3 Actions To Guarantee Your PPP Loan Is Forgiven
Michael Raanan, MBA, EA ?? IRSvideos . com
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As companies are recovering from COVID-19, some are utilizing the Paycheck Protection Program (PPP). If you own a qualifying small business, then it is of the utmost importance that you follow the guidelines for spending the money so that you don’t have to repay it in the future.
Use at Least 75% For Payroll
If your staff are traditional, full-time employees, then this is relatively simple. However, if your business relies on gig employees or contractors, temporarily converting them to full-time employees for the loan’s term may be the best way to disperse the funding.
Rehire Your Employees.
Bringing your workforce and payroll totals back to pre-COVID-19 levels has been a PPP forgiveness requirement from the start. Be sure personnel and compensation are reinstated correctly to help increase the chance of your lender granting forgiveness.
Document all Your Expenses
After the loan funds hit your bank account, you need to start documenting what you spend them on. After the eight-week term is up, gather all your financial data and apply for loan forgiveness. Make sure you have documentation that verifies your business’s number of full-time employees and their wages. This includes payroll documents, income statements, tax filings, unemployment insurance filings, retirement statements, and health insurance contributions. You’ll also need to provide documentation for expenses paid with the loan for things other than employee payroll, such as mortgage interest, rent, and utilities. This includes receipts, canceled checks, and bank statements. Official Small Business Administration (SBA) guidelines should be followed to ensure your PPP loan is forgiven. For assistance with SBA relief or IRS relief, give us a call at (949) 260-4770 or email us at [email protected].
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