Taxes or COVID or Both. Do You Have a Tax Plan?

With COVID at our heels again and Thanksgiving effectively canceled for
many, it seems that a repeat of the first half of 2020 may be at hand.  The
arrival of the vaccine should make it less scary soon, but we still need to
dodge the virus and keep our businesses open between now and when “anyone
with no priority” can get vaccinated.

It’s all distracting us from the wave that will affect or infect us, to
which there will never be a vaccine, higher taxes for most and very soon.  I
can wear a mask, I can Zoom with grandma and owe her a hug, but I can’t
change what’s about to happen to my tax bill.  The Biden campaign promised no
negative tax impact for anyone earning under $400,000. a year.  But if the
corporate tax rate jumps to 28%, do you really think that you won’t be
affected by the coming changes?  To be fair and non-political, if Trump
managed to pull a rabbit out of the hat and remain as president, your taxes
would likely still go up.  Due to the pandemic and the country printing
money it doesn’t have, America is about to either devalue its own dollar, or
start paying its bills, which is going to be felt by all, no matter the
party involved.

Like choosing to wear a mask or avoid crowds, we can take actions that,
while not an absolute guarantee, are likely to lessen the chance of being
overly affected by tax code changes.  You can also start using a tax planner
and meeting twice a year to plan your tax outcomes in advance.  While all
your projections might not come out exactly as planned, it will lower your
chances of being grossly affected.  If you only see your accountant one time
a year, don’t see them at all, or don’t do a draft projection of your return
in October, November or December, then they are not a true tax planner.
They might be well qualified to put numbers in software that accurately
reflects what happened over the last 12 months, but that’s a historian, not
a pro-active planner!