Do you report your business income on Schedule C of your Form 1040?
Then your Payroll Protection Program (PPP) loan-forgiveness should move ahead smoothly.
Nevertheless, loan-forgiveness questions do arise if you’ve already received your PPP money.
If you have questions about spending money on yourself and your employees, you’ve come to the right place.
You’ll get complete answers to important questions when you read the full article titled Tax Tips: Five Answers to Spending the PPP Money on You and Your Employees.
NOTE: This subject is complex and we can’t cover everything in this short email. That’s why it’s so important for you to read the full article.
Question #1: As a sole proprietor with no employees, do I have to pay myself every week for 10.8 weeks to get full loan forgiveness?
Quick Answer:
Nope. Because both your loan and loan forgiveness are based on your 2019 Schedule C net profit, you simply need to spend the loan money for personal purposes anytime during the 10.8 weeks. You’ll get the whole story when you read the full article.
Question #2: I have a few self-employed clients who are about to receive their PPP loans. I’m wondering if they can wait for a number of weeks before they spend their loan proceeds.
Quick Answer:
Yes. No problem. But there are three facts you have to know if they want to avoid problems. We’ll show you how to avoid them when you read this full article.
Question #3: I am a Schedule C taxpayer with no employees. My PPP loan-amount was deposited into my business checking account on May 19, 2020. Exactly when can I start using my loan money?
Quick Answer:
You can use the PPP money at any time during a prescribed period explained in my article. But there’s other important information you need to know to avoid problems. You’ll get full details when you read the full article.
Question #4: My client filed using Schedule C, and in 2019 ran a loss but he withdrew $120,000 from the business as it increased its debt position. How can I get loan-forgiveness if his employee count changes?
Quick Answer:
Your client can list his employees on the forgiveness-application and can use 24-weeks of pay. In addition to payroll, 40% of the forgiveness can come from interest, rent, and utilities. You’ll get the whole story when you read the full article.
Question #5: How do I apply for loan forgiveness?
Quick Answer: Depending on the details of your loan, you need to complete the form designed by your lender. It should follow the SBA rules as they appear in the Forms 3508. We’ll explain everything when you read the full article.