Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member of FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus brought to you each and every Wednesday morning right here on KROS. This is Nate. I have Mike joining me today. April’s moving right along. It is flying by. We’re finally getting some warmer temperatures too. I’ve seen 80, I think, Sunday.
Mike Steigerwald:
It’s unbelievable.
Nate Kreinbrink:
It’s getting close.
Mike Steigerwald:
Nice to feel that warmth of the sunshine.
Nate Kreinbrink:
It is nice to feel that. Obviously, this past week we had the big eclipse event. Saw a lot of cool pictures as far as from different areas. I know where I’m from back in Ohio was one of the areas where it was pretty visible and some of the cool pictures from out there are just a pretty phenomenal event to see.
Mike Steigerwald:
Doesn’t come around very often.
Nate Kreinbrink:
It does not come around very often. I think they said what, 24 more years or something before the next one. But hopefully you’re able to take advantage of that. Again, baseball season is underway. Major League baseball is in full swing. Hopefully, whatever team your allegiance is for is off to a hot start this year. Some are fading quickly,
Mike Steigerwald:
Correct. Some are not. So that’s okay. Go White Sox.
Nate Kreinbrink:
And again, obviously high school sports, high school activities, I know prom season is coming up. In Illinois, you have baseball, softball, all those Iowa, you have track golf a lot of times and I know a lot of theater productions. All those are going on. So again, exciting times, starting to see things green up. It’s I’m ready.
Mike Steigerwald:
Yeah, no doubt.
Nate Kreinbrink:
I’m ready for that warm weather.
Mike Steigerwald:
Let’s keep that consistency.
Nate Kreinbrink:
Yes, that’s the thing. Let’s get it and let’s keep it. Again, with that time of the year, we also have tax deadline. Before we walked up the hill today, Andy came out of his office from back there, had a little smile on his face. So I think he’s seeing an end is near.
Mike Steigerwald:
Yes.
Nate Kreinbrink:
So again, for those that don’t know, Monday is the tax deadline as far as where you have to file. If you have not filed yet and you’re planning on dropping them off to a tax preparer, to an accountant, places, probably time to start looking at seriously considering filing an extension with where those are at. Again, that extension just extends the time for you to file. If you are still going to owe, you still do have to pay by the deadline that you have at that point, but again, it just extends the time for you to actually file those, again, with only a couple days left. That is becoming a real priority as far as for them to make sure those extensions are filed.
Mike Steigerwald:
Certainly, certainly, yes. And what we’ve seen is, of course, the deadline coming, meaning you have just a couple days left to get some of those contributions made to qualify still for tax year ’23. So if you haven’t done it and you want to, now’s the time. So make sure you get those in. And really, that transitions to all of you that have filed and maybe weren’t satisfied with your results and/or the outcome of what this tax season has brought you, time to start asking the questions of what can I do this year to make my next year’s outcome more satisfying?
Nate Kreinbrink:
Right. And I think that’s the biggest thing. People think of tax season, you file your taxes, you get them returned to you. Obviously, you either are happy with what it turns out or you’re not happy. But then in most cases, you file that away and you don’t think about taxes again until next February when you start getting your tax forms to do the whole process over again. Again, that return, when you get it back from you, whether you owe money or whether you’re getting a refund back, that number can be adjusted to whatever it is that you want to do with the right amount of planning in knowing what that number is. Again, so that any refund you get is technically just an overpayment of taxes that you paid in throughout the course of the year. It’s your money that the IRS kept and is just returning to you, whether it’s the federal or on the state level.
If you are owing in, that’s basically you just did not withhold enough taxes throughout the course of the year based off of your income, so you have to settle up with that bill. Wherever you want that to come into, we can adjust your withholdings on any of your income that you have to, again, withhold more or withhold less to, again, make that number that you get on your return, again, close to wherever it is that you want to do. And if you don’t like the way the result was for this year’s tax return, you need to start asking the question as to, “What do I need to do to change that?” And you still have plenty of time left in the year to be able to make that change and spread that out over the next eight months to be able to have it, again, get closer to where you want it to be.
And again, knowing that number, working with your tax professional, working with your financial advisor to say, “Hey, what do we need to do?” If you’re taking a monthly distribution from a retirement account, are you withholding anything? And if so, are you withholding enough? Again, we don’t want to withhold more than what we need to, but again, if we can withhold a little bit each time we take that distribution, it’s going to just offset that number and basically prepay the tax so you don’t have to write that bigger tax bill if you owe at the end of this year.
Mike Steigerwald:
So really, there should be no surprises is what… And if there is a surprise, which that does happen, people, you look at the result and you say, “Oh, I thought it was going to be X, Y, or Z, more or less.” What have you. And you go back in and say, “Well, what do I have to do now to make that change so next year looks different and looks more appealing to my outcome, my desired outcome?”
Nate Kreinbrink:
Right. And I think a lot of times we focus on the withholding part, but sometimes your tax filing status changes, you have a major life-changing event that happened in the course of the year or maybe is going to happen later this year that you want to start planning for. Maybe you’re getting married and you’re going to switch from a single tax filer to a married filing jointly. Well, that’s going to change your tax brackets as far as where you fall, as far as what you need to withhold. Maybe you separated last year, you got a divorce or something like that that’s changing. Well now, you’re going to flip the other way where you’re going from married filing jointly back to a single tax filer. Well, again, that’s drastically going to change the withholding amounts. And again, where your income falls is probably going to be in a different tax bracket.
So again, we need to take that into consideration when we’re looking at stuff where, again, if we have one of those life-changing events that are going to happen or did happen in the course of the year, we need to account for that. Because again, you’re going to get there, and again, we don’t like surprises. I love to do the planning ahead of time. So technically when you go in to do your taxes during tax season, I joke around, it’s essentially like you have the answers to the test when you’re going into it. You’ve done all the heavy lifting ahead of time to, again, get to that number where you want it to be. Tax season is basically just the reporting of the work that we’ve already done and again, playing it to see how close we got to that number that we were estimating it.
Mike Steigerwald:
The follow-through is key. Nothing will change unless you change it. So if you want a different outcome, if you want to get a bigger refund or you want to owe less or whatever your situation came out to be, the key is following through on making some adjustments and planning for it. And Nate, like you said, there’s still plenty of time left in this year ’24 to make those adjustments, to get it to where you want to go.
Nate Kreinbrink:
Right. And again, we make those recommendations, we do the planning for it, and obviously it’s inevitable that tax laws somehow change towards-
Mike Steigerwald:
That’s true too. Yes.
Nate Kreinbrink:
The end of the year. So the rules we thought we were playing with, obviously, to get adapted and things like that. Obviously, with an election coming up in November, that’s bringing a little bit of uncertainty into some things. But again, with where tax laws sit right now, let’s do the planning with it. And then again, if they do change or if they get amended or adapted, again, we react to that and then we say, “Okay, well this is what we were going to do. Now we’ve got to look at it from a different perspective, because the rules of the game changed a little bit.” And again, it’s staying up on those. Again, I know, and I joke with Andy all the time, I always do a show with him when he gets back from his big tax conference and he comes back with this huge stack of papers, and I always ask him, “What is that from? Was that from the conference?” He’s like, “Yes, those are just the changes and amendments to the tax code.”
That’s not the tax code. Those are just the changes and the amendments to the tax code. And so, if the changes in amendments are that thick, you can only imagine how thick that tax code is. And again, for one single person, if you’re just getting and doing your taxes once a year, to understand all that complexities and the nuances that go into it is impossible. And again, a lot of times, you just don’t know what you don’t know. And if there’s ways that you can, again, use that tax code to your advantage, we want to look to do that and put all options out on the table to, again, maximize what it is that you have. We always say, it’s not what you have, it’s what you keep. And a lot of times that refers to how much you are paying in taxes. And if we can pay less in taxes and keep more in our pocket legally by what the law states, again, we want to use any advantage in any one of those scenarios that we can.
Mike Steigerwald:
Certainly, certainly. And again, I think the biggest takeaway from all this, just from interactions we had at the office and cases that we’ve seen has just been exactly what we hit on. And that’s, make the adjustments, ask the questions, gather your stuff, and follow through with making any changes that you need to make.
Nate Kreinbrink:
All great stuff. Again, if you have any questions, feel free to give us a call. We’d be happy to help out in any way we can. Did want to mention real quick before we run out of time that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of April will be donated to the Clinton MercyOne Foundation. Again, this is Nate Kreinbrink with NelsonCorp Wealth Management, Mike Steigerwald with NelsonCorp as well, bringing you this week’s Financial Focus. Thanks again for tuning in and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research incorporated, a broker-dealer, a member FINRA SIPC. Investment advisor representative Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.NelsonCorp.com.