My client got $3,000 of PPP funds. It was direct deposited into his personal checking account. He does not have a dedicated business account. He files a Schedule C with no employees. He is going to pay himself $500 per week for 6 weeks. I have been told he needs to open a business account, transfer the $3,000 into it and then write checks to himself in order to have proof that the $3,000 was properly used and is not taxable.. Any contrary opinions?
-
-
Well, I always tell my Sche C businesses to have a separate account for business income and expenses. It's probably something he should have been doing all along. But if he is filing as a sole proprietor, why would the IRS care? -
Schedule C with no employees is pretty easy accounting. 2019 Schedule C (Line 31/12) X 2.5 for the loan. (Line 31/52) X 8 for the forgiveness, as far as we know now. But, if this gets him to finally open a biz checking account, go for it.Comment
-
A client told me the bank offering the PPP loan wants to know employer state payroll tax assessed, and they said most people include the employee's share of payroll tax in the total, even though the application seems to ask for only the employer payroll tax. Is that correct?"You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
-
The gross employee pay plus the employer SUTA. The various employee withholdings are already included in the gross employee pay. Was what I saw on the applications of the few of my clients that applied and my own application. Then employer-paid health premiums and retirement contributions. Plus rent, utilities...Comment
-
I'm waiting for clarification of what is includable in utilities. Does anyone know for sure the makeup of utilities?This post is for discussion purposes only and should be verified with other sources before actual use.
Many times I post additional info on the post, Click on "message board" for updated content.Comment
-
Originally posted by BOB W View Post
Is there anything specific you are questioning? The definition is in the CARES Act:
(5) the term ‘‘covered utility payment’’ means payment for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020;Comment
-
"payment for a service for the distribution of electricity, gas, water, transportation,"Originally posted by TaxGuyBill View Post
How does one "pay for a service for [the distribution of] transportation"? Ungrammatical if not nonsensical. And what utility is it that involves "a service of transportation"?
Somehow I've always figured garbage & recycling pickup service for a building as a utility, but I guess it's not included in the CARES Act.
"You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
Comment