2020 was not in any way, shape, or form a normal, predictable year. COVID 19 and the governments’ responses to the pandemic altered personal and business realities in ways none of us anticipated.
The various acts passed by Congress and signed by the President offered numerous monetary support programs, some of which you have heard of or received benefits from, but there were many more programs with obscure benefits that you may not have heard about. In addition, while some of the support opportunities provided by the government were managed by the SBA and administered through banking institutions, many more will be administered through tax filings with the IRS. These provisions may directly impact your 2020 tax return.
This year, you will see there will be more questions to answer regarding things that happened or did not happen during 2020. You will see these questions either in questions from the tax preparers or on your tax organizers. The questions are directed towards provisions/programs which may significantly affect your tax liability. Some of these provisions could even result in refundable tax credits.
Also, please note that to process and analyze the answers to these questions will increase the amount of time needed to complete your 2020 tax returns. There may be increased costs and almost certainly more processing time by DBM to properly complete your 2020 income tax filings. In many cases, this additional time will result in significantly less taxes and more cashback from the government.
Legislation continues to evolve as we continue to respond to the pandemic. DBM will continue to monitor the tax impact on our clients and keep you informed.