By Brian E. Ravencraft, CPA, CGMA, Partner at Holbrook & Manter, CPAs
Tax planning and tax compliance are going to be more important than ever for any business owner continuing to weather the COVID-19 storm. Those that received a PPP loan may need to step extra lightly.
The PPP loan program presented an attractive option to business owners at a volatile time, allowing them access the needed funds to cover everything from payroll costs to mortgage interest. Hundreds of billions of dollars were loaned out. However, we learned early in the loan process that the use of these funds may cancel out other benefits afforded to the business owner.
As it stands now, loan recipients will not be able to deduct the expenses if they used PPP loan dollars, that will be forgiven, to cover those expenses. Under Section 1106(b) of the CARES Act, a recipient of a covered loan can receive forgiveness of debt on the loan in the amount equal to the sum of payments made for expenses during an 8-week period beginning on the covered loan’s origination date.… Continue readingRead More »