April 15 2021 may bring a headache that no small business owner anticipated, taxes on their forgiven PPP loan.
Currently the legislation for the PPP loan funding program was not adequately written to avoid the current tax on forgiven debts. This can translate into taxes being due on April 15, 2021 for loan finding received and forgiven in 2020.
In order to possibly avoid this painful many small business owners should plan to automatically file for an extension for their tax returns. There is hope that the law will be changed before the filing deadline but there is no guarantee.
For active planning small business owners should anticipate that tax will be owed on the amount of their forgiven PPP loan to avoid a shock come April 15th.