TEMPE, Ariz. (PRWEB) May 29, 2020
The Paycheck Protection Program (PPP), a key part of the Coronavirus Aid, Relief, and Economic Stability Act (CARES Act), was created to provide funds to small business struggling to survive the coronavirus pandemic. Since its inception, there have been many updates and reversals on guidance that business owners may not be aware of and Tom Wheelwright, CPA and CEO of WealthAbility, hopes to provide clarity and a tool to simplify the process, PPP Debt Forgiveness Calculator.
“Business owners are working night and day to keep their business afloat, and when there are constant changes to PPP guidance, it can be difficult for them to stay up to speed,” Wheelwright said. “Rather than have them fear repercussions of not using the loans correctly or in a timely manner, let’s educate owners on how to use their PPP funds and achieve 100% forgiveness.”
The Debt Forgiveness Calculator is an easy to use downloadable calculator for business owners to determine what debt forgiveness you can expect from the PPP loans. In addition, Wheelwright outlines what small businesses need to know about the Paycheck Protection Program:
1. Eight weeks begins from the day you receive the loan
While there are steps in place working to make the PPP loan more flexible, businesses currently have eight weeks to use the funds starting the day they received the loan. For businesses that have been closed since the PPP loans were available, that puts them in a position to return the money or face threats of fees or even jail time. For the loan to be forgiven, 75% of the funds must be used on payroll and 25% can be used for mortgage interest, rent and utilities. These requirements may be amended by a new bill being debated in Congress this week, H.R. 6886, to extend the time to 24 weeks and relax some other restrictions.
2. You must hire back employees back by June 30
One thing business owners may not be aware of is that you must have 100% of your employees working to have all the PPP loan forgiven. That means if 50% of your employees are furloughed and you don’t hire them back by June 30, only half of the loan is forgivable. However, if you made a written offer to rehire an employee in good faith for the same salary/wage and number of hours as before they were laid off and they reject the offer, you are allowed to exclude the employee when calculating forgiveness. The new bill being debated in Congress would extend this date, to perhaps as late as December 31, 2020.
3. Review the PPP Forgiveness Application Form with Your CPA
For the loan to be forgiven, owners must complete the new PPP Forgiveness Application Form. The application process verifies that businesses spent their money for the appropriate purposes and followed the 75% payroll, 25% non-payroll guidelines. Owners should work closely with their CPA when applying as the application does not follow the strict rules in the law. For example, it does not allow for payments to outside salespeople even though the law is very clear on this point.
4. Records to Provide for Loan Forgiveness
Make sure you have all necessary documents on hand to make applying for forgiveness as smooth as possible. Businesses will need to provide documentation verifying the number of employees on payroll and pay rates—including IRS payroll tax filings and state income, payroll, and unemployment insurance filings; documentation verifying payments on covered mortgage obligations, lease obligations and utilities; certification from an authorized business representative that the documentation provided about the small business is true and that the amount being forgiven was used in accordance with the program’s established guidelines.
Wheelwright believes that with better understanding, small business owners will have the confidence to keep and maximize their PPP loan. For more information and to download Wealthability’s Paycheck Protection Program Debt Forgiveness Calculator, visit wealthability.com/payroll-protection-program-debt-forgiveness-calcuation.
WealthAbility® is a leading financial education company created by CPA, CEO, Author and Speaker Tom Wheelwright to revolutionize the way entrepreneurs, investors and CPAs manage wealth, global change and their business. The overall goal is to help clients “Make Way More Money and Pay Way Less Taxes.” To better serve clients, WealthAbility® provides a new platform of educational tools and global network of CPAs trusted by over 244,123 entrepreneurs and investors to reduce taxes and create wealth. Through these tools, WealthAbility® helps clients reduce taxes by 10-40%, increase confidence in clients’ personal ability to create wealth, and achieve financial dreams – much faster. In addition, the WealthAbility® Network for accounting professionals is educating CPAs and other accounting professionals to better serve clients and run more successful businesses. https://wealthability.com/
About WealthAbility® Founder Tom Wheelwright
Tom Wheelwright is a CPA, CEO of WealthAbility®, Best-Selling Author of Tax-Free Wealth (Rich Dad Advisors Series), Speaker, Entrepreneur and Host of 2 popular podcasts: The WealthAbility™ Show with Tom Wheelwright CPA and The WealthAbility® for CPAs Show. Wheelwright is the CPA for Robert Kiyosaki (Rich Dad Poor Dad) and speaks around the world with Robert to thousands of entrepreneurs, business owners and investors. Wheelwright is a Contributor to Entrepreneur magazine, and his work has been seen in Forbes, The Wall Street Journal, The Washington Post and on FOX and Friends, Marketplace / NPR, ABC News Radio and many other media. https://wealthability.com/tom/