2020 Taxes - Really?

As we approach the end of the year, we reminisce about the year and start thinking about the upcoming tax season.

In the theme of 2020, everything is up in the air! Due to such crazy times, tax planning is more difficult as we await the legislature to take action on many tax issues.  One of the most important issues is whether or not expenses paid with forgiven PPP Loan funds will be deductible.  The IRS has currently stated that they are not deductible, since the forgiven loan amounts are considered tax-exempt income.  However, Congress has stated that their intent was for those expenses to be deductible.  The latest proposed bill addresses that issue, but it has not been completed and until it is signed we are obligated to follow the IRS’s position.

In addition to waiting on legislative decisions, we are looking at possible tax law changes to be implemented as happens in every election cycle.  We are having to basically look at two different tax projections: under current tax law and under the proposed tax increases.

As a result of the chaos of 2020 and possible tax law changes, it has been rumored that the IRS could delay the opening of filing season for 2020 tax returns to as late as the last week in February.  This doesn’t mean that the filing deadline of April 15th  (March 15th for some business returns) will be extended.  If this happens, please be prepared to provide any requested information and/or documents in an expedited amount of time.

If you have any questions or concerns about the upcoming tax season, please contact me.

Have a very Merry Christmas and a Happy New Year!