The year 2020 has finally come to an end, and we have just welcomed the New Year 2021 with a bang. Things are still quite different for businesses this year due to the global pandemic, but with the noise about the incoming vaccines and stimulus bills that are funding everyone BUT the business owners from the United States, here’s just a few things that we would like to share:
With the arrival of another year, the Congress has actually passed on another stimulus bill that’s catered and centered around the provisions for small businesses, but we should remain vigilant, as we can’t always depend on that to always happen to us, especially for this year.
With the economy rising up and down due to the coronavirus, a lot of businesses have been trying to stay afloat, and even if the government is there to help them stay strong amidst the recession, all the money used to keep these businesses intact are eventually coming soon to collect their debt. Some of my PPP clients are already in the process of getting their loans paid and forgiven (at the very least, with a good deal of principal reduced from their original price), but still it is of utmost importance to keep in mind to maintain a diligent documentation and maintenance of any paperwork done – especially if you have received any kind of monetary help from the SBA last year. It’s very critical that you attend to your documents and paperwork in advance of Tax Day, which means right now.
If you remember the “new” tax laws that went into effect since the 2017 and 2018’s, you will know that there are a lot of pieces of the SBA/PPP loans that are unprecedented. Despite us, as tax professionals, “know” what these laws say, often we find that many times whenever these new laws are enacted, you need to consider that these laws and programs also need to be interpreted.
A lot of folks signed a lot of paperwork last year, and the SBA tasked banks to fund the PPP (Paycheck Protection Program) loans, therefore it’s important to remember that if you have a PPP loan, it originated from a bank. Nearly all the big national banks were on it, and some of those banks, like BB&T, merged and became other banks – namely, Truist. Keep in mind that the bank that originated your loan may not be the current servicer of your loan.
Long story short – you need to make sure all your financial obligations are sorted out properly. So check back all your documents, way back from the SBA, and dig out anything you signed last year since Spring and Summer and make sure everything’s good and intact.
Once you’ve done that, you will need to review what standards you’ll need to achieve to be able to have that loan forgiven. If you do this right, you might find yourself with thousands of dollars
in savings on the line – but only if you do it correctly. If you have any questions or worries about it, then set up a call with us or send us an email today.