Year-End 2020 Tax News, Articles & Planning Strategies 

Year-end planning takes place against the backdrop of the continued release of guidance on the landmark Tax Cuts and Jobs Act (TCJA) as well as the Families First Coronavirus Response Act and the Coronavirus Aide, Relief and Economic Security (CARES) Act, enacted in response to the COVID-19 pandemic, which changed some of the TCJA provisions for 2020.

 

While there is no one-size-fits-all approach to tax planning, we have launched this Year-End Tax Planning and Resource Center in order to address the major tax changes and top questions we are receiving from clients. Please click on the headlines below to learn more, and check back often as new articles are continuously being added:

President-elect Joe Biden has announced a tax plan that departs significantly from the policies and impact of major tax revisions enacted in 2017 under the TCJA. Restivo Monacelli's tax team has summarized the key elements of his platform on taxes, as currently available, and provided a side-by-side comparison. 

It is important to note that all these changes would need to be enacted by Congress in order to become law. Regardless, Biden's plan will likely impact your taxes moving forward, so it is important to understand and plan accordingly.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided taxpayers with much-needed relief during this pandemic by establishing additional funding sources, such as the Paycheck Protection Program (PPP); by creating new tax credits, such as the Employee Retention Credit; and by significantly changing several existing tax provisions. There are many nuances and opportunities contained within the CARES Act. Restivo Monacelli discusses five key ways the CARES Act could impact your 2020 taxes and provide opportunities for both businesses and individuals.

The Paycheck Protection Program (PPP) was the centerpiece of the CARES Act, providing businesses negatively impacted by COVID-19 with loans of up to $10M. For many businesses, the concern with filing for loan forgiveness is the "straddle-year" issue. Are the qualified expenditures used with PPP funds non-deductible in 2020 or in the year that they receive forgiveness? Restivo Monacelli breaks down the latest IRS rulings regarding PPP loans and expense deductions. 

A Roth IRA is beneficial to someone who believes they will be in a higher tax bracket at the time withdrawals will be made.  Depending on the taxpayer’s 2020 tax position, it may be advantageous to convert traditional IRA funds, pay tax on the conversion amount in 2020, and take tax-free distributions from a Roth IRA in the future. Restivo Monacelli compares a Roth versus Traditional IRA and discusses who should consider converting to a Roth IRA in 2020.

As we navigate the ever-changing landscape of tax law, we wanted to remind you of some of the provisions of the SECURE Act enacted to make it easier for small business owners to set up retirement plans that are less expensive, easier to administer, and allow more employees to be eligible to participate. Restivo Monacelli summarizes the key reforms for individuals, designed to make it easier for everyone to strengthen their retirement security. 

The Treasury Department and IRS gave their blessing to a type of state workaround to the $10,000 cap on the state and local tax (SALT) deduction implemented under President Trump’s 2017 Tax Cuts & Jobs Act. The guidance could help some business owners get around the cap, which has been among the most controversial provisions in the law.