Upcoming Deadlines
11/15/20
As the end of the year approaches, it is a good time to think of planning moves that will help lower your tax bill for this year and possibly the next. Year-end planning for 2020 takes place against the backdrop of COVID 19 and a laundry list of legislative tax changes that many individuals and businesses still haven’t fully absorbed.
Nevertheless, the best year-end tax planning strategy for many taxpayers may still be to follow the time-honored approach of deferring income and accelerating deductions to minimize 2020 taxes. Deferring income also may help you minimize or avoid adjusted gross income (AGI)-based phaseouts of various tax breaks that apply for 2020. As always, however, year-end tax planning does not occur in a vacuum. It must take account of each taxpayer’s particular situation and planning goals, with the aim of minimizing taxes to the greatest extent possible.
Based on what we are seeing there are many areas of planning to address. There are many decisions this year that will need to be made before year end.
- PPP Loan Forgiveness & Timing
- Planning in a significantly down or up year
- Reasonable compensation and withholding adjustments for s-corp owners
- Health insurance deductions
- Retirement plan contributions
- Vehicle and equipment purchase depreciation
- Changes in household, jobs, and income
“In preparing for battle have always found that plans are useless, but planning is indispensable.” Dwight D. Eisenhower. This quote does a nice job of summarizing 2020 as we have had to navigate two major legislative bills; Families First Coronavirus Act and CARES Act. Both bills carried significant tax changes with very little guidance from the government on how to implement them. There are still many unanswered questions that we are faced with today. Now is the time to consider all the alternatives and make important decisions before year end.
12/15/20
Final Executive Payrolls to ADP and other 3rd Party Payroll Service Providers
12/31/2020
PPP Loan
Retirement Plan Withdrawals
Firm Updates – New Hires
MD LEWIS LLC is happy to announce three new team members to our firm.
Kevin Burkhart
Kevin will be filling a much-needed role will be in our tax department. Kevin is an ambitious tax professional. He has a knack for asking great questions and ability to see more than just numbers on a tax form. He is also very good with customers. We are very fortunate to have him on our team.
Erica Eggers
Erica’s role will be related to special projects, business development and business guidance coaching. Erica will be helping us behind the scenes with client communications, onboarding and developing our delivery systems to improve our customer service. She will also be working directly with clients providing business advice and guidance. She is really fun to work with and has excellent analytical skills.
LeAnn Smith
LeAnn has joined our firm as an administrative assistant. She is an excellent client services representative. We know that because she used to work for us years ago when we were Obermeier & Associates. You may recognize her when you stop in the office. Her fun cheerful attitude will warm up the office, especially with so many employees working remotely.
Business Tax Updates
COVID Related updates
- Cares Act
- Families First Corona Virus Act
Taxability of PPP loans
Individual Tax Updates
Retirement Account withdrawals
NOLs
PPP Loan Updates
Many of you have seen the forgiveness application forms from the banks. Right now, we are advising not to apply for forgiveness unless any of the following situations apply to you.
- You plan to sell the business
- You are taxed as a schedule C sole proprietor and your loan is less than $50,000.
- You expect a significant increase in taxable income in 2021.
Less than 1% of all PPP Loan borrowers have applied for forgiveness. The reason for this is because there are rumors of blanket forgiveness which may have a significant impact on your taxes.
COVID County/City Grants Update
We are seeing county grants opening again for second phases. The 2nd phase for Dakota County now allows for home-based businesses to apply. The best place to check for these would be with your county or city chamber of commerce.