While many taxpayers consider possible future tax policy changes that may result from the recent federal elections, they should also turn their attention to certain current year tax provisions affecting individuals that will expire at the end of 2020. Taxpayers should consider planning for these changes before year-end.
The following highlights a few of the most prominent 2020 expiring year-end opportunities to consider:
- Deduct up to 100% of their Adjusted Gross Income for qualified charitable contributions,
- Penalty waiver for certain early withdrawal from certain retirement accounts relating to coronavirus-related distributions,
- Loss limitations modified for certain businesses,
- Net operating losses (NOLs) carrybacks extended and 80% limitation temporarily removed, and
- Deductible business interest expense increase.
Each of these expiring provisions may provide a savings opportunity for taxpayers if necessary actions are taken before January 1, 2021.