5 Ways to Incorporate Exemptions and Benefits Into Your 2020 Tax Planning

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COVID-related lockdowns have had a devastating effect on all types of businesses across the country. Restaurants, stores, and offices have been forced to close down, either on a temporary or permanent basis. Many of those still in operation are often struggling to manage their cash flow.

There have been several federal and state programs meant to cover businesses affected by the pandemic. You can take advantage of the benefits with these post-lockdown tax planning tips.

Act Fast to Take Advantage of Exemptions

Most federal and state programs require applicants to respond quickly due to limited spaces and resources. The same businesses in Oklahoma that generate sales tax happen to be the most hit during the pandemic. The city’s sales tax is at 4.13% and it relies on those collections to fund most of its obligations.

What that means is that you’ll need to act fast to take advantage of tax exemptions. You should pay attention to those aspects of your business affected by time constraints from statutes and regulations.

Get Your Alternative Minimum Tax (AMT) Refund

To help corporations during the pandemic, congress approved the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The act allows businesses to claim all their AMT tax credits from 2018 and 2019. The advantage is that it speeds up the process so that you can file to get all the AMT refunds at once.

The IRS has a tax preparation guide on the different ways you can make your application. Corporations may fill form 1139 if they want a quick refund. However, the deadline is due on December 31, 2020.

Apply For Federal Opportunity Zones

You may also consult tax preparers on the potential of boosting your income through opportunity zones. Even if you don’t reside or work within that area, you may still be able to receive the benefits. There’s no tax on the asset’s appreciation if you hold your fund in an Opportunity Zone Fund for 10 years.

To maximize benefits, you may want to integrate your tax credits with other incentives. You can work with bookkeeping services to develop a financial model that will address your cash flow problems.

Consider a Disaster Refund

All 50 states were declared disaster zones, including the District of Columbia and the five territories. That means all businesses in the United States have the opportunity to claim a disaster refund. But it covers certain types of losses.

The refund can cover lost inventory due to disruptions in the supply chain caused by the pandemic. It may include manufacturers, restaurants, offices that could not receive their supplies during the lockdown. There may be other requirements you have to fulfill to be eligible for the refund.

See the Big Picture

As businesses recover from the effects of lockdowns, it may be time to consider a paradigm shift. There may be bottlenecks in your monthly bookkeeping functions that your accountants may not have seen.

You may want to step back and evaluate whether your business is efficient enough to work within regulatory requirements. Now more than ever, there is a need for innovative solutions that add value to your bookkeeping services and processes.

Remember, you’ll be working within the constraints set by regulations. A bookkeeping services company can enhance your accounting processes so that you can take advantage of the benefits. Research your options and plan early to avoid rushing at the last minute.

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