Last Minute Deduction Strategies
Here are some last minute deduction strategies:
- Consider if prepaying your 2020 deductions is an opportunity to save on taxes versus paying in year 2021.
- Strategize the timing of customer billing.
- With 100% bonus depreciation and increased section 179 expensing in 2020, you can make significant purchases of equipment, machinery, and furniture and write-off 100% of the value. Make sure the assets are in place by December 31, 2020.
- If you incur an NOL in the current year, you are allowed to carry the loss back 5 years to recapture previous tax paid. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) amended section 172(b)(1) to provide for a carryback of any net operating loss (NOL) arising in a taxable year beginning after December 31, 2017, and before January 1, 2021, to each of the five taxable years preceding the taxable year in which the loss arises (carryback period).
The above is for illustrative purposes and cannot be relied upon without professional tax consultation. Should you desire additional information, we are available to discuss specifics concerning your tax situation.