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Build a Fortress Defense for PPP Loan Forgiveness

More than 70% of small businesses in America now have loan proceeds from the Paycheck Protection Program

More than 70% of small businesses in America now have loan proceeds from the Paycheck Protection Program (PPP) to help retain employees during the current pandemic. The entire amount of a PPP loan is eligible to be forgiven if the funds are used for qualified expenses. Recent legislation liberalizes the terms of loan forgiveness for funds used for payroll, utilities and rent. It is now based on a 24-week period, not just eight weeks.

But how can you best position your company to fully benefit from PPP loan forgiveness? Here are five tips to help meet the challenge.

  • Restore your staff. If possible, restore the number of full-time equivalent (FTE) employees to previous levels by the safe-harbor due date of December 31 (extended from June 30). Bring back furloughed FTEs as soon as you can. Of course, this should fit into your overall business plan. If an employee does not return, document the refusal. All these actions will help when the forgiveness formula is applied to your loan.
  • Pile on payroll costs. Run payroll and other remaining qualified expenses—including mortgage interest, rent and utilities—on the last day of the 24-week period. This will enable your business to maximize the amount of loan forgiveness allowed under the calculation.
  • Reward employees. Consider paying out reasonable incentive amounts to maximize the forgiveness of payroll costs. The bonuses can even go to family members like your spouse or children. But remember that you can only count up to $100,000 of wages per person, pro-rated for the covered year, and you must be able to defend these payments as reasonable.
  • Use the simplified application form. There are two loan forgiveness forms - the regular form (Form 3508) and a simplified version called Form 3508EZ. Review both forms before deciding which one is right for your situation. For instance, there are fewer calculations on the simplified form with less documentation required. To qualify for the simplified form, you must meet at least one of these requirements:
    • You’re self-employed and have no other employees.
    • You didn’t reduce employee hours or reduce their wages and salaries by more than 25%.
    • You lost business due to health directives relating to COVID-19 and didn’t reduce employee wages and salaries by more than 25%.
  • Document everything. Once you receive PPP loan funds, keep supporting documentation on everything related to the loan. Document when you receive the loan, each time you spend part of the loan and accrued interest expense on the loan. Also keep copies of receipts and invoices to document all loan expenditures, including bank account statements and journal entries.

October 25, 2024
Burzenski & Company once again supported an event at the Children's Center in Hamden. On October 24, three employees volunteered to be onsite for the Children's Center Trunk or Treat Halloween event. Callie Kutys, Shelly Panico and Carmen Rosado donned costumes and handed out candy to about 100 children. Booooooooo!
October 11, 2024
IR-2024-263, Oct. 10, 2024 WASHINGTON —The Internal Revenue Service announced today continued progress on Employee Retention Credit claims, with processing underway on about 400,000 claims, representing about $10 billion of eligible claims.
October 5, 2024
Monica Dixon Perry, CVPM, will speak at Veterinary Management Council of CT meeting
October 5, 2024
IRS Direct File set to expand availability in a dozen new states and cover wider range of tax situations for the 2025 tax filing season
September 5, 2024
On Thursday, August 29th, we held our annual state-of-the-firm and company picnic at Owenego Inn located in Branford, CT. The firm recognized the 40th employee anniversary of Partner Melody Mann Fox, CPA. Managing Partner Bill Kalinowski congratulated Melody on her tenure and accomplishments with the firm. Said Ralph L. Ricciardelli, CPA, Emeritus, a founding partner of Burzenski & Company, PC, “Mel, 40 years where does the time go? It’s not easy to build a firm and you’ve done it with a lot of grit, expertise, and professionalism. You have been integral in building the firm. You’ve been integral in helping with the staff, whether it was the administrative staff or the accounting staff. I don’t know what we would do without you. There aren’t enough words of appreciation that we can give to you.” It was a great day for employeea to play games such as bocce, corn hole, Jenga, and a trivia contest with staff split up into teams.
September 1, 2024
At the firm's annual state-of-the-firm and company picnic on August 29th, we recognized the 40th employee anniversary of Partner Melody Mann Fox, CPA. Managing Partner Bill Kalinowski congratulated Melody on her tenure and accomplishments with the firm. Said Ralph L. Ricciardelli, CPA, Emeritus, a founding partner of Burzenski & Company, PC, “Mel, 40 years where does the time go? It’s not easy to build a firm and you’ve done it with a lot of grit, expertise, and professionalism. You have been integral in building the firm. You’ve been integral in helping with the staff, whether it was the administrative staff or the accounting staff. I don’t know what we would do without you. There aren’t enough words of appreciation that we can give to you.”Mel, 40 years where does the time go? I remember when you first came to us in 1984 as a staff person. Our first tax season together was 1985. There was a lot of fun things that happened during those early years that laid the ground work for the future.
August 18, 2024
2024 Connecticut Sales Tax Free Week Highlights The 2024 Sales Tax Free Week is Sunday, August 18, through Saturday, August 24, 2024. Sales or purchases of certain items of clothing or footwear costing less than $100 per item are exempt from sales tax. This special exemption applies to purchases made from retailers located in Connecticut as well as from on-line retailers. This year will be Connecticut's 25th Sales Tax Free Week.https://portal.ct.gov/drs/sales-tax/sales-tax-free-week
July 22, 2024
Sarah Williams, formerly of Abilene, TX, has joined the staff at Burzenski & Company, as a Staff Accountant. She earned a Bachelor of Business Administration degree as well as a Master of Accountancy degree from Abilene Christian University in Abilene, TX. Prior to joining our firm, she was as a Tax Associate. She has two cats named Fig and Peach.
July 19, 2024
Burzenski & Company, PC will close the office on Fridays at 12:00 (noon) in the months of July and August. Please contact us during our normal business hours of 8:30AM to 5:00PM. 203-468-8133
May 7, 2024
Click here to listen to the podcast: https://www.buzzsprout.com/536560/15017840
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