Today's episode is all about taxes and what small business owners need to know. Now, more than ever during this current season we are in and in the future after Covid-19. I am very excited to welcome Wendy Barlin to the show today as our guest expert, Wendy helps digital entrepreneurs minimize their taxes and increase their profits.
Things we talk about:
- The impact any loans received right now could have on your taxes in the future.
- How the PPP loan cannot be used to pay independent contractors and the shock that came to some small business owners.
- Wendy's excel spreadsheet to help you stay organized and work on forgiveness when it comes to loans.
- How important it is to seek out a CPA or Tax Expert to make sure you are educated and prepared for not only now but the future.
- What to do as a small business owner if you have not filed your 2019 taxes due to the deadline extension.
- What April 2021 will look like when we file our 2020 taxes and more importantly what will happen if you never received the stimulus cheque you were approved to.
Here are a few quotes:
"Money is still available, so if you haven't applied and you need to apply you can still do that. Now the question more so is becoming, how do we get forgiveness. Because what was promised by the CARES ACT was if you took this money, and you used it for certain categories of expenses that you would not need to pay it back. Which sounds a lot like free to me and we all like free. Now what's coming out in the fine print is that maybe it's not as free as we thought. In fact, I've had some clients actually return the money."
- Wendy Barlin on applying for loans and if money is still available.
"When you file your 2020 tax return in March 2021. If you did not receive a stimulus check but you were entitled to one, you will get a tax credit on your 2020 tax return. So two really critical things here; one, if you didn't get the smallest payment it's not taxable. Two, if you did not get it, you will get a tax credit on the next year's tax return that you file."
- Wendy Barlin on stimulus and your tax return for 2020.
“You cannot use PPP money to pay your independent contractors and then hope to be forgiven. I think for a lot of smaller solo entrepreneurs that came as a real shock because that's where a lot of their money goes is to contractors."
- Wendy Barlin on what the PPP money can be used for.
"The forgiveness worksheet is extensive. So if the money that you received is large and you really need help making sure that it's forgiven. I really recommend you reach out to your tax preparer and ask them to help you with it. Most of us are getting set up right now to help our clients get forgiveness because in my opinion having seen the form last week. I don't think most of my small businesses can make through completing those 11 pages by themselves."
- Wendy Barlin on the forgiveness worksheet associated with certain loans.