Talking with TaxSpeaker: Video 97
1. I am wondering if you have any thoughts as to how IRS code section 265 is going to apply to expenses that are used to qualify for loan forgiveness under the PPP program. Since those expenses are being identified as paid to convert the loan to a grant will those expenses now be non-deductible as other expenses have historically been if paid for with a federal tax free grant?
2. I submitted the PPP when it first opened before there was proper guidance on the treatment partnership profits. The PPP only included payroll cost not accounting for partnership profits of the business. This was done because they wanted to be the head of the line and make sure they got in before the funds run out. The PPP is now back and approved but for much lower amount than the loan should be based upon the guidance that is out now. The bank says they cannot alter the application. Any suggestions, pointers or guidance from other scenarios you’ve heard about would be of help thank you.
3. We have a client that has fur-lowed his employees. The client has asked if he is required to continue to pay for the healthcare. We have gotten the impression that the employee asking heard something that he was required to continue paying it. Can you give me guidance on this?
4. I was approved for the PPP loan. I am a sole proprietor, Sch C filer, with 3 employees. I was approved for $31700. Of that amount $9900 will go to my employees and the rest will be for my take home pay of $21800. So during the time of payback I hope to finish all of the 200 or so tax returns that I have yet to come into the office. So If my business is still bringing in that kind of money, will I be able to use the $21800, from the loan as my draw, and just bank the money that comes in due to the normal flow of business. And use the income from the tax preps to carry on my normal business. I do operate out of my home, and my office in home expense is relatively small.
5. I have a client who has been paying their employees (who are not working) while they wait for their PPP loan to process. Once they receive the PPP loan can they use these funds to over the payroll that was already paid? Or does the PPP loan only cover paying the employees for the 8 weeks after they receive the loan?
6. If the PPP Loan forgiveness of the CARES act is nontaxable are those expenses going to be reduced or even nondeductible?
7. I am sorry – I must be missing something obvious – in the Cares Act Seminar – PPP loan for SE reaching max $100,000 in wages – says prorated for covered period (37518) – how did you calculate that amount?100,000/12 x 2.5 = 20833.33 I know it made sense when I was listening to seminar –but now I can’t get to that number and have a few clients in that situation.
8. I had a client call today concerned that she received a $2,400 stimulus payment instead of $1,200. Her husband passed away in February of 2019 and their filing status as MFJ in 2019. Should she be concerned about having to pay back $1,200 since her filing status will be “Single” in 2020? Or should she just count herself lucky and take the money and run? Will there be any reconciling of this stimulus on the 2020 tax return?
9. As a small CPA firm, are you or other firms you are aware of applying for the PPP program?
10. I noticed that Form 5227, Charitable Remainder Unitrust (aka CRUT) is not on the list. The normal due date is April 15th. Any thoughts as to whether or not the Form 5227 is also extended?
11. Do you guys know if there is a way to correct a stimulus ck....I had a client that efiled on the 31st of march and they went off of 2018 not 2019's info for Nebraska.....can we somehow correct that. What if the bank account was closed on the prior year? What can someone do that hasn't filed 2018 or 2019...will they send out stimulus checks thru the year??
12. I heard in your question and answer video that multiple companies of the same owner can apply for the PPP. The only limitation is the maximum cap. I have a client that the bank is refusing to submit both of their applications. Unfortunately, I did not write down the section of the law. Can you provide that to me?
13. One quick and easy question....is the stimulus payments a credit on the 2020 tax return that some may have to pay back?
14. do you know how much if any I can charge to help my clients with PPP app?
15. There's so much garbage information out there - I'm just trying to figure out a qualifying dependent over age 16 gets stimulus check for $500. 17 in HS, no job, on parents return as dependent. Or college but no job and on parent return as dependent. Get $500 or not. I've asked everyone and have a slew of responses. trying to get it from the best!
16. Are guarantee payments considered wages in regard to the PPP loan?
17. Assuming we follow the rules in the PPP program and the money becomes tax free. How would we be able to get around IRC 265?