Considering Tax Ramifications
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Considering Tax Ramifications in Illinois Business

Barrington Business Law Attorneys Serving Inverness, Algonquin, and Across the Area

It is critically important that business owners analyze the tax implications at the federal, state, and even at local levels. The law firm of Joseph M. Lucas & Associates, LLC has successfully led our business clients in the proper direction for over 25 years. The only constant in the realm of business law and taxation is change, and we are here locally in Barrington to effectively guide your company.

Illinois Tax Incentives

It has been reported that many within the Illinois business community are concerned about a lack of available tax incentives (Crain's Chicago Business). Data suggests the Prairie State is losing ground in the market compared to neighboring Indiana and Wisconsin, both of which enjoy robust packages to incentivize growth and investment. Fortunately, the state senate has verbally supported the implementation of comparable stimulus initiatives. Seeking advantages of available state incentives is certainly no substitute for careful tax planning and proactive analysis, as there is no certainty that your company ultimately qualify for any of them.

Comparing Avoidance to Evasion

It is critical to have a broad understanding of strategies that allow you to avoid tax liability throughout the various aspects of your business. In doing so, it is essential to differentiate sound business tax transactions and accounting practices from activity that is legally evasive. If you lack the knowledge and understanding in this realm internally, it is strongly suggested that you pursue professional external tax assistance. Inadvertent underreporting of taxable income, inconsistent record-keeping, errors concerning deductions, or instances of overlapping business and personal expenses can lead to violations, regardless of intent.

Business Entity Tax Evaluation

Those who have just recently established their business likely considered the tax ramifications in selecting the entity or structure. Operating as a sole proprietor, partnership, LLC, or another form of a corporation all have different models relative to taxation. Perhaps your business was established several years ago, and variables within the organization such as revenue, expenses, and employees have considerably changed. During the time that your business has evolved, so have the business tax rules and regulations. At this point, it is best to reevaluate your options, as an alternate may perform better as it relates to taxes.

Timing of Events Impacting Tax Liability

Your company taxes are based largely on the transactions which occurred in a given tax year. When you have opportunities to plan carefully, you may uncover significant advantages from accelerating or delaying the timing of events such as when you recognize income or incur larger expenses. For example, it may be highly beneficial to receive a large payment from a client in the next tax year cycle.

Local Tax Related Incentives

The City of Chicago's economic assistance and incentives are coordinated by the Department of Planning and Development. These programs are a good illustration of locally-based opportunities for many businesses to improve their tax outlook. Such examples include:

  • The Property Tax 6(b) program offers multi-year tax relief from the 25 percent industrial standard rate.
  • Class 7 (a & b) real estate tax benefits for properties and projects in certain commercial and redevelopment zones.
  • The city offers a Class C incentive specifically available for the benefit of organizations assuming projects in industrial or commercial properties which were subject to contamination.

Contact Our Barrington Business Lawyers

The lawyers at Joseph M. Lucas & Associates, LLC offer full-service representation for businesses throughout the stages of the business life cycle. From establishing a new entity, to evaluating the tax consequences of selling your company, we can have a positive impact. Contact the office today at 847-381-8700 to initiate a discussion with a member of our team. We serve clients in Inverness, Algonquin, Palatine, Cary in order of importance, Fox River Grove, Kildeer, Wauconda, Island Lake, Lake Zurich, Tower Lakes, Hawthorn Woods, and throughout the area.

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