deductible taxes Archives - Salt Lake City's CPA's https://cpaofsaltlakecity.com/tag/deductible-taxes/ Certified Tax Professionals in Utah Wed, 27 May 2020 04:21:11 +0000 en-US hourly 1 https://wordpress.org/?v=6.3.1 Bad News for Small Businesses that take out PPP Loans https://cpaofsaltlakecity.com/bad-news-for-small-businesses-that-take-out-ppp-loans/ Wed, 27 May 2020 04:21:07 +0000 https://cpaofsaltlakecity.com/?p=7844 The IRS has recently released some bad news for small business firms: the businesses can’t deduct expenses that result in forgiveness of the loan. The stimulus law says that loans forgiven under the Paycheck Protection Program are nontaxable. But the legislation is silent on whether expenses that are funded by the PPP loan proceeds, such as payroll costs, utilities, and ... Read More

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]]> The IRS has recently released some bad news for small business firms: the businesses can’t deduct expenses that result in forgiveness of the loan. The stimulus law says that loans forgiven under the Paycheck Protection Program are nontaxable. But the legislation is silent on whether expenses that are funded by the PPP loan proceeds, such as payroll costs, utilities, and rent, are tax-deductible in cases where the loan is forgiven. IRS answered that question public guidance. To prevent a double tax benefit, the expenses are not deductible.
Congress may need to provide a legislative fix. And that is definitely possible. Tax writers on both sides of the aisle are not happy with the Service’s response, claiming it is contrary to the intent of the legislation to help small businesses. The house’s stimulus bill includes a provision to reverse the IRS’s stance.

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