number then that way nobody can file the return because we we prepare several hundred returns in a filing season and on occasion we'll get some of those returns rejected because we filed the majority of our returns online electronically, electronically.

We pretty much have to because of the volume that we do but it's always an option like if you don't want to file online you can always opt out but there are several times that every so often you'll go in and electronically file something and it'll get rejected.

And the reject code it says a return has already been filed for this taxpayer.

>> Oh my gosh, it's not very welcome news, you know, but then what are you doing?

So then we have to figure out why in the short term we end up paper filing that person's tax return.

I see oftentimes it's maybe parents who have separated and one of them claims the child and the other one tries to claim the child because they haven't communicated in one tries to well they try to claim them right.

>> So a lot of times that's but every now and again it's because of identity theft.

So identity theft a big issue and I mean it's bigger I think because of all the media and technology and all the sources that are out there, Heidi, if if somebody has had their identity stolen and people out there have their Social Security number, mother's maiden name or whatever personal things you don't want them to know and you find out that they've stolen your identity.

Is there any legal protection or what would you do if somebody came to you and said, Heidi, help me?

>> I mean I can't claim that I'm an expert in all of this but immediately I would say change all of your passwords.

Sure.

Possibly go to the bank and talk it over with them because maybe they will have you close the accounts.

>> You have an open new account ,different numbers freeze your credit so that nobody can take credit out your under your Social Security number.

Those are the immediate things that I that I could think of .

>> What are some of the first signs that your identity has been stolen?

>> Let me think your credit card bill but for thousand dollars or do you get you you get those calls where you know how you've been shopping and all of a sudden your credit cards calling you or shutting it down?

You know, I think yeah, banks financial institutions are getting really good at trying to be monitoring that for you.

>> You're a lot of credit card companies do that now.

I mean certain limit they'll call you and say we just got to charge for such and such was that you or somebody else?

>> Yeah.

Yeah.

Any counsel for us on that?

Um, anything like that you know just something just really different happened.

My husband and I decided that we were going to people in our funeral OK and pick the headstone and everything and there are some headstones out in cemeteries now the names of their kids will be on their headstone which at first I think is kind of a nice tribute.

Here's us here's our kids and some of them are specific enough to say birthdays on them and I'm like yeah, I've seen a lot of headstones with birthdays well birthdays for mom and dad .

>> The dying people is fine but not in ones that are still living.

I'm just I'm just wondering if it's a good idea to have those names on there even though when I first originally we were talking to people and they're showing how to do so I'm like I don't think I want that genealogist might really like it because you know, the ancestry, the stuff that you can trace you know they do they used to do a lot of their legwork in actual cemeteries.

>> Yeah, but I thought about that and I thought oh, that's probably not a good thing.

And I do have clients worried about identity theft for mom or dad who have passed it one way.

>> Make sure that well for instance my mom died over two years ago now and my dad four years ago now and I'm still getting stuff at home solicitations for there you know, for charitable charitable donations and everything.

You know, why would that be, Heidi?

I mean what could you do legally to stop that sort of thing, anything?

>> Well, I mean there is some list through the post office that you can sign up for to stop stop solicitations mailings.

But we try to do it because when we administer states in our office and it just seems to take it it takes forever for oh if it does stop the amount of like you said solicitation you freeze the credit for a deceased person, put a credit freeze on there so you can do that.

>> Good idea.

Oh, we have another phone call this time Maryland's on the line with us.

Hi Marilyn.

I'm so glad you're watching LIFE Ahead tonight, what kind of counseling do you need, Marilyn?

>> Well, my dad had passed away two years ago and I filed his taxes.

We had to send them in by mail and that was February 22nd.

We didn't receive anything so I sent something in June.

Registered mail have not received anything back in October , still have not received anything so and because my dad's Social Security is locked out when I try to call I can't get through because I was his Social Security and I didn't know if there's any other, you know, way to get through to the IRS to see if there's something that you know.

>> Yeah.

Like they can move that forward.

That does sound complicated.

>> Maryland who can give advice?

Can you give her any advice?

I can.

Oh, you're not going to like it.

Oh Iris is so significantly behind in processing paper filed returns and it sounds like Marilyn you must have had a refund coming for your dad which required you to file what's called a form thirteen and a refund on behalf of a deceased individual.

So those are if you're like the personal represented of the estate, that's what happens.

So you had this paper file your tax return and the IRS has several million forms behind in processing tax returns.

They just actually announced that they're trying to hire ten thousand individuals to get caught up by the end of this calendar year.

>> Oh my.

It's it it's it's a real issue.

It's recognized the IRS it's there were hearings on it in Washington DC and it's very difficult to get a hold hold of anybody.

What I do when I have to call the IRS, I find out when the particular office that I have to call is open and five minutes before their I start calling I may be on hold.

I make sure I have other things to do while I'm on hold and I could be on hold for an hour to really get hold of them.

There's some ways you can check online to see like where's my refund?

You can check that to see if it's even I mean would you go to IRS and Google that or search for that?

You can see where's my refund?

But I'm I'm really and they usually tell Maryland don't file it three times because it just kind of gets bogged down in the works then.

So I don't know exactly what it is that you if you file tried to file a complete return three times but right now the last I checked I think the IRS said that it was taking at least 16 weeks to process a paper filed return to Luttmann at least and I do have some clients who have yet to see the refund from their taxes filed and these are not even for deceased individuals.

These are just normal tax returns.

They paper file they don't have them yet today for then they filed it over a year ago.

Wow.

That's kind of depressing information.

>> Thanks a lot.

I'm sorry it is but it's the truth and I have heard and read some things too about how far behind they are and trying to help.

>> So it sounds like most returns are that are that are sent in electronically get attention first.

>> Right.

But the phone number the phone number Marilinda call the general number is one hundred eight to nine ten forty and like I said again so she can write that I think it's one eight hundred eight to nine ten forty ten forty to ten forty is easy to remember so you either start at seven o'clock or at 8:00 am a.m. OK and and be prepared but it's I hate it it's it's you just have to sit and wait and on the other hand they are paying you a little bit of interest so OK there you go.

>> I guess that makes it work ok ok Heidi and thank you again by the way Maryland for calling in tonight.

>> Let's talk about the secure act I've heard of that I don't understand what is that?

>> It's a rule that changed the way people can withdraw from IRA funds when they inherit an IRA.

So if you're leaving an IRA to a child used to be they could take many years to withdraw the funds and now they're limited to ten years so oh OK. >> So if if your parents passed away way and left you an IRA all the funds in an IRA you have to take that all out within ten years.

>> Do you have to take it all at once or can you know basis you can make a decision of when you want to take it during that ten year period but it all needs to be out within ten years.

OK, the problem for most people are you think that's reasonable?

>> No, it's it's reasonable.

It's fine.

OK, all right.

>> There you go.

Secure act and make sure that you check on man if you're in that sort of situation.

Let's talk about young people.

My goodness.

I can't believe we're at the end of the show already.

I'm getting a wrap.

Wow.

We've just talked too much into too much information but there's always something to talk about when it comes to long when it comes to accounting.

Well, I thank you all for watching tonight again and I thank Cindy Werner, CPA for being with us.

Cindy, thank you.

And Heidi, always a pleasure.

Thank you for your legal bye.

>> Thank you for the rest of you.

I'll see you here next Wednesday night at seven thirty and this show, by the way, will air three more times here through the weekend.

You can check your TV listings for that rerun.

>> Good night