PPP Loans < $50,000 – Simplified Forgiveness
Recipients of Paycheck Protection Program (PPP) loans of $50,000 or less will be able to apply for forgiveness using a simplified application that was released October 9, 2020 by Treasury and the U.S. Small Business Administration (SBA).
Under the IFR, PPP borrowers of $50,000 or less are exempted from any reductions in forgiveness based on:
- Reductions in full-time-equivalent (FTE) employees; and
- Reductions in employee salary or wages.
COVID-19 RESOURCES
VISIT THE COVID-19 TAX AND RESOURCE PORTAL for latest updates.
New FAQ on PPP Loan Foregiveness Issued 8/4/2020
The US Small Business Administration and Treasury published guidance Tuesday answering 23 frequently asked questions related to the forgiveness of loans issued under the Paycheck Protection Program. Access it here.
PPP Loan Forgiveness Information
Paycheck Protection Program
The AICPA has some great resources for SBA PPP information Click here
And additional COVID -19 resources can be found here
Record Retention Guidelines
What Personal Documents Should You Keep and for How Long?
Keep until warranty expires or can no longer return or exchange
- Sales Receipts (Unless needed for tax purposes and then keep for 3 years)
What to keep for 1 month
- ATM Printouts (When you balance your checkbook each month throw out the ATM receipts)
What to keep for 1 year
- Paycheck Stubs (You can get rid of once you have compared to your W2 & annual social security statement)
- Utility Bills (You can throw out after one year, unless you’re using these as a deduction like a home office –then you need to keep them for 3 years after you’ve filed that tax return)
- Cancelled Checks (Unless needed for tax purposes and then you need to keep for 3 years)
- Credit Card Receipts (Unless needed for tax purposes and then you need to keep for 3 years)
- Bank Statements (Unless needed for tax purposes and then you need to keep for 3 years)
- Quarterly Investment Statements (Hold on to until you get your annual statement)
What to keep for 3 years
- Income Tax Returns (Please keep in mind that you can be audited by the IRS for no reason up to three years after you filed a tax return. If you omit 25% of your gross income that goes up to 6 years and if you don’t file a tax return at all, there is no statute of limitations.)
- Medical Bills and Cancelled Insurance Policies
- Records of Selling a House (Documentation for Capital Gains Tax)
- Records of Selling a Stock (Documentation for Capital Gains Tax)
- Receipts, Cancelled Checks and other Documents that Support Income or a Deduction on your Tax Return (Keep 3 years from the date the return was filed or 2 years from the date the tax was paid — which ever is later)
- Annual Investment Statement (Hold onto 3 years after you sell your investment.)
What to keep for 7 years
- Records of Satisfied Loans
What to hold while active
- Contracts
- Insurance Documents
- Stock Certificates
- Property Records
- Stock Records
- Records of Pensions and Retirement Plans
- Property Tax Records Disputed Bills (Keep the bill until the dispute is resolved)
- Home Improvement Records (Hold for at least 3 years after the due date for the tax return that includes the income or loss on the asset when it’s sold)
Keep Forever*
- Marriage Licenses
- Birth Certificates
- Wills
- Adoption Papers
- Death Certificates
- Records of Paid Mortgages
*These documents should be kept in a very safe place, like a safety deposit box.
Charitable Contributions — an interesting case
A woman used her own money to care for feral cats that she fostered in her home for a pet-related charity, paying for vet bills, food and other items. She incurred her expenses while providing volunteer services to a tax-exempt organization and the tax court agreed with this position. However, to deduct payments of $250 or more, one must have a contemporaneous acknowledgment from the charity in writing. Since the woman did not have any such statement from the tax-exempt organization for her large expenses, she could not deduct those costs. (Van Dusen, 136 TC No.25)
Checking Exempt Status of Organizations
Use IRS Select Check to determine that organizations to which you make contributions are eligible to receive tax-deductible charitable contributions (Publication 78 data). Users may rely on this list in determining deductibility of contributions
Contributed Services for Nonprofits
Most nonprofit organizations rely heavily on the volunteers that donate time to help carry out their missions. Some contributed services are required to be recognized in the financial statements if they meet certain criteria outlined in professional standards. A contribution should be recorded if the contributed services either (a) create or enhance nonfinancial assets, or (b) require specialized skills, are provided by entities or individuals possessing those skills, and would typically be purchased if they were not donated. Assuming the criteria are met such services are generally measured at fair value.
Audits of Nonprofits
Audits take considerable time and effort, but they provide nonprofits with fair assessments of their financial health, in addition to revealing vulnerabilities such as weak internal controls, insufficient cash reserves and poor investment policies. And although the IRS Form 990 doesn’t mandate audited financial statements, the IRS does ask organizations to discuss their audit activities, as well as the role their board plays in them.
