finance
Update : PPP Forgiveness and Important 2020 Tax Considerations
by Jeramy Smith , CPA
As with all things PPP related this year , Congress , the SBA , and the IRS have continually changed and updated aspects of this program . Therefore , the information contained here is likely to change , so consult with your tax advisor and lender about your specific PPP loan to assure you have the latest information .
Should you wait to submit your application for PPP forgiveness ?
Many banks and financial professionals have been encouraging businesses to wait to begin applying for forgiveness in hopes that the process will be simplified .
Because of the multitude of options and requirements to receive PPP forgiveness , the application process looks to be a cumbersome and confusing process for many dental practices . The practice must not only spend the funds on the correct types of expenses , but must pay those funds out within a specific time period ( of which there are multiple periods to select from ) and must maintain employment levels or eliminate employment reductions by a specific date ( of which there are options and also exceptions available in some situations .)
While the forgiveness application forms , and even a simplified EZ version , have been released , there has been discussion in Congress about further simplifying the forgiveness process for smaller loans . For example , the bi-partisan Senate Bill S . 4117
– Paycheck Protection Small Business Forgiveness Act introduced on June 30 , 2020 , proposed a one-page form for loans that are not more than $ 150,000 . If this were to happen , it could reduce the work required for the smaller loans to possibly a one-page form where the taxpayer simply certifies that funds were spent properly .
On October 8 , 2020 , the Department of Treasury introduced an easier Loan Forgiveness Application , Form 3508S , for businesses that received PPP loans of $ 50,000 or less . This new application is a one-page form that does not require any calculations for loan forgiveness and borrowers are not subject to any wage or employee reductions . Therefore , practices with PPP loans of $ 50,000 or less can use Form 3508S and apply for forgiveness now , assuming your lender is ready to accept them .
Practices with PPP loans over $ 50,000 may want to wait a bit longer to apply for forgiveness since further simplification may still be coming from Congress and many in the financial community recommend that most businesses delay starting the forgiveness application process for now .
What are the basics of loan forgiveness for loans over $ 50,000 ?
Assuming that Congress passes no further simplification for loans over $ 50,000 , here are the basics of loan forgiveness :
20 HOUSTON DENTISTRY | www . houstondentistrymagazine . com