Small businesses have been struggling to survive the COVID-19 pandemic, with many closing their doors for good, despite relief funding from the government.
I’m not an expert, but we talked to lots of them, and asked: can small businesses deduct expenses that were paid with PPP money?
"The answer to this one is actually exciting, and yes," said Misty Erickson, Tax Research Manager at the National Association of Tax Professionals.
If you’re a small business owner, you can write off expenses paid with Paycheck Protection Program money. That also includes businesses that have shut down.
"Closing a business does have some of its own implications, but it's not going to change what they can deduct as far as business expenses go," said Nathan Rigney, principal tax research analyst at H&R Block.
But considering the complicated year it’s been, experts urge small businesses to use professional tax services if they can.
"If you have PPP loans and you're planning to deduct those expenses, it's really a good point to talk with a trusted, branded tax professional who has experience in that matter," said Mark Steber, chief tax information officer at Jackson Hewitt Tax Service.
For more information on the 2020 tax season, visit newsy.com/TaxingTimes.
