Important Notice

To ensure compliance with the requirements imposed on us by IRS Circular 230 (31 C.F.R. 10.33 – 10.37, et. Seq.), we inform you that to the extent the information on this page mentions any federal tax matter, it is not intended or written and cannot be used, for the purpose of avoiding Federal Tax penalties.

The information contained in this website is for informational purposes only and is not and does not constitute legal advice on any subject. Receipt of this information does not create an attorney-client relationship. Do not act or refrain from acting based upon this information without seeking your own professional legal counsel.

Friday, December 2, 2011

Dissolving Your LLC Or Corporation

If you are looking to dissolve your Illinois LLC or Corporation, you may file Articles of Dissolution with the Secretary of State. This provides for a more orderly and official dissolution of the entity as opposed to not filing the annual report and waiting for an administrative dissolution. The forms are easy, inexpensive and provide for an address for service of process. The Business Corporation Act provides that "Dissolution of a corporation may be authorized by the unanimous consent in writing of the holders of all outstanding shares entitled to vote on dissolution. Dissolution pursuant to this Section does not require any vote or action of the directors of the corporation." 805 ILCS 5/12.10

Friday, October 7, 2011

Setting Up a New Business?

If you are setting up a new business, make sure you consider the type of structure that you will need. Your options include sole proprietorship, partnership, corporation and limited liability company. Each has unique tax consequences and requirements and all of them require careful consideration to make sure that you are starting on the right foot.

You will certainly save time and money by considering your options carefully before starting your business. You will also avoid running afoul of timely filing requirements. Call my office today.

Monday, October 3, 2011

Unintended Consequences of Self-Help Estate Planning

Many clients ask me: "Can't we just put one or more of our kids on our deed, so that they get the house when we die?"
What if one of your kids has trouble with creditors? What if they go bankrupt? You could lose your house in such a scenario. Placing your kids on the deed could jeopardize many things.

Another popular question: "Can't I just put one of my children on my accounts? When I die, they will know what to do as far as dividing it up among all of my kids."
If your kids got along with each other before your death, that might not last after you are gone.

Why leave things so important to chance? Consider a will or a trust and make everything certain. You may just save your family.

Friday, September 30, 2011

Deceased Spouse's Unused Exemption Amounts

Starting in 2011, any unused exemption amounts of a deceased spouse (up to $5 million) may be passed along to the surviving spouse, even if there was no estate planning. The new portability election allows estates of married taxpayers to pass along the unused part of their exclusion amount to their surviving spouse. However, to make the portability election, a Form 706 must be timely filed with the IRS, even if the form would not otherwise be required. Form 706 is due 9 months after the date of death, and an extension may be obtained for an additional 6 months (but must be requested prior to the original deadline).
Note: Returns are due on October 3, 2011 for spouses that died on January 1, 2011!

Wednesday, September 28, 2011

Employee or Independent Contractor? New IRS Program to the Rescue

The issue:  Is a person that does work for you or your company an employee or an independent contractor?

If you classify the person incorrectly as an independent contractor, you may be liable for unpaid taxes.

According to the IRS:

The IRS has started a new program that will enable many employers to resolve past worker classification issues by voluntarily reclassifying their workers. This new program will allow employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit....

The new Voluntary Classification Settlement Program (VCSP) is designed to increase tax compliance and reduce burden for employers by providing greater certainty for employers, workers and the government. Under the program, eligible employers can obtain substantial relief from federal payroll taxes they may have owed for the past, if they prospectively treat workers as employees. The VCSP is available to many businesses, tax-exempt organizations and government entities that currently erroneously treat their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees.

The requirements to qualify are set forth as follows:
  • Consistently have treated the workers in the past as nonemployees,
  • Have filed all required Forms 1099 for the workers for the previous three years
  • Not currently be under audit by the IRS, the Department of Labor or a state agency concerning the classification of these workers
If you have any questions regarding this program, please let me know.

Thursday, May 26, 2011

Trust Property May Be Held in Tenancy by the Entirety

Effective January 1, 2011, married couples may hold their primary residence as tenants by the entirety within one or more trusts. 765 ILCS 1005/1c states, in part:

Where the homestead is held in the name or names of a trustee or trustees of a revocable inter vivos trust or of revocable inter vivos trusts made by the settlors of such trust or trusts who are husband and wife, and the husband and wife are the primary beneficiaries of one or both of the trusts so created, and the deed or deeds conveying title to the homestead to the trustee or trustees of the trust or trusts specifically state that the interests of the husband and wife to the homestead property are to be held as tenants by the entirety, the estate created shall be deemed to be a tenancy by the entirety.

Tenancy by the entirety affords married couple with extra creditor protection in Illinois. If you have your principal residence in your living trust(s), give me a call to discuss taking advantage of this new law.

Sunday, February 27, 2011

No More Recording Corporation Documents

With the availability of Illinois corporate information online at, Public Act 096-1121 has deleted all requirements for filing with your county recorder. This change took effect on January 1, 2011 and it means that documents like Articles of Incorporation and changes in registered agents no longer need to be recorded with your county. If you have any questions, please call my office.

Friday, February 4, 2011

No Free Lunch....., or Tax Returns

This is like buying a car for free, but the motor is extra.

As tax season gets in full swing, we have all noticed those ads for free do it yourself tax return preparation. Turbo Tax, H&R Block and TaxAct all offer free federal filing for the simplest of returns. (usually taxpayers with a W-2 from their employer and nothing else)

Anyone with a more complicated return (like those with itemized deductions, small businesses, securities sales, educational credits, etc.) will not be able to take advantage of the "free" filing.

Even if you have a very simple return, beware! The federal returns are free, but you must pay for the preparation and filing of your state income tax returns. These fees average $27.95 and up.

My advice is to make sure you are aware of your eligibility to use the free filing up front and determine what other costs will be unavoidable.

Wednesday, February 2, 2011

Filing of Certain Tax Returns Delayed Until February 14th

Due to recent tax law changes, the IRS will not accept 2010 personal income tax returns (paper or e-file) until February 14, 2011. According to the IRS, the affected returns are those claiming itemized deductions on Schedule A, the higher education tuition and fees deduction on Form 8917 and the educator expenses deduction. Many taxpayers claim itemized deductions (mortgage interest, property taxes, medical expenses, charitable contributions, etc.), so this affects a large number of filers.

You may still have your tax preparer start on your returns now, but they may not be processed and filed until the 14th. This also delays any refunds until after that date.

If you need someone to do your taxes, why not call me at 847-955-9000.

Tuesday, January 18, 2011

New Tax Legislation

President Obama has signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief Act) (H.R 4853). The new law gives taxpayers some certainty regarding the following tax issues: individual income tax rates; capital gains and dividend tax rates; income tax credits, such as the child tax credit, earned income tax credit, adoption credit, dependent care credit, and similar credits; alternative minimum tax; business incentives, such as 100 percent bonus depreciation and Code Section 179 deduction; energy incentives; and estate tax.
Specifically, the 2010 Tax Relief Act clarified the issues surrounding the estate tax. Under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the federal estate tax was abolished on January 1, 2010.  During 2010, many tax experts predicted that Congress would revive the estate tax because of the estimated $14 billion in lost tax revenue. The 2010 Tax Relief Act revives the estate tax for decedents dying after December 31, 2009; the maximum estate tax rate is 35 percent with an exclusion amount of $5 million.  In addition, the 2010 Tax Relief Act gives estates of decedents dying after December 31, 2009 and before January 1, 2011 the option to elect not to come under the revived estate tax.  Therefore, if a descendent passed away during 2010, the estate of the descendent may elect to apply (1) the estate tax based on the new 35 percent top rate and $5 million exemption, with stepped-up basis rules applying or (2) no estate tax, with carryover basis rules applying.
The 2010 Tax Relief Act also provides for “portability,” which provides surviving spouses with the option to take advantage of any unused portion of a predeceased spouse’s estate tax exclusion.  In order to take advantage of the unused portion of a deceased spouse’s exclusion, a surviving spouse must make an election on a timely filed estate tax return.
Feel free to call my office with any questions.