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  • Christie Varner

Schedule C? Your PPP calculation just got SIGNIFICANTLY better!

Updated: Mar 10, 2021

If you'd rather watch the video associated with this, just click here or on the picture below ⬇️

📢 Calling all small biz owners who file Schedule C for their taxes

That’s YOU, independent contractors, self-employed, freelancers, gig workers, side hustlers, 1099 vendors, single-member LLC who file as sole proprietors, and others.

🌟 Whether you’re a baker, coach, hairstylist or candlestick maker...or whatever else...the updated PPP guidelines may be awesome news for you!! 🌟

I’m literally so excited for you that I want to be sure EVERY ONE OF YOU knows about this and can take advantage of the money you’re eligible for.

PPP loans are now based on Gross Income:

The BIG CHANGE is that the calculation for the PPP loan will now be based on gross income (line 7 of Schedule C) - instead of net profit (gross income less expenses - line 31 of Schedule C).

For example, if your business made $100,000 in gross income (Line 7 - basically gross receipts less cost of sales), you'd now qualify for $20,833 in PPP funding ($100,000/12*2.5).

If your net profit (line 31) had been only $10,000, you would previously have qualified for just $2,083 ($10,000/12*2.5).

Businesses that had recorded a net loss (even if they had lots of gross income) were ineligible for PPP until now. But now the calculation is based on gross income so a net loss won't disqualify you from PPP funds.

So you can see this impact has HUGE potential!

So, what should you do now?

1️⃣ Gather your 2019 Schedule C (and 2020 Schedule C if you have it done already).

You will want to use the year's return that has the higher amount for Line 7 since that will be used for the calculation. You may now use Line 7 instead of Line 31. (The maximum amount that can be used is $100,000.) If you don't have this, get it from your tax advisor. And keep a copy going forward for your business records.

2️⃣ Download the PPP application form.

Thankfully, it's very short and straightforward. If you'd like to see a video walk-through of it, you can watch that HERE. The term "draw" just refers to funding, so if you haven't received PPP funds yet, this is your first draw.

♦️ If you have not received PPP funds before, you'll be requesting a FIRST DRAW using this revised application based on gross income for Schedule C filers.

♦️ If you have already received a PPP loan and you qualify for the second draw (you had a 25% decline in gross receipts in one quarter of 2020 relative to the same quarter in 2019), then you'll use this revised Second Draw application based on gross income for Schedule C filers.

3️⃣ Review the certifications to be sure your business qualifies.

The ones I especially point out are that you must have been in business by February 15, 2020 and not permanently closed, and also that current economic uncertainty makes this loan necessary to support your business's ongoing operations. There are several certifications so you will want to familiarize yourself with them.

The full SBA updated document can be found HERE.

4️⃣ Find a lender who can help you with the PPP funding.

You can reach out to the bank you have your business accounts with, community banks, credit unions, and even some of the online organizations such as Paypal and Kabbage.

Our Facebook community (Small Business Finance SIMPLIFIED) is also a great place to ask others for their feedback on banks they are using. We all need to share good sources. It's full of entrepreneurs and small business owners just like you. I share accounting & finance freebies, tips, training and strategies geared to small businesses.

💥APPLY soon. PPP applications close on March 31, 2021 (unless funding runs out sooner). 📆

5️⃣ Once you receive your PPP funds, now you will want to be strategic with how you use them and how you account for the funds in terms of the forgiveness application. Be sure to work with your accountant to do this. We want you to maximize the funds your business receives.

What if you need help?

We know it’s frustrating when you don't have a background in business finance. You are trying to run your business & this feels like one more thing to learn. You don’t have to do this alone, nor should you.

Your success is our goal!

With 25 years of experience behind us, our team at VICTORY Advisory Services will empower you with knowledge & simple actionable steps to put you on the path to achieving your goals.

Let's see if we are a good fit for working together. If not, we likely have someone to refer you to.

Ready? Set. Let's go get all the money your business is eligible for!

Cheering you on!



Do you have W-2 employees? Even more $ is available to you!

If you have W-2 employees, be sure to check out the updated and expanded Employee Retention Tax Credit (ERTC) rules that were recently released. Your business could qualify for up to $19,000 PER EMPLOYEE in tax credits. You'll want to be very strategic about applying your PPP funds and selecting your covered period. Here's training on that to help you out too.

Comment below, connect with me on Facebook, LinkedIn, or Instagram, or email me.

If you haven't already joined our free private Facebook group, Small Business Finance SIMPLIFIED, why not? Join us! I love to meet new people!

shared here is updated as of March 4, 2021, to the best of my knowledge. However, this information is shared for educational purposes. Please seek professional advice from your accountant, legal, and tax advisor regarding your specific situation. This does not constitute advice.

Christie Varner, a 25-year CPA, is passionate about helping YOU, small business owner, gain confidence & take control of your business finances so that you can achieve your financial goals without sacrificing your happiness.

When she's not empowering business owners, she's eating Tex Mex, drinking coffee, playing with her Havanese dog, Max, or learning something (and will teach others soon!) from Google, YouTube, or a book!

She'd love to connect with you so reach out & say hi!

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