Accounting, Bookkeeping and Taxes FAQ

If you’re feeling the pinch and can’t pay off your taxes all at once, there’s a pathway to peace of mind with a Payment Installment Plan. Basically, it lets you chip away at what you owe in manageable, monthly bites. Starting the ball rolling is pretty straightforward: head over to MyTax Illinois to apply online, or if you’re more of a paper-and-pen person, you can fill out a Form CPP-1 and mail it in. The state needs to see that your tax filings are up to date, and if you owe more than $10,000, they’ll want to take a closer look at your finances with some extra paperwork. Once you’re all set up, making payments is a breeze. You can do it online, over the phone, send a check by mail, or even use a credit card.

When you’re hustling with DoorDash, Uber Eats, or Grubhub, you’re your own boss, which means handling your taxes differently. Since you’re considered an independent contractor, you won’t see taxes taken out of your paychecks. Instead, if you make over $600, expect a 1099-NEC form for tax time. It’s smart to stash away about 25%-30% of your earnings for taxes to cover your bases for Uncle Sam. Don’t forget, though, you can lower what you owe by deducting business costs, like your car’s mileage or maintenance, phone expenses, and even part of your health insurance. Keep a tight record of your earnings and expenses

In Illinois, employers juggle a mix of federal and state tax responsibilities. On the federal front, they withhold 6.2% for Social Security and 1.45% for Medicare from employees’ wages, matching these contributions themselves. They also handle Federal Unemployment Insurance (FUTA) taxes, typically 6%, but often reduced to 0.6% with credits. State-wise, they’re looking at a flat 4.95% income tax rate for net income and varying unemployment insurance rates—starting at 3.175% for new businesses and ranging from 0.675% to 6.875% for others, based on several factors including total wages paid. Don’t forget the Personal Property Replacement Tax, where C corporations pay 2.5% and S corporations, partnerships, and trusts pay 1.5% of net income. There’s also an elective pass-through entity tax at 4.95%, allowing for deductions against the federal state tax cap​. Keeping on top of these taxes is key for any Illinois employer to stay compliant and avoid penalties.

Yes, a Business Tax ID and an EIN (Employer Identification Number) refer to the same thing. They are used interchangeably to describe the unique nine-digit number assigned by the IRS to businesses operating in the United States. This number is essential for a variety of business operations, including filing taxes, opening business bank accounts, and hiring employees. The EIN is like a social security number but for businesses, providing a way to identify a business entity for federal tax purposes. It’s a crucial part of the documentation needed to legally and financially establish and run a business in the U.S.

No, business tax returns are not public record in the United States. Whether for personal or business taxes, the information you provide on your tax returns is confidential. The IRS or your tax preparer cannot share details from your taxes with third parties without your explicit consent. This rule applies universally, ensuring that the financial details disclosed in your tax filings remain private and are protected from public access

Taxes are financial charges imposed by a government on individuals, businesses, or other entities. For individuals, taxes are typically levied on income, purchases, property, and investments. The amount owed in taxes depends on various factors, including income level, filing status, and applicable tax rates, which can vary from one jurisdiction to another.

Deductions, on the other hand, are specific expenses allowed by the tax code that individuals and businesses can subtract from their gross income before calculating the amount of tax owed. Deductions effectively reduce taxable income, thereby potentially lowering the overall tax bill. They can include a wide range of expenses such as charitable donations, home mortgage interest, medical expenses, and business costs.

The relationship between taxes and deductions is straightforward: deductions reduce the amount of your income that’s subject to taxes, which can, in turn, reduce the amount of tax you owe.

In 2014, the largest portions of federal spending were allocated to health (27%), Social Security (23%), defense (17%), and income security (15%), with these categories comprising the majority of the budget. Other expenditures included veterans benefits, interest payments, and various government programs​

The three major business taxes in the United States are income tax, which is based on the net income of the company; payroll tax, which is paid on employees’ wages to fund Social Security and Medicare; and sales tax, applied to the sale of goods and services, varying by state and locality. These taxes are fundamental to business operations, affecting financial planning and legal compliance.

Real estate investors and agents can leverage various tax deductions, including expenses related to starting a business, costs incurred while searching for new property, advertising expenses, utilities paid by the owner, property maintenance fees, and insurance. Other notable deductions include mortgage interest, legal fees for evictions, expenses paid by tenants, and upgrades for energy efficiency. These deductions can significantly reduce taxable income, optimizing financial returns from real estate investments​.