2020 Year-End Tax Planning
for Businesses
Tax
Relief Strategies for Resilience
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 askboos@booscpa.com.
