This week the house proposed a revamped version of the HEROES Act, at a $2.2T price tag, which includes additional relief for small businesses. The Treasury Department and House Leadership have been in talks trying to get something done.
The officials met on Wednesday to hammer out another stimulus deal. They found common ground on certain items, including the much anticipated $1,200 stimulus payments to consumers.
2nd Round of PPP Loans
Firms that have suffered the most in this pandemic and already used their PPP funding may get a second chance at additional funds. This would be allowed for businesses not publicly traded with less than 200 employees who have experienced a 25% reduction in quarterly revenues year-over-year.
Streamlined Forgiveness
Under the new package, borrowers with less than a $50,000 loan, would only need to certify to the government that they’ve met the requirements for forgiveness. They would then need to maintain their documentation in the case of an audit.
Borrowers with loans between $150,000 and $50,000 would submit certification under a simplified forgiveness application. They would also need to retain documentation.
No one knows the particulars on this one, but it certainly sounds good.
Deductibility of Expenses covered by PPP Loans
Also on the table is the deductibility of the expenses used to provide loan forgiveness. As mentioned, in previous communications, the loan forgiveness process may actually increase income taxes. If you have a business that does the same money this year as in previous years, you receive a $100,000 loan and we use $100,000 in expenses to get it forgiven, then naturally you will pay more in income tax.
The $100,000 used in expenses cannot be deducted, therefore creating more income and income tax. The intent of the CARES Act was for loan money to be tax free.
If they do this, it will be the first time I know of, in the history of America’s taxation system, where a forgiven loan would not create a taxable event. That being said, let’s hope they do something.
Let me leave you with this.
Another week has gone by, as we go further down the rabbit hole.
This week began with the most tumultuous and infantile Presidential Debate in the history of our great nation. No matter what your politics, one thing is certain. It was an embarrassment.
Next, Chicago lifted some of the restrictions on the Phase Four Reopening Plan. Obviously, this is good for many businesses.
Then it was reported that our President and the First Lady, have now contracted Covid.
What’s next? Locusts?
The ups and downs of this new world are exhausting. Get some rest this weekend. Do something that feeds your soul. Spend some time with your loved ones, reassuring them that everything will be fine.
Get ready for Monday. Only whatever God you pray to has any idea what’s in store for us next week. Do it knowing that we are right there with you, ready to help.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there is anything you need, whether you are a current client or not, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
www.AccountingSolutionsLtd.com
CONFIDENTIALITY NOTICE AND LEGAL DISCLAIMER. The information contained in this email message, including any attachments, is legally privileged and confidential and intended only for the addressee(s). If you are not the intended recipient, you are hereby notified that any reading, use, or dissemination of this message is strictly prohibited. If you have received this message in error, please notify us immediately and delete this message from your system.
Although this email and any attachments are believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure it is virus free. Accounting Solutions Ltd. accepts no responsibility for any loss or damage arising from receipt and use of this email.
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.
773-267-7500
chris@accountingsolutionsltd.com
