Episode 7 - Guiding Parents to Tax Filing Success

Tax season can be a wild ride, especially for parents hustling to maximize their returns. But don't worry; we've got CPA and tax expert Logan Allec on the show today to guide you through the tax maze. In today's chat, we'll tackle the puzzling 1098T forms, share top-notch tips for handling tax papers, and even spill the beans on choosing the best tax software, from TurboTax to the freebie Cash App Tax.

Logan helps you make sense of tricky tax software and the intricate world of cryptocurrency reporting. Dealing with the IRS might seem scary, but some folks find real satisfaction in shielding clients from the taxman's clutches. We'll dig into tax debt, fierce collection tactics, and the rush to snag those refunds and stimulus checks before deadlines. And hey, if you crave even more tax wisdom, check out Logan’s YouTube channel for deeper dives. 

Episode Highlights 

(00:03) - Tax Tips for Parents

(05:29) - Software like Turbo Tax and Cash App Tax 

(15:54) - Tax Assistance Services for Individuals

(24:52) - Maximize Tax Refunds and Find a Reliable Tax Preparer

Full transcript

Deb Meyer (00:01.613)

Hello and welcome to episode seven, where we're going to have CPA and tax expert Logan Allec. Logan is the founder of Choice Tax Relief. Okay, Logan, I know many parents are often stressed out this month. They know taxes are coming due soon. Any insight that you can share to potentially calm their fears?

Logan Allec (00:23.958)

Yeah, obviously the process gets more complicated when you have children and especially for families who have kids maybe going into college for the first time. There are tax credits associated with that. Or maybe parents who are paying on the other end of the parenting spectrum; maybe they're paying for daycare or preschool for young ones for the first time. In that sense, you want to make sure you get the 1098T for tuition if you have a kid in college.

If you're paying daycare or preschool expenses, make sure you add up how much you paid for that for that tuition or that daycare during the year. Make sure you get the provider's name, EIN and address because those could all be tax dollars back in your pocket. Same thing if you pay an individual to watch your kids so you can work.

Deb Meyer (01:16.505)

Mm-hmm.

Logan Allec (01:18.53)

Make sure you get their name, social address, things like that. On that front, get a W9. I mean, if they make more than a certain amount, generally around $2,500, the IRS actually will consider someone like that kind a de facto employee. And to be in compliance, you'd actually have to treat them as a household employee.

So I guess what I'm saying is, you know, I don't know if this assuages some fears or kind of creates more fears. But there are some specific tax matters that have to do with parents, that parent should be aware of. And if this sounds overwhelming, reach out to a local tax professional, and they can point you in the right direction.

Deb Meyer (01:59.129)

Yeah, I know with a lot of people even just working with tax professionals that sometimes is like, “oh gosh I have to find the right preparer” or “if I'm gonna do this myself, you know get this documentation gathered and things like that, especially in this digital age.” Speaking from experience, It's hard when you have things coming in the mail. You have other things coming electronically where you're getting, 1099s delivered or W2s.

Logan Allec (02:23.98)

Yeah.

Deb Meyer (02:28.097)

How would you recommend people think about tax season and just the organization behind it as they're here in January and February where some of these year-end tax documents are going to start coming in?

Logan Allec (02:40.858)

One tip that I find works well with a lot of a lot of folks is this: if you're fortunate enough to have a spouse or your partner living with you, have one person kind of being the point person for all that stuff. And you can alternate that back and forth if you'd like, but it's typically good when there's one point person who's kind of responsible for all those tax docs. Because I'm a CPA, it's always me in our household, but if my wife gets a tax doc, she'll just forward it to me, and I'm responsible for it.

Deb Meyer (03:08.537)

Oh, okay.

Logan Allec (03:10.282)

And, you know, I'm the point person for taxes, I find that helps, right? So there's none of this finger pointing. Or you might get a notice from the IRS because he didn't report some tax document, you say, “well, you should have given it to me.” It's good if there's someone who's the point person who can take the lead. That's one tip that I know helps a lot of families, especially those who are in a busy stage of their lives with raising children and everything.

Deb Meyer (03:39.957)

Mm-hmm. And a lot of tax preparation firms are more digital right now. They're asking for the W-2s or the 1099s electronically anyway. To the extent you can already have that set aside, maybe on your, even if it's a work laptop that you're using for personal purposes, sometimes just having some kind of central depository where you can gather those documents. Make sure it's very clear that here's anything tax related and be able to provide it to the appropriate person at that time is helpful, right?

Logan Allec (04:09.886)

Yeah, it's always helpful when someone has a Google Drive that they just share and say, here's all my tax stuff. You know, it's all there. It's all scanned in. It's all there and organized. So that is very helpful, right?

If you have access, if you're fortunate enough to have access to a scanner or even your phone, or if you do get a paper tax document, you can just upload it right there. If you're not comfortable with Google Drive, there are other options. Or your tax preparer may have their own super secure client portal where you could just upload it.

And some of these are mobile friendly to where you can just upload it right from your, you know, snap a picture of it on your phone, upload it to your tax affairs app, right there for their client portal, and then just shred the document. You don't have to worry about it. It's been uploaded to the cloud for your preparer to have so they have it. The whole digital documentation is becoming more common every year, where companies are descending digital tax documents. You get that email, “Hey your tax document is ready” or “Your 1099 is ready.”

I would say right when you get that email, just download it. It's going to take you 15 seconds. Just so you have it downloaded. Upload it to wherever your repository is so you're not scrambling and going through all these emails on April 15th, trying to figure out where everything is.

Deb Meyer (05:18.078)

Mm-hmm.

Logan Allec (05:34.602)

Same thing with the tax docs you receive in the mail. Take the 10 seconds. If you don't have time to upload it, then maybe just create an album in your phone of all the tax documents. And then you can upload them all when you're ready to hand them over to your tax preparer or do your taxes yourself. Or to your spouse if your spouse is doing your taxes. Yeah, the digital advancement makes the whole process a lot more convenient

Deb Meyer (05:53.553)

Mm-hmm. And anyone who is self-preparing, I guess TurboTax is a pretty popular program. Do you like that for people who are insistent on self-preparing as a general rule? Is that a good one, or are there others?

Logan Allec (06:03.506)

Yeah, it's kind of the cream of the crop and makes it really easy. It asks generally the right questions in a way that people can answer and get their tax return done accurately. For many folks, TurboTax is just the way to go. There are less expensive options on the market as well. I reviewed some of these on my YouTube channel before .. Tax Act, H&R Block Online and a few others that might be a little less expensive.

Deb Meyer (06:24.963)

Okay.

Logan Allec (06:31.77)

Sometimes the user experience isn't quite as smooth as TurboTax, but they come at a lower price point. There are some options that are free. I mean, TurboTax has a free plan, right? If you only have like a W2 and very basic tax docs, consider Cash App Tax, which used to be Credit Karma Tax. I believe they still have it for this filing season. I admit I haven't checked for this filing season. But I know historically it's been free.

Logan Allec (07:00.422)

I mean, no matter if you have a Schedule C for self-employment income or Schedule E for rental property. It'll still be absolutely free. You'll need to kind of know your way around a 1040 tax return and all its schedules a little more with Cash App Tax and kind of know what you're doing, as opposed to TurboTax software, which kind of holds your hands a bit more through the process.

Deb Meyer (07:22.761)

Right, they're asking a lot of very pointed questions and some of the questions are a little odd if I remember correctly. I mean, I used TurboTax many years ago and then now we have a tax preparation program in-house that we use that's a little bit different. But I just remember some of these questions where you're like, does anyone really meet these criteria?

Logan Allec (07:43.07)

Yeah, some of it is to cover the tax program to make sure that they've asked the question so that, you know, if the IRS sends a notice, you can't blame TurboTax and say, “Well, TurboTax didn't alert me to this.” So some of those questions are weird. And they're just part of it to make sure you got all the deductions covered. But I think a part of it, too, is to make sure no one can blame TurboTax for not asking those questions that might pertain to, you know …

Deb Meyer (08:10.785)

Yeah, a few people. Right. Well, and I know too, just in recent years, the tax programs are asking a lot more around cryptocurrency, any of the Bitcoin, and those kinds of transactions as well. So just being able to get good documentation, if that's something that you're invested in, is crucial.

Logan Allec (08:11.055)

2% of the population or something, you know, so yeah, that is absolutely critical. I mean, I just had right before this podcast, I was on the phone with one of my tax consultants who was talking to someone who just got a CP 2000 from the IRS for unreported cryptocurrency transactions. The IRS is now saying he owes a whole bunch of money. We're going to have to fight that on his behalf. So make sure you get that crypto right on your tax return because that is definitely a focus area for the service now and certainly in coming years, especially as crypto is kind of getting hot again. We had the ETF approval for the spot ETF and people are kind of getting into it again. That's the way it is with crypto, you know. It gets hot, then it crashes and then people are like, “Oh, forget crypto.” Then they kind of get back into it again. So that's a great point.

Deb Meyer (09:20.893)

Yeah. And again, we're not advocating necessarily to get a crypto investment. We're just saying if you already have one, this is just a practical matter. If you have one, make sure you're, you're getting the right records and documentation for tax purposes.

Logan Allec (09:24.978)

Right. This is just the way it is. If you're already own it. Yeah, and so with crypto, some crypto exchanges, they're self-contained. I mean, some crypto purists would say, “Well, you don't actually own the crypto.” Like if you're using Robinhood, for example, you'll have everything you need to know to report your Robinhood crypto taxes in your Robinhood statement. But for other exchanges where you have your own keys and it's your crypto, then if you transfer crypto from one exchange to another, and then you swap it for another crypto, and then you buy an NFT with it, those are all transactions, right?

And it can get very complicated. So before you start using multiple exchanges and kind of getting too crazy with where your crypto is at, make sure you understand the tax reporting implications, because it can get wild. Much more wild than stock transactions.

Deb Meyer (10:22.853)

Sure, sure. And for people from a complexity standpoint, if you truly just have a W-2, or you and your spouse have W-2s, and there's not a lot of other activity going on, even as a parent, even if you have some daycare expenses or things like that, you might not need a professional tax preparer, but anytime you're talking about some of these crypto transactions, or schedule Cs, or business returns, you probably want to get a qualified preparer … whether it's an enrolled agent or CPA doing the tax return process for you so that nothing's overlooked.

Logan Allec (10:59.506)

Yeah, I mean, if all your tax documents are if your entire tax situation is reporting on tax is report on tax forms like a W two, that you can just plug those into your tax software and I'll spit out the same answer the same, you know, everything is, you know, it's what a tax professional would do for you. But yeah, when you kind of got that business income, and there's business deductions, you know, what can you take? How aggressive do you want to be? Oh, do you want to, you know, talk about maybe deducting some trip?

Deb Meyer (11:24.229)

Mm-hmm.

Logan Allec (11:29.086)

slash vacate, you know, there's kind of, you know, there's ways that attacks professionally kind of guide you to be as aggressive as possible as your tax situation within the confines of tax laws. So you're not doing anything that would flag an audit or anything. But yeah, typically, to your point, you got the business, rental properties, you know, or even crypto adds a layer of complexity that may be beyond the, you know, the typical, you know, not to say that it can't be done, but sometimes just

Deb Meyer (11:42.542)

Mm-hmm.

Logan Allec (11:57.458)

If someone's deeply involved in the crypto, just the amount of work involved in preparing a return can be quite probably worth paying a professional rather than trying to piece all this piece it together yourself.

Deb Meyer (12:09.069)

Right. And the last thing you want to do is be, you know, under reporting income or flagged, you know, an audit later where things are not above board. Right. So if you're, if you're going, getting to a point in your tax prep software and you're like, Hey, I'm just not entirely sure about this. It might be worth getting that extra person. But I mean, truthfully speaking, we're in the month of January. This podcast is going to get published in a little over a week from today's recording date.

Logan Allec (12:17.519)

Yeah.

Deb Meyer (12:38.861)

This is a very timely topic that I think, you know, anyone that would need a professional preparer, you really need to be reaching out to those preparers now because they're already starting to get swamped with tax season with April 15th. Mm-hmm.

Logan Allec (12:51.666)

Yeah, and Deb, one thing I wanted to mention before I forget is tax law for 2023 might change, especially for families right now. In Congress, they're talking about some changes to the child tax credit that will affect the 2023 tax return, the tax returns that people are going to start filing here pretty soon. So you might want to hold off until Congress is done with that. Or you might have a situation like we saw in COVID.

Deb Meyer (12:59.95)

Mm-hmm.

Deb Meyer (13:06.734)

Okay.

Deb Meyer (13:13.325)

Wow.

Logan Allec (13:19.798)

where they made the unemployment compensation, $10,200 of unemployment compensation tax free, right? They decide that like in March, I believe, or maybe April after millions of people already filed their tax return. And then there was this whole hassle, well, should we amend? What should we do? The IRS did make automatic adjustments for many people, but for others, they had to amend. So when we see Congress kind of playing these games like they do, especially like in an election year, of course, they wanna.

Deb Meyer (13:26.25)

Mm-hmm.

Logan Allec (13:48.95)

you know, make a deal with the other side that makes, you know, everybody look good. Like, like in this particular point, the child tax credit, raising the amount of refundable portion of child tax credit, saying, hey, you can use last year's income, you know, instead of to qualify for it. Well, that would be in effect next year. But there's changes that would affect someone to 2023 tax return if they have children and would qualify for the child tax credits, and I want to hold off until pushing that e file button, they can't do it until January 29. Anyway, when he file opens

But if this isn't resolved by that point, you know, you might want to wait until you know, this is actually if a deal does happen, if it's, you know, approved, signed off by the president and, and all that.

Deb Meyer (14:31.617)

Mm hmm. Yeah, that's a good point. If there are still potential tax law changes to that child tax credit, anyone that has a child 17 or under would potentially have these changes go into effect. And it can take some time for the software to update even after a law is passed, right?

Logan Allec (14:47.686)

Yeah, that that's true. I remember with the I made videos about on my YouTube channel, when that unemployment adjustment thing because happened to you know, for the 2020 tax year. Yeah, it was like, when's TurboTax gonna update? When's it gonna update? You know, when? So there's always there's that kind of drama too. And but usually the tax offers are pretty good about obviously, this is their business keeping track of the changes in the law and then you know, emailing their customers accordingly or putting warnings in the tax software.

Deb Meyer (15:05.762)

Mm-hmm.

Logan Allec (15:17.218)

So I hope they do that for this round too.

Deb Meyer (15:17.566)

Mm-hmm.

Yeah, yeah. Well, and another important point to bring up too, you know, the deadline is for 15 for individual tax returns. And if you are getting someone else to prepare it, though, because their workload is generally busier this time of year, no matter what you at least want to get in the pipeline of saying, Hey, I do want to professional prepare, maybe raising your hand in January or February, even if your return won't be filed until closer to that for 15 deadline.

Logan Allec (15:48.338)

Yeah, I mean, because obviously, yeah, exactly. Because tax repairs, they get, you know, pretty busy. The later we get leading up to April 15. So, you know, if you don't, if you want to get it filed by April 15, don't want to go on extension, then you know, now is the time to really be looking for a good tax repair if you want to work with one.

Deb Meyer (15:52.837)

Mm-hmm.

Deb Meyer (15:57.198)

Mm-hmm.

Deb Meyer (16:17.361)

Mm hmm.

Logan Allec (16:39.225)

Yeah, so, um.

Logan Allec (16:43.842)

So, you know, I was a traditional, you know, CPA for many years, tax returns, tax consulting, tax compliance. Um, and part of his lifestyle, you know, that, cause that's a grind. There's a very busy, busy season. Um, and, you know, when I started having, you know, a family and, and kids and, and things like that, it's just, this is, this isn't for me anymore, really. So I decided to not, so I decided to.

Deb Meyer (16:54.958)

Mm-hmm.

Deb Meyer (17:10.106)

Mm-hmm.

Logan Allec (17:14.23)

Um, change the focus of my practice to be, uh, just something that's, that is more workable year round, uh, cause people have tax problems year round. IRS is setting notices year round. Uh, you know, so it, there was a lifestyle component to it as well. Um, also from a business perspective, from a, you know, there's, there's just less competition in this space. I mean, frankly, then in tax return. Um,

Deb Meyer (17:20.973)

Mm-hmm.

Deb Meyer (17:25.711)

Mm-hmm.

Deb Meyer (17:40.526)

Mm-hmm.

Logan Allec (17:44.054)

preparation. I mean, just to be completely honest. And so it's just easier to get good leads, you know, I mean, I feel that some in the tax preparation space, sometimes it can be erased at the bottom with fees and things like this. I mean, not to say that's not a good business model. I mean, it is but also, you know, I do a lot of stuff on YouTube, right? And no one else was really making tax videos about tax debt. And so I saw an opportunity there to, you know, just

Deb Meyer (17:52.613)

Mm-hmm.

Deb Meyer (18:07.193)

Mm-hmm.

Deb Meyer (18:12.334)

Mm-hmm.

Logan Allec (18:13.11)

be the only one talking about this on YouTube. And, you know, that's kind of led to, you know, my channel growing and you know, making, getting a lot of great leads from there. So it was it was kind of a lifestyle thing, kind of a business thing. And also, there's the aspect of sometimes when you're just doing someone's tax return, year after year, you kind of just feel like a chore to them. But when you're helping someone get out of a tax roll problem,

Deb Meyer (18:15.757)

Yeah.

Deb Meyer (18:19.907)

Mm-hmm.

Deb Meyer (18:36.817)

Mm.

Logan Allec (18:41.814)

or tax debt that's been a burden for so long, or they're being bullied by a revenue officer at the IRS who's threatening to take their house and shut down their business and do all these nasty things to them, and you can kind of be that shield between them and the IRS. I mean, there's just, frankly, I feel more appreciated now than I ever did, just kind of doing the annual tax compliance. So, that's just being very raw and honest with that. And this is, again, this isn't to denigrate like the traditional.

Deb Meyer (18:42.021)

Mm-hmm.

Deb Meyer (18:53.325)

Mm-hmm.

Deb Meyer (19:02.05)

Mm-hmm.

Deb Meyer (19:07.627)

Yeah.

Logan Allec (19:10.43)

CPA practices, I did that, you know, for many, for many years. And I know some people love that, you know, they just, they just like being that trusted advisor. But, you know, I, you know, I like helping people who are who have problems and seeing that relief that they that they have and that they can experience once, once we're in there and fighting for them on their behalf.

Deb Meyer (19:16.45)

Mm-hmm.

Deb Meyer (19:30.365)

Mm hmm. Yeah, that really resonates with me too, because I'm also a CPA by background, but I don't really focus on the tax as much from a, I guess, tax season perspective. We just work with clients year round and then we offer tax prep services to our year round clients if they want it right. So our focus is really, again, being with people throughout the transitions of life and being proactive and helping them rather than just

Logan Allec (19:42.882)

Yeah.

Deb Meyer (19:59.301)

Okay, here's a tour we have to do year after year. And it's, but there are plenty of tax practices set up that way that, you know, they're taking, serving 400 different clients and taxis in and they're just working crazy hours all the time. Neither Logan or myself are in that exact mode, but there are plenty of local tax prep firms that you can

Logan Allec (20:02.478)

Right, yes.

Logan Allec (20:13.879)

Right.

Deb Meyer (20:25.341)

do a search and try to find someone reputable that's willing to take you on as a client, if that's of interest. But at least in your case, Logan, you're really helping focus on people that have already either they haven't filed and they need to catch up on filings, historical tax filings when they should have been filing, just didn't, or they have a very heavy tax debt hanging over their heads.

Logan Allec (20:52.542)

Yes.

Deb Meyer (20:53.545)

and you take like a power of attorney or how does that process work?

Logan Allec (20:57.574)

Yeah, so, so we become POA for our clients. So basically, they don't have to deal with the IRS anymore, or their state, if it's a state issue anymore, the IRS or their state will deal directly with us as a representative on their behalf. So yeah, that that's how that works. So and that in and of itself,

Deb Meyer (21:02.646)

Mm-hmm.

Deb Meyer (21:10.694)

Mm-hmm. Okay.

Deb Meyer (21:16.985)

Does that apply to both individuals and business owners or businesses?

Logan Allec (21:20.402)

Yeah, individuals and business owners, you know, our biggest cases are payroll tax cases, you know, the business, I mean, think about it, you have a business, you know, you, you have a cash flow crunch in your business. What's something? I mean, what's something that's easy to not pay? Well, you got to pay your employees what they expect in their paycheck, right? You got to pay, you know, your vendors.

Deb Meyer (21:26.66)

Really?

Deb Meyer (21:42.734)

Mm.

Logan Allec (21:47.542)

right in your business or they're not going to supply your business anymore, you're not gonna have a business, you know, and you kind of look at all these things, these people you got to pay. Oh, that, you know, those thousands of dollars of payroll taxes I'm supposed to send, I'm supposed to, you know, that I'm withholding from my employees paycheck every two weeks. And remitting to the government, wow, that's a lot of mine, thousands, tens of thousands, you know, for some large companies, hundreds of thousands of dollars, you know, on a quarterly or annual basis, to kind of keep the business afloat.

Deb Meyer (21:47.757)

Mm-hmm.

Deb Meyer (22:17.593)

Mm-hmm.

Logan Allec (22:17.882)

I mean, some people steal it, and that's criminal, and that's fraud. But in other cases, it's just they're trying to keep their business afloat. And the payroll tax is the easiest bill to not pay until the IRS catches up with you. And now you can have this huge liability. The IRS takes those payroll tax liabilities a lot more seriously than income tax liabilities, because it can just explode. Because it's not just the taxes.

Deb Meyer (22:31.246)

Mm.

Deb Meyer (22:39.511)

No.

Logan Allec (22:43.082)

you know, for you as the owner, it's the taxes on all these employees. And if you have a small business, let's say 10 employees, 20 employees, that could be a multiple six figure problem every year. And they could end up with this, this assessment by the government for millions of dollars. And some people think they can just shut the business down and forget about it. Now there's the there's the employees portion of the of those payroll taxes is known as the trust fund portion because the

Deb Meyer (22:45.227)

Mm-hmm.

Deb Meyer (22:56.897)

Mm.

Logan Allec (23:12.738)

the employer is supposed to keep it in trust and remit it to the government. The government can make an assessment for those taxes against you personally, even if the business is dead and gone. Right. And they can go after you just as though it was your personal liability, even if you had a corporation or an LLC or something like that set up. And sometimes business owners don't realize that they think, well, I can shut this LLC or corporation down and they'll take care of it. That's not the case with these payroll taxes. So, um, I mean, not to get too technical there, but yes, uh, individuals and, and business owners are.

We serve both.

Logan Allec (23:56.386)

Yeah.

Right.

Deb Meyer (24:07.208)

Okay, okay.

Logan Allec (24:09.418)

Yeah, it gets really nasty. Yeah. Another thing I want to mention, because we're on the topic of non filers. So, you know, there was the stimulus, right, that was paid, you know, in 2020 and 2021. Well, if you haven't filed your tax returns, you know, many people didn't get those if they didn't file their 2018 2019 tax returns. So if that's you, or someone in your audience, not you, but someone in your audience, you know, who never received that stimulus.

Deb Meyer (24:24.663)

Mm-hmm.

Deb Meyer (24:35.106)

Mm-hmm.

Logan Allec (24:38.942)

never received those child tax credit expanded child tax credit in 2021, right, all that stuff. That could be big money. You know, you're leaving on the table, and you only have three years from you know, the due date of the return to claim that money. So, um, you know, 2020 that that's up this year, right. So I would say if you haven't filed your if you didn't get those first and second stimulus checks on behalf of yourself, or your dependents.

Deb Meyer (24:56.54)

Oh.

Deb Meyer (25:01.602)

Mm-hmm.

Deb Meyer (25:08.333)

Mm-hmm.

Logan Allec (25:08.414)

or your spouse, file a 2020 tax return, or you're going to lose your ability to get a refund, right, if you're owed a refund on account that stimulus that's third, that's third stimulus check was 1400 bucks, right? If you didn't get it, family of five, what is that that's 7000 bucks, right? Just for that third stimulus, you get as a credit in 2021 tax return. You know, the child tax credit was expanded in 2021. 3600 for little kids 3000 for

Deb Meyer (25:21.861)

Mm-hmm.

Deb Meyer (25:27.256)

Mm-hmm.

Logan Allec (25:37.886)

older kids and they add an extra year there for older kids. So, you know, there could be that issue too. Maybe, you know, it's not a while the IRS has pressed me to file these returns, because they know I'm going to owe money on them. But it could be, hey, you're owed a refund, right? And especially because there was so many tax benefits to the stimulus and the child tax credit and all that. For families, you know, during COVID and all and all that time, if you didn't get them then get them now by filing those tax returns.

Deb Meyer (25:52.389)

sure.

Deb Meyer (25:57.774)

Mm-hmm.

Deb Meyer (26:07.353)

That's a great point. Thank you. I guess in terms of anyone else that's kind of uh, shift gears from the non-filers for a minute. So anyone else that's kind of, um, just thinking ahead for this, this coming tax season, they're looking to file their 2023 tax return soon. Any other piece of advice or not advice, but just insights that you can provide, um, as they're preparing over these next few months to make sure they're not

overlooking anything from a tax perspective or when they do potentially get a refund, how they could best be putting that money to use. Any considerations there?

Logan Allec (26:46.466)

Yeah, I think, you know, I think for folks who, if there's a lot of folks in audience who have a business and they haven't finished their books yet for 2023, I mean, that's the preliminary step before, you know, I know, tax docs aren't out yet, you're not getting 1099 or W twos or anything like that yet. But before kind of the busyness of, you know, the new year and the spring, then go into summer if you get extension, because I mean, these, the business owners are the ones that tend to get

behind because they have to prepare this set of books, right? They'll prepare the books, they can't do the returns, I would say do that now or as soon as possible. If you have some downtime, do that now because or you're just, you know, it can just, you might not get to it. And then with business owners, you know, you can get an extension, anyone can get an extension, but those the taxes for 2023 are still due on April 15, you have an extension till October. Now W two folks usually

Deb Meyer (27:15.781)

Mm-hmm. Yep.

Deb Meyer (27:21.847)

Mm-hmm.

Deb Meyer (27:38.361)

Thank you.

Logan Allec (27:43.106)

know, unless you're saying you're exempt or claiming way more in your W four than you should, I mean, your withholdings is probably gonna hopefully gonna cover your the taxes you owe. If you're a business owner, and maybe you didn't make a couple estimated tax payments last year, you really want to make sure that you know, how maybe approximately how much you owe, even if you're, you know, if you don't know for sure, you haven't been able to do your books finalized, at least at least, you know, if you're not going to be able to finish them entirely, estimate.

Deb Meyer (28:05.391)

Mm-hmm.

Logan Allec (28:11.594)

right? How much you made from your business last year, make an extension payment, right? Along with your extension by April 15. So at least you won't be hit with that failure to pay penalty. But, you know, most folks just get a W two, you know, 1099 for interest, maybe some stock stuff, just file it. I mean, no need to procrastinate, right? I mean, just get it done. It's one less thing to do during the year, you know, so because especially the families, right? Like, it's so

Deb Meyer (28:12.094)

Mm-hmm.

Deb Meyer (28:15.726)

Yes.

Deb Meyer (28:32.459)

Yeah.

Mm-hmm.

Logan Allec (28:41.222)

a lot of people get an extension, they wait until October 15th, but that's such a busy time for families, we've got school year starting in late August or September, October 15th is two weeks before Halloween, and then it's Thanksgiving and Christmas, it just tends to be a much busier time of year in that fourth quarter.

Deb Meyer (28:46.038)

Yeah Right sports

Deb Meyer (28:55.466)

Mm-hmm.

Logan Allec (29:01.774)

you know, than it is maybe earlier in the year when it's kind of okay, kids have been in school now for like, you know, six months or whatever. And just, you know, we kind of got that rhythm, not the holiday thing. So I mean, it's easy to say harder to do. But yeah, just don't procrastinate if at all possible in terms of what to do with your, you know, what you get for a refund. I mean, I assume your audience is sophisticated enough. Now, don't fall prey to those, you know, those ads that are like, hey, you know,

Deb Meyer (29:08.255)

Mm-hmm.

Deb Meyer (29:11.557)

Thank you for watching.

Logan Allec (29:28.662)

buy a new TV with your tax refund or something like that. I mean, be smart with it, you know, pay off high interest debt, you know, emergency fund, you know, invest, I mean, all those things that I'm sure that you talk about, you know, you know, to your audience.

Deb Meyer (29:35.137)

Mm hmm.

Deb Meyer (29:44.853)

Yeah, I mean, just to add to that, it's important to think through the fact that if you do get a substantial refund, you've actually been overpaying either through withholding on your when your W-2 is coming out, you know, you can see what amount of federal withholding and state withholding you've had. If you have a refund of more than like $3,000, usually that means you're withholding too much from your paycheck. You could probably look to lower that amount. If you're a business owner, it's a little bit different.

owners at least that I work with, we're doing estimated tax payments and we can't always accurately predict what the business is going to do in a given year, even towards December, the month of December can be a big question mark on deductions and what the business activity is. So yeah, just to say if you're

just a I guess traditional W-2 employee, no outside business income. If you have a substantial refund, really estimating or seeing if you might need to revise your withholding for the subsequent tax year. Or in the case of, you know, significant balance due, you're not withholding enough, you're not paying in enough tax throughout the year. So maybe even looking to take some of

that into account when you're planning for your 2024 taxes.

Logan Allec (31:07.25)

Yeah, I mean, that's a great point. I mean, let's say you're looking at a I don't know, let's use around number $10,000 tax refund, right? Like, that's probably a little high, more than probably most, you know, the average family gets hopefully, they're not overpaying by that much. But yeah, it is kind of an interest free loan to the government. Might as well have that money during the year, you know, to invest or, you know, pay off debt, or, you know, if you're really, or if you don't have an emergency fund, stick that thing and you know, some high yield savings account, right?

Deb Meyer (31:13.829)

Mm-hmm.

Deb Meyer (31:25.326)

Mm-hmm.

Deb Meyer (31:28.951)

Mm-hmm.

Deb Meyer (31:34.477)

Mm-hmm. Yep.

Logan Allec (31:36.57)

And you know, make whatever it is now 5% you know, instead of which would be like 500 bucks on a $10,000, you know, refund or you know, 250 bucks on a you know, half of the obviously is throughout the year. So that's not like exact but I mean, make have that money make money for yourself rather than letting you know, giving the government an interest free loan if you notice that you're routinely over

Deb Meyer (31:45.206)

Mm-hmm.

Logan Allec (32:00.57)

you know, being over withheld and getting that refund, especially for you know, new families, you know, you're getting let's say you're getting married this year, right? On your W four is single. If both you still don't tell your employer that you're married, you're going to be withheld at the higher tax rates, right? So even if you're getting married later this year, the Irish are going to consider you married all year. Up at the W four now, you know, so you're being withheld at the married rate.

Deb Meyer (32:06.874)

Mm-hmm.

Deb Meyer (32:13.996)

That you're married. Right.

Deb Meyer (32:21.961)

Mm-hmm. Yep.

Logan Allec (32:26.538)

right, you're gonna get a little less taken out of your paycheck, more money in your pocket, every paycheck, you know, to invest pay off debt, whatever. If you know, you're just kind of starting your family this year and getting married this year, or else you might get a little too much withheld if your employer, you know, thinks you're single all year, when really, you're gonna be considered married for the whole year for IRS purposes, if you're getting married this year, even if you get married on the last day of the year. So yeah, the withholding thing for employees is important to kind of revisit. Obviously, like you said, with business owners with potentially fluctuating income, it can be a little

Deb Meyer (32:26.567)

Mm-hmm.

Deb Meyer (32:41.528)

Mm-hmm.

Deb Meyer (32:47.565)

Right.

Logan Allec (32:56.158)

A little messier, but you know, not something a solid professional can't help them manage.

Deb Meyer (33:02.447)

Yeah, yeah. So last question, myth or reality here. Tax preparers should be evaluated based on how much of a refund the client gets. I wanna bust that myth because.

Logan Allec (33:12.75)

Oh, that's a myth. Yeah, I mean, because you for one, like, and I mean, you got to watch out for ones that advertise that they're the bad ones, you know, so I guess I guess maybe since it's true, because you could tell a bad tax repair if they're if they're bragging about how big a refund you can get. Because the refund it's I'm the returns that were asked how much you paid in how much you owe, right? There's nothing really to do with your with your tax repair.

Deb Meyer (33:22.065)

Yes.

Deb Meyer (33:31.318)

Yes.

Deb Meyer (33:35.693)

It's based on how much you paid in throughout the prior tax year. It has nothing to do with this tax year.

Logan Allec (33:41.962)

Now, well, there's the other there and there's a sense in which, you know, we get some of these folks who come to us. I mean, there, there's a sense in which there are lazy. I mean, there's fraudulent tax preparers like that, who are going to just make up deductions for you and to get a bigger refund. But there's lazy tax preparers to who even if you get a 1099, you have a business. And we've, we've seen this as people have come to us because these tax preparers were so lazy. They don't, they don't educate them about any deductions, right? They just take what's on that 1099.

Deb Meyer (34:08.631)

Mm.

Logan Allec (34:11.186)

slap it on schedule C with like no deductions, right? So in that sense, you know, it could go the other way too. What you wanna do is find a good, solid, qualified, you know, tax repair. And you know, most people who have a CPA or an EA or a tax attorney who does taxes are gonna be solid. But yeah, there's two sides there that you wanna avoid.

Deb Meyer (34:13.825)

No other deductions, wow.

Deb Meyer (34:18.629)

Sure.

Logan Allec (34:37.422)

But the majority of people at those destinations will do right for you.

Deb Meyer (34:41.797)

Okay, great. Well, thank you so much for being on here. Where can people connect with you or I guess learn more. I know you have lots of YouTube videos. You want to point them to the YouTube channel.

Logan Allec (34:52.774)

Yeah, I mean, if you have any tax issue, unfiled returns tax that check me on YouTube, my name L O G A N space a L E C Logan Alec on YouTube. That's where I spend most of my time if you're a tax professional yourself. Follow me on Twitter. I talk more to tax professionals there. But yeah, those are the two places to find me.

Deb Meyer (35:17.15)

Okay, great. Thanks so much for joining us.

Logan Allec (35:19.879)

Yeah, it was a lot of fun. Thank you for having me, Deb.

Deb MeyerWorthyNest LLCfamily finance, beyond budgets, tax season, tax documents, tax credits, childcare deductions, tax software, crypto reporting, tax preparation, tax refunds, tax preparer, tax tips, education expenses, tax debt, tax assistance, payroll tax compliance, tax planning, tax professionals, tax wisdom, tax issues, tax obligationsComment