You’ve applied for the Paycheck Protection Program (PPP) and you’ve been told that you are getting the money. Awesome! But now you need to use those funds wisely in order to have your loan forgiven, and the information can feel very confusing.  Don’t panic!  We’ve got your back covered with some great videos and worksheets to help you navigate this program.  

Remember, to be sure you’ve covered everything for your specific situation, consult directly with a trusted financial professional.  All information in these resources is intended for educational purposes.

Now, let’s get started!

Self-Employed & Partnership Specific Help

As an independent contractor, 1099 worker, sole proprietor, or someone else who files a Schedule C with your tax return, your rules for PPP forgiveness are different from other businesses that pay all their employees through payroll. You are going to want to pay attention to these different rules so you can maximize your forgiveness amount and be legal!   We look at the difference in these rules in How to Get Your PPP Loan Forgiven – Self Employed.

Don’t worry, as a sole-proprietor, you can still use up to 25% of the money for other “allowable costs” if you have them!

No matter if you have employees or not, you will need to fill out the PPP Loan Forgiveness Application.  How to Apply for PPP Loan Forgiveness covers what matters most for sole proprietors, schedule C filers, and independent contractors who have NO EMPLOYEES.

As a sole prop/ICs, you will need to remember that your forgivable loan amount is largely based on your 2019 Schedule C.

The PPP Loan Forgiveness Application can be found here.

Things We ALL Need to Know.

Documentation will be key in your preparation, use of and forgiveness application for PPP funds.  In How to Document Your PPP Expenses for Forgiveness, we’re going through 3 things you need for each expense in order to ensure the bank and/or SBA can see your expenses as legitimate.   This information comes from an auditing background, and helps explain what and why the bank will care about these details.

If you’re wondering what is the “right” way to account for your PPP loan, it’s the classic “it depends” answer, depending on your situation.  However, How to Account for Your PPP Loan to Maximize Forgiveness provides some basic guidelines to help you figure out a direction for YOUR situation.  This is the video to send to your bookkeeper!

Taxability of expenses is something to consider in your accounting as well.  Are PPP Expenses Tax Deductible? looks at the implications for your 2020 tax return.  Forgiven amounts of allowable expenses may not be eligible to include as deductible items later.  Be sure you consider this now!

IRS notice discussing taxability can be found HERE.

There is a lot of confusion about the EIDL Loan and the PPP Loan!  What are they used for? Can they be forgiven? What are the spending restrictions? How can I use them once I have them? How to Use EIDL vs PPP Loans looks at HOW to use the money once you’ve gotten them.  Using these funds properly can help ensure your current financial stability and future financial success.  Knowing about cash flow forecasting can help you decide how best to use these funds for your business.

As more information becomes available…

Over the last several weeks, additional guidance continues to roll out for PPP loans.  Be sure to watch these video updates as you use, document and account for your PPP funds.

Unforgivable PPP Payroll Costs

This short update clarifies items such as worker’s compensation, health savings accounts (HSAs), fringe benefits (i.e. accident or disability insurance) and payroll processing fees.

Some costs are unforgivable, but you may incur them anyway. Until we receive a final list of all the payroll costs that are considered forgivable under the CARES Act and the PPP loan, we need to assume that these costs are unforgivable!

Update to PPP Forgiveness Rules from 5/22

The interim rule is HERE for your reference:

The video looks specifically at:

  • Can I give my employees Hazard Pay, bonuses or myself more as the owner?
  • How many hours is an FTE?
  • Who can elect an alternative payroll covered period?
  • Can I get more than 2 months of utlilities covered or prepay my mortgage interest/
  • And more!


If you would like to discuss your specific situation with us, you can book a 30 minute Quick Fire Clarity session. This is perfect for answering your PPP questions.

Disclaimer: This blog and the linked videos are intended for educational purposes and should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Clara CFO Group, LLC is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience.