The pandemic changed the whole dynamic of our economy this past year and made businesses reimagine how they do business in this new climate. The generous relief packages provided by Congress in response to the pandemic implicates the United States tax code more than any other existing federal laws in the country. Thus, you need to take a close look at year-end tax planning in a way that your business has never done before.
Indeed, year-end tax planning is vitally important this year because of the addition of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and how the Act impacted your business. There is no question that businesses, both large and small, were hit hard in this pandemic. Thus, having the right tax approach will help you guide your business on the right path following this historic economic disruption.
The CARES Act put much-needed funds into the businesses that had to stay afloat. Now, when you do your year-end planning, there are some tax strategies that are well worth considering. In this article, we will discuss those tax strategies for businesses. If, after reading this article, you would like to discuss business tax strategies, we invite you to call the Sarasota tax strategy attorney for businesses, Mary E. King, P.L.
The Law Office of Mary E. King, P.L. can make sure that your tax debt planning in Sarasota is resolved efficiently and at the lowest cost to you. Please fill out our online contact form, or call us at 941-906-7585 today.
1. Translate Losses into Fast Refunds
Under the CARES Act businesses are allowed to use current losses against past income to receive refunds (and thus liquidity) immediately. The net operating losses from 2018, 2019, and 2020 can be carried back five years and put against those prior taxes. The key, however, is to make sure you put those offsets into place before the end of this year. You can do that by filing a tentative refund claim by Dec. 31, 2020, for the 2019 calendar year. For more information about translating your current losses into immediate refunds, contact an experienced Sarasota tax strategy attorney for businesses.
2. Disaster Loss Refunds
The COVID-19 is a disaster beyond most we have had for over a century. Thus, a disaster area was declared in all 50 states, the District of Columbia, and five territories because of the pandemic. That declaration means that every United States business in a disaster area could be eligible for disaster-related refunds. For a quicker refund, a business can claim a pandemic-related disaster loss in 2020 on a 2019 amended tax return.
The losses envisioned by the disaster relief declaration could include loss of inventory, loss of supplies, the closure of offices, and the closure of plants. Remember, though, the claimed loss must be connected to or caused by the pandemic to make sure that your business meets the requirements for the requested refund. Again, an experienced Sarasota tax strategy attorney for businesses can help you further with this type of refund.
3. Faster Alternative Minimum Tax Refunds
The 2018 tax bill passed by Congress repealed the corporate alternative minimum tax (AMT). In repealing that tax, the bill allowed corporations to claim all their unused AMT credits in the tax years from 2018 through 2021. When the CARES Act was passed, it sped up the timeline for claiming those credits. Thus, corporations could claim all the remaining credits in 2018 or 2019. That gives businesses a number of choices in order to obtain fast refunds associated with the AMT. Like the current losses strategy above, your business could file a tentative refund claim, and make sure that the claim is filed before Dec. 31, 2020.
4. Focus Your Tax Professionals
As a final note, you may find that the person or department that does the business’s taxes is, understandably, focused on basic compliance. Yet, now is the time to have those involved in doing the business’s taxes be trained on the unique benefits presented by the CARES Act, which are designed to substantially help businesses survive through the use of the tax code.
Talk to a Sarasota Tax Strategy Attorney For Businesses For Additional Guidance
No question, doing your taxes can be stressful. Yet, having a Sarasota tax strategy attorney for businesses at your side to advise your company on options and strategies for responding to the IRS is invaluable during the pandemic.
Consider reaching out to the Law Offices of Mary E. King to help. Tax matters can be complicated, and thus, it is always helpful to have someone in your corner who understands the tax law and deals with the IRS on a regular basis. Indeed, beyond just the stimulus payment from the IRS, there could be other issues with which a seasoned tax attorney can help.
So, when it comes to dealing with tax relief and tax litigation, you need to talk to a Sarasota tax law attorney who can help. Mary E. King has spent her career concentrating in tax law and can help you with tax scams in Florida and elsewhere. Attorney King has a wealth of information about what types of options would make the most sense for you and your business.
That helps explain why she’s received an A+ rating from the Florida Better Business Bureau. If you have a tax-related issue – no matter how small or how large – setting up an initial consultation with Mary E. King, tax lawyer of Florida, is the first step you should take towards relief.
The Law Office of Mary King P.L. offers complete IRS problem-solving services including all areas from tax debt settlement to planning the most efficient tax strategy for individuals and businesses. Call us today to schedule an initial consultation. With years of experience as a tax lawyer in Sarasota for many clients, Attorney Mary E. King can make sure that your tax issues are resolved in your favor. Fill out our online contact form, or call us at 941-906-7585. Remember, at the Law Office of Mary E. King, we are focused on solving your tax issues for good.