Robert W. Wood is a Tax Attorney with more than 40 years of experience in his field. He has written more than 30 books on the subject of taxes and also writes regular columns for Forbes.com. When it comes to the PPP and taxes, there's been some confusion on how business owners should classify this money on their tax return. Robert weighs in on the subject and what you need to be aware of coming in 2021.
Highlights:
- What is PPP?
- Who can apply and should apply for the PPP?
- Can the employer use the loan for whatever they want in their business? The complex answer is yes.
- If you do get the loan, put it in a separate account so you can accurately track where the money went.
- Originally, you had to spend 75% of the money on payroll. However, that has changed.
- How do you get your loan forgiven?
- Roberto clarifies a tax distinction between whether the PPP is counted as income or as a loan, and what to do when tax season comes around.
- The tax question everyone is asking: is the PPP money tax-deductible?
- Congress and IRS are in disagreement with how the PPP money should be deducted and whether businesses get the double tax benefit or not.
- What's the best way to allocate the PPP money over the next 24-week period? Should it all go to payroll? Robert weighs in.
- If you don't have your loan forgiven, you may have to pay the loan back at a 1% interest rate within five years.
- Robert's final thoughts: Don't get frustrated. It's a challenging law everyone is navigating through.
Resources:
Have questions for Robert? Call him at 415-834-1800
Robert's Forbes author page: Forbes.com/sites/robertwood/#7b18431072de
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