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. It’s Nate Kreinbrink joined this morning by Andy Ferguson, NelsonCorp Tax Solutions. Andy, you flipped the calendar to 2021, rolling right into your busy time out there, isn’t it?
Andy Fergurson:
Yeah, it starts to get crazy right away. As an accountant, your life is full of deadlines anyway, so you have deadlines each month and each quarter and each year. And once you turn the calendar over, you get them all right in a row. You get the end of the month, the end of the year, the end of the quarter. All of them hit me at the same time, and then you got to get right into tax season. It’s an exciting time at the beehive down there.
Nate Kreinbrink:
It’s getting that time. I always look at it to roll it over. It’s kind of the dog days of winter, I guess you would call it now. The holidays are over, the January, February time period and the tax season, though we should be getting warmer, shouldn’t we? Baseball season there. So that’s some excitement to look forward to.
Andy Fergurson:
Yeah, I’m okay with it staying cold through tax season. I don’t mind looking out the window at a cold landscape. It gets a little bit harder when you’re looking out at the flowers blooming and the warm weather and everybody’s out there in shirtsleeves. It makes you want to be out there.
Nate Kreinbrink:
So transitioning to some of the topics. I know you and I talk regularly as far as the different things in the headlines and how they relate to the clients that I work with, the clients that you work with, tax situations, but stimulus packages. It’s in the news all the time. Did you get it already? How you’re going to get it? Scams on it through whatever. Maybe talk a little bit as far as, not necessarily as much as the one that came out earlier in 2020, but this most recent one and the timing as to what it’s going to come out.
Andy Fergurson:
Yeah. So the stimulus package is one of those things that everybody wants to know, how’s this going to impact my taxes? And it will impact your taxes. There’s something that needs to be reported with your stimulus package. When you got your first check or your first direct deposit or your first debit card that came in the mail, way back in May, shortly after that deposit was made, or after you received that check, you got a letter. It was a 1444 letter. And somewhere on that letter, it said, hang on to this. This is an important tax document. Most people didn’t hang onto that letter. But there’s a question on your tax return this year about how much stimulus did you receive? And you need to know that number. So for the first go round of the stimulus, you need to know the number and for your second stimulus, you need to know the number and that’s important. Your tax preparer is going to need that in order to process…
Andy Fergurson:
What is happening with that number is they are reconciling that stimulus to make sure that you got everything you were entitled to, and if there’s something that you didn’t get, you will get that on your 2020 refund. What’s important to think about, or what’s important to consider is your second stimulus may have come to you in 2021 and not in 2020.
Nate Kreinbrink:
As far as when you actually received that payment.
Andy Fergurson:
Right, and normally that would mean it’s part of your 2021 taxes, but that’s not the case this year. That second stimulus is part of your 2020 package, it needs to be reported on your 2020 tax return. And I can’t stress enough the importance of knowing those numbers, the amount that you got before you go into your tax appointment, because your preparer is going to have to put that information in.
Andy Fergurson:
So you may need to go back through your checking records or your bank statement and look for that deposit and make sure you’ve got that exact number. If you were to put the wrong number in and it doesn’t match the IRS records, you can expect to get a letter in about six months from the IRS that says something was wrong on your taxes. And that kind of letter usually scares people. Those notices are not fun for most people and they get real nervous and they call me and they’re worried that the IRS police are coming and they’re going to jail. And so you can save all that hassle by having those two numbers when you go to your tax appointment this year.
Nate Kreinbrink:
So I think that’s going to be the case for a lot of things, when you file for 2020, as far as on the individuals and then as far as on your end as well, with all the different that came out and about as far as with unemployment and wages, and then all that as far as throughout 2020. So I think it’s important that people start looking at the W2s they are starting to get in the mail, which they should be getting here towards the next couple of weeks or whatever. If you’re like most people, you get them in the mail, you throw them on a pile. And then once you think you’ve got pretty much everything, you bring them into your tax preparer and here, thank you. But people need to start looking at those a little bit. And again, not that they need to dissect them, but looking at that information and making sure that it’s accurate.
Andy Fergurson:
Absolutely. You want to make sure, first of all, if anything says important tax document, take it with you. If your tax preparer doesn’t need it and I’m guilty of this every year, I tell people, “Oh, I don’t need this paper,” but I also tell them, “Bring it anyway. I’ll throw it away. You don’t need to throw it away. I’ll throw it away. I got a real big garbage can in my office. And so bring all those papers that say important tax document. Double-check your name. Double-check your social security number on those documents. That’s much easier to fix in January than it is to fix in March or April, because chances are in January, that information hasn’t been submitted to the IRS. You can call your employer and say, “Hey, my name’s spelled wrong here or my social security is off by one digit,” and they can fix it before they submit it. And that’s a much easier process.
Nate Kreinbrink:
Correct. And I think it all goes down to just be a little early when it comes to it this year. I think there’s with the filing there’s going to be a couple of differences that may take a little bit longer and give the people time. And then just as far as what they’re looking at doing, I know you guys on your end with NelsonCorp Tax Solutions are taking on new clients. So as far as the staff that you have this year, and I think excited to do that with a new face this year and helping out that way.
Andy Fergurson:
Yeah, we’re definitely excited. We have some capacity this year and we think that’s going to be a huge benefit to our business. And so we’re excited to take on new people. You’ll see our advertisements coming out a little bit, but the idea of going in early is important too. I would tell you make your appointment early. I tell my staff every year, we can never get the hours in January that we don’t use back. And at the end of the tax season in April, in March, it’s really busy and we’re working long, hard hours. And there’s not a lot of time to put anything in at that point. And so in the front end of the season, when you’re excited and you’re ready to go, that’s the time, if you can get your stuff to your preparer early, they’ll probably turn it over really fast.
Andy Fergurson:
We’ve had it to where we have people submitted to the IRS before the IRS even opens the season. And so there’s an advantage to go in early. I would also expect that this year, because of the changes to the tax law, there’s going to be some more complication. There’s going to be some more due diligence stuff that we have to do, and that’s going to make the process take longer and it’s going to make the process take longer for everybody. And so, because that process is a little bit longer, there may be more and more extensions this year. And so my counsel is get in early, as early as you can. And if you come in late, be prepared that you may have to be extended.
Nate Kreinbrink:
Extension. So I think that’s important to know. I like the way that you do it. I mean, obviously you guys have your drop-offs where you drop them off, you call them, they’re ready, you pick them up. But as far as that physically sitting down with people and explaining to them some of those items, what they mean, how they can change them moving forward. And we talked tax prep, tax planning, that’s all big part of all that when it goes into it. But I think people want to have a little understanding, not that they want to lift up the hood and dive in too far, but knowing where the parts are and knowing what they mean, I think is important.
Andy Fergurson:
That’s my favorite too. The ability to coach somebody through a tax return and help them understand how they can affect the numbers, how they can change things. Because by the time we get to a tax return, we’re really just reporting. We’re taking the information you give us, putting it into a formula that the government has laid out and what it is is what it is. There’s not a lot of room for change at that point. So I do like to help them understand that, hey, if you do this differently in 2021, we can see a different outcome than we did in 2020. And you have control over this number. You have control over this number and that’s how it impacts the bottom line for you. And so there’s a lot to that.
Andy Fergurson:
I enjoy that face-to-face. I also know that people aren’t always comfortable, especially in the society we live in today with the virus where it is, there’s people that aren’t going to want to go and be exposed to a lobby full of people, or even sit across from somebody indoors for 35, 40 minutes. It’s just not comfortable for them. And so we take the drop-offs too, and we understand that, but definitely there’s some value in learning what causes things to happen on your tax return. I tell people all the time, remember back to when you were in high school and college, and you took that tax class, and they’re all like, “I never took a tax class.”
Andy Fergurson:
And it’s tongue-in-cheek for me because we never get taught anything about taxes in public school, other than they exist. We know how the Pythagorean theorem works, but we don’t know how to file our taxes. So there’s just not much education there. And we like to do that in those face-to-face meetings, help people understand how this works, how this number affects this number and give them just a basic understanding so they are more in control and they’re not just reporting, but affecting their taxes.
Nate Kreinbrink:
And do we have about a minute and a half left here. I know there was one other topic that we had talked about, and if you can summarize it quickly, although it’s not a quick topic to summarize necessarily, but there was a new PPP release. Maybe talk the key points quickly, as far as what people can look at from that.
Andy Fergurson:
Yeah, for the small business owners, the second wave of the PPP started, I think yesterday. And there’s some opportunity there. The rules are a little bit different this time. You have to show a very specific loss in gross revenue. And if you don’t show that loss, and if you don’t meet a couple other qualifications, you’re not going to get the PPP loan this time. And so there’s some things that are different this time. When the first one came out, everybody really got it. I mean, everybody got it if they tried. It was a really the wild, wild west, kind of a land grab type of deal. This time it’s going to be a little bit more restrictive and it’s going to be targeted to people who had a harder 2020 than it just everybody.
Nate Kreinbrink:
Got you. All good stuff to know. And as Andy, we always get going, time flies when we’re doing this. I do want to mention real quick that every Friday NelsonCorp is wearing jeans for charity. Money raised in the month of January will be donated to the Victory Center Rescue Mission here in Clinton. Andy, as always, appreciate all the knowledge. It’s always fun talking taxes early in the morning here.
Andy Fergurson:
It’s exciting.
Nate Kreinbrink:
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 the 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 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. For more information, visit our website at www.nelsoncorp.com.