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, it is the third Wednesday of January. That means it is time to talk taxes. We have Andy Fergurson with Nelson Core Tax Solutions joining us today. Third Wednesday’s flying by, and I think it’s safe to say it is January, it is cold. Although, we were joking, it’s going to be a polar vortex today. Or, the opposite of that.
Andy Fergurson:
The opposite.
Nate Kreinbrink:
The opposite of that.
Andy Fergurson:
Tropical.
Nate Kreinbrink:
A tropical vortex.
Andy Fergurson:
Swimsuit weather today.
Nate Kreinbrink:
Positive temperatures all day, no negative signs in front of that.
Andy Fergurson:
I think the sun might come out. We might even see some of this snow melt. You might see water instead of ice somewhere.
Nate Kreinbrink:
It’s quite the middle of January front coming in here, with cold weather, with snow, with everything just thrown in there. Obviously, playing hectic with school schedules, sports schedules, all those activities, trying to get them in. But again-
Andy Fergurson:
Riddle me this, Batman. How can you cancel school and still have a basketball game that night? I don’t understand how that works.
Nate Kreinbrink:
It warms up in the evening. It warms up in the evening.
Andy Fergurson:
The school’s not open for school, but it’s open for basketball.
Nate Kreinbrink:
Well, give them a kudos to all those administrative positions, trying to make those decisions, I guess.
Andy Fergurson:
I know.
Nate Kreinbrink:
And navigate through some of that stuff.
Andy Fergurson:
It’s hard to reschedule stuff, so it’s hard.
Nate Kreinbrink:
To get them officials and everything. But again, hopefully, looking at the extended forecast, a little chilly this weekend, but then mid to upper 30s next week, with a chance of rain.
Andy Fergurson:
Yeah. That sounds like a chance of an ice glaze on top of all that snow.
Nate Kreinbrink:
And then, we’re almost to February, and a couple weeks until spring training starts coming, and then all of a sudden, you feel warmth.
Andy Fergurson:
And before you know it, tax season will be over.
Nate Kreinbrink:
And tax season will be over. But let’s get to it first here, Andy.
Andy Fergurson:
It hasn’t even started.
Nate Kreinbrink:
We were talking on the way up here that, again, we are getting close to that time period. Obviously, people have started to get documents sent to them in the mail. There’s a misnomer, I guess you would say, out there as far as the deadline to receive those documents.
Andy Fergurson:
Yeah.
Nate Kreinbrink:
Again, depending on what type of document it is, there are different requirements for that. But maybe, talk a little bit as far as documents and when they should be maybe expected from?
Andy Fergurson:
Sure. Yeah, we get calls every year. Somebody will tell us that it’s the law that they have to have all their documents by the 31st of January. That’s not true. There are some requirements, some filing requirement dates that are set by the IRS, where employers have to file documents with the IRS by the 31st. But that doesn’t necessarily mean that those documents are going to be in your hand.
Nate Kreinbrink:
By that date.
Andy Fergurson:
On the 31st. I can file my report with the IRS, that goes in one envelope. It has to be postmarked by the 31st. But your W2 goes into a totally separate envelope, and when it gets postmarked is a totally different thing. Generally, they are out by the 31st, but don’t take that as a set in stone-
Nate Kreinbrink:
In your hands by the 31st.
Andy Fergurson:
Just because it’s the 31st, that does not mean that you’re guaranteed to have your documents.
The other thing that I would say is that there are a lot of laws that are broken, all the time. You can’t use the fact that it’s a law to guarantee that you have your documents. If you drive down Highway 30, the speed limit is 65. You ever seen anybody go past 65 on that road? Some people follow the rules, some people don’t. Whether or not you have your documents, you can’t base that on the law. You need to make sure that what you had last year, that you have those things again this year. Watch for the documents you need and don’t just use the calendar as a trigger to think that you have all your documents.
Nate Kreinbrink:
We mentioned the opening day for baseball. Opening day for tax season, as far as the first day that you can officially file is coming up. January 29th is coming into there.
Andy Fergurson:
Yeah, January 29th this year.
Nate Kreinbrink:
I know you made up a good point on the way down here, is that again, that doesn’t money you have to wait until January 29th to make your tax appointment.
Andy Fergurson:
Sure, yeah. If you’ve got your documents now, we can start to prepare returns. We just can’t file them electronically until the 29th. Nobody’s going to get a refund from the IRS before the 29th. Along those lines, if you have certain credits, earned income credit, child tax credit, those credits are going to be released even later. Sometimes, those take an extra month before the IRS releases those credits.
You can hurry up and get things processed early, which will make it so that you get the refund first, but it doesn’t mean that you’re going to get it on the 29th. You’re going to get it first, when the IRS is ready for you to be first. Whatever that date is, I want to say it’s usually mid-February, sometimes it’s early March before even those earned income credit, child tax credits come out.
Nate Kreinbrink:
Well, and again, unless you had a bunch of changes to your work, if you had a couple different jobs or whatever, you can look back at last year’s return and have a pretty good idea of the documents that you should be expecting.
Andy Fergurson:
Sure, yeah.
Nate Kreinbrink:
When you get the majority of those, or if you usually get the majority of those by middle of February, you can make your tax appointment for middle of February-
Andy Fergurson:
Absolutely, yeah.
Nate Kreinbrink:
Or end of February, to get on the books, to get that on the schedule.
Andy Fergurson:
Absolutely.
Nate Kreinbrink:
To be able to get that done, to be able to come in.
Andy Fergurson:
Yeah. If you look at the bottom of your tax return and it says you filed on February 22nd, you can call today and make your appointment for around February 22nd, and assume you’re going to have your documents. If you wait til February 22nd to make sure you have all your documents on that day, and then try and call, you may see yourself pushed out a couple weeks because offices are filling up.
Nate Kreinbrink:
You said, looking at the tax season, looking at taxes every year, there’s always these commercials I see that come on TV as far as, “Do your own taxes.” Or, “You may qualify for free tax preparation,” and all this type of stuff. It’s important to understand what your situations are. And then you said, it’s easier to be proactive and get it done right, rather than trying to fix the problem after the fact.
Andy Fergurson:
Yeah. I feel like it’s a know your limitations type of situation. There are things that I will attempt to fix at my house. Simple, like I’ll unclog my own drain. Or maybe, I’ll change a light switch or an electrical receptacle. But if it gets much more than that inside the wall, I’m not doing a lot of that work. Not because I think it’s overly hard, but because I know my limitations.
Nate Kreinbrink:
Right.
Andy Fergurson:
I’m not taking the toilet off the drain and trying to fix stuff there. I’ll fix the stuff in the back, that I don’t have to shut down the whole house to fix it. But I’m not doing a lot of that extra work because my concern is that, when I get into it, I’m going to have something that I don’t know how to do. It’s going to go past what I saw in my YouTube video.
Nate Kreinbrink:
Right.
Andy Fergurson:
Now, I’m going to be stuck and I’m going to have a houseful of kids with no toilet, and it’s going to be a Saturday night and everybody’s going to be mad at me.
Nate Kreinbrink:
Yeah.
Andy Fergurson:
It’s a know your limitations thing. I think those free file programs are the same type of thing. If you are doing a tax return for a kid whose got one W2, by all means, you should be able to handle that on those free file opportunities. But you should be careful. Understand that when it gets messed up, there’s nobody there to help you to fix that.
I get a call, a couple of calls, every single year, where somebody calls and says, “I thought I could do this on my own. It was super simple and I’ve messed it up.” They’re like, “We want you to fix it.” I’m like, “Well, now that it’s messed up, it’s much harder to fix.”
Nate Kreinbrink:
Right.
Andy Fergurson:
It may be more expensive than it would have been originally.
Nate Kreinbrink:
If you just had a professional do it to start with.
Andy Fergurson:
Right. And the other side of that is I can’t offer any … People will call me and say, “Hey, I’m doing TurboTax right now. It’s asking me this question. What should I say?” I’m like, “I don’t know. I don’t do TurboTax.”
Nate Kreinbrink:
Right.
Andy Fergurson:
I can’t tell you the ins and outs of that software. Or, they’ll do TurboTax and then they’ll get a letter in July. They’ll be like, “Something went wrong. Can you fix this?” I’m like, “I can’t really fix it because I don’t know what happened. Can you show me your tax return from TurboTax?”
“Well, I forgot my password to TurboTax.” I’m like, “Well, now you got to call TurboTax because you’re stuck.”
Nate Kreinbrink:
I can’t help you.
Andy Fergurson:
You lose all those benefits of having a professional help you when you go to do it on your own. There’s nobody to go back to and to get help from. There’s nobody to answer your questions along the way. And there’s nobody really to explain it to you.
If you don’t need those things, by all means, you should do what’s best for you and take advantage of those free file. If you have a basic understanding of what you’re doing, if you have some experience in that field, you should do it. I think it’s the same if you do construction around your house, or electrical work, or plumbing. If you have some experience there, then you should try and do as much as you can. But if you don’t, you should know your limitations.
There’s not very many people I know who would go out to their car, and start taking things out of the engine. I’m one of those people who I’m not going to unbolt anything inside my engine to try and fix something. That’s outside of my spectrum.
Nate Kreinbrink:
Yes.
Andy Fergurson:
I’ll change light bulbs and I’ll change filters, but I’m not going to take a piece off.
Nate Kreinbrink:
Yeah.
Andy Fergurson:
Because that’s outside of my purview. But, if you have experience doing that, by all means, you should do that. Save the money that you’re going to be pay somebody labor to do it because that labor’s expensive. Same with taxes, that labor is expensive because it’s skilled labor. If you have experience, you should do it. But if you don’t have experience, don’t open that can of worms and put yourself in a bad situation.
Or worse yet, you file your tax return and nothing comes back. There’s no problem, but you missed something.
Nate Kreinbrink:
Right.
Andy Fergurson:
Maybe you cost yourself some money. I have returns that I see all the time where I look at somebody’s return from the previous year, and I get in there. I’m like, “Well, there’s $500 missing here.” They’re like, “What do you mean?” I’m like, “Well, if you had done this just a little bit differently, you’d have gotten $500 more.”
Nate Kreinbrink:
Back from what you would have done it on yourself.
Andy Fergurson:
Which is way less than you would have paid me to do it. It just it’s one of those things where you got to know what you’re capable of, what your limitations are. There’s nothing wrong with learning how to do something to do it. My concern is with people that want to just take it on the fly and be like, “This can’t be that hard. The software will do it for me.”
Nate Kreinbrink:
Well, I think too, we’ve talked at length on previous shows as far as the changes to tax code, things not being extended, and exemptions, credits, all that type of stuff as you’re doing it. Again, it’s not something that the average person deals with on a daily basis. It’s something that you come in and you work with every single day. So again, you look at it from that thing.
And again, just a reminder, as you always say, if you are bringing your tax documents in and you have a question, if you need to bring it along, throw it in there.
Andy Fergurson:
Yeah.
Nate Kreinbrink:
Let Andy, or Mike, or someone in their office be the one to say, “Yeah, we don’t need that,” rather than having to go back and get that after the fact.
Andy Fergurson:
Yeah. We’ve got a big old garbage cans, we can throw stuff away if we don’t need it.
Nate Kreinbrink:
Again, all good stuff. I did want to mention real quick, before we run out of time, that every Friday, NelsonCorp Wealth Management and NelsonCorp Tax Solutions wear jeans for charity. Money raised in the month of January will be donated to the Adopted Closet in Dewitt.
As always, Andy, I appreciate you joining me. Andy Fergurson, NelsonCorp Tax Solutions, Nate Kreinbrink, NelsonCorp Wealth Management bringing you this week’s Financial Focus. Thanks for tuning in and have a great 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.