by Gene Marks, For The Inquirer (Insert from Inquier, read full article here)
The federal Paycheck Protection Program was, by most accounts, instrumental in helping to provide money for many small businesses through the pandemic. According to the Small Business Administration, the program — which ended Aug. 8 — provided more than 5 million forgivable loans to small companies, amounting to $525 billion. The loans were used not only to help keep their employees on the payroll, but for other operating expenses such as rent and utilities.
Last week, the Senate failed to pass a bill that would’ve offered another round of PPP funding. But that wasn’t Washington’s only failure. Neither the Senate nor the House has addressed a ticking time bomb within the program: a potentially huge tax bill for recipients.
In the meantime, it’s critical that you meet with your accountant to determine the extent, if any, of this tax liability. And, if needed, make some moves.
Mitchell Gerstein CPA, a tax advisor at Isdaner & Company in Bala Cynwyd, is advising affected clients to look for strategic investments that can reduce taxable income, such as hiring more talent, making capital investments that leverage accelerated depreciation rules, or deferring income and accelerating expenses.