Bob Brinker Tax Advice Warning Pt1

Bob Brinker took a call from a babysitter named Becky on Saturday April 8th, 2007. Bob gave some bad advice to Becky then later in the day he didn't listen to a CPA who called the show to try and correct him. Our Bob Brinker FREE Discussion Forum came alive with people who heard the call saying they could not believe their ears what Bob Brinker told the caller.

The next day, Easter Sunday, Bob Brinker talked about the calls and "recharacterized" what he said. If you were like many of us who heard Saturday's show but missed Sunday's show since we were celebrating Easter with our families, then this is a must read.

Here is a summary of events:

Bob Brinker: "Becky, in the Bronx, listening to WABC radio - hello Becky."

Becky: "Question for you. My only income at this point is from interest and dividends. However, I work at a babysitter and I know I have to report the income. It's paid off the books and I know that I have to report it as taxable. Am I allowed to get an IRA with this income - it's very confusing to me."

Editor Comment (EC): Bob asks Becky several questions including questions about how she is paid and if the money is reported to any taxing authorities.

Becky: "Okay, and what were you trying to tell me about the golfing before. I didn't follow you - something about golf."

Brinker: "No, I said that you certainly - I said that why shouldn't you get paid for babysitting - people get paid to play golf. People get paid to hit baseballs in the Bronx. Why shouldn't you get paid for babysitting? I have no problem with that. But the point is, if it's not declarable income - it sounds like nobody is declaring it. It sounds like she's not doing a W-2. It sounds like she's not withholding New York State or City taxes. It sounds like she's not withholding Social Security and Medicare. It sound like none of this is going on. It sounds like she's just handing you $200 dollars."

Becky: "That's correct."

Brinker: "Well then my advise to you is, consider that a gift. Forget about the IRA, because if you start trying to monkey around with an IRA, well first of all, it's not declarable income, you are going to get your - your going to get the woman in trouble - especially that amount. Consider it a gift because the reality is there would be no tax. But you cannot put that money in an IRA."

• Read the full "Call with Becky transcript"

Following Becky's call on Saturday's Moneytalk, a CPA named Hugh called in to Correct Bob's tax advice to Becky. You can read that exchange and Brinker's Sunday call here

DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice.

Print Article

Email Article

View All Articles

How to subscribe to feeds