Illinois tax code is complex, and a lot of it is fairly punishing to local residents and businesses. In fact, one study rated Illinois the “least friendly” state in terms of taxes.
Navigating the maze of tax laws and regulations often requires expert guidance, especially when it comes to more complex tax situations. Here, we’ll look at some of the nuances of Illinois’s tax code.
Sometimes, your business might need a little more time beyond the deadline to prepare its tax return. Fortunately, filing an extension is fairly simple as long as you keep a few important items in mind.
There are a number of reasons why you might file a business tax extension. These include:
For most businesses, taxes are a burdensome expense. Business tax credits are a way to reduce the total dollar amount of taxes your organization pays each year.
Put simply, tax credits are reductions to the actual dollar amount of taxes owed. They are offered by the government as an incentive for businesses to invest in things that improve society, such as research and development, using green energy, providing for employees’ needs, and so on.
Taxes are complicated. For businesses, they can get especially convoluted. While tax season itself is a long way off, most businesses need to keep their tax obligations in mind year-round.
Following are some of the questions people commonly ask about business taxes.
Most people don’t start thinking about their taxes until April. Many businesses have to deal with them year-round, but even then, their tax burden may not get as much attention as it probably needs. With the start of the new year, now is the time to start preparing your taxes. There are several reasons to do this, six of which we’ll discuss here.
1. Get Refunds Sooner
One of the most attractive benefits of filing taxes promptly is that you get your refund sooner. If you overpaid over the course of the last year, you’ll be due a refund, and that extra cash can be very helpful if business has slowed down after the holiday season. If you make estimated payments throughout the year, that extra windfall can be put toward this year’s taxes, diminishing your overall financial burden.
If you have received workers’ compensation due to a workplace injury, the question of taxes may come up sooner or later. You may wonder if those benefits are taxable. If you are receiving a wage differential or disability benefits, will you have to report those on your return?
The simple answer is these benefits are not taxable. You can receive benefits through workers’ compensation without fear of it impacting your taxes—at least in most scenarios. There is one exception to this rule, and it involves Social Security.
Workers’ Compensation and Social Security
While 2019 may be a few months off, it is rapidly approaching, and it’s never too early to begin planning for the next tax year. The IRS tax code is constantly evolving, as is your own financial situation, so making these plans early will help you avoid unpleasant surprises later on. Among the various tactics one can use to prepare for the next tax year are the following.
Review Your 2018 Return
First, you’ll want to review your tax return for this year. This will give you some insight into where you might have been off on the previous year’s tax planning and how you might improve this year. If you ended up owing taxes, try to see why and make plans now to minimize those issues.
Tax season is coming up, and you may be due a refund. In the simplest of scenarios, this is handled in the course of filing your annual tax return, but in some cases, there may be an error that means you still paid more than you technically owed. Businesses and those with more complex financial profiles may find themselves overpaying due to certain oversights or situations.
Common Errors
Errors on taxes are common, and the IRS generally does a decent job of double checking your returns and refunding overpayments. If you made math errors on your return or when calculating certain taxes, or if you forgot to take certain obvious exemptions, you will usually be refunded the amount overpaid with no effort on your part.
A major part of the estate planning process is making sure you shield your estate from taxes as much as possible. In many cases, this isn’t too much of a problem, but you do need to plan everything carefully. Oversights can lead to excess tax exposure, the result of which would be a significant reduction in what you pass on to your heirs.
One of the questions you’ll have to deal with is whether a tax return needs to be filed for your estate. In many cases, it may not be strictly necessary, but it’s often a good idea to do so anyway.
Technical Requirements for Filing an Estate Tax Return
Corporate Taxation Basics
If you are forming a corporation in the state of Illinois, one of the matters you’ll need to be aware of is how your taxes will be affected. In most cases, you’ll have some familiarity with business tax obligations since most corporations are formed from existing entities, such as partnerships or limited liability companies.
Here, we’ll examine what taxes are imposed upon corporations and how those might best be handled.
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