Entrepreneurs who are cash strapped and took an initial Paycheck Protection Program loan may have another opportunity to borrow. Meanwhile, accountants say it will take more than just additional PPP proceeds to keep firms afloat.
Tax professionals say that while a second bite of the PPP apple would be greatly appreciated, small businesses will need more than that to stay afloat."Essentially without deductibility, the business owner's taxable income will be higher this year, and it will create a larger tax liability at a time when every dollar counts," said Jeffrey Levine, CPA and director of advanced planning at Buckingham Wealth Partners in Long Island, N.Y.
A key feature of PPP loans is that borrowers may be eligible for forgiveness, provided they spend at least 60% of their proceeds on payroll costs. They may be eligible for partial forgiveness if they fall short of that threshold.However, the IRS has blocked borrowers' ability to write off salary costs and other expenses covered by PPP funds. This is to prevent them from taking a so-called "Lawmakers on both sides of the aisle disagree with this. Sens.
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