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 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. It is the third Wednesday of every month, so I am joined today by Andy Ferguson, NelsonCorp Tax Solutions. Again, third Wednesday of the month, middle of February. Usually means we just got done with Valentine’s Day. Normally in a given year, pitchers and catchers would have reported yesterday or today. Who knows what’s going to happen with that. But there is one constant that always remains, Andy, and that means we are in the middle of… Or not even in the middle. Just really getting into the swing of tax season.
Andy Fergurson:
It’s really starting to pick up. It’s starting to come full swing. It’s that time.
Nate Kreinbrink:
I know. We’re starting to get that larger influx of foot traffic through the door as far as drop off meetings and all that. I know for you guys, again, obviously again, I’ll ask you this a month and a half, two months from now. But it is an exciting time to get back into the groove again, see people again, and then having that communication back and forth.
Andy Fergurson:
We’re ahead of the burnout phase right now. We’re still excited and trying to just get everybody through as fast as we can. You’ll probably experience, if you’re one of those people that’s bringing your stuff in early, you’re probably getting it back pretty fast because your preparers are out there trying to stay in front of the mountain and trying to keep that backlog low. Right now, we’re able to do things about as fast as they come in. Very soon, they will be coming in faster than they can be done, and so the backlog will start to grow. If you haven’t got your appointment scheduled, now’s the time, because you may be looking out a couple weeks before you can get in.
Nate Kreinbrink:
Right. I know we started hitting that. I know the last couple of years with extensions and delays and all that type of stuff, everything else that was going on, there was some experience in delays. But I know I was talking with Mike from the office yesterday and looking at the state and federal return right now. A week or two to two to three weeks as far as should be expected, and sometimes even quicker than that.
Andy Fergurson:
We’ve seen them come back in days. So if you don’t have a bunch of credits, you may be getting yours turned around pretty quick.
Nate Kreinbrink:
A different tax year always brings along different changes to it in what people can expect. Some of that is some of the different forms that people should expect to be looking out for. Maybe new from years past, and maybe sure that they have them before they come in to see you.
Andy Fergurson:
We’ve been harping on it for a couple of months now, these 6419s and 6475 letters that show what you got for the child tax credit, what you got for the stimulus money. Those are really important, especially if you had any variation from the maximum amount. If your income was over the maximum last year and you had a tapered stimulus, or if you were able to turn off your child tax credit at some point, it’s really important to have those letters. If those numbers are mismatched on your tax return, that’s what leads to delays. That’s what we saw the majority of the delays were from last year in people getting their refunds, where those numbers were off.
Nate Kreinbrink:
I know from my experience or whatever, those letters come directly to the household. And again, for husband, wife or whatever, there’ll be two separate ones that they’ll get as far as what they need to bring to you.
Andy Fergurson:
That’s a weird thing too, because some people are getting one for each spouse, some are getting a joint letter. It’s all over the board. I’ve seen it both ways. So just make sure that you can-
Nate Kreinbrink:
Anything that looks like it would be good for you, bring it all.
Andy Fergurson:
If you haven’t seen the letter, get into your bank account and see what you got. You should be able to tell from your bank account. It’s just important to know those numbers or it’s going to slow down your process.
Nate Kreinbrink:
You mentioned a term, and I know we’ve touched on it previously, foreshadowing what was going to be coming down the pipeline this tax season. But the child tax credit is here. It is having an impact on people’s taxes and you’re seeing that firsthand.
Andy Fergurson:
Yep. Yep. We talked about it before. If you got the full advanced credit, you’re probably losing $500 per kid on your refund amount. We’ve seen it have some impact already. So you just got to be ready for that and make sure that you understand what’s happening. Pay attention to your tax provider as he’s going over it and telling you what’s happening. That may be the cause of why your refund’s down a little this year.
Nate Kreinbrink:
Right. We’ve seen it, again, with some of the accounts that we have. Obviously, everyone expects W-2s to come out pretty much end of January, early February. They’ll get them and they think they have everything. There are a couple forms that do have an extension and do have a natural later deadline that people need to be a little bit more patient for. Because again, they come in and they don’t have everything with you. You either file it or you file an amendment later on. It just makes for a little bit more of a hassle to do that. Those forms, again, should be coming in, if you haven’t already received them, within the next couple of weeks and still give you plenty of time to get your tax return done.
Andy Fergurson:
You’ll see the 1099s that come from investment accounts, dividends, interest. Maybe the statements that come from your kids’ school, the 1098-T. Some of those things are a little bit behind. There’s nothing worse than having to amend a return for $10 worth of interest that you need to report. So it’s important to watch for the things that you had last year and make sure that you’re aware of having all those things.
Andy Fergurson:
At this time of year, we do it a lot where we have people come in and they’re sure they have everything. As soon as we file that return, we get an email or a phone call that says, “Hey, I got my mortgage statement. I forgot I refinanced last year, so I actually had two mortgage statements.” So you want to make sure you have all those forms. If you have marketplace insurance, you need a 1095-A. If your kid went to school and you want to claim one of those education credits, you need a 1098-T. You just got to watch for all those things, especially if it’s something that you haven’t done before, because your tax prepare won’t know to prompt you for it. If you were new to the marketplace, he’s not going to know you had marketplace insurance, and it’s going to be hard for him to help you catch that error.
Nate Kreinbrink:
Right. I think that just goes back to, again, the ongoing planning that you do, just so you’re aware of it to do it. But again, if there’s a new situation throughout your life, throughout last year, whatever, where you’re saying, “Hey, does this impact my taxes? Will this impact my taxes?” Again, you meet with your tax professional, bring it up, and they can guide you in that right direction to say, “Hey, we’ve got a little change this year.” And then this is why with it.
Andy Fergurson:
That’s a good point too, Nate. One of the things to consider is the tax laws change significantly, and so there are some things that have been expanded that you may qualify for this year that you didn’t qualify for in the past. An example is donations. Everybody’s allowed to take $300 worth of donations off the top.
Nate Kreinbrink:
And that’s above and beyond the standard deduction that they would normally have gotten anyways.
Andy Fergurson:
Right. Because that donation is above the line. It’s before they make the adjustment, and so any cash donations you have are worth reporting. In the past, you wouldn’t have reported them, especially if you lived in Illinois, because it wouldn’t impact your tax return in any way, shape, or form. And so it’s important to report those things. The childcare credit has expanded, the earned income credit has expanded. It may be that you’re an older person who qualifies for the earned income credit now where you didn’t before, or a younger person. So those things are expanded, and it’s important to know to ask questions and to see what’s going on in your own return with those.
Nate Kreinbrink:
All great stuff. Again, as you said, things are picking up, but you obviously still have openings and we still have plenty of time to make appointments or whatever, and still taking new people on as well.
Andy Fergurson:
Yeah, we’re still taking new people. It’s a long season, so there’s still room on the calendar. But get in and make your appointment. Even if you don’t have all your stuff, make your appointment, give yourself some time to get it. If you haven’t gotten something in the mail, you may be able to go to your provider, your bank, or the company that you get your dividend statements from, and you may be able to get a new copy of that. You may be able to find it in an online portal. I know a lot of the school forms, it’s faster to go get it from your online portal than it is to wait for one to come in the mail. Some schools don’t mail the stuff anymore. So you may be able to go find the things that you’re looking for instead of waiting of them to come to you. So there’s lots of options there.
Andy Fergurson:
But yeah, absolutely. Get planned, get on the calendar, make sure you’re in because there’s no plan for an extension this year. We haven’t even heard rumors about them extending stuff. So it’s going to be a regular season. We’re going to be done April 18th.
Nate Kreinbrink:
Right. I know one of those things as far as is with retirement accounts, if you retired and rolled your account over somewhere, there are some forms 1099-R, some of those that you will need to have that you should have received from that old provider. If you haven’t received those yet, you are able to call them, and they can either fax or mail out an additional copy. Again, it won’t change your taxes, but it is just a reporting thing with it to understand where they’re coming from.
Nate Kreinbrink:
Again, real quick, 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 February will be donated to the Have Life Foundation in the Quad Cities.
Nate Kreinbrink:
Andy, as always, appreciate you joining me on this Wednesday morning. Andy Ferguson, NelsonCorp Tax Solutions, Nate Kreinbrink, NelsonCorp Wealth Management, 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, 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.