Search our site

2020 Year-End Tax Planning

With year-end quickly approaching, there is much to be considered in terms of 2020 tax planning. From tax law changes coming out of the stimulus package passed earlier this year to proposals ahead of the election, this year has provided a myriad of tax planning opportunities. We continue to monitor the final results of the Congressional races, and analyze how this may affect tax policy going forward. Below is a list of some of the items to consider for 2020:

  1. Paycheck Protection Program (PPP) proceeds will be tax-exempt income for businesses that received money under the program. However, the IRS has stated that the expenses used by the PPP funds are non-deductible. Analyzing these non-deductible expenses will be critical to determining an accurate projection of 2020 taxable income.
  2. The CARES Act made a technical correction to the Tax Cuts and Jobs Act by reinstating Qualified Improvement (QIP) Property as a 15-year asset. This allows companies to record catch-up depreciation in 2020 for QIP property placed in service in 2017, 2018, and 2019.
  3. The CARES Act allows net operating losses to be carried back 5 years.
  4. Consider making cash contributions to qualified charitable organizations before 12/31/2020 tax advantage of the increase in the Adjusted Gross Income (AGI) limitation being increased from 60% to 100%. The Coronavirus Aid, Relief, and Economic Security (CARES) Act put in place this temporary benefit for taxpayers for the 2020 tax year.
  5. Taxpayers impacted by the August 2020 derecho weather event which occurred in Iowa may qualify for tax relief from the IRS. Any losses in disaster-declared counties incurred greater than the insurance and other reimbursements received may qualify for a casualty loss deduction which may be reportable on your 2020 return, if appropriate.

Please reach out to us regarding any questions you may have ahead of the year-end. We look forward to working with you.