February 24th, 2021 Brad Hennebert
Did you miss out on the first two opportunities to receive your tax-free Paycheck Protection Program (PPP) cash? Many did miss out. Why?
Who wants a loan? No one. Well, almost no one. But who wants a cash gift, tax-free? If you do, read on for the details. But first, you should know that the big picture works like this:
1.You obtain your PPP tax-free monies from a lender (it’s called a “loan,” but watch that word disappear as you read this).
2.You spend all the PPP money on yourself if you are self-employed or operate as a partnership; on payroll (including pay to you, if that applies); and on other covered expenses such as rent, interest, utilities, operations, property damage, suppliers, and worker protection.
3.You apply for loan forgiveness and achieve 100 percent loan forgiveness, which is easy-peasy when you spend 60 percent or more of the money on payroll (yourself if you are self-employed or a partner in a partnership).
4.You deduct the expenses that you paid with the PPP loan monies that were forgiven.
The new COVID-19 stimulus act sets aside $35 billion for first-time PPP applicants, with $15 billion of that made in loans for first-time applicants with 10 employees or fewer or made in amounts less than $250,000 to businesses in low income areas.
The new deadline is March 31, 2021. The monies available in this new round of PPP funding are on a first-come, first-served basis. Don’t procrastinate. Get your application for your first-time PPP monies in place now. Tax Defense Ohio has counseled many of our small business clients on this and helped them figure out the loan forgiveness paperwork. Call us today to schedule an appointment before its too late!