Announcer:
It is 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 representatives securities offered through Cambridge Investment Research, Incorporated, a broker-dealer, 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.
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. Well, it is the third Wednesday of the month, which means it’s talking tax time.
Andy Fergurson:
Tax time, tax time.
Nate Kreinbrink:
Third month of December, and the fourth month of December is-
Andy Fergurson:
Christmas.
Nate Kreinbrink:
… Christmas. This is actually the last show of the year.
Andy Fergurson:
Last show of the year?
Nate Kreinbrink:
Yeah.
Andy Fergurson:
Really? Oh, because we wouldn’t be coming in on Christmas.
Nate Kreinbrink:
Nope.
Andy Fergurson:
Right on.
Nate Kreinbrink:
Last show of 2024.
Andy Fergurson:
And we won’t come in on New Year’s Day, either, because that’ll be the week after Christmas.
Nate Kreinbrink:
And that’ll be next year, anyways.
Andy Fergurson:
So yeah, right on.
Nate Kreinbrink:
Hard to believe we are at that time point.
Andy Fergurson:
And there was white stuff on the ground-
Nate Kreinbrink:
I know.
Andy Fergurson:
… when we came out, so that means it’s wintertime, I guess.
Nate Kreinbrink:
We’ll see if it sticks around for all those who love that White Christmas feeling and-
Andy Fergurson:
This was about the right amount for me, you know, about a quarter inch.
Nate Kreinbrink:
A little fluffy.
Andy Fergurson:
Just enough to cover everything, make it look clean, and then not enough enough to really cause any trouble.
Nate Kreinbrink:
Not real difficult to just shovel off your driveway.
Andy Fergurson:
Yeah.
Nate Kreinbrink:
Listen to us.
Andy Fergurson:
Yeah.
Nate Kreinbrink:
What do you guys say? Old curmudgeons?
Andy Fergurson:
Yeah. Remember when we were kids, we used to pray for snow? You like put spoons on your pillow, or whatever it was, to make it snow?
My kids woke up and saw snow, and they were so excited. And then they were like, “Uh, it’s time to-”
Nate Kreinbrink:
But no delay, no schools, no nothing enough for the-
Andy Fergurson:
Yeah, it wasn’t even deep enough to get on their shoes, you know?
Nate Kreinbrink:
Well, it is that excitement for the first time, and again, I’m sure schools this week, upper grades are probably finishing up testing and all that. Younger grades-
Andy Fergurson:
Party day.
Nate Kreinbrink:
… it’s party week, I think.
Andy Fergurson:
Yeah, yeah. Everybody’s eating snacks and watching movies and-
Nate Kreinbrink:
Getting ready for their big holiday seasons, Christmas programs, choir concerts, all that wrapping up probably and all that excitement and toys and-
Andy Fergurson:
Yeah, we had two basketball games and two Christmas programs last night. That was fun to fit.
Nate Kreinbrink:
I’m excited. I’m going caroling tonight.
Andy Fergurson:
You are?
Nate Kreinbrink:
I am.
Andy Fergurson:
Where? I’d like to be there.
Nate Kreinbrink:
So Zion Lutheran Church has their Faith Foundations for the youth like every Wednesday night, and tonight we are going caroling. We’ll go a lot around to some of the assisted living and the homes in the-
Andy Fergurson:
Nursing homes and stuff.
Nate Kreinbrink:
… in the area, and a few of the members who maybe don’t get out as easier as what they usually do.
Andy Fergurson:
Do you sing the high tenor part?
Nate Kreinbrink:
I am the deeper voice.
Andy Fergurson:
You’re not singing the high off-melody, high tenor?
Nate Kreinbrink:
No. Mainly, I think I’m there for transportation.
Andy Fergurson:
All right. Makes sense.
Nate Kreinbrink:
So let’s talk taxes.
Andy Fergurson:
All right.
Nate Kreinbrink:
We are entering the end of the year.
Andy Fergurson:
My favorite time of the year.
Nate Kreinbrink:
We are filtering into next season, which means it is getting closer to that one season.
Andy Fergurson:
Oh. Yeah, the most wonderful time of the year precedes the storm.
Nate Kreinbrink:
Yes. Which means, again, as you start getting into the next year, people start getting anxious and antsy, I think, to get filing, to get their stuff done.
Again, documents start coming in, in January. As we say every year, save everything. If you’re in doubt, don’t throw it away. Let you be the one to decide that you don’t need it.
But again, it’s important for people to think is that that deadline to send those documents out maybe isn’t quite as necessarily as early as what they were thinking that it was.
Andy Fergurson:
Yeah. A couple of things with that.
First of all, there are a lot of people that are under the misconception that there is some kind of legal requirement that they have all their documents by January 31st. That is not a law. So there are requirements for companies to file certain documents with the IRS and with the Social Security Service by the 31st, but the documents they file and the documents that you get in the mail are not the same thing. And so it is not a requirement that you have your documents by January 31st.
I would also add to that there are probably very, very few people that are ready to file their taxes in the second week of January. I mean, if you are a kid who worked one job and you happen to get your W-2 before January 20th, okay, you may be ready to file. But most people are not going to have their documents by the second week of January.
And so don’t rush in to file a return and then have to do it over, right? We don’t want to do it twice. We don’t want to do it and then miss out on something. We don’t want to miss out on a 1099 mortgage statement or a miscellaneous income statement or something like that, that may be coming behind where you think you have everything.
One thing that’s going to show up this year that people are not used to seeing is a 1099-K. The 1099-K is going to be related to income that you may have received through Venmo or PayPal or Apple Pay or any one of those third party providers that somebody may have given you money through. You may receive a 1099 from that company, or you may have to go onto your app and print that 1099.
Nate Kreinbrink:
Print that. Yes.
Andy Fergurson:
Yeah, because those are going to be required this year.
And if we file without those, what’s going to happen is it’s going to be mismatched in the IRS’s supercomputer, and that mismatch is going to cause either a letter audit or some other inquiry into your return. So we want to make sure we have all those documents.
Make sure you open the envelopes you get, right? I have people that every year somebody brings me a statement or they bring me envelopes and they’re like, “I got all my tax documents.” And they’ll bring me something that says, “Hey, important tax document inside.” And they think it’s their Social Security 1099, and it’s actually the letter from Social Security that they get in December that says, “This is what you’re going to get next year on your Social Security.”
Nate Kreinbrink:
So they still don’t have-
Andy Fergurson:
And so they don’t have their 1099. So just open it, make sure you have what you think you have. Again, collect it all. Put it all in there.
You don’t have to wait to have all your documents to make your appointment. You can make your appointment for your tax return. If you’re meeting with a professional when you do your taxes, look at last year’s return. If you filed your return on February 18th last year, you’re probably going to be able to file at or around February 18th this year. So call now and make your appointment for February 18th. That’s fine.
Nate Kreinbrink:
Get it out of the way, and-
Andy Fergurson:
It’ll be on the calendar. And then you just are collecting stuff until February 18th.
If you filed February 18th and did not have your 1099-B or your K-1 and you had to wait-
Andy Fergurson:
… then push it out, right? Because that happens every year, too.
If you have a trust account or an investment account that requires a 1099-B, those documents usually are not coming until the end of February, sometimes the beginning of March before we see those documents.
So you can make your appointment and go in and have your tax return, but it’s not going to get filed. It’s not going to get filed until we get that last document. So all you’ve really done is frustrate your preparer because now they’ve got to make two appointments with you, instead of one, in a very, very busy, busy time.
Nate Kreinbrink:
Right. Well, and, too, I think as you go into that as far as preparation, but, again, sometimes simple life-changing events, make sure that you let your tax preparer know of any changes that you had.
I mean, obviously the obvious one is marital status or change of address or any dependents. A lot of those things, too, again, let the preparer know because they may not necessarily always know those exact changes based off the documents that you provided them.
Andy Fergurson:
Yeah. And along those lines, we do our best to try and collect that information. And so some people will get frustrated because they’ll come in and they’ll want to drop their stuff off and they’ll say, “Everything’s the same as last year,” and that’s not necessarily the case.
So we are asking the same questions every year, address, phone number. We want to know if any kids moved out. We want to know if anybody went to school. We want to know if anybody got married, if there were any babies born, any of that stuff, those life-changing events.
Usually people are okay telling those things, but it’s the little things, right? “I closed this bank account,” or “I don’t use, or I don’t have this phone number anymore,” or “I changed providers,” or “I changed banks” or anything like that. And you may have changed banks in February and it doesn’t feel like it’s new because it’s almost a year, right?
Nate Kreinbrink:
It’s seems so long ago.
Andy Fergurson:
And so we’re going to ask you for the information every time. Don’t get frustrated.
The purpose of us asking that information is not because we don’t remember you or we don’t know you. It’s because we want to make sure we have the right information.
Nate Kreinbrink:
It’s easier to do it right once than to have to go back and found an amendment and, again, look what you did and then make those changes then with it.
Andy Fergurson:
Absolutely. And think about what’s happening in your preparer’s office, right? In our office, there are 1700 people coming in, in 12 weeks, and they are all bringing 15 to 20 documents in at the same time.
What we’re trying to do is make sure that all that stuff stays together and make sure that it goes to the right place and make sure that we can quickly get that information entered and turned around so that you get an efficient response. So all of the collection of information is designed to help that process happen.
And it may seem frustrating that you got to take an extra two minutes to rewrite your phone number that you’re sure we already have because it hasn’t changed in 20 years. But the purpose of that is to make sure that it’s right. If you write it with your own hand that day, we know it’s right. And that way you get better service.
Nate Kreinbrink:
Well, and I think, too, with that, I mean just said, I mean as far as just the sheer magnitude of documents and things that you guys handle in our office.
Now, think of the IRS that’s trying to receive documents from everybody, which is why that e-filing, electronic filing and deposits and payments are very popular thing as well. Because you don’t have to worry about that paper check, the postal service handling it, delivering it, the IRS receiving it, it gets processed. Boom, we make the payment and it’s done, and you have confirmation that it was paid.
Andy Fergurson:
Yeah, absolutely. Everything you can do electronically through the IRS, you should do. So that includes filing, that includes payments, that includes receiving payments, right? So whether you’re making a payment at the end of the year or you’re making estimates or you’re receiving your check, if you can do it electronically, it will be much smoother.
If it has to go through a paper check or through a paper transaction, it’s going to take much longer. It’s got a much higher likelihood of being mixed up, and it’s got a much higher likelihood of causing you frustration.
I still have clients who have filed by paper who are going, “When am I going to get this?” And my answer is, “I don’t know. I don’t know when they’re going to open the envelope. I’m sure it’s sitting on somebody’s desk or in some room at the IRS building, but I don’t know when they’re going to open it.”
Nate Kreinbrink:
Right. Whereas you pay electronically, you get the confirmation number-
Andy Fergurson:
And it’s there.
Nate Kreinbrink:
… immediately, and you know that it was paid on this date at this time, and [inaudible 00:12:09].
Andy Fergurson:
It goes through the computer and it is much, much, much more efficient. So anything you can trust to do electronically, you should do electronically.
Nate Kreinbrink:
All great stuff. Again, we are running out of time here.
I did want to mention that every Friday, NelsonCorp Wealth Management and NelsonCorp Tax Solutions are wearing jeans for charity. Money raised in the month of December will be donated to the Living Peace 365 Program.
Andy, appreciate you joining me. Merry Christmas to a week early, but it will be quick.
Andy Fergurson:
Yeah. Merry Christmas to everybody out there. Happy Holidays.
Nate Kreinbrink:
Yes, Happy New Year, and I guess we will see you guys-
Andy Fergurson:
Yeah, we’ll see everybody soon.
Nate Kreinbrink:
See you next year.
Andy Fergurson:
Yeah. Everybody’s going to be funneling through here in the next couple of days, so we’ll see you.
Nate Kreinbrink:
Again, Nate and Andy bringing you this week’s Financial Focus. Thanks 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, 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.