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2020 Year-End Tax Planning for Businesses

Posted by BOOSCPA Strategic Tax Services Group Posted on Dec 11 2020
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2020 Year-End Tax Planning for Businesses
Tax Relief Strategies for Resilience

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As the world continues to contend with the COVID-19 pandemic and its economic fallout, businesses are doing all they can to mitigate risks and plan for a recovery that’s anything but certain.

The path forward will likely not be linear. Different regions, industries and business segments may be in different stages of recovery simultaneously.

The tax function plays a critical role in navigating recovery and positioning businesses to emerge from this crisis more resilient than before. Effective tax strategy can preserve liquidity, lower costs and work in tandem with overall business strategy.

Read on to explore the tax relief tactics that can help take your business from reacting to the day-to-day challenges to preparing for the future.


Finding Relief: Tax Strategies to Generate Immediate Cash Flow

During these challenging times, companies must have access to cash to help offset unforeseen costs, whether for buying personal protective equipment (PPE) for on-site employees or investing in the technology needed to keep a remote workforce safely and efficiently connected. Click here to find out more information about finding relief and different tax strategies to generate immediate cash flow!

Optimizing Operations: Uncover Tax Relief Opportunities

Despite the uncertainty, savvy companies can position themselves to outperform their competitors by capitalizing on market shifts and strengthening their core business models. To do so, liquidity will continue to be at a premium, but many companies at this stage should be able to spend a bit in order to reap considerable returns. The tax function is poised to help them do just that.

After taking advantage of tax solutions that are within reach, it’s time to consider low-risk strategies that will plant the seed for future growth. Click here to find out more information about optimizing operations to uncover tax relief opportunities!

Moving Forward: New Tax Strategies to Reimagine the Future

Plans made prior to spring 2020 may no longer make sense in a post-COVID world. To stand apart from competitors, companies need to not only recover from COVID-19, but also integrate the lasting forces of change brought on by the pandemic to emerge more resilient and agile than before.

It’s time to reset vision and strategy—and tax needs to be an integral part of that process. Click here to find out more information about moving forward and setting new tax strategies to reimagine the future!

Planning for What’s Next: Be Prepared to Seize Opportunities

The reality for many is that it may take years to get the phase when a business is meeting or even exceeding market growth. During this stage, a company has fully recovered from the business challenges of the pandemic-recession and is experiencing significant growth. It’s a time when many businesses will be executing the long-term plans they’ve crafted throughout their recovery journey. But companies should consider the tax effects of acting on these plans.  

Key Tax Strategies

Use tax transformation to maintain a broad view of your total tax liability.
Leverage automated solutions for manual and error-prone areas, including state and local sales and use taxation, value added tax, etc. as your business executes on tax transformation plans.
Consider the tax benefits of outsourcing non-essential functions to third parties to lower your company’s total tax liability.

Review federal Work Opportunity Credit criteria for eligible new hires.
Consider eligibility for paid family and medical leave. Under the new law, an eligible employer is allowed the paid family and medical leave credit, which is an amount equal to a percentage of wages paid (up to 25%) to qualifying employees during any period in which those employees are on family and medical leave due to a critical illness or the birth (or adoption or foster care) of a child.
The applicable percentage is 12.5%, increased (but not above 25%) by 0.25 percentage points for each percentage point by which the rate of payment exceeds 50%.
Consider alternative legal entity structures to minimize total tax liability and enterprise risk.
Regularly monitor and assess potential regulatory and legislative changes at the federal, state and local levels, as well as in other countries, if applicable.
Continually iterate and adjust tax strategies to align with overall business strategies.
Evaluate global supply chain and cross-border transactions to minimize global tax liability.

Most importantly, companies need to continue to plan for what’s next. While the immediate threat of the pandemic has abated in this stage, new threats are inevitable. But alongside those threats come new opportunities for those businesses poised to seize them.


Need Help?

If you think your business can benefit or is interested in any of the above Year-End Planning for Businesses opportunities, BOOS & ASSOCIATES is here to help! To inquire more information please email us at