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 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. Welcome to this week’s Financial Focus. Brought to you each and every Wednesday morning right here on KROS. Well, this is Nate Kreinbrink soloing it this morning. Again, hard to believe that we are already to, basically the middle of April already. The year has definitely flying by. It’s definitely been an interesting one, a lot of exciting times coming in. But I think this year especially has proved that a lot of the old so-called wives tales or adages have definitely came true. The ground hog saw its shadow, six more weeks of winter, which I think we’ve pretty much already seen. March came in pretty quietly like a lamb, and definitely went out like a lion with some of the snow storms and wind, and all that. Obviously, now we’re into the next one where April showers are hopefully going to bring along those Mayflowers.
Nate Kreinbrink:
Again, I guess some positive to look at from all this rain that we’ve been getting, and there is some good to it. It’s definitely nice. I always enjoy this time of year seeing things green up, see the sprouts for the flowers, and the plants. The buds on the trees and all that starting to come to pop out and just see the life again as far as the greenness of everything. I always joke around and say I’d rather mow the grass than shovel the snow. We’re hopefully getting to that time period. A lot of other exciting stuff going on. As far as locally, you have the area high school, middle school, track season. Golf season’s underway for some of those. We have a lot of the prom season prep coming up very soon, which we’re going to head into very soonly here.
Nate Kreinbrink:
Also, obviously the end of the school year, which I’m sure there’s a lot of teachers, students, and sometimes parents, maybe not so much parents, that count down to the end of the school. It’s getting closer. Again, I think it’s definitely ready by all of us, as far as the warmer temperatures, and being able to get outside. And enjoy some of the great surroundings and area attractions that we have here. Being able to enjoy some of those things. This time of year also brings about good, bad, or otherwise, the tax deadline. The tax deadline for this year is coming up Monday, April 18th, is the actual tax deadline for 2022. This is a little getting back to normal as opposed to the last two years where we saw that tax deadline being extended back in 2020 for a couple months due to COVID. Last year was extended a month just to kind of get caught up on things.
Nate Kreinbrink:
But again, back to the normal timeframe, as far as that text deadline, which is things need to be turned in by midnight on Monday, April 18th. If you have not already done that, you are definitely in crunch time. Make sure you get those in. I’m sure the tax preparers who are doing them would appreciate getting them to them sooner than later. Again, they’re not pushing hours as far as to hit those deadlines. There are also some things that you as individuals can look at doing it prior to that tax deadline. One of the most important things, and most common things, that people look at prior to that tax deadline is making a prior year contribution to any IRA account or any Roth account that you may have. You do have technically up until that tax deadline, which is April 18th, again, Monday, as far as making any contributions on a previous year merit to any Roth account or to any traditional IRA account. Assuming you meet the income requirements, and assuming you haven’t already hit the contribution limits for last year. Which, for 2021 contribution limits were $6,000 to a Roth and or IRA.
Nate Kreinbrink:
If you are under the age of 50, if you’re over the age of 50, you get an extra $1,000 contribution. Your limit is that $7,000 to look at it from there. Again, if you haven’t, and you have, maybe you got a refund back. And you’re looking at what’s the most efficient way to maybe use that, possibly looking at a previous year contribution may be something that may be beneficial to you. Again, some of those things that you can definitely look at, and now we kind of transition. I’m going to have Andy Ferguson with NelsonCorp Tax Solutions on next week, just to kind of give a recap of tax season. Some of the things with some of the new law changes. Some of the things that were implemented this year, maybe taken away. How some common things that he saw as far as for people to maybe be aware of.
Nate Kreinbrink:
So, that way, again, going forward, you can maybe get a little ahead of that. We always talk the tax preparation versus the tax planning. With tax preparation basically looking back, basically what we are doing now. As far as when you turn your stuff in to have your taxes done, they’re just looking back recording numbers that have already happened. Whereas, again, the other dynamic of that is the tax planning, and that’s essentially looking forward and what can we do to potentially limit some of the negative. If you had to owe in a bunch this pastime, as far as your filing, what can we do differently to maybe minimize that, if that’s the case you want to do. Because, again, and he jokes around with it all the time, is that, again, technically your accountant can make your return, or what you pay in, whatever it is you want to be. Again, that refund is essentially your overpayment of tax that you’re just getting your own money back.
Nate Kreinbrink:
Whereas, again, when you have to pay in you shorted the taxes and you’re just catching up with that. Again, people have different thoughts as far as, “I want to always want to get a refund back.” “I always want to pay in.” “I always want to come down to as close to zero as I can,” whatever your preference is. There’s different theories as far as each one of those. But, again, if it’s not what you want it to be, again, there’s some things that you can do as far as looking at your withholdings. A lot of times we see this when someone’s had a life changing event. Maybe they had a death of a spouse, and their tax status is going to change where they were, again, married, filing jointly last year. But, again, going forward, they’re going to be filing as a single tax filer.
Nate Kreinbrink:
That’s obviously going to have a big impact on their tax situation. We want to make sure that, again, we’re doing, putting the processes in place and some things to maybe minimize that damage as much as we can, if there’s some options that we can look at. People go from working to now, retirement. Obviously their income is going to change now. Again, is there anything that we need to do now going forward in order to help with that? Maybe they weren’t taking money out of a retirement account, but now they are. Or they were taking money out, but they don’t need it as much anymore. Maybe they had a social security benefit that kicked in or a pension, or again, they paid off something. They just don’t need as much money coming in, so their income’s going to reduce now. Okay, we don’t want to withhold too much as far as more than what we have to.
Nate Kreinbrink:
Again, a lot of stuff to kind of look at. Again, this is the time, again, give your tax preparers maybe a little while to kind of catch their breath. And to kind of regroup and retrain their train of thought from looking back, to now looking ahead. But, again, I think they’re always happy. I know Andy jokes around that he loves those meetings as far as the planning aspect of taxes. Putting in that work ahead of time, rather than, again, sitting down and trying to recreate the wheel after the fact. It’s a lot tougher. Obviously, you have a lot less options as far as what you can actually do, and have it impact your taxes after the fact, as opposed to that planning ahead of time.
Nate Kreinbrink:
Usually they’ll have a little more smile on their face as far as getting out of this season. I know I was talking with Mike in our office and asked if he had the countdown yet to the deadline. He wasn’t quite switching over from the countdown from days to hours, but I bet it’ll be pretty quick here as far as that hour deadline to get that stuff coming in. You also have an option that goes along with that, as far as filing an extension physically on your own. The last couple years that tax deadline was extended for everybody. The tax deadline is April 18th, but you can still as an individual, or a household, file an extension to file your taxes. Again, that extension only gives you the right to be able to wait before you turn your taxes in.
Nate Kreinbrink:
There is a misconception with that a lot of times is that extension, when you file for that extension, it does not extend the deadline for you to make any payments, should you owe taxes. Or if you’re making any estimate payments into that. That deadline is still April 18th. Yeah, you can file an extension. You don’t have to turn your taxes in, but if you’re going to owe, or you think there’s a really good chance that you’re going to owe, those payments have to still be in by Monday at midnight. Again, some things to still keep in mind if you still have questions, or if you still haven’t turned your taxes in. Again, I know there’s a lot out there that wait until the very last minute. Well, we’re getting to that very last minute here. Again, help your accountant out. Get that stuff turned in. Again, I’m sure they’d be very happy to it.
Nate Kreinbrink:
Again, I’m going to have Andy Ferguson on next week. Excited to kind of see his perspective and some of the new nuances, and some of the new laws, that went into effect. How they changed, how they impacted? And seeing it from his perspective, as far as what he can pass along as far as for individuals moving forward. Did want to mention though real quick, before I do 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 County Resource Center. Heading down to this weekend, I want to wish everybody a very happy Easter. A fun weekend, as far as hopefully you can spend it with friends, family. Hopefully the weather cooperates so you can get outside. In a lot of local area, Easter egg hunts were last weekend. If you have more smaller ones with your family this weekend, hopefully they turn out well. Enjoy that time. But, again, Nate Kreinbrink with 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 the 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.