By Breana Pitts

ASHLAND (CBS) — At Julie’s Z Breads in Ashland, the small staff transforms zucchini into all kinds of treats.  “We do about 40 different varieties of Zucchini breads and muffins,” explained owner Julie Gross.

Gross has a small storefront in the brick building on Main Street that houses her kitchen, but a large part of her business is baking for coffee shops and cafes. When those businesses were hit by the pandemic, so was she.

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“It was a very scary moment when all that started to happen,” she recalled of those dark days in April when restaurants were closed.

But her mixers kept churning and breads were still being shipped to supermarkets thanks to a Paycheck Protection Loan from the Small Business Administration.

“It was like our lifeline in terms of being able to continue on and not have to say to my employees that they couldn’t come to work,” she said.

But as we approach the end of the tax year, Julie is worried about a couple of unknowns surrounding the loan. “Is it an outstanding loan? It is a forgiven loan?”

The SBA said that loans would not have to be repaid as long as the money was used to cover approved expenses like payroll, but Julie has filled out all of the paperwork and is still waiting for the SBA to sign off.

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“It’s very unsettling,” she said.

Peabody small business tax expert Herb Harris said he feels confident that Julie won’t have to pay back the loan. “I would tell her not to worry too, too much,” he told WBZ-TV.

But there’s another problem: she may owe more in taxes.

The IRS issued guidance back in November saying if loans are forgiven, expenses related to the loan are not deductible. That means Julie and thousands of other small business could be hit with a higher than expected tax bill.

“Where are they going to come up with $20 – $30,000 come tax time because they cannot deduct expenses?” Harris said.

Julie is worried about what the new spike in cases will do to her business and not knowing what her tax burden will be just compounds that worry. “It makes us very anxious, not knowing,” she said.

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Harris told WBZ-TV he is hoping Congress will address the issue and pass a law that will make the expenses deductible. In the meantime, he is advising his clients to put away money to cover the extra taxes, something that’s not easy during a pandemic.

Breana Pitts