This week is another solocast episode of the Progressive Dentist Podcast. I am taking this opportunity to update you on the new COVID relief bill that was passed by Congress and signed by the President just after Christmas.
In the latest version of the COVID relief bill, it states that the PPP expenses are now deductible. This means that gross income does not include any amount that would otherwise arise from the forgiveness of a PPP loan. The other big thing to note is that deductions are now allowed for otherwise deductible expenses that have been paid with the proceeds of the PPP loan that is forgiven.
In addition to the technical changes, there are also important considerations to make about second-draw PPP loans. The hardest-hit borrowers (under 300 employees) with a 25% or higher reduction in revenue from 2019 qualify for the second draw. You also have to have used—or plan to use–the full amount of your first draw to be eligible.
There are a lot of finite tweaks to the qualifications and documentation needed for the second-draw PPP loans. This solocast will provide an outline you can use to guide the conversation with your CPA about how to proceed. For more strategies you can use to reduce your tax liability and save thousands, make sure to order my book, “The 12 Biggest Tax Mistakes That Cost Dentists Thousands,” or enroll in my online course. As always, please visit me at www.theprogressivedentist.com for more informative, money-saving podcast episodes like this one.