CPA Bob

No deductions for expenses paid by PPP debt that is forgiven (04-30-20)

As anticipated, the IRS has issued guidance stating taxpayers may not deduct expenses that were paid by Paycheck Protection Program loans, if the payment of the expenses results in loan forgiveness under the program. (IRS Notice 2020-32) Loan forgiveness is available under the program for the following expenses paid and incurred during the eight weeks after the borrower receives their funds:

- Payroll costs;
- Mortgage interest;
- Rent; and
- Utilities.

Under the Internal Revenue Code, taxpayers are precluded from claiming deductions paid with exempt income. Because PPP loan forgiveness is excludable from taxable income under the CARES Act, taxpayers may not claim deductions for these expenses.

The Notice is available at:

www.irs.gov

Good news... Wells Fargo received permission from the central bank to start loaning funds TODAY for the PPP (payroll protection plan) - Checks are starting to go out!

https://mailchi.mp/3e44f40a450b/tax-season-2020

Tax Season 2020 The filing deadline is still April 15th, but the tax payment deadline has been extended to July 15th. Filing extensions can be made but the final deadline for all payments will remain July 15th. Check out the Treasury Press Release for more details.