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 today with Mike Van Zuiden and NelsonCorp Tax Solutions. Hello Mike, appreciate you joining me on this wonderful January morning.
Mike VanZuiden:
Good to be here in this winter wonderland we call Clinton, Iowa. Right?
Nate Kreinbrink:
Yes. It’s the last weekend in January, hard to believe that this month has flown by so quick. A lot of good things happening. Snow weather, obviously. People kind of get the headlines, but I always think it’s exciting as the basketball season, boys and girls high school kind of start winding down. You start getting a little bit more meaningful games, that tournament time starting to come up a little bit, and so it’s that second season where new life, where everybody has a chance. No matter what happened throughout the year, you put it together, you get hot, you get on a roll in tournament season and kind of see how it goes. Good luck, best of luck to all the area teams as they transition into that time of the year. We’re also transitioning into one of your favorite times of the year, Mike, and that’s tax season. I know I’m starting to see a few more foot traffic coming in, as far as people dropping off and you guys ramping up and getting your stuff in the way, ready to prepare yourself for tax season.
Mike VanZuiden:
Absolutely. We have hit the ground running here, starting to see lots of phone calls, making appointments for the near future here. Actually, some people dropping by. We’ve had some appointments actually in the office already with people, so we’ve got some returns completed for some folks. One change this year is the filing season with the IRS is going to start a little bit later. They won’t start processing returns until February 12th this year. Usually that occurs this last week in January, so that’s pushed back a little bit just because of the recent stimulus and some of the changes that go along with that. But, it doesn’t mean you can’t come in and get them done now. Basically what will happen then is they’re in queue and in line, so when the electronic flood gates open at the IRS, your return’s there and ready to go and hit their system. I would really encourage people, if you have all your information and you’re to file, get in early and we’ll get it done.
Nate Kreinbrink:
I know that’s a big thing there, as far as that doesn’t mean that people aren’t still going to get their forms and everything that they always do. I know that, probably most people like me at home, you start getting those forms throughout the month of January, you have your little pile that you put them all on until you think you got everything, and then you bring them in and let you guys do your thing. But, that won’t change. People will still be getting those things. It’s just when they can file is the deadline that’s extended.
Mike VanZuiden:
That won’t change. You’re still expected to have W2s in the mail to you by the end of January. None of those things have changed. It’s simply when the IRS will start processing the returns. Yeah, when you’re ready, come see us. If you’re a current client, we look forward to seeing you again. We’re taking new clients as well this year. We’d be glad to talk to you and do business with you as well. You can make an appointment to come in and see us. You can drop off, we’ll prepare your return, and call you when it’s ready. Whatever means of getting that done fits your need and your schedule, we’re glad to accommodate that.
Nate Kreinbrink:
Right, and I think that’s one thing that Andy had brought up, too, a time or so, when he was on last time, as far as just that importance of setting up an appointment and sitting down with your tax preparer, and just going over the items. Again, not that you need to understand exactly everything that’s going on inside of there, but having an understanding as far as what those numbers mean and how you can change those moving forward.
Nate Kreinbrink:
I think that’s a big thing that people, especially when they’re new to NelsonCorp Tax Solutions for the first time, and they sit down for that 20 minutes to a half hour meeting with you and Andy, and they come out of there just saying, “No one’s ever done this to me before. I just dropped them off, and this is what I owed, this is what I got back,” or whatever, “and it was what it was.” Having that meeting with you guys, I think that it really opens their eyes as far as what it is that you guys actually do, what it is you looking for, and it gives them a little bit more peace of mind as far as having a little understanding as far as what their tax situation is.
Mike VanZuiden:
Absolutely. I mean, what are you telling me here, and how did I get here?
Nate Kreinbrink:
Right.
Mike VanZuiden:
Boy, I’ve got a tax bill. What can we do to avoid that next year? Yeah, those are all things that we look to provide to our clients when we sit down and talk with them, for sure.
Nate Kreinbrink:
You talked a little bit as far as over the last couple weeks, and again, you and I a little bit yesterday, and then heading up today, show some of the things that you’re seeing when you’re just starting to get into them for this coming year, as far as what people should look for with that. The biggest thing I think is the stimulus money. There’s a lot of questions that always surround that over the past 10 months, as far as, is it taxable income to me, when do I report it, and so on. You mentioned something too, as far as, just on the way up here this morning, that, that second stimulus that you got, even if you received that money after January 1, you still have to report that in 2020.
Mike VanZuiden:
Right. It’s important that when people get their taxes done this year, you know what you received for stimulus money. When you got your stimulus money, if you got it in check form, a letter came with it. Some of us that got direct deposit actually got a letter shortly after explaining what it was for. I think it was called a 1444, I believe is the number. But, that was basically, here’s your stimulus payment, save this for your tax records. Right? Well, that money is hitting your account in the middle of summer. A lot of people may not have held onto that piece of paper.
Nate Kreinbrink:
They haven’t started the pile yet, [crosstalk 00:06:33]
Mike VanZuiden:
Absolutely, absolutely. But, it’s important when you go to get your income taxes prepared that you know what you received for stimulus money. Like Nate was saying, the first payment, as well as the one that you may have received in 2021. It’s not taxable to you, but what it’s going to do, if you haven’t received one or the other and you should have, the process of filing your tax return is going to be the mechanism to-
Nate Kreinbrink:
Settle up, basically.
Mike VanZuiden:
Settle up, basically. The government’s going to settle up with you through that process. Yeah, it’s real important that you know what those numbers are when you come in. We’re going to ask. If you don’t know, we’re going to ask you to find out, just so we can file an accurate return for you on your behalf the first time. Yeah, if you haven’t received it and you were due, you should have received it, this tax return will be the mechanism for that. Yeah, that’s a very important change this year.
Nate Kreinbrink:
I know another item too that you had mentioned was the $300 above the line deduction that people are able to take and be aware of for 2020. Maybe explain a little bit as far as what that is and what people should be looking for, and, again, at least bringing up to their tax preparer when they bring them in to do that.
Mike VanZuiden:
Sure. Charitable contributions are always something that have been tax deductible in the past, but you have to have enough deductions to itemize in order to capitalize on that. Most people aren’t in that boat anymore with the Tax Cut and Jobs Act of a couple of years ago, the standard deduction basically doubled, which eliminated even more itemized deductions for people. What the CARES Act brought about is, if you make a $300 contribution to a charity, a charitable organization in 2020, you can take that as an above the line deduction. It’ll basically go into reducing your adjusted gross income before we calculate tax on that. It will make a difference on your tax return. My case, we give money to our church, but it never, from a tax standpoint, we’re not itemizers where we itemize, so that there was no tax benefit to that. This year, $300, yeah, just let us know that when we do your return and there’s some benefit to you.
Nate Kreinbrink:
That $300 is cumulative too, right, over the course of the year? It’s not like you have make a one time thing-
Mike VanZuiden:
It doesn’t need to be one time contribution, absolutely.
Nate Kreinbrink:
It can just be a total, you made up to a $300 contribution to a charity of your choice, make sure we get that reported so it’s on that return.
Mike VanZuiden:
Absolutely. You could have made a $10 contribution to 30 different charities. It’s a cumulative thing for sure. Absolutely, good point.
Nate Kreinbrink:
Talking with you, talking with Andy when you come up here, I know people think taxes and sometimes they have that little cringe, but I think learning some of these things and just the little conversations that we do have as far as some of these new nuances that are coming out every year, the tax situation is constantly changing. I know this is, what, your third season?
Mike VanZuiden:
This is my second season at NelsonCorp Tax Solution and about 10 total in the business.
Nate Kreinbrink:
Prior to that, but just think about those 12 years or whatever that you’ve been doing it, as far as all the changes to do it, let alone having just the common person understand all these, the importance of working with a professional that knows what they’re doing and doing it that way.
Mike VanZuiden:
Absolutely. It’s like hitting a moving target every year, too. There’s something that changes, right? Yeah, we feel like that’s some value that we bring to the table. We spend a lot of time in continuing ed through the year to maintain the credentials that we’ve earned and just to stay current, so when the time comes, we’re ready for these changes.Yeah, it really is like hitting a moving target. Things change. The CARES Act this past year has changed things. It looks like there’s some potential other changes on the horizon as well with a new administration. It’s just a …
Nate Kreinbrink:
Trying to understand.
Mike VanZuiden:
Trying to understand and keep current.
Nate Kreinbrink:
Andy always says, he goes, “The textbook for the tests that you guys take is like four or five inches thick, and then they throw it on the desk and say, here, learn this. Learn this.”
Mike VanZuiden:
It’s like, great.
Nate Kreinbrink:
But, again, the job that you guys do as far as helping those individuals out, I know you didn’t mention it, but again, wanted to hit it that, you guys are at capacity. We’ve added some staff members to the tax portion down there. You guys are taking on new people, so again, if people are looking for somebody come see you. Right?
Mike VanZuiden:
Absolutely. We’d be glad to help. The door is open, and if we got to work a little extra long to get them all done, that’s what we’ll do. That’s what tax season’s all about. No, we’d be glad to help anybody and everybody. Come our way.
Nate Kreinbrink:
Again, Mike, I appreciate you taking time this time of year to, to join me. Mike Van Zuiden with NelsonCorp Tax Solutions. Did want to mention real quick that every Friday NelsonCorp Wealth Management and NelsonCorp Tax Solutions are wearing jeans for charity. Money raised in the month of January will be donated to the Victory Center Rescue Mission. Mike, as always, appreciate you joining me. Nate Kreinbrink with NelsonCorp Wealth Management, Mike Van Zuiden NelsonCorp Tax Solutions. Thanks again for tuning in everyone, 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 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.