We are at the end of a year that has proven to be a year of lot of changes in many aspects. This year, we have seen tremendous changes in our way of living that will carry over to years to come. However, the changes that the pandemic has brought to the tax laws mainly affect the 2020 tax year for individuals and possibly prior 2 tax years for businesses because accelerated depreciation is a huge tax saving opportunity for businesses. December 31 is the last day to plan or revise your existing tax planning strategy.
Major changes are also expected in the tax laws in 2021. We will advise you when those changes are effective.
Each taxpayer’s situation is unique. Therefore, some taxpayers will benefit more or less from the changes of tax year 2020. As of this week, the Internal Revenue Service could not confirm the beginning of the tax season. The Service is planning for a regular tax season. We will know for sure in the coming days. A few IRS offices are still closed and others are operating at less than capacity because of social distancing. Some work could not be performed from home by certain employees. Some tax returns from the long tax season of 2020 are still being processed, mainly paper returns, amended returns, and returns where taxpayers have to provide additional documents.
This coming tax season is going to be more challenging in many aspects because we still have to continue to follow the health authorities guidelines to combat the pandemic. The IRS has become more flexible. The Service has encouraged tax practitioners and the public to use the technology available and has permitted some tax forms to be signed and submitted electronically to adhere to social distancing to avoid the spread of the virus.
As some of you know, Pierre Tax Group has relocated in late June. Our relocation has allowed us to better serve our clientele. We are currently using the technology more than before. Clients could either meet with us via Zoom or in person, if needed, to handle their tax matter. We also have drop off or short meeting in our conference room. We have a secured electronic portal where clients can upload and download documents. Clients could also review and sign their documents electronically. We could also receive your documents via fax.
As we previously reported, many small business owners have learned that their tax returns have not been done accurately during the process to apply for the Paycheck Protection Program (PPP) or other programs related to relief during the pandemic. Consequently, they lost the opportunity to qualify for loans or higher amount of loans. Many believe that would be a lesson learned by those business owners and hope they would ensure that they implement better accounting system or procedures for their business and that their tax return would be accurately done in the future.
As always, remember:
- A professional tax preparer could only ensure that you get all your legal deductions and credits that you are entitled to under the tax laws.
- A professional tax preparer would not promise you a huge refund. A big tax refund, in many cases, means that you gave the Treasury an interest free loan and it could be avoided.
- You sign your tax return under penalties of perjuries and you declare that you have examined the return and accompanying schedules and statements and you believe to the best of your knowledge that they are true, correct and complete. This statement, in part, explains why the IRS does not process unsigned tax return because the service could not hold you liable for a return that you did not sign.
- Know your tax return.
- If you did not plan accordingly, it would be too late at tax preparation time.
We are inviting you to set up a free appointment with us or to contact your tax advisor to discuss your year-end tax planning strategy. We are looking forward to talking to you and seeing you.
At Pierre Tax Group we wish you a Happy Holiday Season!