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 offer tax.
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. I have Mike from the office joining me today, last show in February. And of course it is a stark reminder as far as what February is supposed to be like.
Mike Steigerwald:
It feels like it.
Nate Kreinbrink:
As far as what the weather is this morning. We were joking on the way up here as far as we got home from work last night, was outside, even was able to get the grill fired up and man, what a difference from when I started to when I ended as far as when that wind changed, it just felt totally different.
Mike Steigerwald:
Oh, certainly. I mean, you’re talking about a 50 degree jump, a drop in temps from day to day. You’ll certainly feel it. And this morning, getting outside, man, that was a starker reminder of where we’re at, February.
Nate Kreinbrink:
And mid 60s by the weekend again.
Mike Steigerwald:
There we go.
Nate Kreinbrink:
So like you said, you get the good stuff. Don’t blink because it’ll be gone. Well, hopefully this is a bad day and we get through it and now we start to get warmer again, so…
Mike Steigerwald:
I agree.
Nate Kreinbrink:
Exciting time. I know high school basketball tournament, girls state is this week in Iowa. Illinois tournaments are getting gone. Boys are wrapping up. The sub-state finals to get there. A lot of area teams bowling success, things that they’ve had in the area. Exciting times. Spring training is underway. March Madness is getting close. Man.
Mike Steigerwald:
It’s a great time of year.
Nate Kreinbrink:
It is a great time of year.
Mike Steigerwald:
It is great for all the high school athletes and making memories and these types of tournament games and competition is great right now, so it’s good luck to everyone still competing.
Nate Kreinbrink:
It’s fun to see. This time of year also is another season in our office and we are full swing into tax season as well.
Mike Steigerwald:
Undoubtedly.
Nate Kreinbrink:
Starting to see obviously the regular traffic of people coming in for meetings, coming in to pick up, coming in to drop off. Just a steady flow of people coming in, filing those taxes. As Andy and Mike has said in prior ones, if you got it, don’t sit on it. Just if you’re ready to bring it in, bring it in. Doesn’t mean you can finish it and not submit it, but at least they’re definitely much appreciated when they get a little bit more time and not have that huge pile there of people that brought it in two days before the filing thinking that they’re going to get it done at that time.
Mike Steigerwald:
Yeah. That’s definitely important. If you got everything, just get it in, get us started. We have seen a big increase in our traffic obviously this time of year, like Nate said. So there’s a lot going on, but it’s actually surprisingly going very smoothly in terms of results and what people want. So we just keep on going. I mean, every day is a new day.
Nate Kreinbrink:
Just keep putting that one foot in front of the other and before you know it, the deadline will be here. So as you see these people come in… Obviously Andy was on last week. We talked taxes. He talked some things that he had seen as far as some of the returns, just a general maybe change that he saw with a lot of people. You’re seeing that too as far as some of the processing which you help out with when you have time up there at the front desk. But as people come in, obviously the simple thing is if you have a question if you should bring the document in, bring it in. And Andy always says, “Let them be the one to say, ‘Hey. You don’t need it,’ or to shred it.” If you have a question with something, bring it in. That makes it easier when you do that. But with some of the withholdings and some of the changes to the W-4 and some of that that have came through gives people a result when they come to pick up, which is different than maybe what they expected.
Mike Steigerwald:
Certainly. And that is definitely a question that we’ve seen a lot and fielded quite a bit in terms of the new Iowa W-4 form. And certain employers, it doesn’t sound like all of them, but a lot of employers are giving employees the new form or telling them there’s a new form and it’s causing some concerns, questions, “Do I have to do anything? Well, they gave me this form. How do I fill it out?” Truthfully, you don’t have to do anything if you don’t want to make any changes. So if there is a new form, but if you’re withholding to stay as it was and keep things status quo, nothing you have to do. However, if you do want to make changes in terms of withholding more or less, which will impact what you either get back in a refund or you owe to the federal taxes or you have to make some change, it’s just on that new form. But we have seen a lot of questions with it, so there’s nothing you have to do if you want to keep everything the same.
Nate Kreinbrink:
And I know with that form, I’ve seen quite a few of them come through. I even had some clients bring some in to help them fill them out during that time or give them some instruction with that. The big change with that Iowa form is you used to have to put down your number of exemptions, one, two, three, four, zero, whatever you wanted to do. Now with this new form, they’re gone away from the exemptions and you have to put a dollar amount in there. And that’s the big change that I think are throwing people off a little bit is they’re not used to actually physically putting in a dollar that corresponds with the exemption. So again, if you’re looking at doing that, make sure that you just don’t put one in there because it’ll probably end up withholding a dollar and it’s not going to be what you thought it was when you go to do your tax return. Then 10 months, 12 months from now, it’s going to be totally different from what you’re looking at.
Mike Steigerwald:
Yeah. And that’s what the big thing is. You don’t want surprises. I mean, nobody likes surprises at this time of year. When you’re coming in, you should have a pretty good feel of what the year looked like in terms of ’23 and in terms of this tax preparation period should have a pretty good feel of where you’ll end up. And going forward, if it’s not the result you wanted, well, you’re going to have to change something. So if you would like that, and some people like to get the bigger refund, well, we got to make some changes in terms of your withholding and make sure they’re taking enough out on a check to check basis. And if it’s the opposite and you don’t mind and you have a big refund, but you’d rather have more throughout the course of the year, you can also make changes that way.
Nate Kreinbrink:
So I know when we do that, again, we always joke around and say, “Hey. We can make that result on your tax return pretty much whatever you want it to be,” whether it’s withholding more or withholding less throughout the year. So it’s where that comfort level falls, but again, if you have any changes or you do that, and again, you make changes through work as far as doing that. Don’t just make the change and think it’s all taken care of. Make sure you’re checking that pay stub. Make sure you’re looking at that as you go periodically throughout the course of the year. And if you have your accountant, maybe schedule a meeting with them four or five months from now, just say, “Hey. Am I on track based off of this most recent pay stub of withholding what I wanted to get to accomplish that goal?” rather than again doing it now, forgetting about it until next March, and now all of a sudden hoping that it was right.
Again, the more you look at that periodically throughout the course of the year, I think the more dialed in with the results you’re going to be.
Mike Steigerwald:
Yeah. The old trust but verify, right?
Nate Kreinbrink:
Yes.
Mike Steigerwald:
Trust that it’s done, but you want that verification to make sure that the changes that you wanted to make actually have been made.
Nate Kreinbrink:
And again, as we get to this time of the year, it’s also I think important to remember that, again, we still have the up until the tax deadline of April 15th to make a prior year contribution to any IRA account or any Roth account that you have if you’re eligible to do that. So you get a refund back, maybe that’s something you want to say, “Hey. Maybe I want to take this and put it into a Roth account and make it a 2023 contribution if I had wages and I fell within the income requirements of being able to do that,” something to look at to do to know that, “Hey. I can still…” Just because it’s 2023, calendar year’s done, the contribution aspect of an IRA or a Roth account, you still technically have up until the tax deadline to make a prior year contribution. And then you have the whole 24 max limit that you’re able to put into it wide open for this year.
Mike Steigerwald:
That’s right. And I mean, it’s important to keep those in mind, as Nate said. Being able to have the ability to have a prior year contribution I think gets lost sometimes, especially this time of year, a lot of busyness and tax front of mind. Well, if you haven’t meet your limit for last year, you can go ahead and tuck that away and then you got the next 10 months, 12 months really, to make the contribution for ’24. And then also be aware of the catch-up contributions, 50+, so you can make a little bit more.
Nate Kreinbrink:
Right. And I think too with that it is still important though to make sure you’re contacting your tax professional when you’re doing that, because again, putting money into a Roth account for 2023 is not going to change your tax return if it’s already been submitted. It’s after tax money. There’s no tax deduction for getting it in there. Again, but if you do make an IRA contribution for 2023 and you’ve already submitted your tax return, you’re going to probably need to file an amendment because that is going to lower it because you do get that tax deduction for putting it into a tax deferred traditional IRA account for that prior year. So again, when you’re doing it, you’re doing a good thing, but again, make sure you are running that by your accountant, your financial professional to, again, make sure that you’re doing it, but it’s not changing something that’s already done, otherwise, the IRS is going to send you a nice little letter saying, “Hey. Something needs to be adjusted or amended from this.”
Mike Steigerwald:
Yep. Yep. Absolutely.
Nate Kreinbrink:
So again, as we go with this, again, just realize that depending on what your outcome of your tax return is, looking forward, it is still going to be March 1st here at the end of the week. That still gives us a full nine months, 10 months, whatever for the rest of the year to be able to make any changes to withholdings to have it impact you to make that change for next year as far as what you’re going to do. Contribution limits for IRA or Roth accounts still have up until the tax deadline to be able to make those. And again, don’t wait until the last minute, so…
Mike Steigerwald:
Yes. Yes. Please. Get it in if you’ve got it.
Nate Kreinbrink:
It’s all great stuff. And again, stay warm out there today. It’s going to be here. It’s going to be gone. It’ll be fine. I think we’ve been pretty fortunate enough for February, so we can’t complain too much.
Mike Steigerwald:
And it won’t last long
Nate Kreinbrink:
And it won’t last long, knock on wood. So before we do run out of time, I did want to mention that every Friday, Nelson Corp Wealth Management and Nelson Corp Tax Solutions are wearing jeans for charity. Money raised in the month of February will be donated to the Lions Club here in Clinton. Again, this is Nate and Mike with Nelson Corp Wealth Management, bringing you this week’s Financial Focus. Thanks 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 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. For more information, visit our website at www.nelsoncorp.com.