Wolters Kluwer Tax & Accounting examines issues that taxpayers need to consider for 2020 year-end and post-election tax planning.
- More than thirty tax breaks that Congress has permitted to regularly expire and then renew currently expire at the end of 2020, including individual, business, and energy tax breaks
- More generous charitable contribution deduction provisions expire at the end of 2020, including a new above-the-line charitable contribution deduction
- The ability to make expanded penalty-free withdrawals from retirement plans for COVID-related expenses expires at the end of 2020
- The deadlines to apply for Economic Stimulus Payments expire before the end of the year, although a tax credit is also available on the 2020 tax return'
- Employers must continue to deal with a variety of tax credits and deferrals related to employee payroll taxes that expire at the end of 2020
- A number of tax provisions provide retroactive relief, which might warrant filing of amended tax returns for prior years, including net operating loss carrybacks, modifications to deductions for non-corporate business losses, modifications to business interest deduction limitations, Qualified Improvement Property, the Kiddie Tax, disaster relief, and those 30+ regularly expiring provisions
- In addition to these, there are the usual year-end tax planning strategies to defer income, accelerated deductions, review your investment portfolio for gains and losses, and take maximum year-end advantage of available tax breaks
- Possible tax increases in 2021 might warrant a reversal of the usual year-end tax planning: accelerate income and postpone deductions, realize capital gains, look at lifetime gifts, and consider Roth conversions
Contact: To arrange an interview with Mark Luscombe or other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact Bart Lipinski.
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