A SIMPLE STEP-BY-STEP GUIDE TO COMPUTING YOUR PPP LOAN AMOUNT
This quick guide can help you calculate your PPP loan amount if you are a sole proprietor (with no employees) OR if you are an independent contractor receiving a Form 1099.
Pull up your 2019 IRS Form 1040, Schedule C. The top of the form will be titled as follows:
On Form 1040, Schedule C, go to line 31 which is titled “Net profit or (loss)”. This will be on the first page of Form 1040, Schedule C.
Take the smaller of 100,000 or the number from Step 2 and divide it by 12.
Multiply the number from Step 3 by 2.5
Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID 19 loan (because it does not have to be repaid). If you are not sure what this means, then you likely did not have an EIDL loan and can disregard this step.
You need to submit your 2019 Form 1040, Schedule C. If you have not yet filed your 2019 tax return, fill out a draft 2019 return and compute the value.
If you are a gig worker/independent contractor, you also need your 2019 Form 1099-MISC detailing your earnings from gig work.
To be eligible for a PPP loan, you had to be in operation on February 15, 2020.