Self Employed? Lower your tax liability with a PPP loan.
- Marc Neglia
- May 28, 2020
- 2 min read
Updated: Jun 13, 2020
As most of you may already know, the CARES act was signed into law earlier this year, which initially included $350B as part of the Payroll Protection Program, which was intended to provide relief and payroll assistance to the many small businesses in the US. Many of the top banks were criticized, and some are even being sued, for prioritizing the first round loans to their larger customers.
The initial funding dried up within two weeks, and many small businesses were excluded due to some of the non-intended consequences of the initial program guidelines. Subsequently, a second round of funding totaling $310B has been approved. Fortunately, due to the lower demand, and the smaller size of the average loan, there's still money left out there. On May 23, the Treasury Department issued an update that reported just under 4.5 million loans have been approved with a total value of $511B. That means there is still $150B left in the pot.
Did you know that as a sole proprietor or independent contractor, you are also eligible for a PPP loan that may be forgivable up to the full amount? Based on this, you may want to have a tax professional prepare your 2019 tax return (if you have not yet), to help ensure that you maximize the benefit of both the PPP program and your overall tax liability. This must be calculated very carefully; you don't want to end up with money that is not forgiven and must be repaid. Your tax preparer already has all the information, why not have him or her help file the PPP application as well?
Neglco Tax Services is staffed with professionals that are available to help you navigate the process of filing both your personal (or business) tax retuns as well as the PPP loan application, should you decide that's a viable option for you.
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