Business and Personal Year-End
Tax Planning Checklist



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    Webinar Slides | Webinar Recording

    Take a look at 2021 tax season cash flow planning for possible higher taxable income and liabilities for 2020 due to deductibility of PPP expenses

  • Take advantage of FFCRA payroll tax credits for 2020 and amend Form 941 if necessary

  • Tell your tax preparer if you had a qualified retirement distribution for 2020 due to COVID-19

  • Consider 139 disaster relief payments for employees instead of bonuses

  • Consider accelerating expenses or depreciation expense if you are in a loss situation for 2020 to utilize the NOL carryback option

  • Review 2018 and 2019 tax returns to make sure you did not have qualified improvement property being depreciated over 39 years. (If so, you can likely correct and claim bonus depreciation on 2020 tax return by filing Form 3115)

  • Keep informed on estate and gift tax law changes and be ready to act

  • Consider year-end vehicle purchases (new and used) to take advantage of much higher depreciation limits that continue in 2020 and taking advantage of bonus depreciation on used equipment. (New store asset bulk purchases are eligible for bonus depreciation and 179)

  • Complete a review of aging receivables and slow moving or obsolete inventory at year-end for bad debt write-offs and inventory markdowns

  • Maximize the allowable pass-through 20% deduction by looking at business structure, wages, and income…Make sure new entities added in 2020 are grouped together correctly

  • Take advantage of attractive accelerated depreciation options for qualified retail improvement property on any store remodeling or upgrades (including roofs, HVACs, and security systems)

  • Consider cost segregation studies for large construction projects resulting in accelerated depreciation deductions and tax savings

  • Determine if you will be taking the Standard Deduction or Itemizing (with higher standard deduction amount and elimination of previously allowed itemized deductions)

    • Consider bunching deductions in 2020 by accelerating charitable contributions or other itemized deductions into 2020
    • Utilize donor advised funds for charitable contributions
  • Consider funding a Health Savings Account (HSA) – especially if you are a taxpayers with high deductible health plans

    • Easy to setup/maintain and you can fund 2020 HSA contributions by April 15, 2021

  • Make sure 1095 and 1099 Forms are being prepared and filed timely for ACA reporting – ACA is still in effect for 2020!

  • Remember you can do an accrual of expenses at year-end, but they must be paid within 2 ½ months after year-end in order to be tax deductible!

  • Retirement plan options prior to year-end versus after year-end – consider using a year-end bonus to maximize your retirement plan contribution for 2020

  • S Corporations/Partnerships with losses – Make sure you have sufficient basis to take K-1 losses as this continues to be an IRS Audit Campaign issue


For more information about any of these tax planning ideas, please feel free to

Download

Webinar Slides | Webinar Recording

from December 9th where information was presented on all of these points, or

Feel free to reach out to either:

Dan Hoff

VP Automotive Account Management at Quatrro
dan.hoff@quatrro.com or 770-450-4339

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Charles Smith

Tax Partner at PBMares
cdsmith@pbmares.com or 252-638-5154

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