ppp loans

[TONYEYE1]

I HAVE READ THAT PPP LOANS SHOULD NOT BE ADDED TO RETURNS.

EXPENSES MAY BE DEDUCTED, CAN ANYONE VERIFY ??

[SnazzyCPA]

Expenses are 100% deductible and the income IF ALREADY FORGIVEN is tax free.  If not forgiven yet, it is still not income.

[abctax55]

1) Stop yelling at us, please

2) Are you yelling about a Sch C, an S-Corp, a partnership?

@SnazzyCPA 's answer is correct for one of the three.

[TONYEYE1]

I USE CAPS BECAUSE OF A VISION PROBLEM

ALSO TIRED OF 4 POINT FONTS

WHY DOESN'T THE PPP WAIVER APPLY TO ALL ??

YOUR ANSWER CONFUSED ME.

[SnazzyCPA]

ABCTAX55

You are sadly mistaken. My answer is correct for ALL of them.  IF it is forgiven, it is tax free income. If it NOT forgiven, it is not income, but is a loan. You do NOT report loans as income, tax free or otherwise (with a couple of exceptions that are far outside the scope of this discussion and the understanding of most people who post on this board!) AFTER it is forgiven, it becomes tax free income. The only difference is how it is handled on a tax return, depending on the type of return being filed. AND no matter what kind of return is filed, the expenses are still allowable in full and allowable when paid or incurred, depending on the accounting method used on the tax return (also far outside the scope and understanding of this thread.)

[sjrcpa]

And the answer can be different for every state.

[abctax55]

PPP LOANS SHOULD NOT BE ADDED TO RETURNS = what the OP asked.

And my answer addressed the issue that PPP loans DO have to be added to Corp & Partnership returns as Sch M adjustments.

Sch C's do NOT need the PPP loans added to the return.

That's the difference that I was pointing out, as the OP didn't disclose the type of return being filed.

[SnazzyCPA]

Really?  You think states are passing legislation to make the federal grants taxable in this age of COVID?  Glad I don't live in one of those states, although that is not the question here.  I believe the focus was on whether or not the deductions were allowed.

[SnazzyCPA]

ABCTAX55

I never said that they didn't have to be added to income. I stated they are tax exempt income and anyone preparing a tax return better know how to report it for the various type of return that they are filing or they should not be in the business of preparing tax returns. That is exactly the problem with the US tax system today, as it stands, allowing so many unqualified people to prepare tax returns for others with no limitations.

[abctax55]

OK fine.... I'm done here.

[TONYEYE1]

thank you SNAZZYCPA