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hello from freedom tax accounting we're an accounting firm where we have been providing quality tax and accounting services now for over 20 years and finally after weeks and weeks of waiting the sba has finally released the final simplified ppp forgiveness form that if you're self-employed this is the ppp forgiveness form that you need to fill out now we are recording this video on january 28th we always emphasize the date on the recording on any video relating to the ppp program because this program is constantly changing so that's the importance of subscribing to our channel so you're always up to date with the most current and accurate information regarding the ppp and the idle loan programs now we do feel that less changes will come this should be the last update to this ppp forgiveness form this form has gone through many changes for the last couple of months so this should be the final version of the ppp forgiveness form if you're self-employed this is the one you need to fill out and in this video we're going to take you on a step-by-step instructional video on how to fill out this application so you get 100 forgiveness of your ppp loan okay so who is this video for this video is for businesses or self-employed that got a ppp loan that's a hundred and fifty thousand dollars or less okay now one of the most common questions we get in our office is is there going to be automatic forgiveness the answer is no there was an idea the last couple of months and congress was debating it if there should be an automatic forgiveness for ppp loans under 150 000 but that did not go through so there is no automatic forgiveness if you got a ppp loan a hundred and fifty thousand dollars or less you have to fill out this form which is the form 3508 s the updated version of this form but they did their best to do the next best thing to automatic forgiveness because this application you're going to see is very easy it's a one-page form you don't have to send in any documentation so it's the closest thing to automatic forgiveness okay now this is for self-employed independent contractors sole proprietorships or single members llc who got pp1 and they filed their 2019 business taxes under schedule c and you used your 2019 schedule c to file for ppp1 and that you did not have employees in payroll okay remember employees in payroll means people you pay as employees from your business that you give them a w-2 at the end of the year independent contractors that you pay and you give them a 1099 at the end of the year are not employees they're not in payroll so if you're self-employed independent contractor sole proprietor single member llc and you don't have employees in payroll this is the forgiveness form that you need to fill out and we're going to go step by step on how to fill it out okay so basically let's start where do you get the form okay let's start with that you get the form going to the let's say you go to the sba.gov website this is the sba.gov website go here where it says coronavirus small business guidance click learn more here you see coronavirus relief options where it says paycheck protection program where it says ppp you click there it takes you to the ppp landing page here you have information on the ppp1 this is the ppp2 and then this right here is ppp forgiveness you click learn more and basically there's a link here that says forgiveness forms you click that and see where it says sba form 3508 s paycheck protection program forgiveness application updated 119-21 you click there once again make sure you're getting ppp loan forgiveness form 3508 s if that's effective january 19th you download the and this is the form okay we will provide a link to this form on the description of this video so that way you don't have to go through all those steps but basically that's the way you get to this form okay so let's go to the form uh here it is so this is the form okay let i need to do this so it looks better and we see the entire content very good so once again the form details that this is for ppp loans that are a hundred and fifty thousand dollars or less here you put your business legal name if you are a self-employed independent contractor and you are not working under an llc then you will put your personal name if you are working under an llc here you will just put the llc name the dba if your business has a dba here you put your business address once again if you don't have an llc then you just put your uh personal address or the address that's on the schedule c so if take a look at your 2019 schedule c because this is where you reported your business um income and here where it says here business address this line here put the address that's here okay unless you have moved if you have moved then you need to put the new address now in the nina ics code this is where a lot of people have a lot of questions every industry has its own code where do you find this number where you have two choices you can once again go to your schedule c see on box b where it says enter code from instructions there is a six digit code here there should be so that's your industry code now unfortunately there are a lot of tax preparers that skip this part and only put here like nine nine nine nine nine nine but that's that won't fly with sba so if you see here nine nine nine nine nine that means that your tax professional did not do this correctly and in that case you're going to have to go to the following website which is this is not it it is over okay let me see where's the website i okay here it is i'm so sorry okay so we have to go to the naics website and once again we are going to provide a link to this website on the description below you go to the n i n a i c s dot com and here where it says n a i c s code search you click that and here where it says naics search here you put your for example if you are a real estate agent you put real estate agent click search and see here where it says selling real estate agents so this number here is your naics code okay so here you put your industry or what do you do click search and look for the code that best describes your business so that's how you get that code okay here then we go to the business tax identification number if you work under an llc here you add your ein number if you're not working under the lc here you put your social security number business phone your your name your email let's go down then here we click first draw okay because you're asking for forgiveness for the first ppp apparently you're going to have to use this same form if you apply for the second ppp loan here you put your sba ppp loan number and the lender ppp loan number this you get from the bank that gave you um your loan okay or when you signed the ppp loan documents this this is a document that you got it says the sba note and it says your sba loan number and here this number here that's your sba ppp loan number okay but you can always check with your lender to see what's your loan number on recess ppp loan amount here you put the amount that was deposited to your account the amount of ppp loan the bank gave you here you put the date that the ppp funds were uh deposited into your account here employees at time of application if your self-employed independent contractor single member lc the sba states that here you put one and here you put one okay the cover period is uh the date here you put the date that you received the ppp funds and then two you just put here the date that's 24 weeks after the first date from from the date that you got the funds you put that date here and then count 24 weeks forward and that 24-week date you put it in this line okay here you click it if you got a ppp loan that's two million dollars or more so this won't apply to you now here where it says amount of loans spent on payroll cost okay now this is where a lot of people get confused because you're basically self-employed and you don't have payroll but what you need to do is you go again to your schedule c all right let's go to the schedule c which is right here you go to your schedule c that you use to fill out your 2019 schedule c which you use to fill out your ppp1 you scroll down to line 31 the number that's here you divide by 12 and you multiply by 2.5 so for example if here it's sixty thousand dollars let's say on 931 sex says sixty thousand dollars you take sixty thousand dollars divide by twelve and you multiply by two point five that's twelve thousand five hundred so that's the number that you're going to uh put in this line on the amount of loans spent on payroll cost now if if your line 31 has over a hundred thousand dollars let's say that it says a hundred and ten thousand dollars you only do this formula with a hundred thousand dollars a hundred thousand dollars is the max okay so you do that math and you put that number here on loan amount spent on requested loan forgiveness it's the same number okay it's line 31 divide by 12 multiplied by 2.5 that's the forgiveness amount that you are eligible to for to get now if your loan amount that you received is higher than the requested forgiveness amount that means that you received ppp funds that you should you receive more than you should have so whatever you don't get forgiven you have to pay back or it becomes a loan with the bank once you do this then you basically have to uh put your initials in your garnish your your certifying that you use the funds correctly you're certifying that you you uh receive the correct amount you put your initials here and here you put your signature print your name put the date your title which should be owner okay and basically your you're you're done this is what you need to send to the bank now the banks you need to submit this form with the bank or the lender that gave you the ppp funds you do not submit this to the sba so if you got your ppp loan through cabbage you filled out the 3508 s with cabbage if you got it with bank of america you fill out this form and send it to bank of america now most lenders have their own version of this form online but they're going to ask you the exact same questions so you should print this out fill it out and when you go to the online version of the 350 3508 s form of your bank then you know exactly what to put in the online version all right now one thing that we wanted to mention is that according to this form it says documents that each borrower should maintain but is not required to submit and this is where we're having issues with banks because according to the new ppp forgiveness rules if you fill out this form you should not have to send documentation to prove to prove that you did the calculation correctly you're going to have to keep your records for four years just in case the sba wants to audit your case but we have seen that the banks don't know this the banks are still asking for documentation if they do they most probably are going to ask for a copy of your 2019 schedule c because they want to at least check that using the formula of line 31 divide by 12 multiplied by 2.5 that's the number that you put on your forgiveness application in this line the requested loan forgiveness okay now we are having issue with with banks there we are doing this through the banks and they're still asking for payroll documents which if you're self-employed you don't have payroll so have a little bit of patience with your bank um we're not having that issue with cabbage or bluevine but other banks are requesting documentation they're not supposed to be asking for so basically um you're done that's basically it um you're done with your forgiveness form very simple send it to the bank that gave you the ppp funds now remember we that we are in tax season a lot of business owners are calling our office to see if we can help them do their taxes the answer is yes we are authorized by the irs to to do taxes for uh individuals and businesses that are located in any of the 50 u.s states so this is our contact information and remember that we are part of freedom group we are a group of four companies where we do tax accounting we do immigration we do real estate and we also do insurance and financial planning so we can help you in many many ways okay now thank you for watching this video remember to subscribe to this channel and if you have received value out of this information like this video and share it with someone that can take advantage of this information so thank you for watching god bless you bye