Deductions Questionable at Tax Time with PPP Loan
The issue is the loan is basically considered a grant once it is forgiven. The IRS has currently ruled that will deny expense deductions to “prevent a double tax benefit.” Typically, expenses like payroll and rent are considered write offs on taxes. However, under this current ruling, payroll paid with PPP money is no longer a deduction. As we are now in the 4th Quarter for 2020, it is best to start Year End planning with your accountant to see how this ruling could affect your bottom line. Read more on the IRS’ stance on the PPP deductions here.
