The AICPA has made strong recommendations regarding extending both the filing season and tax payments until October 15th. We don’t know if Congress will accept, modify or reject them nor do they necessarily represent our opinion as a firm. I see a lot of planning opportunities around these issues if those recommendations are followed.
Here are the tough questions for decision makers:
1. By extending balances due until October without penalty and interest, are you penalizing those who have already paid their 2019 (not 2020) taxes. It’s one thing to extend the deadline but another to extend payment. Is the purpose a compliance problem or an economic stimulus?
2. By extending the payment deadline, are you assuring a higher level of non-compliance come October? The IRS is already short staffed in the compliance area.
3. By extending the deadline this year for payment, are you setting a precedent to make it easier to do so in future years?
Until 2017, businesses could carry losses back to profitable years. That is no longer the case… all losses are now carried forward. Accrual basis taxpayers should review your 2019 situation for additional deductions. If you have a loss in 2020 you may not get to use it until 2021 or beyond.
AICPA orignal article: https://www.aicpa.org/2020/coronavirus-pandemic.html
Thoughts brought to by Partner Steve Geisenberger. Steve became a Partner in the firm in 1986 and is known for his business and taxation expertise.
Spring Cleaning Your Personal Tax Files
The general rule for retaining federal tax records is three years. However, there are many exceptions to this rule so it helps to keep records longer.