Senate Bill 689, which was signed by Illinois’ Governor Pritzker on June 5, 2019, is more than 300 pages long.
Buried inside is some good news. Specifically it provides for the phase out of Illinois’ franchise tax on domestic
and foreign corporations. Currently, Sec. 15.35 of the Illinois Business Corporation Act imposes
a franchise tax on domestic corporations for the privilege of exercising their franchise and Sec. 15.65 imposes
a franchise tax on qualified foreign corporations for the privilege of exercising their authority to do
business in Illinois. The tax is measured by the paid-in capital – which is basically the funds raised
when a corporation issues stock. There is an initial tax, an annual tax, and a tax upon changes in paid-in capital.
Buried inside is some good news. Specifically it provides for the phase out of Illinois’ franchise tax on domestic
and foreign corporations. Currently, Sec. 15.35 of the Illinois Business Corporation Act imposes
a franchise tax on domestic corporations for the privilege of exercising their franchise and Sec. 15.65 imposes
a franchise tax on qualified foreign corporations for the privilege of exercising their authority to do
business in Illinois. The tax is measured by the paid-in capital – which is basically the funds raised
when a corporation issues stock. There is an initial tax, an annual tax, and a tax upon changes in paid-in capital.
Bottom line, the annual report fee to the Secretary of State is now $75. A savings of $25 for most clients.
And who says Illinois is so business unfriendly ...wait not so fast old man. On January 1, 2020 Illinois’
minimum wage increases to $9.25 per hour. On July 1, 2020 the minimum wage increases to $10.
New employees (first 90 days of employment) and employees under age 18 may be paid up to 50 cents
less per hour. Tipped employees must be paid 60% of the hourly minimum wage. That means your servers
wages starting the first of the year is $6 per hour.
And who says Illinois is so business unfriendly ...wait not so fast old man. On January 1, 2020 Illinois’
minimum wage increases to $9.25 per hour. On July 1, 2020 the minimum wage increases to $10.
New employees (first 90 days of employment) and employees under age 18 may be paid up to 50 cents
less per hour. Tipped employees must be paid 60% of the hourly minimum wage. That means your servers
wages starting the first of the year is $6 per hour.
We will see what the effects of the increased minimum wage has with the now shaky Illinois economy.
The experts say that an increased minimum wage will reduce employment in the long run, and less
employment opportunities for low-skilled workers.
The experts say that an increased minimum wage will reduce employment in the long run, and less
employment opportunities for low-skilled workers.
How are you going to handle your increased labor costs? I don’t see any other option but to consider
yet again a price increase.
yet again a price increase.
Don’t forget we will be calling you asking about your health insurance premiums this month.
We know your thoughts are on the holiday and not tax savings ... but taking actions in the next few weeks
specifically designed to reduce your 2019 tax liability will prove to be rewarding when you file your taxes next year.
specifically designed to reduce your 2019 tax liability will prove to be rewarding when you file your taxes next year.
Here is our list of last minute tax strategies for 2019:
1. Increase your contributions to your 401(k) or IRA retirement investment plans. A retirement plan is
an easy deduction. If your employer is not participating in your retirement plan, you should consider an IRA
or participate in the self funded 401(k) if at all possible. Also, while some employers require a wait time or
require employees to wait until open enrollment to start up payroll deductions, some companies will let you start
at the end of the year or even on the next paycheck. It’s worth looking into, since the money contributed to a
retirement account is typically not subjected to income taxes.
an easy deduction. If your employer is not participating in your retirement plan, you should consider an IRA
or participate in the self funded 401(k) if at all possible. Also, while some employers require a wait time or
require employees to wait until open enrollment to start up payroll deductions, some companies will let you start
at the end of the year or even on the next paycheck. It’s worth looking into, since the money contributed to a
retirement account is typically not subjected to income taxes.
2. Charitable giving. Not only are donations good for your taxes, they're good for society as a whole. While
there may be no large tax benefit for some donations, please consider the social benefits to making donations to
charitable organizations.
there may be no large tax benefit for some donations, please consider the social benefits to making donations to
charitable organizations.
Even older computers and cell phones can be useful for training or other charitable causes -- it doesn't have to
be an iPad. You're entitled to fair market value for clothes and furniture, among other things, so take time right
after Christmas to clean your closets and head to your favorite charity.
be an iPad. You're entitled to fair market value for clothes and furniture, among other things, so take time right
after Christmas to clean your closets and head to your favorite charity.
The little things add up too, and you can write off out-of-pocket costs incurred while doing good works.
For example, ingredients for casseroles you prepare for a nonprofit organization’s soup kitchen and stamps you
buy for your school’s fundraising mailing count as a charitable contribution. You can also deduct any out-of-pocket
travel expenses for charitable causes, which includes everything from mileage for travel, taxis or parking expenses.
For example, ingredients for casseroles you prepare for a nonprofit organization’s soup kitchen and stamps you
buy for your school’s fundraising mailing count as a charitable contribution. You can also deduct any out-of-pocket
travel expenses for charitable causes, which includes everything from mileage for travel, taxis or parking expenses.
3. Choose stock donations over cash. If you're thinking about making a large cash donation, you might want
to think about using stock in a company that has done well. Make a donation of those shares; if you sell the
shares to make a large donation you have to pay taxes on the profit. However, if you donate the shares then you
receive a tax deduction for the fair market value of the stock.
to think about using stock in a company that has done well. Make a donation of those shares; if you sell the
shares to make a large donation you have to pay taxes on the profit. However, if you donate the shares then you
receive a tax deduction for the fair market value of the stock.
4. Paying next semester’s college costs early and counting the costs toward the American Opportunity
tax credit. Simple and easy. Works best for freshmen who started college in the fall of 2019.
tax credit. Simple and easy. Works best for freshmen who started college in the fall of 2019.
5. Sell losing investments. Capital losses are first used to offset capital gains, and then up to $3,000 of the
net loss can be deducted against income, such as your salary. Any excess loss is carried forward to future years.
net loss can be deducted against income, such as your salary. Any excess loss is carried forward to future years.
8. See if you can deduct any medical costs. You have to itemize to qualify for this deduction and expenses
have to be more than 7.5% of your adjusted gross income, but if you have a lot of doctors' visits and medical
procedures, it may be worth checking out. Will you need surgery in the near future? If so, try to get it in before
the end of the year.
have to be more than 7.5% of your adjusted gross income, but if you have a lot of doctors' visits and medical
procedures, it may be worth checking out. Will you need surgery in the near future? If so, try to get it in before
the end of the year.
I hope this helps your planning!
