Tax Tip: Did You Receive a PPP Loan?
Make sure you relay the following information to your tax accountant for the upcoming 2020 tax season:
On Dec 27th President Trump signed the Consolidated Appropriations Act, 2021 (CAA 2021) that included the PPP guidance for which we all were waiting.
Forgiven PPP loans and EIDL grants are not taxable AND you can deduct expenses that were paid from those funds. Sounds too good to be true–but it is!
How were these funds recorded in the books? Was the PPP loan forgiven? Knowing this kind of information is crucial when filing 2020 tax returns. We don’t want to take the chance of picking up income that really is tax-exempt.
On a side note – applications for round 2 of the PPP loans are available until March 31st or the money runs out. Small businesses are likely eligible if you experienced a 25% or greater drop in revenue in any 2020 calendar quarter when compared to the same quarter in 2019.
Contact your CPA right away to have these discussions and ask questions about eligibility!
Consult with your tax professional at Ketel Thorstenson about this or other tax matters because each situation is different. Don’t navigate the difficult and ever changing tax codes and legislation on your own. Ketel Thorstenson CPAs and tax professionals receive advanced training and continuing education all year long to keep our service on the forefront of the tax industry. Call us today for guidance on tax planning, tax return preparation, and tax legislation affects or questions.