Illinois Tax Update

Posted on January 16, 2012 by admin

Illinois has adopted several new income tax laws which take effect in 2012. Most notably, on December 16, 2011 the Governor signed into law P.A. 97-0636, which provided for corporate tax relief, along with several individual tax and estate tax modifications. Here are the major new Illinois tax laws that you should be aware of for 2011 and 2012: Individual Tax Changes: Household Employee Withholding – If you withheld income tax from a household employee, you may now report and pay the tax withheld on Form IL-1040. There is a new line for “Household Employment Tax” on 2011 Form IL-1040. … Continue reading →

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IRS ANNOUNCES 2012 INFLATION-ADJUSTED FIGURES

Posted on December 21, 2011 by admin

Many federal tax law dollar limits are subject to periodic inflation adjustments. However, due to low “official” inflation rates, many limitations remained unchanged for three years — an unprecedented stretch of no inflation adjustments. For 2012, however, several cost-of-living adjustments will go into effect. Here is a list of some important tax law limitations/adjustments for 2012, reflecting changes from 2011: Personal exemption — $3,800 per eligible person, up from $3,700. Basic standard deduction — $11,900 (married filing jointly), up from $11,600; $8,700 (head of household), up from $8,500; $5,950 (single and married separate), up from $5,800. Social Security taxable wage … Continue reading →

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NEED A BUSINESS VEHICLE? DEPRECIATION OPPORTUNITIES AVAILABLE PRIOR TO YEAR END

Posted on December 2, 2011 by admin

There’s still time to take steps that will reduce your business’ 2011 federal tax bill.  Soon-to-be-expiring tax breaks present attractive tax-planning opportunities, assuming your business has the requisite resources to make the investment. Heavy-SUV Tax Breaks If a business has a need for a large sport utility vehicle (SUV), potentially large tax breaks are scheduled to expire at year end. The 100% first-year bonus depreciation deduction, as well as the tax code Section 179 expensing provisions, present attractive opportunities to purchase a heavy SUV in 2011. To qualify for the maximum available tax break, the vehicle generally must have a … Continue reading →

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RETIREMENT PLAN DISTRIBUTION WITHHOLDING RULES

Posted on October 23, 2011 by admin

A commonly held belief is that a plan administrator must withhold 20% of the amount of plan distributions for federal income-tax purposes from all retirement plan distributions. But this is simply not the case. As a business owner – or as an employee – it is important to understand the rules surrounding federal income-tax withholding resulting from a request for a distribution from an employer’s tax-qualified retirement plan. Eligible Rollover Distributions An “eligible rollover distribution” is generally a distribution from an eligible retirement plan other than: periodic distributions, so-called “minimum required distributions” (generally, required after age 70½), or hardship distributions. … Continue reading →

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IRS ANNOUNCES SETTLEMENT OFFER ON WORKERS MISCLASSIFIED AS INDEPENDENT CONTRACTORS

Posted on October 7, 2011 by admin

The IRS has announced a new initiative for employers, known as the Voluntary Worker Classification Settlement Program. The program allows employers who have misclassified workers as “independent contractors” rather than “employees” to reclassify the workers. The employers would only have to pay a small percentage of the employment tax liability that would have been due to cover past payroll taxes, with no interest or penalties. While the IRS program is available to businesses of all sizes, as a practical matter, it is likely to most affect smaller entities. Background The classification — or misclassification — of an employee as an … Continue reading →

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