CPA Rachel Katherine Daddesio recently discussed how the CARES Act will provide tax relief in 2020.
The CARES Act was signed into law in March of 2020, in the heart of the COVID-19 pandemic. The goal was to implement a package that would help businesses and citizens of the United States continue through the economic and health crisis caused by the pandemic. CPA Rachel Katherine Daddesio recently discussed how the CARES Act will provide tax relief this year.
First, Rachel Katherine Daddesio discussed the rebate checks that were provided for individuals across the country, whether or not their 2019 returns had been filed. The amounts provided were based on the filing status of the individual, whether they are married, single, heads of household, etc. Rachel Daddesio added that the rebate check was provided before a 2020 tax credit, which means some citizens may be eligible for an additional tax credit when filing the 2020 income tax return.
“It will be especially important for taxpayers to work with CPAs this tax season,” Rachel Katherine Daddesio said. “Tax filing will be more complicated this year due to refund checks and numerous other relief efforts. Those who file their taxes without professional help may miss out on some serious benefits.”
Rachel Katherine Daddesio added that many people with retirement plans have had to tap into them during these difficult economic times. The CARES Act provided several provisions to aid those who have had to use retirement money to support themselves. For instance, those who would normally receive a 10-percent fee for withdrawing up to 100,000 from 401(k) accounts, IRAs, and other retirement plans can have these fees waived if their needs are related to the pandemic. Distributions that were made may be reinstated into the plans within three years without being subject to annual limits.
“Many businesses, large and small, are expecting losses for the year 2020. However, many business owners are not yet aware that tax rules for such losses have been changed drastically,” Rachel Daddesio said.
Rachel Katherine Daddesio explained that new rules apply for net operating losses. The CARES Act has restored carrybacks and expanded them too. Now, Rachel Daddesio stated there is a five-year carryback for 2018, 2019, and 2020. This includes a 100 percent offset to taxable income. Businesses that experienced losses in 2018 and 2019 can now file amended returns as well.
“Now is the time to talk to your CPA, especially if your business is struggling,” Rachel Katherine Daddesio said. “A qualified CPA could help you amend earlier tax returns to help offset some of the losses you’ve taken. You could receive an immediate tax refund.”
Rachel Katherine Daddesio finished by stating that even more tax provisions have been made due to the CARES Act and the coronavirus pandemic as a whole. She urges everyone, even those who are confident in filing their own taxes, to spend at least a few moments speaking with an account before filing taxes for 2020.