I’m getting a lot of questions about this, so let me try to explain this in a different way.
Scenario 1 – In the normal course of 2020, your business shows a taxable profit of $100K. You receive a PPP Loan during the year of $25K. Since it is a loan, it is un-taxable. Because you are able to receive full forgiveness on the loan, the $25K in expenses that would be or were used for forgiveness cannot be deducted in 2020.
As such, you will pay income taxes on $125K.
Scenario 2 – The same set of circumstances occur except the 25K is a grant, or what many would call free money. Grants are always taxable. The taxpayer would then pay income tax on $125K.
In other words, there’s no difference.
The PPP Loan was promoted as free money. Such a thing does not exist. There’s only two things in life that are certain; death and taxes.
Let me leave you with this.
I recently received a call from one of you. He had been notified that someone had filed for unemployment under his social security number against his business. He was obviously distraught until I told him the following.
The same exact thing happened to me six weeks ago.
When we got the paperwork in, my wife flipped. She immediately thought that my identity had been stolen. We checked my credit, put all sorts of stops and fraud alerts in place. We monitored it daily, and then something happened.
Another one of my clients called five weeks ago saying that it had happened to her.
In all, I’ve had this happen to myself and five of my clients. The problem is that there is no rhyme or reason to the circumstances. There are four different payroll companies involved. If it was all happening at one, then we might be able to chase down a culprit. As such, it’s probably someone in the government that has access to our information.
What can we do?
Not very much. You can fill out the paperwork that you receive denying the claim and mail it in. You can also call the 800 number to leave a voicemail. This is exactly what we did, and no one has gotten back to us. I suppose that we could call every day, but I don’t know what that would accomplish.
As far as I can tell, everyone who is supposed to be working at the Department of Employment Security is unemployed.
So where are we on this?
I have no idea. I haven’t received anything back from them nor heard a word. We might find out a week from now when they shut down the federal government. Just kidding.
So what do we do?
We wake up every day, go to work, and be the best entrepreneurs we can possibly be. We wake up every day, and try to make our little part of America the best that we possibly can.
In other words, we lead.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there is ever anything that 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
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