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. Well, this is Nate Kreinbrink, joined again by Mike VanZuiden with NelsonCorp Tax Solutions. Mike, I appreciate you taking your time out of the busy schedule to join me this morning. Getting into this time of the year, I know it’s exciting, we were talking on the way up major league baseball pitchers and catchers reporting. Everyone has an 0 and 0 record. Optimism is always high. I know high school basketball, state tournaments, both girls and boys, is underway. State wrestling is underway. Again, exciting time of the year, end of the year as we’re coming into it. That also means busy time of the year for you in the tax business, Mike. Why don’t you talk a little bit about how things are going and how this tax season is shaping up so far.
Mike VanZuiden:
It’s a busy time of year obviously for us tax folks. We’ve had a good start to the season. We’re not bored by any stretch the imagination I guess would be a good way to put it. We have seen a lot of familiar faces. We’ve seen a lot of new faces come into the office. We do a lot of drop-off business, so people can bring their returns to us and actually just drop them off. We’ll prepare them and call them when there ready. We’ve been turning those around in under a week, so people are getting prompt, efficient, timely preparation of their tax returns. It’s been a good start, and we’re having a good year.
Nate Kreinbrink:
I know, just walking through the lobby or whatever and hearing Becky on the phone, booking appointments and things like that, I mean, just turn them through and making sure the efficiency, like you said, is always an important thing. When people drop them off, they think you can just drop them off and you’ll have them done in an hour, but obviously it takes a little bit more than that to go through them and do that. Again, if they have a… still looking and getting some of those documents that they’re waiting on for taxes, there’s obviously a still room to drop them off for you guys.
Mike VanZuiden:
Absolutely. Yeah. We’re in the office 8:00 to 5:00 at least Monday through Friday, and most of the time we’re working much later in the evenings during the week, so we welcome appointments, we welcome the drop-offs, and we can accommodate either one, whatever works best for the customer and their schedule. We can accommodate.
Nate Kreinbrink:
Well, and I think what you just mentioned there is a big thing. Most people when they think taxes, they think drop-offs, “Here’s all my stuff,” bind it together, drop it off and then come back, pick it up, and then either I’d get a refund back or I have to pay depending on whatever the numbers show. A big thing I think with you guys that I know is extremely important is those one-on-one meetings, actually taking the time and sitting down with people and going through the return, going through the numbers that they have there and explaining to them as far as, “This is why you’re getting a big return,” or, “This is why you have to pay in a lot.” I think that one-on-one interaction I think is very critical, and again, I think is something that people extremely like.
Mike VanZuiden:
I think it is important, and I think for some people, I think a lot of our drop-off customers, things are pretty consistent year to year, so-
Mike VanZuiden:
… they’ve had those conversations in years past, understand what’s there, what’s on the return, and so the drop-off seems to work best for them. Sometimes the one-on-one meeting is a valuable when things are a little more complicated, a little more complex, they’re a little more dynamic. There’s change year to year, so it provides the basis for some conversation, not only questions about what you’ve got, expenses, deductions, things like that, sometimes that situation is just beneficial. Really, it varies by taxpayer. Some people, the appointment is a great thing. Others, “Hey, my stuff’s pretty much the same year to year, so just keep doing what you’re doing.”
Nate Kreinbrink:
Well, I think that does, I mean, it goes back to what we always say as far as tax preparation verse tax planning. I know tax preparation we always say is we’re looking backwards, we’re looking back and reporting, “This is what I had for income last year,” reporting it on my tax return and turning it in. There’s really not a whole lot that you can technically do to change any of those numbers. Obviously, you’re just reporting what the 1099s and some of those things say.
Nate Kreinbrink:
Tax planning is now let’s take this information and let’s look forward and say, “Can we benefit our tax situation in a better way for us to go forward>” I think one of those things in what you said as far as just avoiding any unexpected taxes that people have sudden they file for their taxes, and they’re unexpectedly having to pay in a lot more than what they thought of. One instance that you said was people taking early withdrawals from a retirement account, whether it’s a IRA, Roth IRA, 401(k), and they had a loan against the 401(k), they were… switched jobs, they rolled that 401(k) over to something else. Now, that loan was a distribution. If they’re pre-59.5, that 10% penalty is going to hit them whenever they file for their taxes. A lot of times, when they take those distributions, they withhold taxes from that money, but they don’t account for that 10% penalty, and depending on the size of that loan, the size of that distribution, that 10% penalty can be quite a overwhelming, I think, when they sit and do their taxes sometimes.
Mike VanZuiden:
Absolutely. Most of those distributions, the early distributions, they’ll have the income tax withheld, but like you said, the 10% penalty is not accounted for. I think that’s one thing that’s important for… People can go grab a program in the store and try and do their own taxes. One of the things that when people bring their taxes to us, they pay us a fee to prepare the tax return, but then we are a resource for them not only during tax season but during the year. Let’s say a situation arises where you’re thinking about, “Boy, I could use some extra money. I’m now 59.5. I’m going to, I’m going to grab five, $6,000 out of my IRA,” we are that resource where you pick up the phone and call us. We can tell you exactly what the impact it’s going to be on you from a tax standpoint.
Mike VanZuiden:
You pay a fee for the tax return, but really, that planning portion and everything is part of that, so we look at ourselves as a resource year round. You’ve got questions that come up from your return or you have situations arise, and you want to know “if I do this, what’s the impact on me tax-wise,” we can help with that. Our business is not from February 1st to April 15th. It’s a year-round thing, and I think it’s important for people. That’s something that you get from us, and for [inaudible 00:07:48] get if you go pick up the box off the shelf and think you can prepare your tax return on your own because maybe you can, but there are things that add value to that process that you miss by doing it that way.
Nate Kreinbrink:
Well, and I think too, I mean, even this year, and I mean, you go back two years to 2018 when the Tax Cut Jobs Act came out, you come back to this year with the SECURE Act, I mean, those tax laws are constantly changing in the revisions in how they, “Okay, yesterday, this was the rules. Now, today, this is the rule.” Again, for someone that would have to be able to be adept to be able to know what those changes are, how they impact them, again, that’s what you guys do, and that’s what you guys do as far as learning those new rules and how they apply yesterday versus today and going forward.
Mike VanZuiden:
Right. I think in a situation where we’re sitting down with somebody and doing a tax return, certainly, we’re there as a resource for questions, but also, I think as we’re working through that process, we’re going to be proactive about those things, so if we see something on the tax return that looks like, “Boy, if you did this instead of what you’re doing now, here’s here’s the impact on your bottom line, on your tax return,” I think that’s something that we look for in each appointment, and not just appointments. Even in the drop-offs. If we see something that someone is doing that, “Well, if you did this instead of that, there’s X amount of savings to you,” those are things we’re looking for all the time. It’s not just data input and spitting out a return. There’s a lot of thought and evaluation of what we see that goes into each and every return.
Nate Kreinbrink:
Well, I think that planning, and we always talk about it, is crucial, I mean, whether it’s retirement plan, from your end, tax planning, but [inaudible 00:09:37] more, I mean, your taxes and your investing and your investments and returns and that stuff, they go so much hand in hand, and having that plan and understanding how they’re… you can coordinate those and understanding that the left hand is doing this, the right hand is doing this. How can they work together so we don’t have any unexpected outcomes when we sit there and do our tax returns.
Nate Kreinbrink:
I think one big thing with that is whether it’s the Roth conversions, this favorable tax environment that we in. Again, for us, it’s so nice, whether it’s yourself, Mike, Andy, Deb, just being able to walk down the office with some of the people that we work with, and then they’re getting their taxes done to say, “Hey, we’re looking at doing this,” bring up their tax situation, “How is that going to impact us?” That coordination I think is just something that is not able to be offered anywhere else that our clients just absolutely love and being able to have that coordination and those quick answers right from the get-go.
Mike VanZuiden:
Sure, absolutely.
Nate Kreinbrink:
Again, a lot of things that are going into it, a lot of planning from whether it’s taxes for the financial situation, being able to tie that altogether. I know like Mike said, they’re starting to pick up, but definitely still got room, so if you’re looking for somebody, give Mike, give Andy, Deb a call. They’d be happy to sit down with you, and as Mike said, that one-on-one, that ongoing planning throughout the year I think is just a huge resource where it’s not, like you said, a box where it’s, “This is my return, and now, I’ve got to figure it out again next year,” or whatever, having that someone to just run a question by I think is invaluable with any of that.
Mike VanZuiden:
Absolutely. It sure is.
Nate Kreinbrink:
Again, this is Nate Kreinbrink with NelsonCorp Wealth Management, Mike VanZuiden with NelsonCorp Tax Solutions. Did want to mention real quick that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of February will be donated to the Mississippi River Eco Tourism Center. Again, I appreciate you guys tuning in this week, 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 representatives securities offered through Cambridge Investment, 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.