HAPPY HOLIDAYS
from
Nazareth CPAs
Year-End Tax Planning Considerations
(203) 956-4899 | (203) 291-9093
cecil@nazarethcpas.com
1. Received a PPP loan for your business? Apply for forgiveness or convert to a low-interest loan. You have until August 31, 2021 to do so.
2. Have stock market gains? Consider selling some losing positions. You can "harvest" up to $3,000 of long term losses in 2020 against long-term 2020 gains. Excess losses from 2020 can be carried forward into future years.
3. Pay estimated taxes for 2020 as follows:
a. 100% of last year tax (2019).
b. 90% of this year’s tax (2020).
c. 110% if your AGI exceeds $150,000.
If you pay quarterly, then Q4/2020 is due Jan. 15, 2021
4. Increase your charitable contributions. Give as generously as you can. You can deduct $300 even if you do not itemize. Bottom line: We are more fortunate than most people. This year, I decided to triple my annual contributions.
As John F. Kennedy said: “Much more is expected from those who have been given a lot.”
5.Start a retirement plan if you don’t have one. This must be done before Dec. 31.
6. Purchase equipment or a vehicle for use in your business by Dec. 31st to take advantage of bonus depreciation (Sec. 179). You can write off up to $1 million of equipment purchases from your business
7. Prepay your expenses and defer income whenever you have available cash to do so.
==========================
IRS Audits on the Rise
- Stepped up audits for those who report high Schedule C losses.
- Taxpayers who don't report foreign income or FBAR compliance. Ref. recent Brockman case.
- Anyone dealing in crypto-currency.
-
Real estate losses are passive losses and are not deductible subject to some thresholds.
- Commingling of business and personal expenses.
- Non-filers.
=========================================
Why Have a Personal Financial Statement?
- Helps your plan your overall wealth.
- Aids in estate planning, gifting and trusts.
=========================================Now Is a Great Time to Refinance
- Mortgage rates are at historic lows.
- Lower your monthly payments; increase cash flow.
=========================================
Start Your 2020 Tax Planning Now
(203) 956-4899 | (203) 291-9093
cecil@nazarethcpas.com
Security - Phone scams. NEVER respond to phone calls or emails from the IRS. The IRS will only send you written communication by postal mail. Never email documents containing your Social Security numbers.
=======================================
Why You Want an Independent Review of Your Company's Financial Statements
Banks, lenders, acquirers and auditors look more favorably at your financials if they’re independently reviewed or audited and you’ll likely receive better rates and terms.
Contact us for assistance with your personal and business financial statements.
We offer three levels of service:
1) Compilation. Simple compilation of financial statements.
2) Review. More analytical procedures performed.
3) International Tax Planning. (India-US specialty).
===============================
