Instituting Paycheck Protection Program (PPP) loan has created a lot of frustration, particularly for small business owners. The confusion is even greater for those who operate as sole proprietors. The number of loans is tremendous, loan officer overwhelmed and federal guidance regarding the protocol somewhat confusing. In addition, the ambiguity of definitions of employees and independent contractors goes back to the times even before the pandemic. To be eligible for PPP loan, the sole proprietor must file the Form 1040 Schedule C for 2019. Once that is done, the sole proprietor needs to determine whether getting PPP even works for their business, all based on the numbers of the Schedule C. If it does, it is recommended to file as soon as possible, due to the high volume of applications and expected long processing times. Finally, in good faith, some banks have steered early applicants that are sole proprietors towards applications that utilized simple 1099 form and 2018 Tax Returns. If you are one of them, you should consider hiring a tax consultant in order to successfully transition your loan to forgiveness phase, without incurring any penalties.
Key Takeaways:
- Small business owners are facing a lot of trouble trying to get a payment protection program loan.
- Due to confusion over the specifics and the pandemic, many business owners have given up on applying when they didn’t have to.
- Read on to learn if you qualify for a payment protection program loan and how to apply.
“Determine if the PPP works for your business, and do so by calculating the numbers based on your Schedule C for 2019.”
Read more: https://www.entrepreneur.com/article/350314
