loan forgiveness

New Law Doubles Business Meal Deductions And Makes Favorable PPP Loan Changes

The COVID-19 relief bill, signed into law on December 27, 2020, provides a further response from the federal government to the pandemic. It also contains numerous tax breaks for businesses. Here are some highlights of the Consolidated Appropriations Act of 2021 (CAA), which also includes other laws within it.

Business meal deduction increased 

The new law includes a provision that removes the 50% limit on deducting business meals provided by restaurants and makes those meals fully deductible.

As background, ordinary and necessary food and beverage expenses that are incurred while operating your business are generally deductible. However, for 2020 and earlier years, the deduction is limited to 50% of the allowable expenses.

The new legislation adds an exception to the 50% limit for expenses of food or beverages provided by a restaurant. This rule applies to expenses paid or incurred in calendar years 2021 and 2022.

The use of the word “by” (rather than “in”) a restaurant clarifies that the new tax break isn’t limited to meals eaten on a restaurant’s premises. Takeout and delivery meals from a restaurant are also 100% deductible.

Note: Other than lifting the 50% limit for restaurant meals, the legislation doesn’t change the rules […]

By |2021-01-04T23:16:46+00:00January 4th, 2021|business, covid-19, expensing, New Tax Laws|0 Comments

Paycheck Protection Program Loan Forgiveness Calculators

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Many small businesses are struggling navigating the complexity of the Paycheck Protection Program (PPP) and loan forgiveness aspect of it. While legislation, regulations and info regarding loan forgiveness is changing and revised often, it’s important to be proactive and keep a close eye on your record keeping. The AICPA has released an excel file that serves as a calculator, based on the current parameters of the loan forgiveness program. If you have questions, please reach out to your Linkenheimer CPA.

You can access the calculator by clicking here. It will download a copy of excel file once you click on it. You can also find the calculator on the AICPA website here. 

By |2020-09-03T20:02:53+00:00May 26th, 2020|business|0 Comments

Paycheck Protection Program Loan Forgiveness

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Dear Clients and Friends:

Congratulations if you received a Paycheck Protection Program (PPP) loan! We hope it provides much needed cash during these uncertain times. Now that you have the funds, we want to point out certain steps you should take over the next eight weeks to ensure maximum forgiveness of your PPP loan.

Use the Funds for Forgivable Purposes. Forgiveness of your PPP loan depends largely on whether you use the money to pay forgivable expenses. These include (1) payroll costs (if you’re self-employed, these costs include the net profit amount from your business, as reported on your 2019 tax return), (2) interest payments on mortgages incurred before 2/15/20, (3) rent payments on leases dated before 2/15/20, and (4) utility payments under service agreements dated before 2/15/20. However, according to the Small Business Administration (SBA), not more than 25% of the forgivable loan amount (the amount of the loan used to pay forgivable expenses) may be attributable to nonpayroll costs. In other words, at least 75% of the loan must be used for payroll costs.

To help you meet this requirement, consider implementing the following best practices:

  • Set up a separate bank account for […]
By |2020-09-03T20:03:00+00:00May 4th, 2020|business, employer, liability, New Tax Laws|0 Comments
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