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Should I Return My PPP Loan for Self Employed and Sole Proprietors - YouTube
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Alright guys so what's going on today I
want to answer a question and that
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question is are you committing fraud if
you got too much money for the PPP
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program let's talk about it what's going
on guys welcome back to the channel if
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you're new here my name is Jonathan morg
I'm a photographer filmmaker and a
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creative entrepreneur who likes to make
videos like these for other
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photographers filmmakers and creative
entrepreneurs out there who are trying
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to build a life for their terms and get
it how they live so if that sounds like
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something that you're into check out
some of my other videos that I have on
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my channel about photography filmmaking
and what it's like to be a full time
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freelancer so as of the last couple of
weeks it has been a firestorm people
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have been trying to figure out do I
apply for PPP do I apply for
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unemployment can I get them both you
also got the Eid L if you're watching
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this video I'm sure you are familiar
with all of these programs and you
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probably still have a lot of questions
as we all do now prior I just made a
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video that talked about how you can get
forgiveness on your loan for the sole
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proprietor self-employed independent
contractor so that's all my uber my LIF
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my gig economy people out there and
after making that video I made another
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video talking about can you apply for
unemployment and a PPP at the same time
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so there's been a lot of questions about
it in that previous video I give you my
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strategy on what I plan on doing but I
also got some interesting comments and
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questions in that video so I want to
address some of those right now one of
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the common questions that I got or
comments that I was seeing was that
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people who were applying for the PPP
loan program we're getting approved for
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loans but they weren't getting the loans
specifically the right way so what I
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mean when I say that is is that in order
to determine your max PPP loan amount it
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goes off of your line 31 on your 2019
tax returns now your line 31 is your net
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profits but when this program first
started it was a lot of chaos it was a
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lot of pandemonium there wasn't a lot of
clarification there wasn't a lot of
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rules there wasn't a lot of guidelines
and it was up to us to self-certify the
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amount that we were requesting initially
there was some confusion on what you can
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and you couldn't include
to request your loan or to come up with
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your loan amount
so as time goes on the SBA in the
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Treasury has continued to bring changes
and further guidelines and clarification
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to some of the rules which isn't always
fair because they're constantly moving
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to target on us some people had told me
that they got their PPP loan based off
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of their 1099s which was their gross
amount they didn't go off at a net
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profit amount some of them had told me
that also they had showed a certain
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gross amount but when they go to file
their taxes for 2019 they're gonna show
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a net loss now in my mind this is
potentially problematic first and
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foremost if you having loss on your 2019
tax returns you're not eligible for the
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PPP program so that's number one the
next problem is when it comes to the
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forgiveness portion of the loan now the
SBA and the Treasury have come out with
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a formula for the self employee and the
sole proprietors to follow that's going
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to determine your automatic forgiveness
amount this is known as owner
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compensation replacement but when it
comes to the self employee and the sole
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proprietor a lot of us or most of us or
some of us don't have business bank
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accounts now I suggest that you do set
up a business bank account even if you
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are a sole proprietor but it's not
always required so then the question
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becomes right it's like how do we
determine like how do we prove that we
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paid ourselves and that's the good thing
about the SBA and the Treasury coming
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out with that loan forgiveness formula
but when it comes to the actual time to
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forgive your loans right or to apply for
forgiveness some of the questions that
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are surrounding it at what documents am
I going to need and my guess you're
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probably gonna need your 2019 taxes all
right and your Schedule C and you're
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gonna have to be going off at at line 31
because that is what the SBA and the
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Treasury has created this whole formula
around to determine your loan
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forgiveness so this could be problematic
if when you originally filed for the for
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your loan you went off of your gross
instead of your net and then if you're
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showing that you have a net of negative
then you probably won't be able to get
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any of the loan forgiven unfortunately
this going to be problematic or are you
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gonna be seen as committing fraud I
really don't know I mean I guess only
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time will tell and the tricky part is
that if this is problematic where maybe
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it is you know you falsely claimed this
money then the question in my mind is
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will you still have the same loan
forgiveness period as everybody else
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who's requesting for forgiveness who
didn't
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falsely attain the funds so for the rest
of us who didn't falsely attain the fund
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if you have that two-year loan repayment
period at the 1% interest with the six
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months of deferred payments so if you
were falsely categorized or you're
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redeemed as you falsely attain the funds
or maybe it was seen as fraudulent or
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whatever the case may be the question is
is are you still gonna get that same
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loan forgiveness period or are they
gonna request the funds back all at once
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now the answer is I really don't know
and I hope that they don't do that but
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if I were you and I attained the funds
and that type of manner I went off of my
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gross and I didn't go off of my net and
I got more than I was supposed to then
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basically I would reach out to your bank
I will reach out to your lender a CPA or
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some type of tax strategist somebody who
is a professional in this field who can
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help give you a little bit more guidance
and clarity I would like to say that
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you're gonna be okay and it's gonna be
all good but in all honesty I don't know
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I've heard people saying that they were
just gonna keep the money or they're not
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gonna request forgiveness and then just
let it turn into a repayment period
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higher supposed to be now you can do
that you can take your chances with that
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just don't request forgiveness and
didn't just let it turn into a loan and
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then repay it but at the same time it's
like I get that it's cheap money but
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also it's like why even do it you know
especially if you're getting a loan
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amount that can be comparable to
unemployment right because with
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unemployment you don't have to pay that
back with the PPP you are gonna pay that
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back even if it is cheap money so that's
just my thoughts on it I don't know what
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you guys are gonna do you can let me
know in the comments like I said I've
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had a couple people who told me that
they acquired a PPP
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own going off adjust their gross but
when they go to father 2019 taxes is
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gonna show a loss
I don't know how problematic that can be
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it is all Federalists from the
government so I don't know how easily
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they'll be able to connect the dots and
I don't know if you're gonna be put in a
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category where they're saying that you
falsely attain the funds hopefully not
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hopefully you can just hold on to the
money and then just pay it back over
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that two-year period so that's it for me
today guys hopefully you found this
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video useful if so give me a like drop
me a comment let me know what's going on
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did you get the funds did you wrongly
get the funds
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thank you wrong we got the funds or you
know what's going on with you and your
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business right now so it's all my people
out there who are trying to build a life
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on their terms and get it how do you
live this is your man Jonathan Moore and
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I'm signing out peace
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