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 representatives, 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. Well, it is the third Thursday of the month, which means it’s time to talk taxes, and joined again this morning by Andy Fergurson with NelsonCorp Tax Solutions. Andy, I know it’s a busy time of the year, so I appreciate you taking time out of your busy schedule to join us and to fill in the program today. Middle of March always seems fun time, crazy time, weather’s starting to get going. Kids are on Spring break, so they’re able to enjoy a lot of that. You, maybe not so much this time of year.
Andy Fergurson:
Yeah. Not everybody’s getting up at the same time at my house, so maybe it makes it a little bit harder to get out the door in the morning because there’s nobody making any noise. But, at least the weather’s turning nice. The sun’s shining.
Nate Kreinbrink:
It is.
Andy Fergurson:
It’s not dark as early. It feels like we’re at the end of it, or we’re staring down the barrel of the end of it. And that is comforting and frightening at the same time, because we fight to get through it, but I’ve also got a lot of work to do, and that work is not going to do itself.
Nate Kreinbrink:
Right. And as we went through it, and we’ve talked, some of the things coming up through the last couple of months shows, as far as things people should be prepared of. One of the things that you had always said, and we talked about a little bit on the way up here is, all the documents as far as for the year, making sure people bring those all into it with proof that you’ve got some of the stimulus payment. That’ll be for, usually, you and your spouse, and all those things coming in. How’s that playing out so far?
Andy Fergurson:
Yeah. So, we’ve seen people doing a pretty good job bringing those letters in. But then, they’re forgetting things that they would normally bring. It’s almost like there’s a capacity on how many forms you can remember. And so, the IRS gave you four extra letters to remember if you’re a joint filing client, and so now there’s four other things that are being forgotten. And so, it’s really important to go through last year’s tax return and make sure that those 1099-Rs, the Social Security statements, the dividend statements, the 1099-Bs, those things that you had last year, property tax, and your car tags and all that stuff, those things that you recorded last year need to be recorded again this year.
Andy Fergurson:
We’re in that time where we filed half of the returns that we’re going to file for the season. And so, some are starting to come back with additional documents, right? We’re having people come in who came in, in February and all of a sudden, their 1099-B from their brokerage firm is coming out and they’re like, “Hey, is this important?” And yeah, now we’re going to have to do an amendment.
Andy Fergurson:
And, that’s something that’s a difficult thing. Those amendments are just an added level of reporting that we have to do. So, you’ll see your preparers eyes drop when you bring that in. And they’ll be a little bit like, “Oh man, now we got to do an amendment.” So, it’s really important to gather that stuff and get as much as you can going, because it’s crazy time now. And, it’s hard to add to that pile of stuff to do when it’s a forgotten form.
Nate Kreinbrink:
It is. And again, you obviously enjoy everything that is that you do. And I know you look at back early February, mid-February, you have that excitement-
Andy Fergurson:
Yeah.
Nate Kreinbrink:
… as far as-
Andy Fergurson:
Getting a little more adrenaline pushing you.
Nate Kreinbrink:
… as far as every day, or whatever. But again, I’m trying to get to some of these deadlines. I know the deadlines as it states right now is what? April 17th, April 18th, whatever that Monday is. Last year, roughly around this time, we had an extension. But as of now, there’s really no-
Andy Fergurson:
Yeah, there’s no-
Nate Kreinbrink:
… mention of anything-
Andy Fergurson:
… extension on the horizon.
Nate Kreinbrink:
… of that on it.
Andy Fergurson:
Yeah, no extension on the horizon. And so, this will be the first time that in the last three years that we’ve had a-
Nate Kreinbrink:
Normal.
Andy Fergurson:
… a normal deadline. And so, tax day’s April 18th this year because good Friday is on the 15th. And so, that gets us to Monday, but no real extension to speak of. So, this is it. This is what we’re going to have to do. And, it’s the dog days for a tax preparer. You come into it, like you said, with a little bit more excitement. You’re ready to go. You’re raring to go. And, you’re cranking out returns, and excited to see people get their refunds, and all that stuff. And, it’s starting to settle in a little bit, the long days and the long hours, and all those extra things that you have to deal with are starting to take their effect. So, be extra nice to your preparers.
Nate Kreinbrink:
Be extra nice to them.
Andy Fergurson:
Be extra nice to those staff that you interact with or the people that you’re talking to on the phone, because they’ve had a long day already, and it may only be 7:00.
Nate Kreinbrink:
And so with that, I mean, you’ve done quite a few. And obviously, we’ve seen the foot traffic in and out, and drop-offs, and meetings, and all that, just constant for the last month and a half, two months, or whatever. What are maybe some things that you’ve seen-
Andy Fergurson:
Sure.
Nate Kreinbrink:
… throughout the course so far this year? Maybe as a reoccurring thing that’s maybe new that you maybe haven’t from years past?
Andy Fergurson:
I don’t know if it’s necessarily new, but we’ve seen something. One of the things I would remind people, is try not to assume that your preparer’s going to remember everything that you’ve talked about all year long. A conversation that you had in June, or in even November, that you did some planning with them, is not going to be on the top of their mind as they sit down to do your tax return. So, there’s things that you may know or may expect them to know, but don’t give them the information like they know. Does that make sense?
Nate Kreinbrink:
Mm-hmm (affirmative).
Andy Fergurson:
Maybe give the information and let your preparer tell you that they are already know that, because there’s… A good example is something like a QCD, which is qualified charitable distribution. A lot of times, there’s no documentation on the forms that are submitted on the 1099-R. There’s nothing that says that any of that money went to a charity. So, for you to assume that, that money’s going, or that your preparer is going to know that you gave that money to a charity is an unsafe assumption. It’s going to cost you money if you do that.
Andy Fergurson:
So, there’s an opportunity to make sure that you’re sharing all that information. Don’t assume that your preparer saw in the paper that your son got married, right? But, he’s not going to know that unless you’re telling him that information. And, don’t assume that if you told somebody in his office that your son got married, that that preparer is going to have that information. Just give him all the information you can have.
Andy Fergurson:
One of the things I see sometimes that catches people up a little bit too is, we’ll sit down and we’ll start talking about their information. And, they’ll want to tell me that all their information from last year is the same. Well, we still want to double check that, because if I have your phone number wrong in my software, and you tell me it’s the same as last year, it’s still wrong. And so, take the 10 seconds to let them go over that stuff and confirm all those numbers, addresses. They’re not going to know you moved if you moved. Unless they were there helping you move, they’re probably not going to remember.
Nate Kreinbrink:
Which, you haven’t done a lot of that last year.
Andy Fergurson:
No, I try to avoid that kind of labor. I’m built for supervisory things. Yeah, so just don’t make an assumption that they know. They’re dealing with a lot of people, and a lot of stress at this point in time in the season. So, just offer that information up, and try and help them get the right information on the form the first time so we don’t have to do it over.
Nate Kreinbrink:
Over again. And, I know another item that we really hit multiple shows leading up to this year, which is different, and the first time, is the Child Tax Credit. And as far as how that’s impacting people’s returns because of the prepayments that they got starting last July, for those that qualified for it. Is that pretty much what you expected it to be this year? Are people pretty well-prepared for that coming in?
Andy Fergurson:
So yes, people are pretty well-prepared, and that’s not what I expected. So, I really expected to see a lot of more shock and surprise in people as they realized that their bottom line number on their tax return was less than what it was last year for that Child Tax Credit. But, everybody seems to be pretty well aware. We must have talked about it enough, or the media has talked about it enough to where those that took the Child Tax Credit are preparing themselves. Usually they’re coming in going, “Well, I already got half my tax credit, so I expected it to be a little bit lower,” so that’s a good thing. Everybody seems to be fairly prepared for that.
Andy Fergurson:
And, the Dependent Care Credit is helping offset that as well. It’s an expanded credit. The Earned Income Credit is expanded. So, there’s some things that are providing a little bit of cushion for some of those people that are protecting them from having a real small return or balance due. The other thing that was something that was surprising, or was something that people are dealing with is, a lot of people got some Recovery Rebate Credit last year. So, that was the credit for getting… You got your stimulus money on your tax return instead of getting it when everybody else got it in the mail. And so, that Recovery Rebate Credit may have puffed up your return last year.
Andy Fergurson:
And then, that Recovery Rebate Credit’s not there this year. And so, that’s caused a little bit of issue for some people where, if you got an $1,800 Recovery Rebate Credit last year, and it’s not there this year, your return moves by that $1,800. And so, couple that with other things, the Child Tax credit, it may be a significant difference. So, I think what I’ve seen mostly, those people come in with not a real expectation of where the number’s going to be. They’re just kind of like, “We just got a-
Nate Kreinbrink:
It’s a little bit-
Andy Fergurson:
Yeah, “It’s going to be different. I don’t know how different, but it’s probably going to be different.”
Nate Kreinbrink:
All good stuff. And I know you said we’ve got a month yet, but don’t wait till the last minute.
Andy Fergurson:
No.
Nate Kreinbrink:
Still got time to get those in as early as you can. Take it easy on the people that are preparing your taxes. So, give them time to not rush to that minute. Did want to mention though, 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 March will be donated to the Northeast Elementary PTO, All-inclusive Playground Equipment Fundraiser. Andy, appreciate you taking time out again. Good seeing you. Always good talking taxes. We’re getting there, buddy. We’re getting there.
Andy Fergurson:
All right. Sounds good.
Nate Kreinbrink:
Again, Andy Fergurson, 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.