Preparing for the Payment Protection Program w/ Steven Perry
Learn More at BooksTaxesATL.com
Kenny Harper: Hey there Amplifiers! Kenny Harper here and I’m with a rockstar professional that really is giving some really important information when it comes to finances and accounting. There’s a lot of things going on right now with the PPP program or I should say “PP Program. But Steve Perry is going to be sharing some information. He is the chief accounting officer at Books Taxes and More.
Steve, thank you for sharing some insights to Growth Amplifiers.
Steve Perry: Well thank you. I recently wrote a blog based on some information I got from the IRS and some digging into the law. The PPP and the idle loans sound great and they are but you have to understand you’re in a minefield. The IRS has already come out and said you will not be able to deduct expenses that you normally would deduct if you use them for a loan that is going to be forgiven. What this means is if you’ve used PPP to keep your employees working or even sitting at home but they’re getting paid, you can’t deduct that payroll because the government paid for it so what you need to do is segregate your money.
Anything you get from the SBA whether it be PPP or idle in one account. Use that money first with good accounting, good bookkeeping and second, go back to your regular funds. Now this is going to create some questions that your tax accountant may not think of next spring but you need to make a note of it right now. If you have one of these loans if you do have a question about this I’m really easy to get to. Go to my website bookstaxesATL.com. That’s books taxes ATL dot com and you can read the blog.
You can see exactly what I’m talking about and my contact information is in there both email and phone if you do think you might have a problem or just have a question you want to talk about… Kenny.
Kenny Harper: Super awesome my friend, that is really helpful so I’m actually in that bucket myself and I’ve been kind of scratching my head because, we are all in this boat, we get this information, “Hey you can apply for this loan”, there’s a lot of information to look over and it’s not very clear and there hasn’t really been anyone to talk to about it to get clarification on “What do you mean I could use it for mortgage and interest and some expenses?” So I think that’s really helpful tip. Now you mentioned something just now that I just wondered if you could dive in a little bit deeper. Setting up a separate account and then using that money first and if you could just go into that just a little bit deeper if I could.
Steve Perry: Absolutely. Go to your bank, wherever you buy wherever you do your business banking and say look, I want a separate account for this loan, this loan proceeds. They might look at you a little strange but I’m quite literally talking about a separate account. Then you use that account first drain it down to take care of the authorized expenses payroll primarily, but some mortgage and rent payments. I don’t want to go into all the details here because it would take me two hours. But those other things that you can, that preserves your own cash you know that you’ve been trying to stretch until later and then once the loan money is gone, then use your cash knowing that anything you pay for with your money has the same deductibility would have otherwise. So for example if you pay payroll a lot of your money that’s still deductible it’s just when you pay it out of PPP loans. Some people will just keep a different set of books. As an accountant I like one set of books. I’m funny that way. You bring out two ledgers, we got a problem. So one set of books, two bank accounts it’s not hard to do. If your banker gets confused, give me a call I can help him out. I’ll be confused.
Kenny Harper: Awesome! Well I think that’s a helpful tip because I was I was in that questioning scratching my mind talking to my I’ve seen you know what the last thing I’d want to do is end up spending money that we really don’t have and then having to pay it back. Thank you loan.
So Steve, thank you very much if you want to learn more about this information.
As Steve said you can go to his website BooksTaxesATL.com and he has a great blog on his website. You can check that out and contact him if you have more questions.
Kenny Harper: Thank you!
Steve Perry: Thank you!