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IRS says Paycheck Protection loans not tax deductible

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AdvertisementThousands of Nebraska businesses benefited from program amid pandemicIRS says Paycheck Protection loans not tax deductibleThousands of Nebraska businesses benefited from program amid pandemicHide TranscriptShow TranscriptAT BLACKSTONE SOCIAL SAY THEY’VE ALREADY LOST 40% OF THEIR REVENUE FOR THE YEAR AND NOW ANOTHER FINANCIAL HIT WHEN WE SAT DOWN AND TALKED TO HER ACCOUNT AND LAST MONTH AND FOUND OUT THAT, YOU KNOW, WE CAN’T WRITE OFF ALL THE EXPENSES OF THAT MONEY. WE SHOOK OUR HEADS A LITTLE BIT AND WE WERE SURPRISED BY THAT. HE SAYS THE THE PAYCHECK PROTECTION LOANS WERE CRITICAL TO HELP. GET THROUGH THE EARLY PART OF THE PANDEMIC AND THE FUNDING IS IT WAS REALLY HELPFUL BECAUSE YOU STILL HAVE RANDY STILL A LOT OF EXPENSES THAT PAY TO PAY AND SO IT WAS REALLY VALUABLE TO GET SOME OF THOSE FUNDS TO HELP OFFSET SOME OF THE DROP IN BUSINESS, BUT NOW HE KNOWS THEY’LL HAVE TO PAY TAXES ON THOSE PPP LOANS THE IRS ANNOUNCED THAT LAST MONTH CPA JARED FAULT HIS SAYS BUSINESSES MAY HAVE TO PAY BACK UP TO ONE-THIRD OF THE MONEY THEY RECEIVED BACK IN THE SPRING. IT’S A LITTLE BIT ALMOST KIND OF FUNNY THAT HERE CONGRESS GAVE YOU THIS MONEY IS SUPPOSED TO BE TAX-FREE AND NOW CONGRESS IS GOING TO GET IT BACK, YOU KNOW ONE THIRD OF IT BACK AND THAT DOESN’T MAKE SENSE TO ANY OF US, NEBRASKA CONGRESSMAN. DON. BACON IS PART OF A BIPARTISAN COMMITTEE WORKING ON A NEW STIMULUS. HE HOPES TO CANCEL OUT THIS LATEST FINANCIAL BLOW TO OWNERS. JUST TRYING TO STAY IN BUSINESS. I WISH WE COULD JUST FIX THA IRS TO ROCK. SO I THINK THERE AGAINST THE DESIRE THE DESIGNS OF THE CURES AT BILL AND UM, BUT WE’RE GOING TO PUT IT IN RIGHT NOW. IT’S IN THE PEPPER - BILL TO FIX THAT. SO HOPEFULLY THAT WILL PASS FAULT IS BELIEVES LAWMAKERS WILL MAKE A DEAL TO HELP BUT UNTIL THEN, I THINK THE BIGGEST THING IS, YOU KNOW BUSINESS OWNERS WITH ALL THE UNCERTAINTY I THINK WORK WITH YOUR PROVIDER WORK WITH YOUR LOCAL ADVISOR AND JUST MAKE SURE THAT YOU KNOW THE RULES AND YOU’RE DOING THE WHATAdvertisementIRS says Paycheck Protection loans not tax deductibleThousands of Nebraska businesses benefited from program amid pandemicPaycheck Protection loans helped thousands of Nebraska businesses keep the doors open during the early days of the pandemic. But the IRS has ruled that those loans are not tax deductible. It's another financial hit to bar and restaurant owners like Mike DiGiacomo. He and his partners own three bars in Omaha and have collectively lost 40% of their revenue for the year."When we sat down and talked to our accountant last month and found out that we can't write off all the expenses of that money, we kind of shook our heads a little bit and were surprised by it," DiGiacomo said.He says the Paycheck Protection loans were critical for their survival in the spring."The funding was really helpful because you still have rent, you still have a lot of expenses to pay, and so it was really valuable to get some of those funds to help offset some of the drop in business," DiGiacomo said.Now he, and business owners like him, will have to pay taxes on those loans. The IRS made the announcement in November. CPA Jared Faltys said businesses may have to pay back up to one-third of the money they received."They think it's a little bit, almost, kind of funny that here, Congress gave you this money, it's supposed to be tax free, and now Congress is going to get it back, one-third of it," Faltys said. "That doesn't make sense to any of us."Nebraska Congressman Don Bacon agrees. He's part of a bipartisan committee working on a new stimulus. He hopes to cancel out this latest financial blow to owners trying to stay in business."I wish we could just fix that with IRS direct, because I think they're going against the designs of the CARES Act bill, but right now it's in the compromise bill to fix that, so hopefully that will pass," Bacon said.Faltys believes lawmakers will get a deal done. Until then, however, "I think the biggest thing is business owners, with all the uncertainty, I think work with your provider, work with your local advisor, and just make sure you know the rules and you're doing the what-if planning," he said.Paycheck Protection loans helped thousands of Nebraska businesses keep the doors open during the early days of the pandemic. But the IRS has ruled that those loans are not tax deductible. It's another financial hit to bar and restaurant owners like Mike DiGiacomo. He and his partners own three bars in Omaha and have collectively lost 40% of their revenue for the year.Advertisement"When we sat down and talked to our accountant last month and found out that we can't write off all the expenses of that money, we kind of shook our heads a little bit and were surprised by it," DiGiacomo said.He says the Paycheck Protection loans were critical for their survival in the spring."The funding was really helpful because you still have rent, you still have a lot of expenses to pay, and so it was really valuable to get some of those funds to help offset some of the drop in business," DiGiacomo said.Now he, and business owners like him, will have to pay taxes on those loans. The IRS made the announcement in November. CPA Jared Faltys said businesses may have to pay back up to one-third of the money they received."They think it's a little bit, almost, kind of funny that here, Congress gave you this money, it's supposed to be tax free, and now Congress is going to get it back, one-third of it," Faltys said. "That doesn't make sense to any of us."Nebraska Congressman Don Bacon agrees. He's part of a bipartisan committee working on a new stimulus. He hopes to cancel out this latest financial blow to owners trying to stay in business."I wish we could just fix that with IRS direct, because I think they're going against the designs of the CARES Act bill, but right now it's in the compromise bill to fix that, so hopefully that will pass," Bacon said.Faltys believes lawmakers will get a deal done. Until then, however, "I think the biggest thing is business owners, with all the uncertainty, I think work with your provider, work with your local advisor, and just make sure you know the rules and you're doing the what-if planning," he said.Loading more articles...

AdvertisementThousands of Nebraska businesses benefited from program amid pandemicIRS says Paycheck Protection loans not tax deductibleThousands of Nebraska businesses benefited from program amid pandemicHide TranscriptShow TranscriptAT BLACKSTONE SOCIAL SAY THEY’VE ALREADY LOST 40% OF THEIR REVENUE FOR THE YEAR AND NOW ANOTHER FINANCIAL HIT WHEN WE SAT DOWN AND TALKED TO HER ACCOUNT AND LAST MONTH AND FOUND OUT THAT, YOU KNOW, WE CAN’T WRITE OFF ALL THE EXPENSES OF THAT MONEY. WE SHOOK OUR HEADS A LITTLE BIT AND WE WERE SURPRISED BY THAT. HE SAYS THE THE PAYCHECK PROTECTION LOANS WERE...

IRS says Paycheck Protection loans not tax deductible

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