As we reach the end of the annus horribilis that was 2020, it's hard to even think of another income tax deadline in three to four months.

But as Mark Twain once observed, the only two things you can count on in life are death and taxes.

The good news: If your small business was clobbered by the COVID-19 pandemic and government shutdowns, you shouldn't have to pay a lot in taxes for 2020.

The bad news: Sometimes our income tax laws work in crazy ways.

I'm indebted to my good friend John D'Aquila, a certified public accountant and head of D'Aquila and Company in Jacksonville, Florida, for sharing some of his year-end tax tips with me and allowing me to share them with you.

The Basics. When it comes to year-end tax planning, two rules never change: You should try to (1) accelerate as many deductions as possible to December 2020 and (2) postpone as much income as possible to January 2021. If you know you will owe someone money early next year, ask him or her to submit invoices now so you can mail payment before year end. Better yet, if it's a scheduled monthly payment, ask if it's possible to pay the entire year in advance; you may even get a discount for doing so. Wait until Jan. 1 to mail your invoices unless a client (having read this column) asks you to send it now, in which case you probably should in the interest of good customer service.

Business Deductions. As a result of the Coronavirus Aid, Relief, and Economic Security Act, aka the CARES Act, qualified improvement property such as qualified leasehold improvements, qualified restaurant property and qualified retail improvement property is now depreciated over a 15-year life and eligible for bonus depreciation. This change is retroactive to 2017, and amended returns can be filed to claim refunds for the missed deductions.

PPP and EIDL Loans. Included in the CARES Act was the Paycheck Protection Program (PPP), a program authorized by the Small Business Administration (SBA) to guarantee $349 billion in new loans to eligible businesses and nonprofits affected by COVID-19. Although these loans may qualify for loan forgiveness, the expenses paid for with forgiven funds are NOT deductible. If your business obtained funds through the PPP program, talk to your accountant as soon as possible after Jan. 1 and discuss the steps and documentation necessary to ensure your loan is fully forgiven.

If your business received a grant as part of an Economic Injury Disaster Loan (EIDL) from the SBA, the portion labeled as a grant is treated as income for federal income tax purposes (state and local tax laws may vary).

Relaxed Rules for Deducting Net Operating Losses. The CARES Act also temporarily removed the 80% limitation on taxable income for deducting net operating losses (NOLs) for 2020 and amended the rules for NOLs to provide for a five-year carryback of any NOL arising in 2018, 2019 and 2020. As a result, if applicable, your business can take such NOLs into account in the earliest tax year in the carryback period and carry forward unused amounts to each succeeding tax year. Alternatively, you can waive this carryback period and instead carry forward any NOLs to offset income in future years. Depending on expected tax rates and cash flow in future years, this waiver option may make more sense than carrying back any NOLs.

Reduction in Business-Interest Deduction Limits. If the gross receipts of your business exceed $26 million in 2019 and 2020, your ability to take business deductions is limited to 30% of your business's adjusted taxable income. For tax years beginning in 2019 or 2020, for business entities other than partnerships and limited liability companies (LLCs) taxable as partnerships, the CARES Act reduced the limitation to 50% of a business's adjusted taxable income.

Employee Payroll Tax Deferrals. If your business has deferred an employee's payroll taxes for Sept. 1, 2020, through Dec. 31, 2020, under President Donald Trump's administration's payroll tax memorandum issued in August 2020, you should discuss your options with your accountant. Because these taxes are not forgiven and must be repaid at the end of the year, this deferral could result in numerous practical challenges, such as what happens if an employee leaves before he or she repays the payroll taxes.

Extension of Time to Pay Employment Taxes. Under the CARES Act, a business can delay payment of applicable employment taxes for the period beginning on March 27, 2020, and ending before Jan. 1, 2021 (the payroll-tax deferral period). Generally, under this provision, the business is treated as having made all employment tax deposits that would otherwise be required during the payroll-tax deferral period, if all such deposits are made not later than the "applicable date," which is (1) Dec. 31, 2021, with respect to 50% of the amounts due and (2) Dec. 31, 2022, with respect to the remaining amounts. For self-employed taxpayers, the payment for 50% of the self-employment taxes for the payroll-tax deferral period is not due before the applicable date.

More next week ...

Cliff Ennico ([email protected]) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our webpage at www.creators.com.

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