Business & farm

You wrote:

"no one can say for sure that the IRS will catch the failure to timely file the carryforward election"

Now you see? 

That is actually where startups in TY year 2020 / Covid year get messed up by this CARES act!

When this CARES act is supposed to help.

"carryforward election"?  

That's a misnomer!

It's a "waive carryback election".

"Waive carryback" naturally results in a NOL carryfoward.

Pre CARES act, it was only carryforward.

This is all wrong!   The new CARES act TY 2020 should have been:

Carryforward UNLESS you want and check Carryback.

That's a big difference.

Big difference.

And do it like that is more in the spirit of how it was and what tax payers expect to have to do. 

And it would not have messed up existing programs and forms people might have already had.

The turbo tax program for TY2020 that I had started before Oct 15, 2021
seemed to not even have that CARES act "carryback waive" option built in like that.

I did not come across that "carryback waive" option once.  

I still don't see it.

No popup screens that asked me about waiving anything.

because ... BEFORE CARES act ... there WAS ONLY carryforward.

And the TurboTax TY 2020 was likely made before all these CARES act provisions kicked in?

In TurboTax I saw no specific questions about carry forward in TurboTax TY 2020,

nor about carry backward, 

as I was populating all the necessary fields in TurboTax Home and Business earlier on.

I only discovered about "5-y carryback waiving" online

as I read additional info on the IRS site and elsewhere

anxious to do everything perfectly in my very first business tax year for my new business,

and seeking more info than what the TurboTax provides.

and now ... now one apparently has to ELECT it by October 15, 2021 .... NOT to have carrybacks

This makes life harder for 2020 small biz startup owners like myself

who have been scrambling, and happily welcomed extra business in TY 2021.

It feels like a triple punishment, rather than help, this CARES act.

Punishment number 1 being the COVID year. 

Punishment 2

I started working on the 2020 TY timely ... already in July 2021 or so ... to file TY 2020 by October 15, 2021,

within the extension deadline. 

Clueless that apparently there was a "waive carryback deadline" ticking.  Tick, tick - no idea!

Then:  stuff happened, let's call it 'life'.  

I had to interrupt my filling TY 2020 in October in the convenient TurboTax forms.

Had to, even though I was much enjoying filling everything out and calculating and making a gazillion Excel sheets. 

Weirdly to some perhaps: I was having fun of sorts.   And learning a lot.  

I assumed there would be no harm in interrupting filling out my TY 2020 return and filing past Oct 2021:

After all; I had nothing but BIG unanticipated losses for TY 2020,

and could not possibly owe the IRS anything....

And, I assumed anyway that these losses would naturally go forward into TY return 2021.

No matter when I file them.

Punishment 2

Losses do not carry naturally forward.  

Now I might  in time incur penalties if I do not file the Form 1045?

(Which of course I will-file the 1045)

But the whole "MUST fill out the 1045" after October 15, 2021 is not right, an extra punishment of sorts.

I am guaranteed not the only startup person in 2020,

learning the new biz every which way and who is tax-wise a newbie too,

who gets hit with this.  

That's not counting punishment nr 3: 

no help or loans or anything for startups who had already poured $1000s in their new business
which was to open full flung in 2020, and was shut down before it began.

No help because  for the government support, a business owner has to show "prior income" which of course is:

  not there, because with a 2020 startup there is no prior income to show.  

It think this CARES act is more of a night mare than a help for TY 2020 startups

that were well underway when Covid hit in March 2020.  

As a new business owner, the newness of business itself is challenging enough;

to wrap your head around the taxes; also challenging enough. 

Then, if you are still standing after year 2020, having survived a major blow of shutdowns,

having carried your business from your own savings for months at an end,

in the hope that eventually, eventually this just had to all blow over  ...

and then it does .... and you are still standing, and you are having a good year 2021

not even having made up for the losses though - but at least making income ...

So hooray, hooray ... we made it!

THEN:  tax man comes and slaps you with complex CARES act rules and regs that punish you if you don't meet them in your first year of doing business, and which act only seems here to help existing businesses?

So for startups:  no aid, no relief, more economic INsecurity.

Wrong, wrong, wrong!

I am mad