Payroll Protection Program (PPP) for Schedule C’s

March 9, 2021

Hi, I’m Donna Bordeaux with Did you know that there’ve been some changes to the PPP rules that will allow sole proprietors filing a Schedule C to be able to increase the amount of their PPP loan? And if you weren’t eligible before because you weren’t profitable, guess what? Now you may be able to get the PPP loan.

What the new calculations tell you, or that you were allowed to use gross income. Before we were using the net profit on the Schedule C and as we know, many businesses are not profitable or they write off things that cause them not to be profitable, like vehicles, self rent, depreciation, and we’re trying to reduce taxes. Obviously, we want the lowest income. So if you have a Schedule C, if you were in business on February 15th of 2020, you may be eligible to apply for a PPP loan using the new rules with gross income on the Schedule C.

If you had employees, you’ll deduct simply the employee wages and any pension or benefit costs. If that number is over $100,000, you’re limited to $100,000. So if you fall into that category, the maximum PPP loan would be for two and a half months, which is $20,833.

So let me give you a quick example of a situation where somebody who wasn’t eligible before would be eligible now. I was talking with a prospect and she had $300,000 in gross revenue on 2019’s schedule C. She had a loss at the bottom line of $7,000. And the prior calculations that loss would determine that she is not eligible for a PPP loan.

In the new calculation, she’s able to take the $300,000 deduct offer employee costs, which she didn’t have any. So she could take the $300,000. She would be limited to $100,000 of that, times the two and a half months. So she went from having no PPP eligibility to getting $20,833 under the new rules. If you have a Schedule C and you need help with your PPP loan, and you’d like to get lined up with somebody who can keep you informed and abreast of these things all throughout the year, it’s time for us to talk.

I’d love to chat with you. If you want to schedule an appointment with me, there’s a link on the upper right corner. Thank you very much. I’m Donna Bordeaux with CalculatedMoves.

Donna Bordeaux, CPA with Calculated Moves

Creativity and CPAs don’t generally go together.  Most people think of CPAs as nerdy accountants who can’t talk with people.  Well, it’s time to break that stereotype.  Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux.  They have over 50 years of combined experience as entrepreneurial CPAs.  They’ve owned businesses and helped business owners exceed their wildest dreams.   They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.