How would an independent contractor find out their quarterly gross receipts?

How would an independent contractor find out their quarterly gross receipts?

Let’s say you made $10,000 in the fourth quarter of 2019. If your gross revenues were $7,500 or less, that would qualify you. $7,501 would not. If any one quarter qualifies, you meet the reduction of income qualification.

The paycheck protection program reduction of income tool at the end of this article will help you see if you qualify.

Understanding “Gross Receipts.”

The language in the act and in the SBA guidance for the Paycheck Protection Program (PPP) 2.0 second draw uses the term “gross receipts.”

For those of us that are independent contractors, that means it’s the money we’ve received. If you contract with gig companies like Doordash, Uber Eats, Lyft, Instacart, Grubhub, Postmates or any of the others, your gross receipts are whatever you received for your contract work including tips, delivery and trip fees, money received for referrals, bonuses.

If you ran a business that sold items, gross revenue means your sales minus cost of goods sold, returns and allowances.

For example, I used to buy and flip bicycles. If I bought a bike for $100, spent $25 on parts to fix it up, and sold it for $500, my cost of goods sold would be $125, my gross receipts would be $375 ($500 $125).

Differences for those who started their business in 2019 or later.

It’s easy enough to compare one quarter of 2020 to the same quarter in 2019 if you were in business all four quarters of 2019. But what if you weren’t?

Any business that started before to the same quarter of 2019. In other words, if you started in , you can compare 4th quarter to 4th quarter, 3rd to 3rd, and 2nd to 2nd to see if you meet the income reduction qualification.

There’s more flexibility for people who started later. If you started in the online title loans Missouri second half of 2019, you can compare any quarter of 2020 to either the third or fourth quarter of 2019.

You could pick the lowest earning quarter of 2020 and compare that to the highest of the 3rd or 4th quarters of 2019. Read More