Generated by All in One SEO Pro v5.0.1.1, this is an llms-full.txt file, used by LLMs to index the site. # Warady & Davis LLP Top 25 Chicago CPA Firm | Accountants | Consultants ## Posts ### [TIE Blog](https://waradydavis.com/blog/) **Published:** December 22, 2020 **Author:** WaradyDavis **Content:** [![COVID-19 IRS Penalty Relief: What Taxpayers Need to Know](https://waradydavis.com/wp-content/uploads/2026/06/WD-article-cut-covid-19-irs-penalty-relief-may-2026-400x250.png)](https://waradydavis.com/covid-19-irs-penalty-relief-what-taxpayers-need-to-know/) ## [COVID-19 IRS Penalty Relief: What Taxpayers Need to Know](https://waradydavis.com/covid-19-irs-penalty-relief-what-taxpayers-need-to-know/) A recent court ruling may provide relief from COVID-19 IRS penalties. Learn who may qualify and why the July 10, 2026, deadline matters. [read more](https://waradydavis.com/covid-19-irs-penalty-relief-what-taxpayers-need-to-know/) --- ### [IRS offers guidance on taxation of phased retirement payments](https://waradydavis.com/irs-offers-guidance-on-taxation-of-phased-retirement-payments/) **Published:** July 13, 2016 **Author:** WaradyDavis **Excerpt:** Phased retirement has become an increasingly popular trend lately. Along with its increased use, however, a number of questions have arisen. The IRS recently has issued guidance for determining the taxable portion of payments made to an employee during phased retirement. The guidance explains whether the payments are “received as an annuity” under Code Sec. 72 and how to determine the taxable portion of payments that are not received as an annuity. **Content:** # IRS offers guidance on taxation of phased retirement payments **Categories:** Employee Benefit Plans, Perspectives on Employee Benefits --- ### [401(K) and Retirement Plan Limits for 2016 Tax Year](https://waradydavis.com/401k-and-retirement-plan-limits-for-the-tax-year-2016/) **Published:** January 1, 2016 **Author:** WaradyDavis **Excerpt:** On October 21, 2015, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2016. In general, the pension plan limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment. However, other limitations will change because the increase in the index did meet the statutory thresholds. **Content:** # 401(K) and Retirement Plan Limits for 2016 Tax Year **Categories:** Perspectives on Employee Benefits --- ### [Year-End Tax Planning Strategies for Your Business](https://waradydavis.com/year-end-tax-planning/) **Published:** December 6, 2022 **Author:** Leslie Flinn **Excerpt:** As 2022 winds down, now is the time for your business to take stock of its tax situation and implement year-end tax planning strategies. **Content:** # Year-End Tax Planning Strategies for Your Business **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Some Proposals in Obama's FY 2017 Budget Could Gain Traction in 2016](https://waradydavis.com/some-fye-2017-budget-proposals-could-gain-traction-in-2016/) **Published:** April 1, 2016 **Author:** WaradyDavis **Excerpt:** Enhanced Code Sec. 179 expensing and the high-dollar health care excise tax are two proposals in President Obama’s fiscal year (FY) 2017 budget that could become law before the end of his term. Other proposals nclude enhancements to small business tax incentives, expanded opportunities for retirement savings, revisions to the net investment income (NII) tax, and more. **Content:** # Some Proposals in Obama’s FY 2017 Budget Could Gain Traction in 2016 **Categories:** The Bottom Line --- ### [Top Ten Tax Developments for 2014 Impacting 2015](https://waradydavis.com/top-ten-tax-developments-for-2014-impacting-2015/) **Published:** January 1, 2015 **Author:** WaradyDavis **Content:** # Top Ten Tax Developments for 2014 Impacting 2015 **Categories:** The Bottom Line --- ### [Congress to Vote on New Covid-19 Stimulus Deal](https://waradydavis.com/congress-to-vote-on-new-stimulus-deal/) **Published:** December 21, 2020 **Author:** Leslie Flinn **Content:** # Congress to Vote on New Covid-19 Stimulus Deal **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, necessity questionnaire, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP necessity questionnaire, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Are you eligible for unemployment insurance? Here’s what to know](https://waradydavis.com/are-you-eligible-for-unemployment-insurance-heres-what-to-know/) **Published:** April 6, 2020 **Author:** Leslie Flinn **Content:** # Are you eligible for unemployment insurance? Here’s what to know **Categories:** Business, Business Management, COVID, Financial Planning, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Update: COVID Economic Injury Disaster Loan Program](https://waradydavis.com/update-covid-economic-injury-disaster-loan-program/) **Published:** September 23, 2021 **Author:** Leslie Flinn **Content:** # Update: COVID Economic Injury Disaster Loan Program **Categories:** COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, PPP2 loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Adjust your expectations of business interruption coverage](https://waradydavis.com/adjust-your-expectations-of-business-interruption-coverage/) **Published:** June 2, 2020 **Author:** Leslie Flinn **Content:** # Adjust your expectations of business interruption coverage **Categories:** Business, Business Management, COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago CPA, Chicago CPA Firm, Chicago Small Business, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, small business coronavirus, small business covid-19, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [COVID-19 Relief Bill Addresses Key PPP Issues](https://waradydavis.com/new-stimulus-bill-addresses-key-ppp-issues/) **Published:** December 22, 2020 **Author:** Leslie Flinn **Content:** # COVID-19 Relief Bill Addresses Key PPP Issues **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [PPP Loan Forgiveness Q&A](https://waradydavis.com/ppp-loan-forgiveness-qa/) **Published:** May 13, 2020 **Author:** Leslie Flinn **Content:** # PPP Loan Forgiveness Q&A **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Answers to More CARES Act Emergency Loan Questions - Round 2](https://waradydavis.com/answerstoquestions-emergency-loans/) **Published:** April 2, 2020 **Author:** Leslie Flinn **Content:** # Answers to More CARES Act Emergency Loan Questions – Round 2 **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Treasury Releases Favorable PPP Economic Need Certification Guidance](https://waradydavis.com/ppp-economic-need-certifications/) **Published:** May 13, 2020 **Author:** Leslie Flinn **Content:** # Treasury Releases Favorable PPP Economic Need Certification Guidance **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago CPA, Chicago CPA Firm, Chicago Small Business, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Economic Injury Disaster Loans, EIDL, EIDL funding, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Interim Stimulus Plan, Northshore CPA, Paycheck Protection Program, PPP funding, PPP Loans, small business coronavirus, small business covid-19, small business stimulus relief, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [PPP and EIDL Loan Programs On Hold. What's Next?](https://waradydavis.com/ppp-eidl-onhold-whats-next/) **Published:** April 20, 2020 **Author:** Leslie Flinn **Content:** # PPP and EIDL Loan Programs On Hold. What’s Next? **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The Tax Cut and Jobs Act (TCJA)](https://waradydavis.com/the-tax-cut-and-jobs-act-tcja/) **Published:** December 22, 2017 **Author:** WaradyDavis **Excerpt:** On December 22, President Trump signed into law H.R. 1, the “Tax Cuts and Jobs Act,” a sweeping tax reform law that promises to entirely change the tax landscape. Here is a quick rundown of some of the key changes affecting individual and business taxpayers. Except where noted, these changes are effective for tax years beginning after December 31, 2017. **Content:** # The Tax Cut and Jobs Act (TCJA) **Categories:** E-Alerts --- ### [Businesses Can Still Cut 2024 Taxes](https://waradydavis.com/businesses-can-still-cut-2024-taxes/) **Published:** December 16, 2024 **Author:** Leslie Flinn **Excerpt:** Implementing tax strategies now can help your company save big on its next return. Discover how businesses can still reduce their 2024 taxes effectively. **Content:** # Businesses Can Still Cut 2024 Taxes **Categories:** Business, E-Alerts, Hot Topics, Perspectives on Employee Benefits, Profitable Solutions for Nonprofits, Tax, The Bottom Line, Uncategorized **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New Revenue Recognition Standard](https://waradydavis.com/new-revenue-recognition-standard/) **Published:** February 26, 2019 **Author:** Leslie Flinn **Content:** # New Revenue Recognition Standard **Categories:** Audit & Accounting, Business, Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New Stimulus Proposal: The Heals Act](https://waradydavis.com/new-stimulus-proposal-heals-act/) **Published:** July 28, 2020 **Author:** Leslie Flinn **Content:** # New Stimulus Proposal: The Heals Act **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Still waiting for your stimulus check?](https://waradydavis.com/still-waiting-for-your-stimulus-check/) **Published:** June 4, 2020 **Author:** Leslie Flinn **Content:** # Still waiting for your stimulus check? **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New Partnership Basis Reporting](https://waradydavis.com/partnership-basis-reporting/) **Published:** November 8, 2019 **Author:** webmaster **Content:** That was, of course, until now. Effective for tax years beginning after December 31, 2017, the Internal Revenue Service has changed the instructions to the Form 1065 K-1 to include basis reporting requirements. ## What are the new basis reporting requirements and who do they affect? This change directly affects partnerships that are reporting their partners’ capital accounts on an alternative, non-tax basis, such as GAAP, 704(b) or any other acceptable hybrid method. The change in reporting requires those partnerships not reporting their capital accounts on the income tax method of accounting to additionally report on a partner’s K-1 when their tax basis capital is negative, at either the beginning or the end of the year. ## What is tax basis capital and why does the IRS care to have it reported by the partnerships? Tax basis capital is defined as the amount of cash and the tax basis of property contributed to a partnership by a partner, less the amount of cash, and the tax basis of property distributed to a partner by the partnership, plus the partner’s cumulative share of the partnership’s taxable and non-taxable income and losses. The believed intent of the IRS is to identify circumstances in which the partners are required to recognize income or gain or to identify losses that the partners are limited in deducting as a result of having a negative tax basis. ## Why would a partnership care about reporting these items if they only affect the partners? The penalty for not complying with this change in reporting is $195 per partner, per month until corrected. This penalty can add up quickly. For example, a partnership that has 10 investors and a negative tax capital account would be penalized $23,400 if not corrected for the year. This is true even if only one of the partners’ tax capital accounts goes negative. Fortunately, on March 7, 2019, the IRS provided temporary relief to partnerships who failed to provide their required tax basis capital account information on their 2018 tax returns. The IRS waived the penalty until March 2020 if the 2018 tax return is filed on time or within the extension period, and the partnership provides a schedule to the IRS detailing the partners who have a negative tax basis. While the temporary relief is welcome, [recreating partnership tax basis for each partners](https://waradydavis.com/partnerships-get-ready-for-new-audit-rules/)’ capital account can be very time consuming. It requires a review of all prior year tax returns, Schedule K-1s, and items which could occur outside of the partnership itself such as changes in ownership. Creating this tax capital schedule means that many partnerships will be required to have at least two sets of capital accounts (tax basis and non-tax basis) for each partner. Adding these new basis reporting requirements to the already established loss limitation rules (i.e. basis limits, at-risk limits, passive activity loss limits and the new limitation on excess business losses for non-corporate taxpayers enacted by the Tax Cuts and Jobs Acts) creates an increasingly challenging and complex tax environment for partnerships. If you have any questions or need guidance complying with the new reporting requirements, or the loss limitations rules, please contact Warady & Davis LLP at 847-267-9600. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New tax law brings big changes for individual taxpayers](https://waradydavis.com/new-tax-law-brings-big-changes-for-individual-taxpayers/) **Published:** January 3, 2018 **Author:** WaradyDavis **Content:** # New tax law brings big changes for individual taxpayers **Categories:** Tax Legislation --- ### [How will the Tax Cuts and Jobs Act affect your estate plan?](https://waradydavis.com/how-will-the-tax-cuts-and-jobs-act-affect-your-estate-plan/) **Published:** January 5, 2018 **Author:** WaradyDavis **Excerpt:** Effective January 1, 2018, the Tax Cuts and Jobs Act reduces individual and corporate tax rates, eliminates a host of deductions and credits, enhances other breaks and makes numerous additional changes. One thing the TCJA doesn’t do is repeal the federal gift and estate tax. It does, however, temporarily double the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption, creating new estate planning challenges and opportunities. **Content:** # How will the Tax Cuts and Jobs Act affect your estate plan? **Categories:** Estate Planning, Tax Legislation --- ### [Congress passes biggest tax bill since 1986](https://waradydavis.com/congress-passes-biggest-tax-bill-since-1986/) **Published:** December 20, 2017 **Author:** WaradyDavis **Content:** # Congress passes biggest tax bill since 1986 **Categories:** Tax Legislation --- ### [Many factors are involved when choosing a business entity](https://waradydavis.com/many-factors-are-involved-when-choosing-a-business-entity/) **Published:** October 1, 2021 **Author:** Leslie Flinn **Content:** # Many factors are involved when choosing a business entity **Categories:** Business Management --- ### [Recent Tax Changes Reflected in New IRS Study](https://waradydavis.com/recent-tax-changes-reflected-in-new-irs-study/) **Published:** July 13, 2016 **Author:** WaradyDavis **Excerpt:** The IRS recently released its Spring 2016 Statistics of Income (SOI) Bulletin containing a treasure-trove of useful information. The bulletin contains data gleaned from more than 148 million individual income tax returns filed for the 2014 tax year (TY). The data for 2014 reveal a corresponding increase in tax liability across all tax brackets. The SOI bulletin presents the most recent figures available for the 2014 tax year from various tax and information returns filed by U.S. taxpayers. In addition, the report compares the data to similar statistics measured in 2013. In general, the latest report shows a continued improvement in the national economy, year over year. **Content:** # Recent Tax Changes Reflected in New IRS Study **Categories:** The Bottom Line --- ### [Build Back Better Act proposed tax changes](https://waradydavis.com/build-back-better-act-proposed-tax-changes/) **Published:** October 20, 2021 **Author:** Leslie Flinn **Content:** # Build Back Better Act proposed tax changes **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Build Back Better Act, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Infrastructure Investment and Jobs Act, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [2025 tax calendar](https://waradydavis.com/2025-tax-calendar/) **Published:** January 1, 2025 **Author:** Leslie Flinn **Content:** # 2025 tax calendar **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [2022 cost-of-living adjustments](https://waradydavis.com/2022-cost-of-living-adjustments/) **Published:** November 10, 2021 **Author:** Leslie Flinn **Content:** # 2022 cost-of-living adjustments **Categories:** Business, Business Management, Hot Topics, Tax --- ### [Illinois Secure Choice Applies to More Businesses](https://waradydavis.com/illinois-secure-choice-applies-to-more-businesses/) **Published:** June 2, 2022 **Author:** Leslie Flinn **Excerpt:** Illinois Secure Choice Now Applies to More Businesses. If you have 5 or more employees and do not offer a retirement savings plan, take action now. **Content:** # Illinois Secure Choice Applies to More Businesses **Categories:** Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, PPP2 loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The SECURE Act changes the rules for employers](https://waradydavis.com/the-secure-act-changes-the-rules-for-employers/) **Published:** February 23, 2020 **Author:** Leslie Flinn **Content:** # The SECURE Act changes the rules for employers **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New Mandatory Retirement Program for Illinois Employers](https://waradydavis.com/new-mandatory-retirement-program-for-illinois-employers/) **Published:** January 15, 2016 **Author:** WaradyDavis **Content:** # New Mandatory Retirement Program for Illinois Employers **Categories:** E-Alerts --- ### [New law helps businesses make their employees’ retirement SECURE](https://waradydavis.com/new-law-helps-businesses-make-their-employees-retirement-secure/) **Published:** January 23, 2020 **Author:** Leslie Flinn **Content:** # New law helps businesses make their employees’ retirement SECURE **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Meals, entertainment and transportation may cost businesses more under the TCJA](https://waradydavis.com/meals-entertainment-and-transportation-may-cost-businesses-more-under-the-tcja/) **Published:** January 15, 2018 **Author:** WaradyDavis **Content:** # Meals, entertainment and transportation may cost businesses more under the TCJA **Categories:** Tax Legislation --- ### ["Repair" Regulations Require Taxpayer Action in 2014 and Beyond](https://waradydavis.com/repair-regulations-require-taxpayer-action-in-2014-and-beyond/) **Published:** May 9, 2016 **Author:** WaradyDavis **Content:** # “Repair” Regulations Require Taxpayer Action in 2014 and Beyond **Categories:** Tax Legislation --- ### [Large Employers: Affordable Care Act Tax Overview](https://waradydavis.com/large-employers-affordable-care-act-tax-overview/) **Published:** May 9, 2016 **Author:** WaradyDavis **Content:** # Large Employers: Affordable Care Act Tax Overview **Categories:** Tax Legislation --- ### [Election Year Politics Dominate Tax Legislative Action](https://waradydavis.com/tax-legislation-moves-forward-before-congress-august-recess/) **Published:** July 13, 2016 **Author:** WaradyDavis **Excerpt:** As Congress’ August recess nears, lawmakers are moving tax legislation for individuals and businesses. Bills targeted to tax reform, small business tax relief, and more have been introduced and are working their way to votes in the House and Senate. Congress is also grappling with the IRS’s budget for fiscal year (FY) 2017. **Content:** # Election Year Politics Dominate Tax Legislative Action **Categories:** The Bottom Line --- ### [Congress Faces Busy Tax Agenda Before the Presidential Election](https://waradydavis.com/congress-faces-busy-tax-agenda-before-the-presidential-election/) **Published:** September 27, 2016 **Author:** WaradyDavis **Excerpt:** Learn about what's on Congress' plate between now and the November election including Included many tax-related bills, potentially impacting individuals, businesses and others. **Content:** # Congress Faces Busy Tax Agenda Before the Presidential Election **Categories:** The Bottom Line --- ### [Is Your Not-for-Profit Complying with the Affordable Care Act?](https://waradydavis.com/is-your-not-for-profit-complying-with-the-affordable-care-act/) **Published:** January 1, 2015 **Author:** WaradyDavis **Excerpt:** Like many businesses in the for-profit sector, nonprofit organizations need to ensure they are continuing to comply with the Affordable Care Act (ACA). Organizations that fail to comply may face stiff penalties. **Content:** # Is Your Not-for-Profit Complying with the Affordable Care Act? **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Treasury Seeks to Limit Certain Valuation Discounts for Family-Controlled Entities: Proposed 2704 Regulations](https://waradydavis.com/treasury-seeks-to-limit-certain-valuation-discounts-for-family-controlled-entities-proposed-2704-regulations-2/) **Published:** August 18, 2016 **Author:** WaradyDavis **Excerpt:** Proposed regulations under section 2704 of the Internal Revenue Code were released earlier this month in regard to valuation of interests in many family-controlled entities for estate, gift, and generation-skipping transfer tax purposes. The proposed regulations are looking to limit the amount of certain valuation discounts and this could mean increased estate taxes on the death of owners of family businesses and/or entities. **Content:** # Treasury Seeks to Limit Certain Valuation Discounts for Family-Controlled Entities: Proposed 2704 Regulations **Categories:** E-Alerts --- ### [A Look at Corporate Sponsorship](https://waradydavis.com/a-look-at-corporate-sponsorship/) **Published:** November 15, 2015 **Author:** WaradyDavis **Excerpt:** Accepting a corporate sponsorship to help fund one or a series of events or simply to provide ongoing support for your organization’s programs and operations can benefit both the organization and the corporation -- if the sponsorship is arranged properly. In addition to the corporate sponsor’s financial support, your organization may receive in-kind services and/or product donations, along with increased media attention that can boost public support for your mission. For the corporation, the sponsorship offers public recognition of the business’ charitable activities, which may help it attract new customers and enhance its reputation. **Content:** # A Look at Corporate Sponsorship **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Update: nonprofit fraud](https://waradydavis.com/update-nonprofit-fraud/) **Published:** July 20, 2020 **Author:** Leslie Flinn **Content:** # Update: nonprofit fraud **Categories:** Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Chicago nonprofit aidot, Chicago nonprofit fraud preventation, Chicago Nonprofit tax, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, nonprofit fraud, Northshore CPA, not-for-profit fraud, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Tips for Preventing Fraud in Your Organization](https://waradydavis.com/tips-for-preventing-fraud-in-your-organization/) **Published:** January 2, 2015 **Author:** WaradyDavis **Excerpt:** If your nonprofit became a victim of fraud, it wouldn’t just hurt your organization’s bottom line — the infraction also could do devastating damage to your reputation. By implementing some simple controls, though, your organization can help protect itself from these risks. **Content:** # Tips for Preventing Fraud in Your Organization **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [The Fed's Main Street Lending Program: Who's Eligible?](https://waradydavis.com/mainstreet-lending-program/) **Published:** April 13, 2020 **Author:** Leslie Flinn **Content:** # The Fed’s Main Street Lending Program: Who’s Eligible? **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Making sense of FASB’s new accounting standard for nonprofits](https://waradydavis.com/making-sense-of-fasbs-new-accounting-standard-for-nonprofits-2/) **Published:** April 10, 2017 **Author:** WaradyDavis **Excerpt:** The FASB recently released its first update to the financial reporting rules for nonprofits since 1993. The new Accounting Standards Update (ASU) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, will affect the financial statements of most nonprofits when it takes effect. This article explains the standard’s new net asset classes, how liquidity and available resources reporting has changed, and the new requirements for reporting expenses and investment return. How to present operating cash flows is also briefly discussed. A sidebar outlines the FASB’s goals for the new standard. **Content:** # Making sense of FASB’s new accounting standard for nonprofits **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [FASB accounting rules delay in the works](https://waradydavis.com/fasb-accounting-rule-delays-in-the-works/) **Published:** August 29, 2019 **Author:** webmaster **Content:** # FASB accounting rules delay in the works **Categories:** Audit & Accounting **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Do you know the current value of your business?](https://waradydavis.com/do-you-know-the-current-value-of-your-business/) **Published:** June 1, 2019 **Author:** Leslie Flinn **Content:** # Do you know the current value of your business? **Categories:** Business, Business Management, Business Valuation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Handling Your Investments During the Pandemic](https://waradydavis.com/handling-your-investments-during-the-pandemic/) **Published:** September 9, 2020 **Author:** Leslie Flinn **Content:** # Handling Your Investments During the Pandemic **Categories:** Business, Business Management **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Chicago financial planning, Chicago wealth management, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New Tax Legislation: Should you file now or wait?](https://waradydavis.com/new-tax-legislation-should-you-file-now-or-wait/) **Published:** February 12, 2024 **Author:** Leslie Flinn **Excerpt:** The Tax Relief for American Families and Workers Act of 2024, passed in the House on January 31st. It is now waiting on revisions and/or vote in the Senate. **Content:** # New Tax Legislation: Should you file now or wait? **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The TCJA temporarily expands bonus depreciation](https://waradydavis.com/the-tcja-temporarily-expands-bonus-depreciation/) **Published:** January 29, 2018 **Author:** WaradyDavis **Content:** # The TCJA temporarily expands bonus depreciation **Categories:** Business, Tax Legislation --- ### [Favorable tax breaks for businessess](https://waradydavis.com/tax-cuts-and-jobs-act-offers-favorable-tax-breaks-for-businesses/) **Published:** January 2, 2018 **Author:** WaradyDavis **Content:** # Favorable tax breaks for businessess **Categories:** Tax Legislation --- ### [Congress Juggles Tax Issues](https://waradydavis.com/congress-juggles-tax-issues/) **Published:** May 9, 2016 **Author:** WaradyDavis **Content:** # Congress Juggles Tax Issues **Categories:** Tax Legislation --- ### [What's in the latest PPP loan forgiveness FAQs?](https://waradydavis.com/ppp-faqs-august411/) **Published:** August 4, 2020 **Author:** Leslie Flinn **Content:** # What’s in the latest PPP loan forgiveness FAQs? **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, PPP FAQs, ppp loan forgiveness, PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [What's In the Recent Executive Orders?](https://waradydavis.com/executive-orders/) **Published:** August 11, 2020 **Author:** Leslie Flinn **Content:** # What’s In the Recent Executive Orders? **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, executive order, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [SBA clarifies deferral period for PPP payments](https://waradydavis.com/sba-clarifies-deferral-period-for-ppp-payments/) **Published:** October 8, 2020 **Author:** Leslie Flinn **Content:** # SBA clarifies deferral period for PPP payments **Categories:** COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The Fed's Main Street Lending Program Updates](https://waradydavis.com/mainstreet-lending-program-updates-2/) **Published:** May 1, 2020 **Author:** Leslie Flinn **Content:** # The Fed’s Main Street Lending Program Updates **Categories:** Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Main Street Lending Program open to nonprofits](https://waradydavis.com/main-street-lending-program-open-to-nonprofits/) **Published:** July 20, 2020 **Author:** Leslie Flinn **Content:** # Main Street Lending Program open to nonprofits **Categories:** Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [What's in the CARES Act for You and Your Business?](https://waradydavis.com/whats-in-the-cares-act/) **Published:** March 29, 2020 **Author:** Leslie Flinn **Content:** # What’s in the CARES Act for You and Your Business? **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Employee Retention Credit: Are You Missing Out?](https://waradydavis.com/employee-retention-credit-are-you-missing-out/) **Published:** April 24, 2021 **Author:** Leslie Flinn **Content:** # Employee Retention Credit: Are You Missing Out? **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, PPP Application Deadline, PPP Deadline, PPP extended, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [IRS guidance provides RMD rollover relief](https://waradydavis.com/irs-guidance-provides-rmd-rollover-relief/) **Published:** July 7, 2020 **Author:** Leslie Flinn **Content:** # IRS guidance provides RMD rollover relief **Categories:** COVID, Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Retirement Plan Loans: The Pros and Cons](https://waradydavis.com/retirement-plan-loans-the-pros-and-cons/) **Published:** April 1, 2021 **Author:** WaradyDavis **Excerpt:** According to the Employee Benefit Research Institute, more than one-fifth (or 21%) of all 401(k) plan participants eligible for loans have loans outstanding at any given time. Looking out for the best interests of your plan participants might involve discouraging them from borrowing against their savings, at least in the absence of a personal financial crisis. **Content:** # Retirement Plan Loans: The Pros and Cons **Categories:** Employee Benefit Plans --- ### [PATH Act Boosts Tax Benefits for Businesses, Adds Certainty](https://waradydavis.com/path-act-boosts-tax-benefits-for-businesses-adds-certainty/) **Published:** May 16, 2016 **Author:** WaradyDavis **Content:** # PATH Act Boosts Tax Benefits for Businesses, Adds Certainty **Categories:** Tax Legislation --- ### [2025 Tax Proposals](https://waradydavis.com/2025-tax-proposals/) **Published:** February 11, 2025 **Author:** Leslie Flinn **Excerpt:** President Trump’s tax plan proposals include eliminating the estate tax, lifting the SALT cap, and cutting taxes on tips, overtime, and Social Security. **Content:** # 2025 Tax Proposals **Categories:** Tax, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Some deductions may be smaller (or nonexistent) for your 2018 tax return](https://waradydavis.com/some-deductions-may-be-smaller-or-nonexistent-for-your-2018-tax-return/) **Published:** February 26, 2019 **Author:** Leslie Flinn **Content:** # Some deductions may be smaller (or nonexistent) for your 2018 tax return **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New Extended Tax Deadlines and Economic Impact Payments](https://waradydavis.com/new-extended-tax-deadlines-and-economic-impact-payments/) **Published:** April 11, 2020 **Author:** Leslie Flinn **Content:** # New Extended Tax Deadlines and Economic Impact Payments **Categories:** COVID, Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, economic impact payments, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Take action now to reduce your 2023 income tax bill](https://waradydavis.com/take-action-now-to-reduce-your-2023-income-tax-bill/) **Published:** December 5, 2023 **Author:** Leslie Flinn **Excerpt:** Concerned about your 2023 tax liability? Here are a few tax planning strategies that can have a positive impact on reducing your tax burden for this year. **Content:** # Take action now to reduce your 2023 income tax bill **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [IRS issues updated 2018 withholding tables](https://waradydavis.com/irs-issues-updated-2018-withholding-tables/) **Published:** January 19, 2018 **Author:** WaradyDavis **Content:** # IRS issues updated 2018 withholding tables **Categories:** Tax --- ### [It’s a good time to check your withholding](https://waradydavis.com/its-a-good-time-to-check-your-withholding/) **Published:** May 31, 2019 **Author:** Leslie Flinn **Content:** # It’s a good time to check your withholding **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Business year-end tax planning](https://waradydavis.com/business-year-end-tax-planning/) **Published:** November 7, 2019 **Author:** webmaster **Content:** # Business year-end tax planning **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Businesses: Act Now to Make the Most Out of Bonus Depreciation](https://waradydavis.com/businesses-act-now-to-make-most-out-of-bonus-depreciation/) **Published:** August 9, 2022 **Author:** Leslie Flinn **Excerpt:** If your business plans to purchase bonus depreciation qualifying property, take action soon to realize a valuable tax break. **Content:** # Businesses: Act Now to Make the Most Out of Bonus Depreciation **Categories:** Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Update on Trump's Proposed Budget and Tax Reform](https://waradydavis.com/update-on-trumps-proposed-budget-and-tax-reform/) **Published:** July 12, 2017 **Author:** WaradyDavis **Content:** # Update on Trump’s Proposed Budget and Tax Reform **Categories:** Tax Legislation --- ### [All Legal Same-Sex Marriages Will Be Recognized for Federal Tax Purposes](https://waradydavis.com/all-legal-same-sex-marriages-will-be-recognized-for-federal-tax-purposes/) **Published:** May 9, 2016 **Author:** WaradyDavis **Content:** # All Legal Same-Sex Marriages Will Be Recognized for Federal Tax Purposes **Categories:** Tax Legislation --- ### [2 valuable year-end tax-saving tools for your business](https://waradydavis.com/2-valuable-year-end-tax-saving-tools-for-your-business/) **Published:** December 26, 2019 **Author:** Leslie Flinn **Content:** # 2 valuable year-end tax-saving tools for your business **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Tax Cuts and Jobs Act: Key provisions affecting individual taxpayers](https://waradydavis.com/tax-cuts-and-jobs-act-key-provisions-affecting-individual-taxpayers/) **Published:** January 5, 2018 **Author:** WaradyDavis **Content:** # Tax Cuts and Jobs Act: Key provisions affecting individual taxpayers **Categories:** Tax Legislation --- ### [Treasury Issues New FAQs on PPP Loan Forgiveness](https://waradydavis.com/treasury-issues-new-ppp-faqs/) **Published:** August 8, 2020 **Author:** Leslie Flinn **Content:** # Treasury Issues New FAQs on PPP Loan Forgiveness **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [PPP loan forgiveness update](https://waradydavis.com/ppp-loan-forgiveness-update/) **Published:** October 10, 2021 **Author:** Leslie Flinn **Content:** # PPP loan forgiveness update **Categories:** PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, PPP2 loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Filing Season Closes; Cybersecurity and Customer Service Top Priorities for IRS](https://waradydavis.com/irs-cyber-security-customer-service/) **Published:** May 1, 2016 **Author:** WaradyDavis **Excerpt:** The 2016 filing season has closed with renewed emphasis on IRS cybersecurity, tax-related identity theft and customer service. **Content:** # Filing Season Closes; Cybersecurity and Customer Service Top Priorities for IRS **Categories:** The Bottom Line --- ### [IRS ERTC Voluntary Disclosure Program Deadline](https://waradydavis.com/irs-ertc-voluntary-disclosure-program-deadline/) **Published:** February 28, 2024 **Author:** Leslie Flinn **Excerpt:** The IRS’s new Voluntary Disclosure Program may provide employers relief from penalties related to ineligible Employee Retention Tax Credit claims. **Content:** # IRS ERTC Voluntary Disclosure Program Deadline **Categories:** Business, Business Management, Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Businesses Still Have Time to Claim the ERC](https://waradydavis.com/businesses-still-have-time-to-claim-the-erc/) **Published:** December 6, 2022 **Author:** Leslie Flinn **Excerpt:** Employers may still claim the Employee Retention Credit (ERC) retroactively by filing amended payroll tax returns (Form 941-X) for tax years 2020 and 2021. **Content:** # Businesses Still Have Time to Claim the ERC **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New stimulus business and nonprofit benefits](https://waradydavis.com/the-american-rescue-plan-act-of-2021-business-nonprofit-benefits/) **Published:** March 12, 2021 **Author:** Leslie Flinn **Content:** # New stimulus business and nonprofit benefits **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act Individuals, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, American Rescue Plan Act Unemployment, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Important Employee Retention Credit Changes](https://waradydavis.com/important-employee-retention-credit-changes/) **Published:** November 9, 2021 **Author:** Leslie Flinn **Content:** # Important Employee Retention Credit Changes **Categories:** Business Management, COVID, Hot Topics, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, PPP2 loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Congress expands small business COVID-19 relief](https://waradydavis.com/congress-expands-small-business-covid-19-relief/) **Published:** April 24, 2020 **Author:** Leslie Flinn **Content:** # Congress expands small business COVID-19 relief **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago CPA, Chicago CPA Firm, Chicago Small Business, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Economic Injury Disaster Loans, EIDL, EIDL funding, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Interim Stimulus Plan, Northshore CPA, Paycheck Protection Program, PPP funding, PPP Loans, small business coronavirus, small business covid-19, small business stimulus relief, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Tax Scams Proliferate During Filing Season](https://waradydavis.com/tax-scams-proliferate-during-filing-season/) **Published:** March 20, 2017 **Author:** WaradyDavis **Excerpt:** The filing season is the most active time of the year for tax scams. These scams take every shape and form, ranging from telephone calls to individuals to sophisticated schemes targeting employers and businesses. The goal of all these scams is identity theft. **Content:** # Tax Scams Proliferate During Filing Season **Categories:** E-Alerts --- ### [A Few Good Reasons to File Your Taxes Now](https://waradydavis.com/a-few-good-reasons-to-file-your-taxes-now/) **Published:** February 6, 2015 **Author:** WaradyDavis **Content:** # A Few Good Reasons to File Your Taxes Now **Categories:** E-Alerts --- ### [Checking Your Service Providers’ Data Security System](https://waradydavis.com/checking-your-service-providers-data-security-system/) **Published:** June 1, 2021 **Author:** WaradyDavis **Excerpt:** Maintaining data security is a significant part of running any business. Breaches are inevitable — although not at every organization. Now is the time to ask your service providers about their data security. **Content:** # Checking Your Service Providers’ Data Security System **Categories:** Employee Benefit Plans --- ### [Are you ready for endowments?](https://waradydavis.com/are-you-ready-for-endowments/) **Published:** July 18, 2021 **Author:** WaradyDavis **Excerpt:** With baby boomers — the largest and wealthiest generation in U.S. history — expected to transfer trillions of dollars worth of assets in the next few decades, this could be the right time to launch an endowment. This article explains the two main types of endowments, describes the pros and cons, and addresses managing assets and spending restrictions. “Quasi” endowments also are discussed. **Content:** # Are you ready for endowments? **Categories:** Not-for-Profit --- ### [New favorable PPP rules for self-employed](https://waradydavis.com/new-ppp-rules-for-self-employed/) **Published:** March 4, 2021 **Author:** Leslie Flinn **Content:** # New favorable PPP rules for self-employed **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, PPP Gig Workers, PPP Independent Contractor, ppp loan expenses, ppp loan forgiveness, PPP Schedule C, PPP Self Employed, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The CARES Act liberalizes net operating losses](https://waradydavis.com/the-cares-act-liberalizes-net-operating-losses/) **Published:** June 2, 2020 **Author:** Leslie Flinn **Content:** # The CARES Act liberalizes net operating losses **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago CPA, Chicago CPA Firm, Chicago Small Business, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Economic Injury Disaster Loans, EIDL, EIDL funding, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Interim Stimulus Plan, Northshore CPA, Paycheck Protection Program, PPP funding, PPP Loans, small business coronavirus, small business covid-19, small business stimulus relief, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New tax law gives pass-through businesses a valuable deduction](https://waradydavis.com/new-tax-law-gives-pass-through-businesses-a-valuable-deduction/) **Published:** February 5, 2018 **Author:** WaradyDavis **Content:** Although the drop of the corporate tax rate from a top rate of 35% to a flat rate of 21% may be one of the most talked about provisions of the **Tax Cuts and Jobs Act (TCJA)**, C corporations aren’t the only type of entity significantly benefiting from the new law. Owners of noncorporate “pass-through” entities may see some major — albeit temporary — relief in the form of a new deduction for a portion of qualified business income (QBI). ## **A 20% deduction** For tax years beginning after December 31, 2017, and before January 1, 2026, the new deduction is available to individuals, estates and trusts that own interests in pass-through [business entities](https://waradydavis.com/many-factors-are-involved-when-choosing-a-business-entity/). Such entities include sole proprietorships, partnerships, S corporations and, typically, limited liability companies (LLCs). The deduction generally equals 20% of QBI, subject to restrictions that can apply if taxable income exceeds the applicable threshold — $157,500 or, if married filing jointly, $315,000. QBI is generally defined as the net amount of qualified items of income, gain, deduction and loss from any qualified business of the noncorporate owner. For this purpose, qualified items are income, gain, deduction and loss that are effectively connected with the conduct of a U.S. business. QBI doesn’t include certain investment items, reasonable compensation paid to an owner for services rendered to the business or any guaranteed payments to a partner or LLC member treated as a partner for services rendered to the partnership or LLC. The QBI deduction isn’t allowed in calculating the owner’s adjusted gross income (AGI), but it reduces taxable income. In effect, it’s treated the same as an allowable itemized deduction. ## **The limitations** For pass-through entities other than sole proprietorships, the QBI deduction generally can’t exceed the greater of the owner’s share of: - 50% of the amount of W-2 wages paid to employees by the qualified business during the tax year, or - The sum of 25% of W-2 wages plus 2.5% of the cost of qualified property. Qualified property is the depreciable tangible property (including real estate) owned by a qualified business as of year-end and used by the business at any point during the tax year for the production of qualified business income. Another restriction is that the QBI deduction generally isn’t available for income from specified service businesses. Examples include businesses that involve investment-type services and most professional practices (other than engineering and architecture). The W-2 wage limitation and the service business limitation don’t apply as long as your taxable income is under the applicable threshold. In that case, you should qualify for the full 20% QBI deduction. ## **Careful planning required** Additional rules and limits apply to the QBI deduction, and careful planning will be necessary to gain maximum benefit. Please contact Warady & Davis LLP at [(847) 267-9600]() for more details. **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2018 All Rights Reserved. **Categories:** Tax Legislation --- ### [PPP for the self-employed and independent contractors](https://waradydavis.com/ppp-opens-to-self-employed-and-icseasury-provides-ppp-clarity-2/) **Published:** April 20, 2020 **Author:** Leslie Flinn **Content:** # PPP for the self-employed and independent contractors **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Partnerships: Get ready for new audit rules](https://waradydavis.com/partnerships-get-ready-for-new-audit-rules/) **Published:** November 20, 2017 **Author:** WaradyDavis **Excerpt:** For partnerships, including limited liability companies taxed as partnerships, new audit rules are a game changer. The rules apply to returns for partnership tax years that begin after December 31, 2017, including amended returns. **Content:** # Partnerships: Get ready for new audit rules **Categories:** Tax Legislation --- ### [Nonprofits: Are you ready for the new contribution guidance?](https://waradydavis.com/nonprofits-are-you-ready-for-the-new-contribution-guidance/) **Published:** January 16, 2020 **Author:** Leslie Flinn **Content:** # Nonprofits: Are you ready for the new contribution guidance? **Categories:** Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Congress rolls back burdensome UBIT on transportation benefits](https://waradydavis.com/congress-rolls-back-burdensome-ubit-on-transportation-benefits/) **Published:** January 11, 2020 **Author:** Leslie Flinn **Content:** A much-hated tax on not-for-profit organizations is on the way out. At the end of 2019, Congress repealed a provision of 2017’s **Tax Cuts and Jobs Act (TCJA)** that triggered the unrelated business income tax (UBIT) of 21% on nonprofit employers that provide employees with transportation fringe benefits. Unequipped to handle the additional administrative burdens and compliance costs, thousands of nonprofits had complained — and legislators apparently listened. ## Same benefits, new costs At issue is the TCJA provision saying that nonprofits must count disallowed deduction amounts paid for transportation fringe benefits such as transit passes and parking in their UBIT calculations. UBIT applies to business income that isn’t related to the organization’s tax-exempt function. Thus, simply by continuing to provide some of the same transportation benefits they’ve always provided employees, nonprofits were liable for additional tax. For example, employers were forced to assign a value to parking spaces provided to employees. Such activities were time-consuming and burdensome, and the additional costs forced nonprofits to divert funds from pursuing their missions. Nonprofit coalition Independent Sector estimates that the [**transportation tax**](https://waradydavis.com/industry/transportation-logistics/) and related administrative costs set back nonprofits by an average $12,000. Fortunately, the repeal of the UBIT provision will be retroactive. Although the details haven’t yet been hammered out, nonprofits that paid the tax on applicable transportation benefits in 2018 and 2019 are expected to get their money back. ## Other developments Repealing the UBIT on certain transportation benefits isn’t the only recent legislation of interest to nonprofits. Last month, Congress also streamlined the foundation excise tax. The current two-tiered tax that many foundations protested will be replaced with a 1.39% revenue-neutral tax. Congress is likely to address other nonprofit demands — for example, for the introduction of a universal charitable deduction — in future sessions. We can help you stay current with the latest tax developments affecting nonprofits. Contact Warady & Davis LLP’s not-for-profit team at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Donor care during the COVID-19 pandemic](https://waradydavis.com/donor-care-during-the-covid-19-pandemic/) **Published:** April 23, 2020 **Author:** Leslie Flinn **Content:** One of the many challenges of operating a not-for-profit organization during the coronavirus (COVID-19) pandemic is that just when you desperately need financial support, many donors are unable to help. Widespread unemployment, stock market volatility and general uncertainty make even dependable donors reluctant to part with their money. Then there’s the fact that donors are receiving a staggering number of charitable solicitations right now. If your nonprofit doesn’t directly serve constituencies harmed by COVID-19, your appeals are likely to go to the bottom of donors’ piles. Here are some ideas for keeping your organization’s needs top of mind. ### Avoid mass appeals Now is generally not the time to make mass appeals for donations. If you do contact your entire mailing list, use the opportunity to express concern for your supporters’ well-being and to update them on how your organization is faring under the circumstances. Also let donors know that charitable donations made in 2020 are deductible up to $300, even if donors don’t itemize. To keep supporters engaged, stay on top of your social media accounts. Use Twitter, Facebook and other platforms to announce program suspensions and reopening dates and to share success stories — either recent or, if your nonprofit is temporarily closed, from the past. ### Build support Reach out to significant donors in person. Obviously, face-to-face meetings are out of the question, so give major supporters a phone call or arrange for a videoconference. Be sensitive to donors’ financial challenges and prepare to be flexible. If donors express the desire to help but can’t commit to an amount right now, suggest they might want to make a multi-year gift or include your nonprofit in their estate plans. Donors might also be able to provide your group with [**professional services**](https://waradydavis.com/industry/professional-services/) — such as PR expertise or legal advice — or be willing to contribute an item to an online fundraising auction. It’s a great time to learn more about major donors and ask them how they want to help, now and in the future. You may be surprised by their answers. Chances are these supporters are well established in the community and have friends and colleagues they can introduce to your nonprofit. If these well-connected donors aren’t already on your board, invite them to become members — or ask them to chair a future event. ### Resist the temptation Although you may be tempted to throw yourself on the mercy of donors, desperate appeals may not be wise right now. Donors generally want to invest in fiscally sound nonprofits that will be around for the long haul. So long as your nonprofit has adequate operating reserves and a contingency plan, you should be able to weather the current storm. ## We Are Here to Help Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago CPA, Chicago CPA Firm, Chicago Small Business, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Economic Injury Disaster Loans, EIDL, EIDL funding, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Interim Stimulus Plan, Northshore CPA, Paycheck Protection Program, PPP funding, PPP Loans, small business coronavirus, small business covid-19, small business stimulus relief, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Accounting Today 2023 Regional Leader](https://waradydavis.com/accounting-today-2023-regional-leader/) **Published:** May 9, 2023 **Author:** Leslie Flinn **Excerpt:** Wardy & Davis has been recognized as one of Accounting Today's 2023 Regional Leaders in the Great lakes for the seventh consecutive year. **Content:** Warady & Davis LLP is pleased to announce that for the seventh consecutive year, the firm has been named a Great Lakes Regional Leader by [Accounting Today](https://www.accountingtoday.com/) in their annual “Top 100 Firms and Accounting’s Regional Leaders” report. This recognition highlights top performing accounting firms in the second-largest region in terms of revenue. The Great Lakes region includes Illinois, Indiana, Michigan, Ohio, and Wisconsin. ![2023 Accounting Today Regional Leader](https://waradydavis.com/wp-content/uploads/2023/04/2023_AT_regional-leaders-1-300x170.png "2023_AT_regional leaders 1 | Warady & Davis LLP") This annual survey and awards program is designed to recognize and honor the best employers in the accounting industry, both nationwide and in 10 major geographic regions. Each year, several hundred firms participate in the survey process, which ranks firms to assess growth strategies and success through the previous year. Check out the full publication[ here. ](https://acrobat.adobe.com/link/review?uri=urn:aaid:scds:US:6d09df43-3e91-3a41-85b6-a08401fedab2) #### About Accounting Today Accounting Today is a leading provider of online business news for the accounting community, offering breaking news, in-depth features, and a host of resources and services. #### About Warady & Davis Founded in 1949 with a long list of distinguished clientele, W&D is a full-service, mid-size audit, accounting, tax and consulting firm providing solutions to [privately-held businesses](https://waradydavis.com/industry/owner-run-and-family-businesses/), owners, high net-worth individuals and their families. With 145+ firm members headquartered in north metropolitan Chicago, we serve clients in a wide variety of industries located throughout the United States and internationally. Client revenues may range from start-up enterprises to $500,000,000+ in annual revenue. Warady & Davis LLP is proud to be named a “100 Best Accounting Firms to Work for” nationally by Accounting Today, a “Best Place to Work for Millennials” in America by Best Companies and The Center for Generational Kinetics, and a “Best Place to Work in Illinois” by The Daily Herald. Together we create an exceptional, cohesive team of people who are passionate about what we do and are committed to our clients’ success and to each other. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Surviving the COVID-19 crisis: A not-for-profit action plan](https://waradydavis.com/surviving-the-covid-19-crisis-a-not-for-profit-action-plan/) **Published:** April 10, 2020 **Author:** Leslie Flinn **Content:** Although many not-for-profits have been hurt by the coronavirus (COVID-19) pandemic, your organization’s specific challenges likely depend on your mission, constituency and other factors. For example, social distancing rules have forced most arts organization to temporarily shut down and furlough employees. Many social services charities, on the other hand, have remained open and are struggling to meet surging demand for services. What unites the [not-for-profit sector](https://waradydavis.com/industry/not-for-profit/) right now is financial insecurity. Without reserves and a resilient revenue model, you may be unable to continue operations. Here’s some suggested steps to help keep your organization afloat. ### **Take stock** **First, determine your not-for-profit ’s cash position and how long you can continue operating if no new revenue comes in.** If you’ve built an emergency reserve fund, you may be able to continue for six or more months. Unfortunately, most charities have much thinner cash cushions — perhaps only enough to cover a few weeks of bills. **Next assess (or reassess) future cash flows.** Say, for example, that your mental health clinic uses a fee-for-services model, but your out-of-work clients can no longer afford the fees. Or perhaps your school raises 30% of its annual income with a gala that you’ve had to reschedule from April to October. You’re probably looking at some big shortfalls. **Be careful not to underestimate cash needs — particularly if demand for services has increased.** Assume that funding sources that were already shaky will evaporate and that usually reliable donors won’t be able to come to your rescue due to competing demands and their own financial concerns. ### **Seek solutions** Now look for alternative sources of financial support. If you haven’t already, see if your nonprofit qualifies for a loan under the federal government’s new Paycheck Protection Program. Loans to not-for-profit with less than 500 employees can be forgiven so long as you keep people on the payroll and adhere to other guidelines. Community foundations are another key source of emergency funding. More than 250 community foundations in all 50 states have created COVID-19 relief funds. Built for speed and flexibility, these funds have already announced $64 million in grants to local nonprofits directly addressing the crisis. Many private foundations and government funders have also stepped up to the plate by removing grant restrictions. Get in touch with current grantmakers to see if they can help ease burdens and increase monetary support. Now is also the time to touch base with restricted gift donors. Explain that by removing restrictions, they enable your not-for-profit to deploy funds where they’re most needed now. Finally, let all donors know that federal tax rules have been relaxed for certain charitable contributions. ### **Unpredictable future** It’s impossible to predict how long and severe the COVID-19 crisis will be, so prepare your organization for a tough fight. Contact your Warady & Davis LLP advisor at 847-267-9600 or info@waradydavis.com for help assessing your financial position and for advice about the new tax provisions. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or info@waradydavis.com. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved **Categories:** COVID, Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Fraud and the nonprofit - How to counter your vulnerabilities](https://waradydavis.com/fraud-and-the-nonprofit-how-to-counter-your-vulnerabilities/) **Published:** July 18, 2021 **Author:** WaradyDavis **Excerpt:** Every organization — whether for-profit or nonprofit — is at risk of falling victim to costly acts of fraud. Nonprofits, though, have some common characteristics that can make them particularly susceptible to such schemes. This article discusses organizational weak spots and advises on ways to combat risks by implementing some simple controls. **Content:** Every organization — whether for-profit or nonprofit — is at risk of falling victim to costly acts of fraud. Nonprofits, though, have some common characteristics that can make them particularly susceptible to such schemes. Fortunately, you can help combat the risks at your nonprofit by implementing some simple controls. ## Weak spots [Not-for-profits](https://waradydavis.com/industry/not-for-profit/) tend to operate in a culture of trust and rapport, and that’s one reason that they’re attractive targets for fraud perpetrators. Organizations are often founded by a handful of passionate and idealistic volunteers and develop over time into a team with tighter relationships than typically seen in many for-profit businesses. As a result, management may not feel the need for antifraud controls, or they find it hard to ask tough questions when confronted with possible signs of fraud. Similarly, many nonprofits place significant control in the hands of a limited number of people — for example, the founder, CEO or executive director. This is a risk even in an organization with some internal controls, because these powerful individuals can simply override the controls, with lower-level staff too intimidated to intervene. Nonprofits that have a lot of cash on hand, either in the office or at remote events, also can run into fraud problems. Cash has a way of disappearing into people’s pockets, especially at events held without proper accounting procedures. Creating a paper trail, with numbered tickets or receipts and multiple people involved every time cash is handled, helps mitigate the risk. These aren’t the only factors that make not-for-profits so vulnerable to fraud. High turnover among staff, volunteers and board members, as well as limited resources, also may contribute. ## Suggested controls Internal controls in the form of strong policies, procedures and governance are a must for every nonprofit, regardless of size. Controls can help deter and detect fraud. Perhaps the most critical control is *segregation of duties*. A single employee should never be responsible for all the steps in any accounting process — for example, collecting, recording, reconciling and depositing cash receipts. Segregating duties can be a challenge for smaller nonprofits. But, at the very least, the duties of handling and reconciling funds should involve more than one individual. And a separate individual should receive and review bank statements. If your nonprofit lacks the manpower, consider including board members or outside advisors to segregate duties. Just remember if you do so, your auditor cannot be part of your control process. Nonprofits also should conduct *background checks* on board members, employees, volunteers and anyone else who might handle cash. The checks should encompass credit history, references and criminal history and be updated periodically. Keeping a would-be perp out of the organization is well worth the cost of a background check. *Governance* plays a role in deterring and detecting fraud, too. Your board of directors must perform proper oversight by, for example, naming qualified individuals to independent finance and audit committees. It also should set an antifraud tone by developing — and enforcing — policies on matters such as conflicts of interest and the treatment of whistleblowers. We can assist you with such policies if you have not yet adopted them or they need to be updated or modified. The Association of Certified Fraud Examiners has consistently found that tips are the most common (and low-cost) detection method for occupational fraud. It’s best if tips are reported to the board or one of its committees, rather than management. The organization should make an anonymous fraud hotline available to employees, volunteers, vendors and clients. Finally, you’ll need to formally educate your employees about fraud. You should provide training on the organization’s antifraud policies, red flags that could signal fraud and how the hotline works. Board members and volunteers with financial responsibilities should receive training, as well. ## An ounce of prevention You can’t prevent all fraud — no organization can. But you can reduce the risk of substantial fraud losses by recognizing your vulnerabilities and taking appropriate steps to mitigate them and to investigate thoroughly when fraud is suspected. Choosing to ignore fraud and hope for the best may result in suffering both financial and reputational damage. ## Sidebar: Understanding the fraud triangle According to the Association of Certified Fraud Examiners, organizations worldwide lose about 5% of annual revenue to occupational fraud. Experts say occupational fraud is more likely to take place when three conditions are present: motive, rationalization and opportunity. ***Motive*.** The motive leg is sometimes referred to as “pressure.” The perpetrator has some motive to commit the fraud, and it often comes in the form of pressure, such as pressure to meet organizational goals. Motive also can be personal, including the need to pay off debt. ***Rationalization*.** Perpetrators are capable of justifying their dishonesty. Fraudsters might rationalize that they’ll pay the organization back eventually or that they deserve stolen assets because they feel they’re underpaid. ***Opportunity*.** Opportunity is the leg of the fraud triangle that employers can control. Perpetrators take advantage of opportunities when they think they won’t get caught. Weak internal controls and poor management can present opportunities for fraud. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2021 **Categories:** Not-for-Profit --- ### [Collaborative activities. Are you reporting them correctly?](https://waradydavis.com/collaborative-activities-are-you-reporting-them-correctly/) **Published:** November 2, 2016 **Author:** WaradyDavis **Excerpt:** More and more nonprofits are joining forces to better serve their client populations and cut costs. But such relationships can come with complicated financial reporting obligations. Your organization’s reporting requirements will depend on the type of relationship you enter. **Content:** #### More and more nonprofits are joining forces to better serve their client populations and cut costs. But such relationships can come with complicated financial reporting obligations. Your organization’s reporting requirements will depend on the type of relationship you enter. ### **Collaborative arrangements** The simplest relationship between nonprofits for accounting purposes may be a collaborative arrangement. These are typically contractual agreements in which two or more organizations are active participants in a joint operating activity. And both are vulnerable to significant risks and rewards that hinge on the activity’s commercial success. Examples include a hospital that’s jointly operated by two nonprofit health care organizations or multiple organizations that are working together to develop and produce a new medical product. Costs incurred and revenues generated from transactions with third parties should be reported, on a gross basis on its statement of activities, by the [not-for-profit](https://waradydavis.com/industry/not-for-profit/) who’s considered the “principal” for that specific transaction. Generally the principal is the entity that has control of the goods or services provided in the transaction, but follow Generally Accepted Accounting Principles (GAAP) for your particular situation. Payments between participants are presented according to their nature (following accounting guidance for the type of revenue or expense the transaction involves). Participants in collaborative arrangements also are required to make certain disclosures, such as the nature and purpose of the arrangement and each organization’s rights and obligations. ### **Mergers** In some circumstances, two organizations may determine that the best route forward is to form a new legal entity. A merger takes place when the boards of directors of both nonprofits cede control of themselves to the new entity. The assets and liabilities of the organizations are combined as of the merger date. Note that the accounting policies of the original entities must be conformed for the new entity. ### **Ceded control without creation of a new legal entity** Another option is for the board of one organization to cede control of its operations to another entity (for example, by allowing the other organization to appoint the majority of its board) as part of its decision to engage in the cooperative activity — but without creating a new legal entity. In this case, an *acquisition* has taken place, with the remaining organization considered the acquirer. The remaining entity must determine how to record the acquisition based primarily on the current value of the assets and liabilities of the organization acquired. If there’s an excess of value in the acquisition transaction, it should be recorded as a contribution. If the value is lower, the difference is generally recorded as goodwill. But, if the operations of the acquired organization are expected to be predominantly supported by contributions and return on investments, the difference should be recorded as a separate charge in the acquirer’s statement of activities. If your nonprofit assumes control of the other, and GAAP requires you to consolidate financial statements with the other entity, you must account for your interest in the other organization and the cooperative activity by applying an acquisition method described in GAAP. If the shoe is on the other foot, and it’s *your* not-for-profit that cedes control of its operations to another entity, the other organization may need to consolidate your organization (including the cooperative activity) beginning on the “acquisition” date. If your nonprofit will present its own separate financial statements, you must determine whether to establish a new basis for reporting assets and liabilities based on the other entity’s basis. ### **New legal entity to house only this collaboration** In many cases, if a new legal entity is formed, it’s used only to house the cooperative activity instead of all activities of the organizations that are collaborating. This would be neither a merger nor an acquisition. But to determine the proper accounting treatment, it’s important to look at which, if any, collaborator has control over the activity. ### **Proceed with caution** The benefits of collaborating with other nonprofits are usually clear — but the financial reporting rules often are anything but. Warady & Davis LLP’s not-for-profit team can help you understand the rules and comply with your reporting obligations. Please contact us at (847) 267-9600 with any questions you may have. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [W&D Spotlight - Sean Snowden, MBA, CVA - W&D Consulting LLC](https://waradydavis.com/wd-spotlight-sean-snowden-mba-cva-wd-consulting-llc/) **Published:** September 1, 2015 **Author:** WaradyDavis **Excerpt:** Sean Snowden, MBA, CVA, is the Managing Member and Director - Business Valuation Services at W&D Consulting LLC, an affiliate of W&D which specializes in business valuations services for clients in a wide range of industries and market niches. **Content:** **W&D Spotlight – [Sean Snowden, MBA, CVA, Managing Member – W&D Consulting LLC](https://waradydavis.com/staff/sean-snowden-mba-cva-managing-member-wd-consulting-llc/)** Sean Snowden, MBA, CVA, is the Managing Member and Director – Business Valuation Services at W&D Consulting LLC, an affiliate of W&D which specializes in [business valuations services](https://waradydavis.com/service/business-valuation-approach/) for clients in a [wide range of industries and market niches](https://waradydavis.com/industries/). Sean has performed over 700 valuations in various industries with an expertise in estate and gift, sale and/or purchase of interests in closely held entities, S corporation elections, mergers and acquisitions and other business purposes. Valuations have ranged from small businesses to companies with over $350,000,000 in annual sales. W&D Consulting LLC provides business valuation and consulting services on a confidential basis for closely-held business owners and high net-worth individuals and families as well as their professional advisors in accordance with nationally certified and recognized professional standards. W&D brings the essential credentials, knowledge and demanding analytical skills necessary to assess and value clients’ assets. **Key Services** W&D assists business owners, investors and professional advisors such as CPAs, attorneys, and financial planning consultants in value determination for the following areas: - Sales Mergers & Acquisitions - Estate & Gift Valuations - Succession Planning - Economic Damages - Shareholder Disputes - Buy/Sell Agreements - Fair Value Measurements - Valuation of Shares and Options - S Corp Election (C Corp to S Corp) - Asset Allocation - Goodwill Impairment - Matrimonial Litigation - Real Estate Property “Estimates of Value” - Expert Witness Testimony - Valuation Mediation - Partnership Admissions & Dissolutions - Family Wealth Transition - [Litigation Support](https://waradydavis.com/service/litigation-support-services/) Industry Areas** Valuations range from small companies to businesses with annual sales of over $500,000,000 in the following industries: - [Real Estate](https://waradydavis.com/industry/real-estate/) - Construction - Hospitality - [Manufacturing](https://waradydavis.com/industry/manufacturing-audit-accounting-and-tax-services/) - Distribution - [Wholesale](https://waradydavis.com/industry/wholesale-distribution/) - Retail - [Transportation](https://waradydavis.com/industry/transportation-logistics/) - Medical - [Technology](https://waradydavis.com/industry/technology/) - Service - Professional Practices - [Family Limited Partnerships/LLCs](https://waradydavis.com/industry/owner-run-and-family-businesses/) - Preferred Limited Partnerships/LLCs ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [21st Century Cures Act Expands use of HRAs by Small Employers](https://waradydavis.com/21st-century-cures-act-expands-use-of-hras-by-small-employers/) **Published:** January 18, 2017 **Author:** WaradyDavis **Excerpt:** The 21st Century Cures Act ("Act"), passed in late December, 2016, contains provisions for "Qualified Small Business Health Reimbursement Arrangements" ("HRA"). This new HRA would allow eligible small employers to offer a health reimbursement arrangement funded solely by the employer that would reimburse employees for qualified medical expenses including health insurance premiums. **Content:** **The 21st Century Cures Act** (“Act”), passed in late December, 2016, contains provisions for “Qualified Small Business Health Reimbursement Arrangements” (“HRA”). This new HRA would allow eligible small employers who do not offer a group health plan to ANY of their employees to offer a **“qualifying HRA” that employees can use to pay for medical care expenses including premiums for individual health policies.** This has not been allowed under the Affordable Care Act, and the IRS (as well as DOL) has issued various notices and guidance over the past few years, reiterating this prohibition and the penalties on noncomplying employers. **The new changes will be effective January 1, 2017.** The maximum reimbursement that can be provided under the plan is $4,950 or $10,000 if the HRA provided for family members of the employee. An employer is eligible to establish a small employer health reimbursement arrangement if that employer (i) is not subject to the employer mandate under the Affordable Care Act (i.e., less than 50 full-time employees) and (ii) does not offer a group health plan to any employees. To be a qualified small employer HRA, the arrangement must be provided on the same terms to all eligible employees, although the Act allows benefits under the HRA to vary based on age and family-size variations in the price of an insurance policy in the relevant individual health insurance market. Employers must report contributions to a reimbursement arrangement on their employees’ W-2 each year and notify each participant of the amount of benefit provided under the HRA each year at least 90 days before the beginning of each year. This new provision also provides that employees that are covered by this HRA will not be eligible for subsidies for health insurance purchased under an exchange during the months that they are covered by the employer’s HRA. Such HRAs are not considered “group health plans” for most purposes under the Code, ERISA and the Public Health Service Act and are not subject to COBRA. This new provision also overturns guidance issued by the Internal Revenue Service and the Department of Labor that stated that these arrangements violated the Affordable Care Act insurance market reforms and were subject to a penalty for providing such arrangements. The previous IRS and DOL guidance would still prohibit these arrangements for larger employers. The provision is effective for plan years beginning after December 31, 2016. (There was transition relief for plans offering these benefits that ends December 31, 2016 and extends the relief given in IRS Notice 2015-17.) The Act includes numerous other provisions including various areas of medical research and devices, HIPAA privacy and security-related projects for the Department of Health and Human Services (HHS); faster approval process for new medications and medical devices by the Food and Drug Administration (FDA); mental health and substance use disorder; Medicare and Medicaid; and provisions affecting President Obama’s Precision Medicine Initiative and Vice President Biden’s Cancer Moonshot effort ($1.8 billion for cancer research). For a copy of the new Act, please click on the link: [**https://www.congress.gov/114/bills/hr34/BILLS-114hr34eah.pdf**](https://r20.rs6.net/tn.jsp?f=001w8wQaf9GEWxMTB756UOagPCJQsuvDiBZrLdZTcPk-GUtzZJ_ERZYa9w5D0ASB-CmQtT-UYhUhx2dYkmjnTOjcwjsgmj0YqSx-Rc0-fDuo0dAhgylJvZQkc146jB-LYP_iKDWxnNLn2-iwYvhubAF_-aonPJNiGoLGB8UX9oRKvwRrtCmi5I4OSetatYNNrLqiJZjeFZfMi_vj-1UzlTlZTRfcDvIu8vIGNYXyx-2b7A=&c=RlygOfFZEbBNXibzj1KubxaOZxphd7scch00eCbW1CUxUs4tW8ctCQ==&ch=ROa3q-LZS_cbbxkZ-2V_BCOaE8tBQf__xUOUMmXau5ezCkXlvumL9Q==) The HRA provisions are contained in Section 18001 of the Act beginning on page 806. **Legal Notice**: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Tax Legislation --- ### [Repair Regulations Relief for Small Businesses](https://waradydavis.com/repair-regulations-relief-for-small-businesses/) **Published:** February 15, 2015 **Author:** WaradyDavis **Excerpt:** In Rev. Proc. 2015-20, the IRS substantially simplified the requirements for small businesses to adopt the tangible property regulations (the "repair regulations") for 2014. The relief allows small businesses to change their accounting methods, to comply with the regulations, without having to apply Code Sec. 481 and without having to file Form 3115, Application for Change in Accounting Method. **Content:** In Rev. Proc. 2015-20, the IRS substantially simplified the requirements for small businesses to adopt the tangible property regulations (the “repair regulations”) for 2014. The relief allows small businesses to change their accounting methods, to comply with the regulations, without having to apply Code Sec. 481 and without having to file Form 3115, Application for Change in Accounting Method. The repair regulations are broad and comprehensive, applying to any business that uses tangible property. The regulations totally redo the rules for deducting and capitalizing expenses associated with fixed assets. IRS adopted final regulations in September 2013, effective for tax years beginning on or after January 1, 2014. Taxpayers also have the option of applying the final regulations in 2012 and/or 2013. **Change of accounting method** Taxpayers ordinarily have to file Form 3115 to request IRS consent to change a method of accounting. The IRS provided automatic consent for taxpayers to change their accounting methods to comply with the repair regulations, but this did not relieve taxpayers of the requirement to file Form 3115. Furthermore, taxpayers changing their accounting method must apply Code Sec. 481(a), which requires them to calculate an adjustment to their accounting treatment of the same items for prior years, as if the new method were used in the prior years. Code Sec. 481 is designed to prevent any duplication of deductions or omission of income upon a change in accounting method. Small businesses in particular had complained to the IRS about the burden of implementing the regulations with a full Code Sec. 481 adjustment. Taxpayers would be required to go back in time (as far back as their books allow) and redo their analysis of prior year tangible property costs. **Relief** The IRS has now responded by providing relief from the requirements for changing an accounting method. [Small business taxpayers](https://waradydavis.com/industry/small-businesses/) can make the change without filing Form 3115 and without having to make a 481 adjustment. Instead, taxpayers can make the change on a “cutoff” basis, by taking into account only amounts paid or incurred, and dispositions of property, in their 2014 tax year. In effect, small business taxpayers can make the change prospectively. The relief applies to a taxpayer that has one or more separate and distinct trade(s) or business(es) with either total assets under $10 million at the start of the 2014 tax year, or that has average annual gross receipts of $10 million or less for the prior three years. **Claiming relief** Because the IRS provided automatic consent, taxpayers making the change for 2014 would not have to file Form 3115 until the deadline for their 2014 income tax return, either March 15 or, with an extension, September 15. So taxpayers (and their tax representatives) are right in the middle of the process to comply with the regulations for 2014. The timing of the IRS’s relief, in February 2015, is opportune, and gives small businesses plenty of time to comply with the regulations for 2014. The relief is elective. Small businesses can follow normal change of accounting procedures, or can use the relief provided in Rev. Proc. 2015-20. There are trade-offs to claiming the relief. For some taxpayers, there may be tax savings from applying Code Sec. 481 to prior years, regardless of the burden involved to make the calculations. Furthermore, taxpayers that do not file Form 3115 will not get audit protection for tax years before 2014. *Rev. Proc. 2015-20, IR-2015-29* As always, please contact your Warady & Davis LLP advisor at (847) 267-9600 if you have any questions or concerns. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Expanded retirement plan options for small business](https://waradydavis.com/dol-expands-retirement-plan-options-for-smaller-businesses/) **Published:** November 10, 2019 **Author:** webmaster **Content:** The U.S. Department of Labor (DOL) has released a final rule that should make it easier for smaller businesses to provide retirement plans to their employees. According to the DOL, the rule will enable more small and midsize unrelated businesses to join forces in multiple employer plans (MEPs) that provide their employees a defined contribution plan, such as a 401(k) plan or a SIMPLE IRA plan. Certain self-employed individuals also can participate in MEPs. In October 2018, [the DOL issued a proposed rule](https://waradydavis.com/overtime-updates-will-extend-protections-to-4-2-million-workers-2/) to clarify when an employer group or association, or a professional employer organization (PEO), can sponsor a MEP. (A PEO is a company that contractually assumes some human resource responsibilities for its employer clients.) The final rule, effective September 30, 2019, is similar to the proposal, but not entirely. ## The appeal of MEPs According to the DOL, businesses that participate in a MEP can see lower retirement plan costs as a result of economies of scale. For example, investment companies may charge lower fund fees for plans with greater asset accumulations. By pooling plan participants and assets in one large plan, rather than multiple small plans, MEPs make it possible for [small businesses](https://waradydavis.com/industry/small-businesses/) to give their workers access to the same low-cost funds offered by large employers. MEPs also let participating employers avoid some of the burdens associated with sponsoring or administering their own plans. Employers retain fiduciary responsibility for selecting and monitoring the arrangement and forwarding required contributions to the MEP, but they can effectively transfer significant legal risk to professional fiduciaries who are responsible for managing the plan. Although many MEPs already exist, the DOL believes that previous guidance, as well as uncertainty about the ability of PEOs and associations to sponsor MEPs as “employers” under the Employee Retirement Income Security Act (ERISA), may have hindered the formation of plans by smaller employers. The final rule clarifies when an employer group or association, or PEO, can sponsor a MEP. ## Permissible MEP sponsors Under the final rule, a group or association, a PEO, and self-employed people can qualify as employers under ERISA for purposes of sponsoring MEPs by satisfying different criteria. **Groups and associations:** Among other requirements, groups and associations of employers must have a “commonality of interest.” This means that the employers in an MEP must either: - Be in the same trade, industry, line of business, or profession, or - Have a principal place of business in the same geographic region that doesn’t exceed the boundaries of a single state or metropolitan area. (A metropolitan area can include more than one state.) Thus, a MEP could, for example, comprise employers in a national trade group or a local chamber of commerce. But the rule prohibits an employer group or association from being a bank, trust company, insurance issuer, broker-dealer, or other similar financial services firm (including a pension record keeper or a third-party administrator) and from being owned or controlled by such an entity or its subsidiary or affiliate. Such entities can, however, participate in their capacities as employer members. **PEOs:** The final rule requires PEOs to, among other things, perform “substantial employment functions” for their client-employers that adopt the MEP. In contrast to the proposed rule, the final rule includes a single safe harbor for all PEOs, regardless of whether they’re certified PEOs. And the new safe harbor includes only four criteria, rather than the proposed nine. **To be considered to perform substantial employment functions for its client-employers, the PEO must, for each client-employer that adopts the MEP:** 1. Assume responsibility for and pay wages to employees, without regard to the receipt or adequacy of payment from those clients. 2. Assume responsibility to pay and perform reporting and withholding for all applicable federal employment taxes, without regard to the receipt or adequacy of payment from those clients. 3. Play a definite and contractually specified role in recruiting, hiring, and firing workers, in addition to the client-employer’s responsibility for recruiting, hiring, and firing workers. 4. Assume responsibility for, and have substantial control over, the functions and activities of any employee benefit that the PEO is contractually required to provide, without regard to the receipt or adequacy of payment from those client employers for such benefits. **Self-employed individuals:** So-called “working owners” without employees may qualify as both an employer and an employee for purposes of the requirements for groups and associations. Such owners must: - Have an ownership right in a trade or business (including a partner or other self-employed individual), - Earn wages or self-employment income from the trade or business in exchange for personal services, and - Work on average at least 20 hours per week or 80 hours per month for the trade or business, or have wages or self-employment income from the trade or business that at least equals the working owner’s cost of coverage for participation by the owner and any covered beneficiaries in any group health plan sponsored by the group or association. The determination of whether an individual qualifies as a working owner must be made when he or she first becomes eligible for participation in the defined contribution MEP. Continued eligibility must be periodically confirmed using “reasonable monitoring procedures.” ## An open issue When it issued the proposed rule, the DOL solicited comments on “open MEPs” or “pooled employer plans” — which are defined contribution retirement arrangements that cover employees of employers with no relationship other than their joint participation in the MEP. After reviewing the feedback, the DOL decided that open MEPs deserve further consideration. It therefore issued, in conjunction with the final rule, a 16-page Request for Information. Responses are due October 29, 2019. Unlike the DOL, the U.S. Congress has the authority to amend ERISA and other laws that affect retirement savings. In May 2019, the House of Representatives passed legislation that would allow open MEPs. The Setting Every Community Up for Retirement and Enhancement Act of 2019, commonly known as the SECURE Act, hasn’t yet advanced in the U.S. Senate. If you have questions on how the final rule might benefit your company’s retirement plan, please contact Warady & Davis LLP at 847-267-9600. We’d be pleased to help. ###### **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal, or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business, or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Employee Benefit Plans **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Juggling Wealth Management is No Trick](https://waradydavis.com/juggling-wealth-management-is-no-trick/) **Published:** August 9, 2016 **Author:** WaradyDavis **Excerpt:** Preserving and managing wealth requires addressing a number of major issues. These include saving for your children’s education and funding your own retirement. Juggling these competing demands is no trick. Rather, it requires a carefully devised and maintained wealth management plan. **Content:** Preserving and managing wealth requires addressing a number of major issues. These include saving for your children’s education and funding your own retirement. Juggling these competing demands is no trick. Rather, it requires a carefully devised and maintained wealth management plan. ### Start with the basics First, a good estate plan can help ensure that, in the event of your death, your children will be taken care of and, if your estate is large, that they won’t lose a substantial portion of their inheritances to estate taxes. It can also guarantee that your assets will be passed along to your heirs according to your wishes. Second, life insurance is essential. The right coverage can provide the liquidity needed to repay debts, support your children and others who depend on you financially and pay estate taxes. ### Prepare for the challenge Most people face two long-term wealth management challenges: funding retirement and paying for college education. While both issues can be daunting, don’t sacrifice saving for your own retirement to finance your child’s education. Scholarships, grants, loans and work-study may help pay for college — but only you can fund your retirement. Uncle Sam has provided several education incentives that are worth checking out, including tax credits and deductions for qualifying expenses and tax-advantaged savings opportunities such as 529 plans and Education Savings Accounts (ESAs). Because of income limits and phaseouts, many higher-income families won’t benefit from some of these tax breaks. But, your children (or your parents, in the case of contributing to an (ESA) may be able to take advantage of them. ### Give assets wisely Giving money, investments or other assets to your children or other family members can save future income tax and be a sound estate planning strategy as well. You can currently give up to $14,000 per year per individual ($28,000 if married) without incurring gift tax or using your lifetime gift tax exemption. Depending on the number of children and grandchildren you have, and how many years you continue this gifting program, it can really add up. By gifting assets that produce income or that you expect to appreciate, you not only remove assets from your taxable estate, but also shift income and future appreciation to people who may be in lower tax brackets. Also consider using trusts to facilitate your gifting plan. The benefit of trusts is that they can ensure funds are used in the manner you intended and can protect the assets from your loved ones’ creditors. ### Charitable giving’s place in wealth management Do charitable gifts have a place in wealth management? Absolutely. Properly made gifts can avoid [gift and estate taxes](https://waradydavis.com/service/estate-gift-tax-planning/), while possibly qualifying for an income tax deduction. Consider a charitable trust that allows you to give income-producing assets to charity, but keep the income for life — or for the charity to receive the earnings and the assets to later pass to your heirs. These are just two examples; there are more ways to use trusts to accomplish your charitable goals. ### Overcome the complexities Creating a comprehensive plan for [wealth management](https://waradydavis.com/service/wealth-management-services/) and following through with it may not be simple — but you owe it to yourself and your family. We can help you overcome the complexities and manage your tax burden. Contact your Warady & Davis LLP advisor at (847) 267-9600 to discuss these and other planning ideas. For more information about ways W&D can help, see **Wealth Management Services.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [Update on Proposed Tax Law Changes](https://waradydavis.com/update-on-proposed-tax-law-changes/) **Published:** September 23, 2021 **Author:** Leslie Flinn **Content:** On Sunday, September 12, 2021, the House Ways & Means Committee (the “Committee”) released draft legislation as part of Congress’ ongoing $3.5 trillion budget reconciliation process. The legislation, as approved by the Committee on Wednesday, September 15, include*s **significant tax proposals that, if passed, will dramatically change the tax and estate planning landscape for high-income and high-net worth individuals.*** 2021 tax planning will be particularly important this year, including revisiting your estate plan and developing defensive strategies. Below is an overview of the tax proposals that are particularly relevant for tax planning purposes: ## **Individuals** - **The top marginal income tax rate** would increase from 37% to 39.6% for married individuals filing joint returns with taxable income over $450,000; single taxpayers with taxable income over $400,000; and, married individuals filing separate returns with over $225,000. (This increase would also apply to trusts and estates with taxable income over $12,500.) - **The top capital gains tax rate** for those same high-income taxpayers would increase from 20% to 25%for all sales and transactions closing after September 13, 2021. - **A new 3% surta**x on modified adjusted gross income over $5 million for single individuals, heads of household, married couples filing jointly, and surviving spouses. The surtax would kick in at $2.5 million for married couples filing separately. - **A $10 million limit would apply to Individual Retirement Accounts (IRAs) contribution**s—allowing for no further contributions for married couples with taxable income over $450,000 or singles with taxable income over $400,000. The $10 million threshold would also accelerate required minimum distributions for those accounts. - The proposal would also disallow the so-called “back-door” Roth IRAs by eliminating conversions for IRAs and 401(k) plans for single filers making over $400,000, head of household filers above $425,000, and for joint filers reporting more than $450,000. - **Wash sale rules** modified to include commodities, currencies, and digital assets. - **The deduction for qualified business income** would be amended by setting a cap on allowable deductions at $500,000 for individuals filing a joint return; $250,000 for a married individual filing a separate return; and, $10,000 for a trust or estate. - **The temporary expansion of the child tax credit—and advanced payments**—would be extended through 2025. Additionally, changes to the Earned Income Tax Credit (EITC) and the Child and Dependent Care Tax Credit (CDCTC) would become permanent. ## **Estate and Gift Tax Provisions** - **The federal estate tax exclusion amount** would be reduced to $6,020,000 in 2022 from $11,700,000 in 2021. - **Valuation discounts** for transfers of non-business assets would be eliminated. - **Two key estate planning techniques would be significantly altered:** Grantor trusts would be included in the grantor’s estate, and distributions from grantor trusts would be treated as taxable gifts. And, sales to intentionally defective grantor trusts (IDGTs) would be eliminated. ## Businesses - **Top corporate tax rate** would increase to 26.5% from 21% for corporate income above $5 million.(The 2017 law cut the rate for large corporations from 35% to 21%.) The tax rate drops to 18% for small businesses with income less than $400,000 and would remain 21% for all other businesses. - ****S**ection 199A pass-through deduction** would be capped at $400,000 for single filers, $500,000 for joint filers, $250,000 for married couples filing separately, and $10,000 for a trust or estate. - **3.8% Net Investment Income Tax, or NIIT**, would apply to net investment income derived in the ordinary course of a trade or business for single taxpayers making more than $400,000 in taxable income and $500,000 for married couples filing jointly. It’s worth noting that the NIIT does not apply to wages already covered by FICA. - **Deduction for Global Intangible Low-Taxed Income, or GILTI,** would be reduced, essentially resulting in a tax rate of 16.5625%—it would also require a country-by-country method for calculating GILTI. Additionally, the proposal would reduce the deduction for foreign-derived intangible income, or FDII, to 20.7%. - **Eligible S corporations**—those organized on May 13, 1996, before the current-law check-the-box regulations—would be allowed to reorganize as partnerships without triggering a tax. - **Permanently disallows excess business losses**—net business deductions in excess of business income—for non corporate taxpayers. In addition to these provisions, there are proposals on funding the IRS, on international income taxation and more. Several of the tax proposals outlined above would be effective upon the date of enactment. **Questions?** While it is impossible to accurately predict when, or what version of, the bill may ultimately become law, **taxpayers should promptly seek guidance in determining how to proceed in this uncertain environment – particularly in the area of [estate and gift planning](https://waradydavis.com/service/estate-gift-tax-planning/).** ***Please contact us with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ##### **SOURCE: IRS** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, PPP2 loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Seven Things Every Business Owner Should Do In 2016](https://waradydavis.com/seven-things-every-business-owner-should-do-in-2016/) **Published:** May 16, 2016 **Author:** WaradyDavis **Excerpt:** If you own or manage your own business, you’re probably busy monitoring operations and dealing with everyday problems. But there are a few things that you should make time to do every year. These are important for your long term business and personal success. **Content:** If you own or manage your own business, you’re probably busy monitoring operations and dealing with everyday problems. But there are a few things that you should make time to do every year. These are important for your long term business and personal success. ## 1. Review your business tax strategy. A month or so after you’ve filed your tax return; make an appointment with your tax advisor. Go over your return together and identify opportunities for tax savings. Question everything, starting with whether you’re using the right form of business entity. Ask about recent changes in the tax code and how they might benefit your business. Make your advisor a “partner” in your business strategy. ## 2. Update succession planning for your business. Review your [succession planning](https://waradydavis.com/service/succession-planning/) annually. You should have a specific plan for each key manager position, including yourself. Be prepared for a short-term absence or a permanent vacancy. Your plan might mean promoting from within or recruiting externally. An up-to-date plan can be invaluable if you have an unexpected vacancy. ## 3. Review and update your personal estate planning. If you’re a business owner, your company is likely to be a significant part of your estate. A good estate plan is essential if you hope to pass it on to your heirs. But your company, your personal circumstances, and the tax laws are continually changing. You should take time each year to make sure your plans are current. ## 4. Review Your Information Technology Usage and Needs. Is your computer system giving you the information you need to run your business? Are your hardware and systems up-to-date and secure? Who do you turn to when you have a technology problem? Today, technology is essential to any businesses’ success. At a minimum, on an annual basis, you and your IT staff or outside advisors should review your in place technology – hardware, software and support – to identify areas that need to be addressed to maximize business performance. ## 5. Review Your Internal Controls. Although most companies have some form of internal controls to prevent the misuse or theft of company assets, fraud still costs American businesses billions annually. It is essential that sound internal controls be implemented to safeguard your most vulnerable and liquid assets such as cash, accounts receivable, inventory, etc. Review your controls and make sure they are followed and monitored. ## 6. Review your business banking relationships. Annually, you should go over your cash balances and banking relationships with your controller or CFO. Then both of you should meet with your banker. Ask about new products or services that could help your company. Address any service concerns or problems you might have had. Look for ways to reduce idle cash, boost interest earned, and improve cash flows. ## 7. Review your business insurance coverage. Don’t just automatically write a check to renew your insurance policies when they come due. Instead, you should sit down with your insurance agent every year. Review your business operations, focusing on any changes. Discuss types of risk that could arise. Ask about new developments in business insurance. Use your agent’s expertise to identify risk areas and suggest suitable coverage. These are just some of business planning strategies to consider for 2016. Please contact us or your tax advisor for more details. *If you have any questions , as always, please contact your Warady & Davis LLP advisor at (847) 267-9600.* Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Business, Business Management --- ### [Albert & Goodman Merges Practice with W&D](https://waradydavis.com/albert-goodman-merges-with-waradydavisllp/) **Published:** January 1, 2019 **Author:** WaradyDavis **Excerpt:** Warady & Davis LLP is pleased to announce that Albert & Goodman CPAs PC, formerly of Buffalo Grove, IL, merged with our firm effective January 1, 2019. Martin (Marty) Albert Jr., CPA will join as a Partner. All Albert & Goodman staff have joined the W&D team. **Content:** Warady & Davis LLP, Certified Public Accountants and Consultants, is pleased to announce that Albert & Goodman CPAs PC, formerly of Buffalo Grove, IL, merged with our firm effective January 1, 2019. Warady & Davis LLP ranks as one of the Chicago area’s largest accounting firms with 100+ professionals and 23 partners (Source: Crain’s Chicago Business and Accounting Today, 2018). **[Martin (Marty) Albert Jr., CPA will join as a Partner.](https://waradydavis.com/staff/martin-albert/)** “For more than 69 years, together with our clients, Warady & Davis LLP has grown from an entrepreneurial vision to a thriving business. Our goal is to serve our clients as more than just an accounting firm, but instead to form a trusted business advisor relationship that plays a key role in their success. Together with Albert & Goodman, we look forward to upholding our combined traditions of excellence backed by W&D’s depth of resources and services,” commented Richard M. Franklin, CPA, Co-Managing Partner of Warady & Davis LLP. “We are excited about the merger with W&D. Together, we share the same commitment to excellence and high-level of service quality our clients value,” Marty Albert elaborates. Located in the north metropolitan Chicago area, Warady & Davis LLP was founded in 1949 and provides a comprehensive scope of audit, accounting, tax, financial and advisory services to a wide variety of industries. Through its subsidiary, W&D Consulting LLC, they also provide business valuation, [litigation support](https://waradydavis.com/service/litigation-support-services/), expert witness and advisory services. ## Biographical information ### Martin Albert, Jr., CPA, Partner Marty has more than 30 years of corporate, partnership and individual audit, accounting and tax knowledge, general business and specialized real estate expertise. Prior to merging his practice with Warady & Davis LLP, Marty was a shareholder of Albert & Goodman CPA’s, PC and a Partner of Vladem, Lerman, Albert & Company. Marty serves as a trusted adviser to his diverse client base which includes real estate, employee benefit plans, professional services, manufacturing, wholesale and other clients. **Albert & Goodman is now located at Warady & Davis LLP’s offices:** **1717 Deerfield Rd, Ste 300 South, Deerfield, IL 60015. 847-267-9600 (Main). [waradydavis.com](https://waradydavis.com)** **[Directions](https://waradydavis.com/resource-center/contact-us/)** **Categories:** Managing Partner --- ### [Joel M. Friedman, JD, CPA, Partner Merges Practice with W&D](https://waradydavis.com/joel-friedman-merges-practice-with-wd/) **Published:** November 1, 2021 **Author:** Leslie Flinn **Excerpt:** Warady & Davis LLP is pleased to announce that Joel M. Friedman, JD, CPA, Partner, Joe Tamburello, CPA, Manager and Eileen Polard, Accountant merged with our firm effective December 1, 2021. **Content:** Warady & Davis LLP, Certified Public Accountants and Consultants, is pleased to announce that [Joel M. Friedman, JD, CPA, Partner](https://waradydavis.com/staff/friedman-joel-jd-cpa/), [Joseph M. Tamburello, CPA, Manager](https://waradydavis.com/staff/joe-tamburello-cpa/) and [Eileen Pollard, Accountant ](https://waradydavis.com/staff/eileen-pollard/)merged with our firm effective December 1, 2021. Warady & Davis LLP ranks as one of the Chicago area’s largest accounting firms with 125+ professionals (Source: Crain’s Chicago Business and Accounting Today, November 22, 2021). “For more than 72 years, together with our clients, Warady & Davis LLP has grown from an entrepreneurial vision to a thriving business. Our goal is to serve our clients as more than just an accounting firm, but instead to form a trusted business advisor relationship that plays a key role in their success. Together with Joel and his team, we look forward to upholding our combined traditions of excellence backed by W&D’s depth of resources and services,” commented Richard M. Franklin, CPA, Co-Managing Partner of Warady & Davis LLP. “We are excited about the merger with W&D. Together, we share the same commitment to excellence and high-level of service quality our clients value,” Joel Friedman elaborates. Located in the north metropolitan Chicago area, Warady & Davis LLP was founded in 1949 and provides a comprehensive scope of audit, accounting, tax, financial and advisory services to a wide variety of industries, business owners, their families and individuals. Through its subsidiary, W&D Consulting LLC, they also provide business valuation, [litigation support](https://waradydavis.com/service/litigation-support-services/), expert witness and advisory services. ## Biographical information ### Joel M. Friedman, JD, CPA, Partner Formerly of Horwood, Marcus & Berk, Joel M. Friedman is a tax partner with Warady & Davis LLP where he specializes in [estate and gift planning](https://waradydavis.com/service/estate-gift-tax-planning/), related tax matters, high net-worth individuals, trusts, foundations and [not-for-profit organizations](https://waradydavis.com/industry/not-for-profit/). Joel provides both tax and legal technical acumen and knowledge of the individuals, families and entities that are involved. With his extensive background, Joel often assists clients and attorneys in matters related to taxation, estate planning and business law. In addition, Joel does extensive work in the not-for-profit area. He is President of the [Alvin H. Baum Family Fund](https://baumfund.org/), a significant donor to many charities. Among his awards and activities are the John Marshall Law School Spirit Award and the Cove School’s Prism Award. Joel is also the founder of the Environmental Change Institute at the University of Illinois (Champaign/Urbana campus), which has become the Institute For Sustainability, Energy and Environment (iSEE). Joel maintains an active role in iSEE’s activities. He is also a two-time Recipient of Chicago Magazine’s Five Star Wealth Manager Award and has achieved a Martindale -Hubbell AV® Preeminent™ Peer Review Rating. **[READ MORE](https://waradydavis.com/staff/friedman-joel-jd-cpa/)** **Joel M. Friedman, JD, CPA is now located at Warady & Davis LLP’s offices:** 1717 Deerfield Rd, Ste 300 South, Deerfield, IL 60015. 847-267-9600 (Main) [Warady & Davis LLP](https://waradydavis.com/) [Directions](https://waradydavis.com/resource-center/contact-us/) **Categories:** Managing Partner --- ### [Public Disclosure Requirements](https://waradydavis.com/tax-disclosure-requirements/) **Published:** February 1, 2015 **Author:** WaradyDavis **Excerpt:** Organizations that are tax exempt under IRS Section 501(c)(3) vary significantly in size and mission. But they all have one thing in common. All must comply with federal tax laws, including the requirement to make certain documents available to the public upon request. If someone makes a request and your organization fails to comply, an IRS audit and substantial penalties could result. **Content:** Organizations that are tax exempt under IRS Section 501(c)(3) vary significantly in size and mission. But they all have one thing in common. All must comply with federal tax laws, including the requirement to make certain documents available to the public upon request. If someone makes a request and your organization fails to comply, an IRS audit and substantial penalties could result. ## Application for Exempt Status Section 501(c)(3) organizations that applied for tax-exempt status after July 15, 1987, must make a copy of their application (Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code) available for inspection and/or provide a copy when requested. The requirement covers all supporting documents and IRS correspondence related to the application. Note: Organizations may charge a reasonable fee (no more than the per-page fee the IRS charges) for providing copies. Also note that the names and addresses of contributors listed on an exemption application are subject to public disclosure. ### Information Return Exempt organizations also must make their annual information return available for inspection and copying. This includes Form 990, Return of Organization Exempt from Income Tax, or Form 990-EZ, plus all schedules, attachments, and supporting documents. Organizations must generally make their returns available for three years and are generally not required to disclose the names or addresses of the contributors listed on Schedule B (some exceptions apply). ### Income-tax Return The public must be permitted to inspect or make copies of any Form 990-T, Exempt Organization Business Income Tax Return, filed by a 501(c)(3) organization after August 17, 2006 (along with all related schedules, attachments, and supporting documents). These documents must also be made available for a three-year period. ### Compliance If someone walks into your office and requests a copy of one or more of the documents covered under these rules, you should generally provide it the same day the request is made. The time frame for responding to written, faxed, or e-mailed requests is generally 30 days. Another way to comply with the requirement to provide documents for copying is to make them “widely available” on your website or the website of an organization that maintains a database of such documents. Then, when someone requests copies, you can refer them to the appropriate website. **Penalties** Responsible persons who fail to comply with document requests may be subject to penalties. The daily penalty is $20, with a maximum penalty of $10,000 for each failure to provide a copy of an annual information return. There is no maximum penalty for failing to provide a copy of an exemption application. ## Disclosure Rules for Quid Pro Quo Contributions This is a slightly different type of disclosure rule. Organizations that hold fundraising events where something of value is provided (e.g., dinner, door prize, etc.) in return for contributions must disclose the fair market value of the service or item being provided in its fundraising materials. If you have any questions about your nonprofit organization, please contact Warady & Davis LLP at [(847) 267-9600](). **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [PPP and EIDL Programs Extended](https://waradydavis.com/ppp-extended/) **Published:** July 7, 2020 **Author:** Leslie Flinn **Content:** ## **The Paycheck Protection Program application deadline has officially been extended to August 8th.** Under the program, the SBA had approved almost 4.9 million loans, totaling $520.6 billion. Despite the program’s popularity, it had approximately $130 billion in unallocated funds when it shut down on June 30th. Created as part of the CARES Act, the PPP offers forgivable loans of up to 2.5 times a business’ average monthly payroll costs, up to $10 million. The recent easing of the forgiveness restrictions through the Paycheck Protection Flexibility Act further increases the possibility of a business receiving full or partial loan forgiveness if they meet certain criteria, including using 60% of their PPP funds on payroll and maintaining staff headcount. The SBA has also released a new EZ application for loan forgiveness, streamlining the required paperwork down to a two-page document for those who qualify, which will likely be the majority of borrowers. Congress is also debating a new piece of legislation, The Paycheck Protection Small Business Forgiveness Act. Specifically, the ACT would forgive PPP loans of $150,000 or less if the borrower submits a one-page attestation form to the lender. It also ensures the lender will be held harmless from any enforcement action if the borrower’s attestation contained falsehoods. The new deadline for PPP applications combined with the relaxed forgiveness rules may make it easier for those who haven’t yet applied to pursue access to remaining funds. ## EIDL is Accepting Applications In addition to the PPP, the SBA has also reinstated the **[Economic Injury Disaster Loan pro](https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance)**gram, which provides funds for industries struggling to stay afloat in the wake of the coronavirus or any other qualifying disaster. PPP borrowers are eligible to also apply for EIDL loans, but the monies must be used for separate expenses. EIDL interest rate is 3.75% for small businesses and 2.75% for nonprofits with a 30 year term. The first payment is deferred for one year. A business that qualifies may also be eligible for a one-time EIDL Advance grant of $1,000 per employee, up to a maximum of 10 employees and $10,000. You can apply for and receive an EIDL Advance even if your EIDL application is not approved. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [AICPA gives 5 good reasons not to rush your PPP forgiveness application](https://waradydavis.com/aicpa-gives-5-good-reasons-not-to-rush-your-ppp-forgiveness-application/) **Published:** July 15, 2020 **Author:** Leslie Flinn **Content:** Borrowers who received Paycheck Protection Program (PPP) loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act are asking their CPAs if and how they will qualify for PPP loan forgiveness. There is uncertainty over some of the program details. Organizations — especially small businesses — worry about meeting the maximizing loan forgiveness requirements. While you may be anxious to apply for forgiveness, here are five factors the AICPA recently provided which affect the forgiveness application process timing. 1. **Most lenders are not ready to process forgiveness applications.** Many are developing technology tools such as “forgiveness portals” or will leverage other automation options for a more efficient process. Until the U.S. Small Business Administration (SBA) and the U.S. Treasury Department issue final guidance, those technology tools can’t be finalized. The timing on when that guidance will be available is uncertain. Bank of America, as one example, is [telling](https://about.bankofamerica.com/promo/assistance/faqs/small-business-paycheck-protection-program) PPP loan holders it expects to begin opening its online loan forgiveness application process in early August and will email instructions to borrowers when it’s ready. 2. **Organizations have 24 weeks to use their PPP money, leaving them more time to take steps that will help them qualify for full loan forgiveness.** Borrowers who received their loans before June 5, 2020, can choose either eight weeks or 24 weeks for their covered period. That increased flexibility in the time to use PPP funds can be important in maximizing loan forgiveness. 3. **Payroll costs are a significant component of PPP forgiveness.** Many payroll providers are developing custom reports specifically to comply with PPP guidance. However, like lenders, they are waiting on final SBA and Treasury guidance so they can prepare the PPP-compliant reports borrowers will need. 4. **Borrowers aren’t required to make any loan payments before they apply for forgiveness or until 10 months after their covered loan period ends.** Since payments aren’t due yet, there is less urgency to apply for forgiveness. 5. **Applying for forgiveness may be easier than clients expect.** Borrowers can use a simplified process through [SBA Form 3508EZ](https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-EZ-Instructions.pdf) if they meet at least one of these requirements: - They are self-employed individuals, independent contractors or sole proprietors who had no employees when they applied for their PPP loan and who didn’t include any employee salaries in calculating their average payroll amount in their application. - They didn’t reduce salaries or hourly wages for certain employees by more than 25% during the loan period and — except for specified exceptions — didn’t reduce the number of employees or the average paid hours for employees between Jan. 1, 2020, and the end of their covered loan period. - They didn’t reduce salaries or hourly wages for certain employees by more than 25% during the loan period and were unable to operate at the same business activity level during the loan period because of federal safety requirements or guidance related to the pandemic. CPAs expect SBA guidance to help determine how broadly this safe harbor can be used. ### **Be prepared** While waiting for final program guidance, borrowers can take steps to prepare for the forgiveness application process by documenting how the loan proceeds are used. Gather documentation needed to support non-payroll costs for expenses such as mortgage interest, rent or lease payments and utilities, including account statements and other proof of payments. Lenders may not request supporting documentation for all disbursements as part of the forgiveness application; however, increased scrutiny is [guaranteed for loans of $2,000,000 or more](https://www.journalofaccountancy.com/news/2020/may/sba-safe-harbor-for-ppp-loans-under-2-million.html#:~:text=PPP%20funds%20are%20available%20to,were%20in%20operation%20on%20Feb.&text=On%20April%2028%2C%20Treasury%20Secretary,for%20the%20loans%20was%20appropriate.). ### **Be patient** PPP loans have gone to 4.8 million organizations through June 30, 2020. [Recent legislation](https://www.journalofaccountancy.com/news/2020/jul/senate-approves-5-week-ppp-extension.html) extended the opportunity for organizations to apply for loans until Aug. 8. While questions remain about some forgiveness process details, CPAs are following developments. It can be difficult to be patient when your organization is affected by the ongoing uncertainty COVID-19 created. But that may be the best approach until the SBA and your lender establish a forgiveness application process. **SOURCE: AICPA** ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Assessing productivity in a pandemic](https://waradydavis.com/assessing-productivity-in-a-pandemic/) **Published:** July 13, 2020 **Author:** Leslie Flinn **Content:** The COVID-19 crisis is affecting not only the way many businesses operate, but also how they assess productivity. How can you tell whether you’re getting enough done when so much has changed? There’s no easy, one-size-fits-all answer, but business owners should ask the question so you can adjust expectations and objectives accordingly. ## **Impact of remote work** Heading into the crisis, concerns about productivity were certainly on the minds of many in leadership positions. In March, research firm Gartner conducted a snap poll that found 76% of HR leaders reported their organizations’ managers were concerned about “productivity or engagement of their teams when remote.” Many of these fears may well have been alleviated after a month or two. News provider USA Today collaborated with researchers YouGov and social media platform LinkedIn to conduct a poll in April that found 54% of respondents (professionals ages 18-74) said that working remotely has positively affected their productivity. They cited factors such as time saved by not having to commute and fewer distractions from co-workers. The bottom line is that allowing — or, in recent months, requiring — employees to work remotely shouldn’t drastically alter your expectations of their productivity. Every employee must continue to fulfill his or her job duties and meet annual performance management objectives (as perhaps adjusted in light of the pandemic and altered economy). However, it’s unrealistic to expect anyone to accomplish markedly more just because he or she is no longer subject to a long commute and regular office hours. In fact, when assessing productivity, business owners should bear in mind the dual challenge of work-life balance while working remotely (childcare obligations, etc.) and the mental health component of living through a pandemic. ## **Solid metrics** If remote work isn’t a major concern for your company — either because your employees were already doing it, adapted to it readily or simply cannot work from home — there remain some tried-and-true ways to evaluate productivity. Metrics can be useful. For example, one broad measurement of productivity is revenue per employee. To calculate it, you’ll need to check your financial statements to see how much revenue your business brought in during a defined period. Then, you divide that dollar figure by your total number of employees. The idea is that every worker should generally bring in enough revenue to rationalize his or her paycheck. It’s not a “be all, end all” metric by any means, but revenue per employee can help accurately shape your understanding of productivity and cash flow. And, as mentioned, you’ll need to think about how this year’s economic conditions have altered your productivity needs and what employees can reasonably accomplish. ## **Careful calibration** When the subject of productivity arises, many business owners’ instinctive answer is “more, more, more!” Carefully calibrating your expectations and goals, however, can lead to more sustainable results. Warady & Davis LLP can help you choose and calculate the right metrics and set realistic productivity objectives. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [How competitive is your company in a changed economy?](https://waradydavis.com/how-competitive-is-your-company-in-a-changed-economy/) **Published:** July 14, 2020 **Author:** Leslie Flinn **Content:** Just about every business owner’s strategic plans for 2020 look far different now than they did heading into the year. The COVID-19 pandemic has changed the economy in profound ways, forcing many companies to recalibrate suddenly and severely. As your business moves forward in this uncertain environment, it’s important to re-evaluate competitiveness. You may have lost an edge that previously existed, or you may have the opportunity to gain one. Here are some critical elements to consider. ## **Objectively assess leadership** More than likely, you and your management team have had to make some difficult decisions over the last few months. Even if you feel confident that you’ve done most everything right, objectively examine and discuss your successes, failures, strengths and weaknesses. ## **Reassess external relationships** Most businesses rely on relationships to function competitively. These include connections with customers, suppliers, lenders, advisors and the local community. In addition, if your company is subject to regulatory oversight, it must cooperate with local, state and federal officials. Review and discuss the state of each of these relationships. Are you getting positive customer feedback on your response to the crisis? Have you been paying suppliers on time? If not, are you openly communicating about potential solutions? ## **Examine supply chain and technology** Competitiveness can hinge on a company’s ability to access the supplies it needs to operate profitably, and the crisis has had a major impact on supply chains. Are you in danger of being cut off or limited from any mission-critical supplies or materials? Also, look into whether you have access to optimal and scalable technology that allows you to produce and deliver competitive products or services. This has become a major issue in many industries as companies pivot to operate more virtually and do less business in-person. ## **Look to the future** Finally, identify how COVID-19 and the resulting economic fallout is affecting your industry. Many sectors have obviously struggled, but others are booming in response to pandemic-driven needs for certain supplies and services. Study how this year’s changes are affecting industry outlook and projected customer demand. You may need to operate more cautiously to deal with lower revenue for another year or more. Then again, now could be the time to claim greater market share if competitors have been struggling more than you. ## **Rise to the challenges** The pandemic has complicated strategic planning for every business owner. You must now anticipate not only the usual challenges to your competitiveness, but also the difficulties of operating safely in a pandemic and recovering economy. Warady & Davis LLP can help you identify, quantify and analyze all the factors that contribute to stability and profitability. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Getting a new business off the ground: How start-up expenses are handled on your tax return](https://waradydavis.com/getting-a-new-business-off-the-ground-how-start-up-expenses-are-handled-on-your-tax-return/) **Published:** September 22, 2021 **Author:** Leslie Flinn **Content:** Despite the COVID-19 pandemic, government officials are seeing a large increase in the number of new businesses being launched. From June 2020 through June 2021, the U.S. Census Bureau reports that business applications are up 18.6%. The Bureau measures this by the number of businesses applying for an Employer Identification Number. Entrepreneurs often don’t know that many of the expenses incurred by start-ups can’t be currently deducted. You should be aware that the way you handle some of your initial expenses can make a large difference in your federal tax bill. ## How to treat expenses for tax purposes If you’re starting or planning to launch a new business, keep these three rules in mind: 1. **Start-up costs include those incurred or paid while creating an active trade or business — or investigating the creation or acquisition of one.** 2. **Under the tax code, taxpayers can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs in the year the business begins.** As you know, $5,000 doesn’t go very far these days! And the $5,000 deduction is reduced dollar-for-dollar by the amount by which your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized over 180 months on a straight-line basis. 3. **No deductions or amortization deductions are allowed until the year when “active conduct” of your new business begins.** Generally, that means the year when the business has all the pieces in place to start earning revenue. To determine if a taxpayer meets this test, the IRS and courts generally ask questions such as: Did the taxpayer undertake the activity intending to earn a profit? Was the taxpayer regularly and actively involved? Did the activity actually begin? **Eligible expenses** ### In general, start-up expenses are those you make to: - Investigate the creation or acquisition of a business, - Create a business, or - Engage in a for-profit activity in anticipation of that activity becoming an active business. To qualify for the election, an expense also must be one that would be deductible if it were incurred after a business began. One example is money you spend analyzing potential markets for a new product or service. To be eligible as an “organization expense,” an expense must be related to establishing a corporation or partnership. Some examples of organization expenses are legal and accounting fees for services related to organizing a new business and filing fees paid to the state of incorporation. ## Plan now If you have start-up expenses that you’d like to deduct this year, you need to decide whether to take the election described above. Recordkeeping is critical. Contact us about your start-up plans. We can help with the tax and other aspects of your new business. *© 2021* **Categories:** Business, Business Management --- ### [Partnerships and Seasonal Employers may Be Eligible for More PPP Money](https://waradydavis.com/more-ppp-money-for-partnerships-seasonal-employerssed-2/) **Published:** May 19, 2020 **Author:** Leslie Flinn **Content:** ### There is a new[ **PPP interim final rule** ](https://home.treasury.gov/system/files/136/Interim-Final-Rule-on-Loan-Increases.pdf)(the tenth) on increasing PPP loan amounts for partnerships and seasonal employers. Before this rule, small businesses that are structured as partnerships or classified as seasonal employers did not have any clear guidance on the PPP loan amounts they were eligible to receive. The language states “this interim final rule authorizes all PPP lenders to increase existing PPP loans to partnerships or seasonal employers to include appropriate amounts to cover partner compensation \[…\] or to permit the seasonal employer to calculate its maximum loan amount using the alternative criterion posted on April 28, 2020.” That means if a partnership received a PPP loan “that did not include any compensation for its partners,” then “the lender may electronically submit a request through SBA’s[ E-Tran](https://www.sba.gov/sites/default/files/articles/ETran_Origination_01_2014.pdf) Servicing site to increase the PPP loan amount to include appropriate partner compensation.” The new and improved way to calculate your maximum loan amount that takes into consideration partner compensation can be found [here,](https://www.sba.gov/sites/default/files/2020-04/How-to-Calculate-Loan-Amounts.pdf) with question four. For seasonal employers, the new rule allows the calculation for a maximum PPP loan amount to be determined based on the employer’s average total monthly payments for payroll, ‘‘the 12-week period beginning February 15, 2019, or at the election of the eligible \[borrower\], March 1, 2019, and ending June 30, 2019.’’ Alternatively, an employer may “elect to determine its maximum loan amount as the average total monthly payments for payroll during any consecutive 12-week period between May 1, 2019 and September 15, 2019.” More on that can be found [here](https://home.treasury.gov/system/files/136/Interim-Final-Rule-on-Loan-Increases.pdf), on page 2. ## Many Questions Remain to be Addressed We will continue to keep you updated as new guidance is released by the Treasury and SBA. Additionally, we are pleased to host a webinar on Wednesday, May 22nd, exploring the new PPP Loan Forgiveness application and updated guidance. Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [SBA Releases PPP Loan Forgiveness Application & Instructions](https://waradydavis.com/ppp-loan-forgiveness-application-released/) **Published:** May 19, 2020 **Author:** Leslie Flinn **Content:** The SBA and the Treasury Department have released the eagerly awaited **Paycheck Protection Program (PPP)** loan forgiveness application and detailed instructions. The SBA explained that the application and instructions “include several measures to reduce compliance burdens and simplify the process for borrower.” The Application and Instructions do not answer all key questions, but a number of calculations and substantive questions are resolved. ## Key PPP Loan Forgiveness Clarifications 1. **Definition of Loans in Excess of $ 2 million.** Audit threshold for loans in excess of $2 million is based on original principal amount disbursed, including affiliate loans. 2. **Treatment of EIDL Advances.** EIDL advances will be deducted from forgiveness amount remitted to lender. 3. **Timing of 8-Week Period for Loan Forgiveness.** The Application allows the borrower to choose from one of two 8 week time periods for determining loan forgiveness. 1. **Covered Period:** The 56-day period following the receipt of the first loan money, which is referred to as the “Covered Period.” OR 2. **Alternative Payroll Covered Period:** to coincide with the payroll schedule of the borrower, if it is bi-weekly or more frequently. The Alternative Payroll Covered Period, if elected, will begin on the first day of the borrower’s first pay period following the date that they receive their first PPP loan dollars, and will end on the 56th day thereafter. For example, if the borrower received their PPP loan proceeds on Monday, April 20, and the first day of its first pay period following its PPP loan disbursement is Sunday, April 26, the first day of the alternative payroll covered period is Sunday, April 26, and the last day of the alternative payroll period is Saturday, June 20 (8 weeks or 56 days). A borrower that elects to use the Alternative Payroll Covered Period must also account for other payroll related expenses (employee health insurance, retirement plan contributions, and state and local taxes assessed on employee compensation) during the same period of time. Non-Payroll Related expenses (rent, interest and utilities), however, must still be accounted for in the “Covered Period” (the first 56 days after the receipt of the first PPP loan amount. **Stay-Tuned on 8-Week Period Relief.** Treasury Secretary Mnuchin has indicated that congressional action is necessary to adjust the 8-week period timing and no changes are planned by the SBA. Congressional leaders from both parties have indicated that they support extending the 8-week period. In fact, the Democratic-run House of Representatives has already voted to extend the eight-week period in the PPP to 24 weeks, part of a $3 trillion coronavirus relief bill lawmakers passed May 15th. This bill, however, is unlikely to pass as proposed in the Senate. 4. **Treatment of Expenses Incurred and Paid.** One PPP loan forgiveness area that caused confusion was the timing of expenses eligible for forgiveness and the language of ***“incurred and paid.”*** The instructions contain considerable detail in this area for different expense types. **Payroll.** Payroll costs (gross salaries and wages of employees up to a cap of $100,000 per year) **do not** have to be both “paid and incurred” in the exact eight week covered or alternate covered period (56 days). In addition, payroll costs incurred during the 8-week period and paid on or before the next regular payroll date are eligible for forgiveness. This means that each payroll paid during the 8-week period counts toward forgiveness, as do the payroll costs incurred during the last pay period of the 8-week period that are paid in the first regular payroll period after the 8-week period. **Note:** Borrowers are not allowed to count payroll costs twice—so costs that are both paid and incurred in the 56-day period only count once towards forgiveness. **Owner-employees, self-employed individuals and self-employed partners.** Owner-employees, self-employed individuals, and self-employed partners’ maximum compensation is 8/52 of 2019 compensation, capped at $15,385 per individual. **This means that owners cannot increase their pay during the 8-week period above their 8-week average pay for 2019 and have that increase count toward forgiveness.** **Employee Salary Increases and Bonuses.** The application and guidance does not include any limit on increasing employees’ wages; therefore, it appears that employee wage increases are allowed capped at $15,385 per individual for the 8-week period. **Non-Payroll Expenses.** Interest, rent and “utilities” that are incurred during the eight week repayment measurement period and *before the next regular billing date*, even if after the covered period, will also qualify to be forgiven. Non-payroll costs that were paid and incurred will also only count once for loan forgiveness. Prepayments are not permitted. **Health Insurance.** Eligible costs that are paid or incurred during the 8- week Covered Period include self-insurance programs and employer-sponsored group health plans, reduced by employee contributions. It appears that accrued costs paid during the 8-week period will count toward forgiveness. (Additional guidance may clarify this treatment.) **Retirement Contributions.** The Instructions indicate that the total “amount paid by \[the\] Borrower for employer contributions to employee retirement plans” in the covered period or alternate covered period will be entered in the calculation worksheet,” but there is no indication as to whether the amount that is “paid by Borrower” can include contributions attributable to an entire year, or even 2019 and 2020 combined. More guidance is needed to determine retirement treatment. It is possible that funding a pension plan for all of 2019 or all of 2020 (or even both) will qualify for forgiveness based upon the present regulations, and that non-tax qualified “retirement plans” may be used for this as well. 5. **Health Insurance and Retirement Plan Contributions for Independent Contractors, Proprietors and Partners in Partnerships.** The application and Instructions appear to not permit independent contractors, proprietors, or individuals who are partners in a partnership to receive the benefit of forgiveness for the costs of their own health insurance and retirement plan contributions. The newly issued Instructions provide that the “Payroll” will include total amounts paid by the Borrower for “employee health insurance…\[and\] employer contributions to employee retirement plans …” 6. **The 75% Rule Is Not “All Or Nothing.”** The loan application instructions make it clear that the borrower can first determine its payroll, health insurance and retirement plan expenses (the “Payroll Amount”) and then the sum of the other forgivable expenses (“rent, utilities, and interest”) cannot exceed 33 1/3% of the Payroll Amount. For example, if the loan is $100,000, and only $70,000 is spent on payroll, health insurance and retirement plan expenses, then 33 1/3rd% of $70,000 is $23,333, and the maximum amount forgiven based on interest rent and utilities will be $23,333, so that the total loan forgiveness would be $93,333. 7. **Business rent or lease payments extends to lease agreements for real or personal property**. Rent and interest paid on leases of non-real estate business assets, and interest paid on loans that are secured by non-real estate “mortgages,” will qualify for forgiveness, if they were in effect on February 15, 2020. It appears that vehicle and equipment leases will be considered eligible rental and interest costs. 8. **FTEE Calculation.** Average full-time equivalency (FTE) is the average numbers of hours paid per week divided by 40 (rounded to the nearest tenth), with the maximum for each employee capped at 1.0. Or borrower may elect a simplified method that assigns a 1.0 for employees who work 40 hours or more per week and 0.5 for employees who work fewer hours. 9. **Loan Forgiveness Reductions**. The Application indicates how to apply the related calculations with respect to reduction of what is forgiven when there is a reduction in workforce or large salary reductions for non-highly compensated employees. - - - One clarification is that the amounts otherwise forgiven for rent, interest and utilities are also reduced if there is a reduction in the number of employees under the test. - Salary and hourly wage reduction applies only to employees whose salaries or hourly wages were reduced more than 25% during the covered or alternate covered period compared to the period **January 1, 2020 through March 31, 2020. 10. **Attempted Rehire Exclusion**. The borrower’s forgiveness amount will not be reduced for headcount reductions related to: 1. 1. 1. Individuals to whom the borrower has made a written offer in good faith to rehire an employee that the employee declined (as previously provided in FAQ 40), 2. Employees whose employment was terminated for cause, or 3. Employees who voluntarily resigned. 11. **FTEE and Salary & Wages Safe Harbor.** Restoring employees to work and raising salaries and wages following a pay cut can mitigate reductions to loan forgiveness. Where layoffs or salary reductions occurred between February 15, 2020, and April 26, 2020, the loan forgiveness amount will not be reduced if the reductions in personnel and salaries are undone prior to June 30, 2020. To accomplish this, the company must, by June 30, 2020, rehire employees such that its full time equivalent employee levels are at least where they were as of February 15, 2020, and reinstate all salaries and wages for employees making less than $100,000 during all pay periods in 2019 that were reduced by more than 25% back to the level of those salaries and wages as of February 15, 2020. The application and instructions also include documentation that must be submitted with the loan application, borrower certifications and more. The SBA indicated that it would soon issue further guidance and regulations to assist borrowers in completing their debt forgiveness application. This is good news for borrowers and advisors alike because while the application clarifies much of the calculation, there are still unanswered questions. Treasury Department link to Loan Forgiveness Application, click [here](https://content.sba.gov/sites/default/files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20Forgiveness%20Application.pdf). ## Many Questions Remain to be Addressed We will continue to keep you updated as new guidance is released by the Treasury and SBA. Additionally, we are pleased to host a **webinar on Wednesday, May 27th, exploring the application and updated forgiveness guidance.** Look for an invitation soon. Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New COVID-19 law makes favorable changes to “qualified improvement property”](https://waradydavis.com/new-covid-19-law-makes-favorable-changes-to-qualified-improvement-property/) **Published:** April 23, 2020 **Author:** Leslie Flinn **Content:** The law providing relief due to the coronavirus (COVID-19) pandemic contains a beneficial change in the tax rules for many improvements to interior parts of nonresidential buildings. This is referred to as qualified improvement property (QIP). You may recall that under the Tax Cuts and Jobs Act (TCJA), any QIP placed in service after December 31, 2017 wasn’t considered to be eligible for 100% bonus depreciation. Therefore, the cost of QIP had to be deducted over a 39-year period rather than entirely in the year the QIP was placed in service. This was due to an inadvertent drafting mistake made by Congress. But the error is now fixed. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. It now allows most businesses to claim 100% bonus depreciation for QIP, as long as certain other requirements are met. What’s also helpful is that the correction is retroactive and it goes back to apply to any QIP placed in service after December 31, 2017. Unfortunately, improvements related to the enlargement of a building, any elevator or escalator, or the internal structural framework continue to not qualify under the definition of QIP. In the current business climate, you may not be in a position to undertake new capital expenditures — even if they’re needed as a practical matter and even if the substitution of 100% bonus depreciation for a 39-year depreciation period significantly lowers the true cost of QIP. But it’s good to know that when you’re ready to undertake qualifying improvements that 100% bonus depreciation will be available. And, the retroactive nature of the CARES Act provision presents favorable opportunities for qualifying expenditures you’ve already made. We can revisit and add to documentation that you’ve already provided to identify QIP expenditures. For not-yet-filed tax returns, we can simply reflect the favorable treatment for QIP on the return. If you’ve already filed returns that didn’t claim 100% bonus depreciation for what might be QIP, we can investigate based on available documentation as discussed above. We will evaluate what your options are under Revenue Procedure 2020-25, which was just released by the IRS. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago CPA, Chicago CPA Firm, Chicago Small Business, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Economic Injury Disaster Loans, EIDL, EIDL funding, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Interim Stimulus Plan, Northshore CPA, Paycheck Protection Program, PPP funding, PPP Loans, small business coronavirus, small business covid-19, small business stimulus relief, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New PPP Loan Forgiveness Guidance and Possible Congressional Changes](https://waradydavis.com/new-ppp-loan-forgiveness-guidance-possible-congressional-changes/) **Published:** May 26, 2020 **Author:** Leslie Flinn **Content:** Treasury and the U.S. Small Business Administration (SBA) released new Paycheck Protection Program (PPP) guidance Friday night, May 22nd, that provides some clarity on several loan forgiveness questions but leaves key questions unanswered. The two new interim final rules issued late Friday build upon the [**loan forgiveness application**](https://www.sba.gov/document/sba-form-3508-ppp-loan-forgiveness-application-instructions)[ ](https://www.sba.gov/sites/default/files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20Forgiveness%20Application%20FINAL_Fillable.pdf)and instructions released May 15 but do not address either the eight-week period during which PPP funds must be spent to qualify for forgiveness or the rule requiring PPP borrowers to spend at least 75% of the funds on payroll costs to qualify for full loan forgiveness. **Those two issues are the focus of multiple bills being considered in Congress.** The Senate could vote as early as this week on a bill that would double the loan forgiveness period to 16 weeks. The House is expected to vote this week on standalone legislation that would extend the loan forgiveness period to as long as 24 weeks and also eliminate the rule requiring PPP borrowers to spend at least 75% of the funds on payroll costs to qualify for full loan forgiveness. A separate Senate bill would also expand the loan forgiveness period to 24 weeks and eliminate the 75% rule. Through May 23, the SBA approved more than 4.4 million PPP loans totaling more than $511 billion. About **[$138 billion in PPP funds](https://www.sba.gov/sites/default/files/2020-05/PPP__200523.pdf)** remained available for additional lending as of May 23. ## Highlights of the new interim rules While the two proposed bills making their way through Congress would have an impact on loan forgiveness, the two new interim final rules released Friday are the most recent authoritative guidance. One addresses requirements for loan forgiveness ([**READ**](https://home.treasury.gov/system/files/136/PPP-IFR-Loan-Forgiveness.pdf)) and the other outlines PPP loan review procedures and related borrower and lender responsibilities (**[R](https://home.treasury.gov/system/files/136/PPP-IFR-SBA-Loan-Review-Procedures-and-Related-Borrower-and-Lender-Responsibilities.pdf)[EAD](https://home.treasury.gov/system/files/136/PPP-IFR-SBA-Loan-Review-Procedures-and-Related-Borrower-and-Lender-Responsibilities.pdf)**). The 26 pages of loan forgiveness requirements guidance, a substantial portion of which repeats the instructions to the PPP loan forgiveness application released on May 15, answer more many questions related to the loan forgiveness process, which payroll and non-payroll costs are eligible for forgiveness, and how various scenarios affect the amount of loan forgiveness for which a borrower qualifies. **Highlights include:** - **Establishment of an alternative method for determining when the eight-week period starts.** Businesses with pay cycles of biweekly or more frequent can elect an alternative payroll covered period, which is the eight-week period starting the first day of the pay period after they received the funds. Previously, the only starting date allowed was the day the lender disbursed funds to the borrower — which remains the requirement for all businesses with pay periods less frequent than biweekly. - **Clarification that bonuses and hazard pay are eligible for loan forgiveness**, **as are salary, wages, and commission payments to furloughed employees.** The payments cannot exceed the pro-rated amount of a $100,000 annual salary. - **Establishment of caps on the amount of loan forgiveness available for owner-employees and self-employed individuals’ own payroll compensation.** Specifically, the amount requested can be no more than the lesser of 8/52 of 2019 compensation (i.e., approximately 15.38% of 2019 compensation) or $15,385 per individual in total across all businesses. For self-employed individuals, including Schedule C filers and general partners, no additional forgiveness is provided for retirement or health insurance contributions. - **Clarification on when non-payroll costs must be incurred or be paid to qualify for loan forgiveness.** Specifically, the costs must be paid during the eight-week period or incurred during the period and paid on or before then next regular billing date, even if that date is after the eight weeks. The guidance also states that advance payments on mortgage interest are not eligible for loan forgiveness. - **Confirmation that employers can exclude from loan forgiveness calculations certain employees.** The new guidance reiterates that in calculating any reduction in full time equivalent employees, employers can exclude any employees who decline a good faith offer to return at the same pay and hours as before they were laid off or furloughed. The guidance released Friday includes a requirement for borrowers to notify the state unemployment office of an employee’s rejected offer within 30 days of that rejection. Additionally excluded from the loan forgiveness reduction calculations are employees fired for cause or if the employee voluntarily resigned, or voluntarily requested a reduction in hours - **Definition of full-time equivalent as 40 hours, and two methods for calculating FTEs for non full-time employees.** - **Declaration that borrowers can restore forgiveness if they rehire employees by June 30 and reverse reductions to salaries and wages for FTE employees by June 30. The guidance states that loan forgiveness totals will not be reduced for both hours and wage reductions for the same employee.** The 19-page **[interim rule](https://home.treasury.gov/system/files/136/PPP-IFR-SBA-Loan-Review-Procedures-and-Related-Borrower-and-Lender-Responsibilities.pdf)** on PPP review procedures and related borrow and lender responsibilities covers procedural details. Most notably the rule: - **Establishes that the SBA may review any PPP loan**, regardless of size, to determine if the borrower is eligible for PPP loans under the CARES Act, whether the borrower calculated the loan amount correctly and used the funds for eligible costs, and whether the borrower is eligible for the amount of loan forgiveness it requests. - **Declares that borrowers may appeal SBA determinations within 30 days of receipt.** The guidance also says an appeal process will be established, with the specifics coming in a later interim final rule. - **Requires lenders to decide on loan forgiveness within 60 days** **of receipt of the complete application from the borrower.** The SBA then has 90 days to review the loan forgiveness application. - **Clarifies that borrowers may be asked questions by lenders and the SBA.** - **Confirms that lenders will not be paid their fees for any PPP loans the SBA deems ineligible.** This includes a 1-year clawback provision on bank fees for those loans. ## W&D is here to help. We will continue to keep you updated as new guidance is released by the Treasury and SBA. Additionally, we are pleased to host a **LIVE webinar on Wednesday, May 27th, exploring the application and updated forgiveness guidance. [REGISTER](https://us02web.zoom.us/webinar/register/WN_h_Dr-niKR0CyvJL_iHZhoA)**. Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Creating a Digital Estate Plan](https://waradydavis.com/creating-a-digital-estate-plan/) **Published:** October 1, 2015 **Author:** WaradyDavis **Content:** ### As October 19-25 is National Estate Planning Awareness Week, it’s a good time to ensure your estate plan is current and comprehensive. Although it is often overlooked, including a digital estate plan that addresses financial and social digital assets is becoming increasingly important. To get started, compile a list of important files and photos you have on your phone, desktop, laptop or flash drives; in a cloud; or on backup CDs or DVDs. Sketch out the folders where they are kept. Then create an inventory of any bank, brokerage, retirement plan, credit card, loan or insurance accounts you access online. Include information on how to access any financial software you use. If you have any intellectual property, an online store or valuable domain names, remember to delineate what you want done with them. Even though many states do not recognize digital executors, you can still name a trusted individual (perhaps a son or daughter who is particularly adept with technology) to follow your wishes or at least help your traditional executor. Make a comprehensive list of essential passwords and PIN numbers for that individual. For security sake, store the list in a safety deposit box or use an online storage service created for this purpose, such as Everplans. Do not include passwords in your will, since it will become a public document when you die. Next, make a to-do list outlining how you want your online social assets handled. You may choose to have your Facebook profile deleted or memorialized after your death. If you prefer to keep it active, you can designate a “legacy contact” to manage it. Google’s Inactive Account Manager lets you tell the company what to do with your Gmail, Blogger, YouTube and other accounts when you depart. If you want to leave some sort of digital message after your death, you might ask someone to post a photo album chronicling your life on Flickr or a personal video to your YouTube channel. You can write final letters to family and friends on sites like Afterwords and My Goodbye Message. To Loved Ones allows users to schedule messages to be sent on birthdays, anniversaries or other special occasions. If you have any questions about estate planning, please contact Warady & Davis LLP at (847) 267-9600. We can work closely with your financial, tax and estate professionals to make sure your plan addresses a changing landscape. Call us to schedule a meeting of your advisor team. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [W&D Spotlight - Ronald S. Zweig, CPA, RIA - RSZ Financial Advisors](https://waradydavis.com/wd-spotlight-ronald-s-zweig-cpa-ria-rsz-financial-advisors/) **Published:** June 30, 2015 **Author:** WaradyDavis **Excerpt:** In addition to his 40 years of experience in a broad range of public accounting, financial and tax services, Warady & Davis LLP Partner, Ron Zweig, CPA, RIA, has a successful, respected investment advisory practice, R S Zweig Financial Advisors LLC. **Content:** In addition to his 40 years of experience in a broad range of public accounting, financial and tax services, Warady & Davis LLP Partner, Ron Zweig, CPA, RIA, has a successful, respected investment advisory practice, R S Zweig Financial Advisors LLC. RSZ offers a complete range of goal-driven investment and wealth management services through Securities America Inc. He is ranked among SAI’s top producers and manages significant portfolio assets. Ron’s primary focus areas include wealth accumulation, retirement planning and protection of wealth and portfolio management. Please visit Ron’s website – **[rszfinancial advisors.com](https://www.rszfinancialadvisors.com)** for weekly market updates and other valuable information. If you are interested in contacting Ron, he may be reached at 847.714.0500. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Tax Related Identity Theft Remains Serious Problem](https://waradydavis.com/tax-related-identity-theft/) **Published:** March 1, 2016 **Author:** WaradyDavis **Excerpt:** In recent years, identity theft has mushroomed and during the filing season, tax-related identity theft is especially prevalent. Identity thieves typically file fraudulent returns early in the filing season, before unsuspecting taxpayers file their legitimate returns. Criminals gamble that the IRS will not detect the false return and will issue a fraudulent refund. **Content:** In recent years, identity theft has mushroomed and during the filing season, tax-related identity theft is especially prevalent. Identity thieves typically file fraudulent returns early in the filing season, before unsuspecting taxpayers file their legitimate returns. Criminals gamble that the IRS will not detect the false return and will issue a fraudulent refund. **Filing early** is strongly recommended, but enhanced identity theft prevention measures and security protocols will lengthen time frames for refund issuance. On February 17, 2016, the Illinois Department of Revenue announced that it is working with the IRS and other states’ revenue tax departments to protect taxpayers and does not anticipate releasing any individual income tax refunds between January 1, 2016 and March 1, 2016. Filing your return electronically and requesting direct deposit into your checking or savings account is still the fastest way to receive your refund. ## Background Tax-related identity theft occurs when criminals use stolen identification information to file a return claiming a fraudulent refund. According to the U.S. Department of Justice, tax-related identity theft is on the increase and is also becoming more organized. Tax-related identity theft is often perpetrated by criminal enterprises, involving multiple individuals. In 2015, the IRS held several high-level meetings with state tax authorities and tax preparation software providers. These security summits focused on ways to improve cybersecurity and curb tax-related identity theft. All three sectors have agreed to share more information, where allowed by law, to combat tax-related identity theft. The IRS has made a number of upgrades to its return processing filters and taken other behind-the-scenes measures to flag fraudulent returns. Identity validation for taxpayers using tax preparation software has been enhanced. These steps are intended to protect taxpayer accounts by creating security questions and device identity recognition, the IRS explained. All these actions for 2016, the IRS has explained, will serve as the baseline for additional improvements for the 2017 filing season. ## Steps The IRS has described the steps taxpayers should take if they suspect their identities have been stolen and a fraudulent return has been filed in their name: - Taxpayers should contact the IRS and alert the agency that their identity has been stolen. - Taxpayers should file a paper return if they are unable to e-file (for example, the fraudulent return was e-filed). - Taxpayers should complete and file Form 14039, Identity Theft Affidavit, with their return. After the taxpayer’s return and Form 14039 are received for processing by the IRS, the agency’s Identity Theft Victim Assistance (IDTVA) function will handle the case. This special unit will assess the scope of the issues to determine if the case affects one or more tax years as well as determining if there are other victims, who may be unknown to the taxpayer, listed on the fraudulent return. The IRS will mark the taxpayer’s account with an identity theft indicator and the taxpayer will receive an Identity Protection Personal Identification Number (IP PIN). According to the IRS, most tax-related identity theft cases are handled within 120 days but more complex cases may require additional time. ## Verification of identity Sometimes, the IRS may ask a taxpayer to verify his or her identity. This request is done by letter. The IRS explained that most verifications of identity can be done online or by telephoning the agency, but the IRS may request that an individual come in person to a Taxpayer Assistance Center to verify his or her identity. If you have any questions about tax-related identity theft, please contact our office. If you believe your identity has been stolen or you have received a letter from the IRS asking you to verify your identity, please contact us immediately at (847) 267-9600. We can help you work with the IRS. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [Tax refunds may be delayed, Filing season launches January 23rd](https://waradydavis.com/filing-season-launches-january-23-some-refunds-may-be-delayed/) **Published:** January 10, 2017 **Author:** WaradyDavis **Excerpt:** The IRS announces the beginning of the 2017 filing season and reminds taxpayers that the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) may impact certain refunds in 2017. **Content:** The individual income tax filing season opens on January 23, 2017, the IRS has announced. The IRS also reminded taxpayers that the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) (P.L. 114-113) may impact certain refunds in 2017. **Filing season launch** The IRS will begin accepting electronic tax returns and processing paper returns on January 23, 2017. Click to view a chart of all Tax Deadlines 2017**.** Unlike past years, the IRS did not have to deal with late tax legislation in 2016. Typically, the IRS needed extra time to reprogram its processing systems for late tax legislation and that can move the start of the filing season to later in January. The deadline for filing 2016 individual returns is Tuesday, April 18, 2017. The deadline is three days later in 2017 because April 15, 2017 falls on a Saturday. Additionally, Monday, April 17, 2017 is a holiday in the District of Columbia. That holiday moves the deadline to April 18, 2017. **Refunds** The PATH Act generally requires that no credit or refund for an overpayment for a tax year will be made to a taxpayer before the 15th day of the second month following the close of that tax year, if the taxpayer claimed the earned income tax credit (EITC) or Additional Child Tax Credit (ACTC) on the return. The provision in the PATH Act applies to credits or refunds made after December 31, 2016. The IRS explained that it must hold the entire refund, even the portion not associated with the EITC and the ACTC. The IRS reported that it will begin releasing affected refunds starting February 15, 2017. However, the IRS reminded taxpayers that it may take additional time for financial institutions to accept and despot the refunds to taxpayers’ accounts. The IRS added that taxpayers can track the status of a refund by using the Where’s My Refund? tool on the IRS website and also the IRS2Go app. “This is an important change as some of these taxpayers are used to getting an early refund,” IRS Commissioner John Koskinen said. “We want people to be aware of the change for their planning purposes. We don’t want anyone caught by surprise if they get their refund a few weeks later than in previous years.” **ITINs** Another important change affects individual taxpayer identification numbers (ITINs). Under the PATH Act, any ITIN not used on a tax return at least once in the past three years expires January 1, 2017. In addition, any ITIN with middle digits of either 78 or 79 (9NN-78-NNNN or 9NN-79-NNNN) will also expire on that date. The IRS encouraged affected taxpayers to renew their ITINs. If you have any questions about the start of the filing season, refunds or ITINs, please contact Warady & Davis LLP at (847) 267-9600. IR-2016-167 Source: IRS ##### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [IRS releases 2017 standard mileage rates; business and medical/moving rates drop](https://waradydavis.com/irs-releases-2017-standard-mileage-rates-business-and-medicalmoving-rates-drop/) **Published:** January 10, 2017 **Author:** WaradyDavis **Excerpt:** The IRS has released the 2017 optional standard mileage rates that employees, self-employed individuals, and other taxpayers can use to compute deductible costs of operating automobiles (including vans, pickups and panel trucks) for business, medical, moving and charitable purposes. **Content:** The IRS has released the 2017 optional standard mileage rates that employees, self-employed individuals, and other taxpayers can use to compute deductible costs of operating automobiles (including vans, pickups and panel trucks) for business, medical, moving and charitable purposes. The updated rates are effective for deductible transportation expenses paid or incurred on or after January 1, 2017, and for mileage allowances or reimbursements paid to, or transportation expenses paid or incurred by, an employee or a charitable volunteer on or after January 1, 2017. **Business mileage rate** Beginning on January 1, 2017, the standard mileage rates for the use of a car, van, pickup of panel truck used in a business is: - 53.5 cents per mile for business miles driven (down from 54 cents in 2016); - 17 cents per mile for medical and moving expenses (down from 19 cents in 2016); and - 14 cents per mile for miles driven for charitable purposes (permanently set by statute at 14 cents). - Comment. The business rate had increased by 1.5 cents in 2015 and then dropped 4 cents in 2016, while the medical and moving rates dropped slightly (by 0.5 cents) in 2015 and then more significantly by four cents in 2016. With gas prices dropping and vehicle prices holding steady in 2016, when statistics for the 2017 rates are gathered, the optional mileage rates for business expenses for 2017 dropped to their lowest levels over five years. **Comment:** As an alternative to the optional mileage rates, taxpayers can use the actual expense method. Actual expenses include expenditures for gas, oil, repairs, tires, insurance, registration fees, licenses, and other qualified costs, including depreciation. Other items, however, such as parking fees and tolls may also be deductible. A taxpayer may not use the business standard mileage rate after using a depreciation method under Code Sec. 168 or after claiming the Code Sec. 179 first-year expensing deduction for that vehicle. A taxpayer also may not use the business rate for more than four vehicles at a time. **Other amounts** For automobiles used for business, a taxpayer must use 23 cents per mile as the portion of the standard mileage rate treated as depreciation for 2017 for purposes of later determining any gain or loss on a subsequent sale. For prior years, these amounts are 24 cents for 2016 and 2015; 22 cents for 2014; and 23 cents for both 2012 and 2013. To compute the allowance under a fixed and variable rate (FAVR) plan for 2017, the standard automobile cost may not exceed $27,900 for cars or $31,300 for trucks and vans (down from $28,000 for cars for 2016 but up slightly for trucks and vans from $31,000 for 2016). If you have any questions please contact our office at 847-267-9600. ##### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [Tax Time: A Perfect Opportunity to Review Your Investments](https://waradydavis.com/its-tax-time-now-is-an-ideal-time-to-review-your-investments/) **Published:** March 20, 2017 **Author:** WaradyDavis **Excerpt:** Being smart about your taxes isn’t just about making good decisions when you file. While you have your tax information in hand, it’s an ideal time to take a look at your investments and the types of accounts you have to make sure you’re getting the most tax benefits. **Content:** By: **[Ronald S. Zweig, CPA, Partner](https://waradydavis.com/staff/ronald-s-zweig-cpa-partner/)** – Warady & Davis LLP and Registered Investment Advisor with **RS Zweig Financial Advisors LLC** Being smart about your taxes isn’t just about making good decisions when you file. While you have your tax information in hand, it’s an ideal time to take a look at your investments and the types of accounts you have to make sure you’re getting the most tax benefits. As an investor, your first priorities should be 1) to develop an asset allocation strategy that aligns with your investment objectives and risk profile, and 2) to select quality securities that support that strategy. Only after that’s done should you turn your attention to taxes and identify opportunities to improve the tax-efficiency of your portfolio. Here are several planning strategies to consider: - **Make the most of tax-advantaged accounts.** Evaluate the tax-efficiency of each investment, based on factors such as dividend yields, fund turnover, and expected growth. To the extent possible, tax-efficient investments should be held in taxable accounts. Tax-inefficient investments should be held in tax-advantaged accounts, such as traditional or Roth IRAs, qualified retirement accounts, or education savings accounts. Tax-advantaged accounts may also offer opportunities to rebalance your portfolio tax-efficiently by containing asset turnover, to the extent possible, within those accounts. - **Consider tax-efficient options.** Examine investment alternatives that offer similar benefits in a more tax-efficient structure. For example, exchange traded funds (ETFs) typically generate fewer taxable gains than comparable mutual funds, and index funds tend to be more tax-efficient than actively managed funds. - **Analyze tax-exempt investments.** Consider tax-exempt investments, such as municipal bonds. But be sure to calculate the tax-equivalent yield to determine whether the tax savings compensate for reduced returns. - **Harvest losses.** Throughout the year, consider selling poor-performing investments to generate losses that can be used to offset capital gains (plus up to $3,000 of ordinary income). You can even buy the investments back, so long as you wait at least 31 days to avoid the wash sale rule. - **Watch out for short-term gains.** Gains on investments held less than a year are generally taxed as ordinary income and may also be subject to the 3.8% net investment income (NII) tax. There are several potential strategies for minimizing these taxes, including holding these investments for at least one year, harvesting losses to offset short-term gains, and limiting short-term gains (if possible) to tax-advantaged accounts. - **Pay attention to basis.** If you buy shares of stock or mutual funds at different times, you can minimize your gains when you sell a portion of your shares by selling the shares with the highest cost basis. To do that, you need to use the “specific identification method” and inform your broker which shares you wish to sell. If you don’t, the IRS will apply the first-in, first-out (FIFO) method, which often results in the lowest-basis shares being sold first, generating higher capital gains. - **Avoid year-end mutual fund purchases.** This is a common tax trap. Generally, mutual funds distribute capital gains and other income near the end of the year. If you invest in these funds shortly before the record date, you’ll be taxed on these distributions as if you had held the funds all year. Tax season is an ideal time to consider these issues. An examination of your investment-related taxes for 2016 can reveal tax-saving opportunities for 2017. For more information please contact your Warady & Davis LLP advisor at (847) 267-9600 or visit our **[Wealth Management Consulting](https://waradydavis.com/service/wealth-management-services/)** page to see how we can help. ##### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [New ERC guidance; Congress mulls early termination](https://waradydavis.com/new-erc-guidance-congress-mulls-early-termination/) **Published:** August 12, 2021 **Author:** Leslie Flinn **Content:** The IRS has published new guidance on the [**Employee Retention Credit (ERC)**.](https://waradydavis.com/employee-retention-credit-are-you-missing-out/) The credit was created in March 2020 to encourage employers to keep their workforces intact during the COVID-19 pandemic. **[Notice 2021-49](https://www.irs.gov/pub/irs-drop/n-21-49.pdf)** addresses various issues, particularly those related to the extension of the credit through 2021 by the American Rescue Plan Act (ARPA). The guidance comes as Congress weighs ending the ERC early (after September 30th – the end of 3rd Quarter 2021) to help offset the costs of the pending infrastructure bill. As of now, the credit is worth as much as $28,000 per employee for 2021, or up to $7,000 per quarter. ## Guidance on ARPA changes **The majority of the IRS guidance deals with issues raised by the American Rescue Plan Act’s ERC-related provisions, including:** **1. Applicable employment taxes.** Under the CARES Act, employers could claim the ERC only against Social Security taxes. The guidance states that, for the third and fourth quarters of 2021, employers are entitled to claim the credit against their share of Medicare taxes, with the excess refundable. **2. Maximum amount.** The maximum credit of $7,000 per employee per quarter for the first and second quarters of 2021 continues to apply to the third and fourth quarters. A separate limit applies to so-called “recovery startup businesses,” though. **3. Recovery startup businesses.** The ARPA expanded the pool of ERC-eligible employers to include those that: - Began operating after February 15, 2020, and - Have average annual gross receipts for the three previous tax years of less than or equal to $1 million. These employers can claim the credit without suspended operations or reduced receipts, up to $50,000 total per quarter for the third and fourth quarters of 2021. The guidance clarifies that a taxpayer hasn’t begun operating until it has begun functioning as a going concern and performing those activities for which it was organized. It also provides that the determination of whether a taxpayer is a recovery startup business is made separately for each quarter. **4. Qualified wages.** The ARPA directs extra relief to “severely financially distressed employers” with less than 10% of gross receipts for 2021 when compared to the same calendar quarter in 2019. These businesses may count as qualified wages any wages paid to an employee during any calendar quarter — regardless of employer size. Note that the ARPA prohibits “double dipping.” Wages taken into account for several business tax credits (for example, the research, empowerment zone and work opportunity tax credits, as well as credits for COVID-related paid sick and family leave) can’t also be taken into account for purposes of the ERC. **5. Interplay with shuttered venue and restaurant revitalization grants.** According to the guidance, recipients of a Shuttered Venue Operator Grant or a Restaurant Revitalization Fund grant may not treat any amounts reported or otherwise taken into account as payroll costs for those programs as qualified wages for ERC purposes. Such employers must retain documentation that supports the ERCs they claim. **6. Exclusion of wages paid to majority owners of corporations.** The rules regarding owner and related party compensation, which attribute ownership to owners’ family members, could significantly reduce the amount of the ERC for family-owned corporations. A footnote in the guidance indicates that even the wages paid to minority owners might end up excluded from the ERC computation. ***Additional guidance is still needed for this important area.*** ### Miscellaneous issues The guidance addresses several other lingering issues related to the ERC for 2020 and 2021. For example, it clarifies the definition of a “full-time employee.” The notice explains that employers do not need to include full-time equivalents when calculating the average number of full-time employees for purposes of determining whether an employer is a large or small eligible employer. But, for purposes of identifying qualifying wages, an employee’s status is irrelevant, so wages paid to non-full-time workers may be treated as qualified wages (assuming all other applicable requirements are met). The guidance also sheds further light on the: - Treatment of tips and the Section 45B credit - Timing of qualified wage deduction disallowance - Alternative quarter election for 2021 - Gross receipts safe harbor, and ### ERC’s future is uncertain The U.S. Senate has passed infrastructure legislation that would eliminate the ERC for the fourth quarter of 2021. However, the House of Representatives is on recess until the fall, so the fate of the credit remains uncertain. ### Questions? ***This is a complex area and the W&D team is here to help. Please contact us with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. SOURCE: IRS ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Back to Business Grant Program Overview](https://waradydavis.com/back-to-business-grant-program-overview/) **Published:** August 19, 2021 **Author:** Leslie Flinn **Content:** As part of Governor JB Pritzker’s overall economic recovery strategy, the $250 million Back to Business (B2B) grant program aims to deploy small businesses recovery grants for those hit hardest by the COVID-19 pandemic. The B2B grant program builds on the success of last year’s Business Interruption Grant (BIG) program – an equity focused business relief program, which directed $290 million to 9,000 businesses in 98 communities across Illinois. B2B is a key component of the Governor’s $1.5 billion economic recovery plan, aimed toward a swift and equitable deployment of American Recovery Plan Act (ARPA) funds that have been designated for Illinois to assist in recovery from the COVID pandemic. To assist small businesses with the B2B application process and other upcoming or ongoing economic recovery grant programs offered at the State or federal level. DCEO has invested $9 million in support of [Community Navigator organizations](https://www2.illinois.gov/dceo/AboutDCEO/GrantOpportunities/Pages/CommunityNavigator.aspx) working in every region of the state. These organizations will provide technical assistance to businesses, with a focus on underserved businesses including minority, rural, veteran and women-owned businesses. ### Funding available: - $250 million to small businesses across the state that experienced losses in 2020 due to COVID-19, including the following set-asides. ◦ $100 million – Businesses located in Disproportionately Impacted Areas (DIAs). (See DIA Map below) ◦ $30 million – Arts and Entertainment businesses that didn’t receive Shuttered Venue Operators grants ◦ $25 million – Restaurants and taverns that didn’t receive the Restaurant Revitalization Fund ◦ $25 million – Hotels ◦ $25 million – Businesses that didn’t receive a BIG grant due to exhaustion of funds - Grants will range from $5,000 to $150,000 per business and can be used to cover a wide range of operations/staff/overhead costs ◦ Up to $250,000 for hotels ### Eligibility requirements: - Businesses with revenues of $20 million or less in 2019 and a reduction in revenue in 2020 due to COVID-19 ◦ $35 million or less for hotels - Priority will be given to the following categories: ◦ Hard-hit industries (see eligibility guidelines for a full list of priority industries and their definitions) ◦ Hard-hit areas – DIAs comprising of 176 zip codes ◦ Businesses who have yet to qualify for state funding or federal assistance (including the Paycheck Protection Program (PPP), Restaurant Revitalization Fund (RRF), business Interruption Grant (BIG), Shuttered Venue Operators Grant (SVOG), and more) ◦ Businesses that had less than $5 million in revenue in 2019 - Learn about [eligibility guidelines](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_EligibilityGuidelines.pdf) - Eligibility guidelines also available in: [Spanish](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_EligibilityGuidelines_Spanish.pdf), [Polish](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_EligibilityGuidelines_Polish.pdf), [Chinese](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_EligibilityGuidelines_Mandarin.pdf), [Hindi](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_EligibilityGuidelines_Hindi.pdf), and [Arabic](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B%20Eligibility%20Guidelines_Arabic.pdf) - Upon receiving an award, all grantees will need to sign the program [Certification Agreement](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_Certification%20Agreement.pdf). ### How to apply: - **Application Portal Now Open** - Applications can be tracked in real-time - Allies for Community Business (A4CB), DCEO’s grant administrator, is now accepting applications - Learn about the information and **[documentation required](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_Application_RequiredDocs.pdf)** - Documentation required also available in: [Spanish](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_ApplicationRequiredDocs_Spanish.pdf), [Polish](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_ApplicationRequiredDocs_Polish.pdf), [Chinese](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_ApplicationRequiredDocs_Mandarin.pdf), [Hindi](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_ApplicationRequiredDocs_HI.pdf), and [Arabic](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_ApplicationRequiredDocs_AR.pdf) - Documentation needed: - Business owner ID (ITIN business owners eligible) - Business’s 2019 AND 2020 Federal tax returns - Two (2) business bank statements – one from the period April through December 2020, and most recent statement - List of **[Frequently Asked Questions](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_FAQ.pdf)** also available in: [Spanish](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_FAQ_Spanish.pdf), [Polish](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_FAQ_Polish.pdf), [Chinese](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_FAQ_Mandarin.pdf), [Hindi](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_FAQ_HI.pdf), and [Arabic](https://www2.illinois.gov/dceo/SmallBizAssistance/Documents/B2B_FAQ_AR.pdf) ## **Questions?** ***Please contact us with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ##### **SOURCE: Illinois Department of Commerce** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, PPP2 loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Federal Disaster Tax Relief](https://waradydavis.com/federal-disaster-tax-relief/) **Published:** January 29, 2025 **Author:** Leslie Flinn **Content:** ## Federal Disaster Tax Relief: New Opportunities for Taxpayers > ## The Federal Disaster Tax Relief Act introduces critical measures to ease the financial burden on individuals affected by disasters and allows taxpayers to file amended returns or seek refunds for losses that were previously non-deductible. Individual taxpayers are encouraged to consult their W&D advisors if they experienced losses from federally declared disasters between 2021 and 2024 or received relief payments from wildfires or the East Palestine Train Derailment. On December 12, 2024, the **[Federal Disaster Tax Relief Act of 2023](https://www.congress.gov/bill/118th-congress/house-bill/5863)** was signed into law, providing new opportunities for tax payers. The Act introduces significant tax relief measures for individuals and families impacted by disasters. This long-anticipated legislation provides a variety of benefits, including expanded deductions and exclusions from gross income for qualified disaster-related expenses. Below, we outline the key provisions and how they may benefit taxpayers. ### **Expanded Casualty Loss Deductions** One of the most noteworthy changes under this new law is the elimination of the ***10% Adjusted Gross Income (AGI) floor*** for qualified disaster-related personal casualty losses. Previously, taxpayers could only deduct casualty losses exceeding 10% of their AGI, limiting relief for many individuals. Under the new provisions: - **Qualifying disasters** – Casualty losses are eligible if they result from a presidentially declared disaster occurring between December 28, 2019, and January 11, 2025 and officially declared by February 9, 2025. This includes major recent disasters such as Hurricane Helene, Hurricane Milton, Hurricane Ian and the wildfires in Hawaii, and wildfires in California, among many other disasters that occurred over the last four years. See the [**FEMA website**](https://www.fema.gov/disaster/declarations) to search for specific disasters that fall within this qualified period. - **$500 floor** – Casualty loss is subject to a modest $500 floor. - **“Above the line” deduction** – Taxpayers can claim these losses even if they take the standard deduction, offering broader access to relief. - **No deadline extensions** – The legislation does not extend the time to amend prior-year returns or request refunds for these losses. ### **Wildfire Relief Payments: Exclusions from Income** The Act also addresses the increasing prevalence of wildfires by excluding qualified wildfire relief payments from gross income. Key points include: - **What’s covered** – Compensation for losses, damages, additional living expenses, emotional distress, and other wildfire-related costs not covered by insurance. - **Eligibility period** – Payments received after December 31, 2019, and before January 1, 2026, qualify for this exclusion. - **Double benefit prohibition** – Taxpayers cannot deduct expenses covered by these payments or use them to increase the basis of property improvements. - **Extended refund claims** – Taxpayers have at least one year from the law’s enactment to file claims for refunds related to these payments. **NOTE:** The IRS announced [**new tax relief for taxpayers impacted by current wildfires in California**](https://www.irs.gov/newsroom/irs-california-wildfire-victims-qualify-for-tax-relief-various-deadlines-postponed-to-oct-15), where various deadlines are postponed to October 15. The state of California has also recently announced certain **[tax relief for taxpayers located in Los Angeles County due to the wildfires.](https://www.gov.ca.gov/2025/01/11/california-provides-tax-relief-for-those-affected-by-los-angeles-wildfires/)** ### **Specific Relief for East Palestine Train Derailment Victims** Special provisions in the Act provide relief for victims of the February 3, 2023 train derailment in East Palestine, Ohio. Relief payments related to this disaster are excluded from gross income and cover: - Losses and damages to property. - Compensation for inconvenience, closing costs, and diminished property value. - Payments provided by federal, state, or local agencies, Norfolk Southern Railway, or its affiliates. - Applies to payments received on or after February 3, 2023. ### **What This Means for Taxpayers** The Federal Disaster Tax Relief Act introduces critical measures to ease the financial burden on individuals affected by disasters. By eliminating the AGI threshold for casualty losses, expanding exclusions for wildfire relief payments, and addressing specific events like the East Palestine train derailment, the legislation ensures broader and more equitable access to tax relief. **This provides sorely needed relief and allows taxpayers to file amended returns or seek refunds for losses that were previously non-deductible.** Individual taxpayers are encouraged to consult their W&D advisors if they experienced losses from federally declared disasters between 2021 and 2024 or received relief payments from wildfires or the East Palestine Train Derailment. If you believe you qualify for any of these benefits, please connect with your Warady & Davis LLP advisor. Our team is here to help you navigate these changes and maximize the relief available to you. Warady & Davis LLP will continue to keep you informed regarding available disaster relief. You may also contact your Warady & Davis LLP business advisor with any additional questions or concerns – (847) 267-9600 or**[ info@waradydavis.com. ](mailto:info@waradydavis.com) Visit [Tax Services](https://waradydavis.com/service/tax-services/) for more information on how W&D can assist you.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [IRS Gets Budget Boost to Improve Cyber Security, Curb Identity Theft](https://waradydavis.com/irs-gets-budget-boost/) **Published:** February 1, 2016 **Author:** WaradyDavis **Excerpt:** Going into the 2016 filing season, the IRS has additional monetary resources to improve customer service and cybersecurity along with curbing identity theft. The fiscal year (FY) 2016 omnibus spending bill approved by Congress and signed into law by President Obama in December, allocates $290 million above FY 2015 funding to the IRS with instructions of where to spend the funds: customer service, tax-related identity theft and refund fraud, and cybersecurity. **Content:** Going into the 2016 filing season, the IRS has additional monetary resources to improve customer service and cybersecurity along with curbing identity theft. The fiscal year (FY) 2016 omnibus spending bill approved by Congress and signed into law by President Obama in December, allocates $290 million above FY 2015 funding to the IRS with instructions of where to spend the funds: customer service, tax-related identity theft and refund fraud, and cybersecurity. **Customer service** During the 2015 filing season, many taxpayers and tax professionals were very frustrated with customer service at the IRS. The National Taxpayer Advocate discovered that less than 40 percent of all calls to IRS customer service representatives were answered. The average wait time to speak with an IRS employee stretched past 20 minutes. Further, the IRS increased its use of so-called “courtesy disconnects.” That occurs when the IRS disconnects an incoming call because its phone lines are overloaded. According to the National Taxpayer Advocate, the IRS disconnected more than eight million calls from taxpayers during the 2015 filing season. Lawmakers became aware of the customer service challenges at the IRS over the course of several hearings during 2015. IRS Commissioner John Koskinen and other officials said that the agency “had to do more with less.” Speaking in November, Koskinen said that without more funding, customer service would be worse in 2016. The FY 2016 omnibus authorizes more funding for 1-800 help line services for taxpayers. Congress directed the IRS to make improving telephone service a priority and to enhance response times. **Identity theft** Tax-related identity theft occurs when a criminal uses the personal identification information of a taxpayer to file a return claiming a fraudulent refund. Typically, refund fraud occurs early in the filing season. The taxpayer files a legitimate return and discovers that his or her identity has been stolen. In response, the IRS has continuously upgraded its processing filters to uncover fraudulent returns. The agency has also partnered with state tax authorities and private sector tax software vendors and launched public education campaigns about tax-related identity theft. The FY 2016 omnibus authorizes more funding to improve the identification and prevention tax-related identity theft and refund fraud. **Cybersecurity** In 2015, the IRS acknowledged that cybercriminals hacked its popular online Get Transcript app. The app enables taxpayers to obtain line-by-line return information. Criminals, the IRS explained, have used this information to file false returns that claim tax items similar to those items that taxpayers have claimed in the past and to generate fraudulent refunds. The FY 2016 omnibus appropriates more funding to enhance cybersecurity to safeguard taxpayer data. If you have any questions about the impact of IRS’s FY 2016 budget, please contact your Warady & Davis LLP advisor at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [New Borrower-Friendly PPP Loan Forgiveness Applications and Guidance](https://waradydavis.com/new-ppp-forgiveness-apps-guidance/) **Published:** June 17, 2020 **Author:** Leslie Flinn **Content:** # New Borrower-Friendly PPP Loan Forgiveness Applications and Guidance **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Small Employers: Affordable Care Act Tax Overview](https://waradydavis.com/small-employers-affordable-care-act-tax-overview/) **Published:** May 9, 2016 **Author:** WaradyDavis **Content:** ## Small Employers: Stay on the good side of changing requirements and opportunities Employers face a variety of tax-related compliance requirements [under the Affordable Care Act](https://waradydavis.com/navigating-the-road-ahead-for-the-affordable-care-act/) (ACA). As a small employer, you need not comply with one of the most notable provisions — shared responsibility, commonly referred to as “play or pay” — or fear the related penalties. But you still must consider carefully whether the ACA provides other reasons for you to start offering health care coverage or to change or eliminate coverage. You also may be eligible for a tax credit. Here’s a closer look at some key tax-related ACA provisions and IRS guidance that are of particular interest to small employers. Additional provisions and details may apply, so consult your tax and benefits advisors to determine exactly how your organization will be affected. ### You Are A Small Employer – Right? The ACA’s play-or-pay provision doesn’t *require* any employer, small or large, to provide health care coverage. Rather, in some cases, it imposes penalties on “large” employers that don’t offer “minimum essential” coverage or that offer coverage that is “unaffordable” or that doesn’t provide “minimum value.” The play-or-pay provision won’t take effect for large employers until Jan. 1, 2015. In addition, some “transitional relief” will be available in 2015. Nonetheless, employers must determine annually, based on their employees’ actual hours of service, whether they’ll be considered a large employer for the next year. So, even if you’ve already determined that you’re currently a small employer, it’s important to keep an eye on your workforce so you’re aware if any changes occur that could cause you to become a large employer for ACA purposes. ### Calculating full-time employees Under the ACA, a large employer is one with 50 or more full-time employees. Under IRS final regulations issued in February 2014, however, qualifying employers with 50 to 99 full-time employees won’t be subject to the play-or-pay provision until 2016. To qualify for this transitional relief, the employer must: - Maintain its workforce size and aggregate hours of service, - Maintain the health care coverage it offered as of Feb. 9, 2014, and - Certify that it meets the requirements. When counting full-time employees, part-timers must be factored into that number by calculating full-time equivalent employees (FTEs) and adding that figure to the total number of actual full-time employees. A full-time employee generally is someone employed on average at least 30 hours per week or 130 hours in a calendar month. Calculating FTEs for a given calendar month requires totaling the hours of service for all part-time employees and dividing that figure by 120. For hourly employees, the hours should be calculated based on records of hours worked and hours for which payment is made or due for vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. **For salaried employees, there are three methods of determining the hours:** 1. The same method used for hourly employees, 2. A days-worked equivalency method (each worker is credited with eight hours for each day worked), or 3. A weeks-worked equivalency method (each worker is credited with 40 hours for each week worked). You can apply different methods for different classifications of nonhourly employees, so long as the classifications are “reasonable and consistently applied.” ### Seasonal employees and controlled entities Under certain circumstances, hiring seasonal workers could push a small employer over the edge and trigger the play-or-pay provision. This could be the case if you’re close to the threshold of being considered a large employer. Even if you aren’t otherwise close to the threshold, you could be at risk if your seasonal employees work a substantial number of hours. Fortunately, if your company meets the full-time employee threshold for 120 days or fewer during a calendar year “solely due to seasonal workers,” you won’t be subject to the play-or-pay provision. Nonetheless, if your business typically hires seasonal help, you should discuss any potential risks with your financial and benefits advisors. If your company controls multiple other entities, or is controlled by another entity, you may need to delve into the “controlled group” rules under the ACA. Generally, separate entities that are part of a controlled group will be treated as a single employer for play-or-pay purposes. Controlled groups can take various forms, such as parent-subsidiary, brother-sister or other combined groups. Contact your tax and benefits advisors for more information. If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. © 2012 Thomson Reuters/RIA. All rights reserved. ### Changes to the health care coverage credit As you’re probably aware, under the ACA a credit for providing health care coverage has been available to small employers for the last several years. Through 2013, the maximum tax credit was 35% of premiums paid by qualified small business employers (25% of premiums for small tax-exempt organizations). There are some important changes to the tax credit for 2014. In late 2013, the IRS issued proposed regulations updating and fine-tuning the original Section 45R rules governing the credit. More important, the tax break becomes more valuable to eligible employers starting in 2014 — but some new limitations also take effect. ### Changes to the health care coverage credit As you’re probably aware, under the ACA a credit for providing health care coverage has been available to small employers for the last several years. Through 2013, the maximum tax credit was 35% of premiums paid by qualified small business employers (25% of premiums for small tax-exempt organizations). There are some important changes to the tax credit for 2014. I n late 2013, the IRS issued proposed regulations updating and fine-tuning the original Section 45R rules governing the credit. More important, the tax break becomes more valuable to eligible employers starting in 2014 — but some new limitations also take effect. ### Qualification requirements To qualify for the full tax credit, employers cannot have more than 10 full-time employees or the equivalent with part-timers factored in. This is calculated differently than for the play-or-pay provision. To determine the number of FTEs for purposes of claiming the credit, you calculate the total number of employee hours for the year and then divide that number by 2,080. The result is then rounded down, though not below zero. Please note that there are various factors that may complicate the calculation for your specific circumstances. These include hiring new employees during the year and starting an entirely new business. The tax credit is reduced if an employer has more than 10 but fewer than 25 FTEs or pays average annual wages of more than $25,000 but less than $50,000. And the credit is unavailable for employers with 25 or more FTEs and those whose aggregate employee wages average $50,000 or more. (This salary cap will be inflation-adjusted annually.) Also, the percentage of the health plan’s value paid by the employer must be the same for all employees. (Different tax credit formulas apply to tax-exempt organizations.) Sole proprietors, partners in a partnership and shareholders who own more than 2% of an S corporation’s stock are not counted as “employees” for purposes of the size or average wage calculations. The same applies to family members working in the business. Up until now, in order to claim a tax credit, small employers could find a suitable health plan any way they chose. Starting this year, the rules have changed. The proposed IRS regulations state that small employers will qualify for tax credits only if they choose coverage via the Small Business Health Options Program (SHOP). SHOP was intended to help small businesses find affordable health care coverage to offer their employees. But because of state-level uncertainties, hesitant insurer implementation and technology issues, SHOP has been slow to get off the ground. (See the sidebar “SHOP website delayed,” below, for more information.) Consequently, the Treasury Department has announced that employers without access to SHOP coverage will be eligible for the credit as long as they provide coverage that meets the guidelines of a SHOP plan. ### Determining the credit amount The *maximum* credit, determined as a percentage of the business employer’s contribution to the employee’s health benefit (based on self-only coverage), has increased from 35% in 2013 to 50% in 2014. The maximum credit for eligible tax-exempt organizations has also increased from 25% to 35% in 2014. The actual amount of the credit your company can claim is based on a complex formula. **The first element is that the credit must be based on the lesser of:** - The amount you paid on employees’ behalf, or - What you would have paid if you’d used an average small group plan for your rating area. In other words, if you offer a very generous health plan, you’ll get the same tax benefit you’d receive for an “average” plan. If you receive state tax credits for providing health benefits, they won’t affect whether you satisfy the 50% minimum cost-sharing test. But they *will* impact the amount of the federal tax credit. The cost-sharing test determines the amount the employer is required to pay for each employee, typically based on self-only coverage. Thus, if an employee opts for family coverage, the employer will be required to pay no less than 50% of the premium that the employee would have paid had he or she chosen self-only coverage. But there are various exceptions that could leave the employer obligated for an amount different from that calculated under the general rule. Other components of the formula are the number of FTEs, average wages and possibly the phaseout calculations if you have more than 10 employees or average wages exceeding $25,000. Let’s look at an example: For the 2014 tax year, Acme offers its employees a group health plan with single and family coverage and pays 50% of the premiums. Acme has 10 full-time equivalent employees with average annual wages of $23,000. Six employees are enrolled in single coverage and four are enrolled in family coverage. Total premiums are $4,000 a year for single coverage and $10,000 a year for family coverage. Let’s presume for illustrative purposes that the average premiums for the small group market in Acme’s state are $5,000 and $12,000, respectively. Acme’s premium payments ($2,000 for single coverage and $5,000 for family coverage) don’t exceed 50% of these averages, so it computes the credit based on its actual premium payments of $32,000 (6 × $2,000 + 4 × $5,000). Acme’s tax credit is $16,000 ($32,000 × 50%). ### Two-year limit and other notes of interest Beginning in 2014, the credit can be taken for only two years, which must be *consecutive* years. But, even if you claimed it for tax years *before* 2014, you can still claim the credit for two years beginning in 2014 or later (such as for 2014 and 2015 or for 2015 and 2016). This adds an element of strategic planning in that a business may want to refrain from taking the credit, even though eligible to do so, until it will provide the greatest benefit. The credit, or a portion of it, can be carried back or forward if your tax liability for the year is lower than the credit amount. Transition rules allow you to be eligible for the tax credit for 2014 even if your plan year begins later than Jan. 1. (Note: The new regulations make it clear that you cannot create a new but identical business entity simply for the sake of allowing you to get around the two-year limit.) ### Making tough choices Small employers don’t need to worry about suffering play-or-pay penalties for not providing sufficient coverage. But, with insurance premiums continuing to be expensive for many businesses, you’ll still need to make the tough choice of whether to offer a group medical plan, subsidize your employees’ health care via SHOP or cease offering any health care benefits at the peril of losing valuable staff members. Your tax and benefits advisors can help you sort out these tough choices. If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. © 2012 Thomson Reuters/RIA. All rights reserved. ### More ACA issues to keep an eye on in 2014 While the ACA’s health care credit and SHOP website may have garnered the most attention, a couple of other significant provisions do go into effect in 2014 that small employers need to be aware of. In addition, there are some provisions that went into effect in 2013 that warrant continued vigilance. Let’s take a closer look. ### More ACA issues to keep an eye on in 2014 While the ACA’s health care credit and SHOP website may have garnered the most attention, a couple of other significant provisions do go into effect in 2014 that small employers need to be aware of. In addition, there are some provisions that went into effect in 2013 that warrant continued vigilance. Let’s take a closer look. ### Shorter waiting period for coverage One notable health care act provision that took effect on Jan. 1, 2014, is a much shorter maximum waiting period for health care coverage. That is, when a new hire opts to participate in your health plan, this individual’s coverage must begin within 90 days of his or her start date. The requirement is applicable to all qualifying employees and their dependents. The waiting period should be calculated using all calendar days, including weekends and holidays. So, let’s say you hire a new full-time staff member who starts work on July 1 of this year. His or her coverage must begin by Sept. 28. ### New, higher incentives for employee wellness programs Beginning on Jan. 1, 2014, employers that offer a qualifying, “health-contingent” wellness program may receive a maximum reward of 30% of the cost of its health coverage (up from 20% in 2013). And the maximum reward for the prevention and reduction of tobacco usage is 50%. These ACA incentives are intended to encourage employers to establish formal programs to promote employee wellness. To meet the definition of “health-contingent,” participants must meet specified, health-related objectives to obtain a reward, such as decreasing tobacco usage or lowering their cholesterol. Additional rules and restrictions apply. **“Exchange notices” to employees** One of the ACA provisions that *all* employers — whether small or large — had to begin complying with last year (as of Oct. 1, 2013) was providing all employees with “exchange notices.” These communications were mandated to: - Provide notification of the existence of the new Health Insurance Marketplace, - Offer information explaining that employees may be eligible for a premium tax credit if they buy coverage via a Marketplace, and - Warn employees that, if they do buy from the Marketplace, they may lose any employer contribution to any existing employer-provided health plan. The notice is, however, required to be given only once — you don’t need to provide it annually. So, assuming you complied last year, you don’t need to send notices to all of your employees again this year. But keep in mind that exchange notices are required to be provided to all *new* employees hired after Oct. 1, 2013, regardless of plan enrollment status (if applicable) or of part-time or full-time status. So if you’ve added staff recently, be sure to keep up with this obligation. The Department of Labor offers a [sample notice](https://search.usa.gov/search?query=ebsa&affiliate=u.s.departmentoflabor) on its website for employers that offer health care coverage. You don’t need to provide separate exchange notices to dependents or other individuals who are now or may become eligible for coverage under your plan but who aren’t employees. And you don’t need to provide notices to individuals who are no longer employees, such as retirees or COBRA beneficiaries. ### Additional Medicare tax withholding Under the Federal Insurance Contributions Act (FICA), wages are subject to a 2.9% Medicare tax — 1.45% paid by the employers and 1.45% withheld from the employees’ wages. Beginning last year, under the ACA, taxpayers with FICA wages over $200,000 per year ($250,000 for joint filers and $125,000 for married filing separately) had to pay an additional 0.9% Medicare tax on the excess earnings. Unlike regular Medicare taxes, the additional Medicare tax *doesn’t* include a corresponding employer portion. But employers *are* obligated to withhold the additional tax to the extent that an employee’s wages exceed $200,000 in a calendar year. Remember, the $200,000 amount doesn’t include the employee’s income from any other sources. Nor does it take into account his or her tax filing status. One consequence: You may be required to withhold the additional Medicare tax from wages paid to employees who aren’t ultimately liable for the tax — for example, because their wages, together with those of their spouse, don’t exceed the $250,000 threshold for joint filers. An employee can’t ask his or her employer to stop withholding the tax. Instead, if an employee ultimately doesn’t owe the tax, he or she can claim a credit for the withheld tax on his or her income tax return for the year. It’s also possible that *no* additional Medicare tax will be withheld from employees who *are* liable for the tax. This could occur if the combined earnings of a married couple filing jointly exceed $250,000 but neither spouse’s wages are more than $200,000 or if an individual has two jobs and neither job pays wages in excess of the threshold. Employees who anticipate additional Medicare tax liability can’t request that you withhold additional amounts specifically for the tax. They can, however, use Form W-4 to request additional *income* tax withholding sufficient to cover their liability for the additional Medicare tax. In November 2013, the IRS released final regulations regarding the additional Medicare tax and the employer withholding requirements. The only substantial change from the proposed regulations is that employers no longer have access to relief from payment liability for any additional Medicare tax that was required to be withheld but that they didn’t withhold — unless the employer can provide evidence that the employee in question has paid the tax. ### Amending FSA plans Health care FSAs allow employees to redirect pretax income to an employer-sponsored plan that pays, or reimburses them for, qualified medical expenses not covered by insurance. A maximum employee contribution limit of $2,500 went into effect in 2013. (Employers can set a *lower* limit, however.) According to the IRS, the new limit applies on a plan year basis. Thus, non-calendar-year plans must comply for the plan year that started in 2013. Employers that haven’t yet done so must amend their plans and summary plan descriptions to reflect the $2,500 limit (or a lower one, if they wish) by Dec. 31, 2014, and institute measures to ensure employees don’t elect contributions that exceed the limit. Note that there will continue to be *no* limit on employ*er* contributions to FSAs. ### SHOP website delayed There’s been no shortage of media coverage on the faults of the healthcare.gov website. For small businesses hoping to use it to find group coverage, the wait for full functionality shall continue. In late 2013, an official at the U.S. Department of Health and Human Services confirmed that the SHOP website would not be ready to go until November 20*14*. The federal government had hoped to launch the site on Oct. 1, 20*13*. This delay affects only applying for SHOP coverage *online* through the *federal* website. Until the website is ready, to apply for SHOP coverage, paperwork generally must be submitted through a broker or agent. You can still go to [healthcare.gov](https://www.healthcare.gov/) to research health care coverage and find other pertinent information. If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. © 2012 Thomson Reuters/RIA. All rights reserved. If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. © 2012 Thomson Reuters/RIA. All rights reserved. **Categories:** Tax Legislation --- ### [Unemployment fraud increasing exponentially](https://waradydavis.com/unemployment-fraud-increasing/) **Published:** January 1, 2021 **Author:** Leslie Flinn **Content:** The U.S. Department of Labor’s Inspector General estimated $26 billion in unemployment benefits could end up being pocketed by fraudsters. NortonLifeLock, which has 4.5 million customers, has seen a 6,140% spike in the number of unemployment insurance fraud claims from people who requested identity theft restoration services due to fraudsters stealing their unemployment benefits. Targets of identity theft typically discover the scam when their employers alert them that a claim has been filed in their name despite still being employed. A letter also may arrive from the state detailing the unemployment benefits, and oftentimes, a debit card is included in the mailing. Many victims of identity theft won’t realize they have an issue until they start getting 1099 tax forms in the mail for income on unemployment benefits they did not apply for or stimulus money they never received. Others might not find the fraud until after their taxes are filed and they’re questioned during an audit why unemployment or federal benefits were not claimed. **In Illinois, fraudulent claims are being handled by Illinois Department of Employment Security, or [IDES](https://www2.illinois.gov/ides/Pages/Reporting_Unemployment_Insurance_Fraud.aspx).** Illinois Attorney General Kwame Raoul recently announced the launch of a task force that will give federal, state and local law enforcement organizations the ability to share resources. The task force will include the state’s IDES, Illinois State Police and Department of Revenue, along with the U.S. Department of Labor Office of Inspector General and the IRS. ## **How can I spot unemployment insurance identity theft?** - You receive a debit card or an unemployment insurance letter (UI Finding) and have not filed a claim for benefits. - You are notified by your employer that a claim for benefits has been filed when you have not been separated from employment. - You attempt to file a claim online and one already exits. - You receive IRS correspondence regarding unreported UI benefits. - You receive notice of a state or federal tax offset. ## **What steps should I take if I receive a debit card or a UI Finding letter, and did not file for unemployment benefits?** If you suspect a claim has been submitted using your information, and you have not applied for unemployment insurance benefits in Illinois, take steps as follows: - Visit the [IDES website for reporting Unemployment Insurance Fraud.](https://www2.illinois.gov/ides/Pages/Reporting_Unemployment_Insurance_Fraud.aspx) - Report the fraudulent claim to the IDES [here](https://www2.illinois.gov/ides/Pages/Report-Identity-Theft.aspx). - DO NOT activate the debit card that was mailed to you. - DO NOT contact KeyBank. - Request your free credit reports via [annualcreditreport.com ](https://www.annualcreditreport.com/index.action)and review them for other fraudulent activities. - Visit [Data breach response guide](https://www.identitytheft.gov/databreach) for additional steps recommended by the Federal Trade Commission. - Reach out to the three major credit bureaus and place alerts on your accounts. - Consider enrolling in an identity protection and credit monitoring service such as LifeLock. ## **Questions? Contact your Warady & Davis advisor at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: Illinois Department of Employment Security ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Tax Scams **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, identity theft, Illinois unemployment insurance fraud, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, insurance fraud, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA, unemployment --- ### [Supreme Court Upholds Healthcare Law](https://waradydavis.com/healthcare-law-upheld-by-supreme-court/) **Published:** May 9, 2016 **Author:** WaradyDavis **Content:** **In what has been termed the most consequential decision of the decade, the Supreme Court generally upheld the Patient Protection and Affordable Care Act of 2010 (PPACA). The decision has far-reaching implications, many of which will financially impact businesses and individuals.** The main provision at issue was whether it was constitutional for the act to require that, starting in 2014, most Americans have a basic level of health insurance or pay a penalty. In a 5-4 decision, the Court found that the provision was constitutional within Congress’s power under the taxing clause. Considered the lynchpin of the health care Act, there had been widespread speculation that if the mandate fell, the Court might also decide that none of the Act’s other provisions could survive. The decision means that, generally, without congressional action, the provisions of the health care act that already have gone into effect will stand, and the provisions that are scheduled to go into effect in future years will, indeed, go into effect. As to Medicaid expansion, the court ruled that such expansion is an option and not a requirement for the states. The Chief Justice addressed the Medicaid issue by stating that Congress can offer money to states to expand Medicaid and could attach conditions to such grants but it is “not free to … penalize states that choose not to participate in that new program by taking away their existing Medicaid funding.” The states will not be forced to expand Medicaid in order to maintain current subsidies. We will continue to watch developments closely and keep you posted on any rulings or legislation that may impact your tax situation. The majority of the provisions of the PPACA will come into effect in 2013 and 2014. For a detailed timeline of the phase-in provisions of the Patient Protection and Affordable Care Act – CLICK HERE. If you have any questions about the tax provisions in the health care reform laws, please contact us at 847-267-9600. We will be following developments as they ensue after the Supreme Court issues its decision. If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. © 2012 Thomson Reuters/RIA. All rights reserved. **Categories:** Tax Legislation --- ### [Key Provisions of the Tax Cuts and Jobs Act](https://waradydavis.com/key-provisions-of-the-tax-cuts-and-jobs-act-2/) **Published:** December 18, 2017 **Author:** WaradyDavis **Content:** On December 15, the Conference Committee—having reconciled and merged the differing House and Senate provisions into a single piece of legislation—released the **“Tax Cuts and Jobs Act,”** a sweeping tax reform proposal. Listed below is a quick reference of the Act’s key provisions affecting individuals, including the new rates and brackets, the increased standard deduction and elimination of personal exemptions, the repeal of the individual mandate under the Affordable Care Act, and a new deduction for pass-through income. The **“Tax Cuts and Jobs Act”** has largely taken shape at a breakneck speed over a two-month period, passed by the House on November 16 and by the Senate on December 2. Republican leaders are now saying that they have the votes necessary for passage, and it is generally expected that the measure will be approved in both the House and Senate early this week and then make its way to President Trump for his anticipated signature shortly thereafter. It will be the largest major tax reform in over three decades. We will provide more in-depth analysis of the business, individual and estate provisions once the Act is signed into law. ## Individual Tax Rates ***(Note: Individual rate cuts would begin in 2018 and expire after 2025.)*** **Current law:** - Seven rates, starting at 10 percent and reaching 39.6 percent for incomes above $418,401 for singles and $470,701 for married, joint filers. **Proposed:** - Seven rates, starting at 10 percent and reaching 37 percent for incomes above $500,000 for singles and $600,000 for married, joint filers. **For joint filers:** - 10 percent: $0 to $19,050 - 12 percent: $19,050 to $77,400 - 22 percent: $77,400 to $165,000 - 24 percent: $165,000 to $315,000 - 32 percent: $315,000 to $400,000 - 35 percent: $400,000 to $600,000 - 37 percent: $600,000 and above **For single filers:** - 10 percent: $0 to $9,525 - 12 percent: $9,525 to $38,700 - 22 percent: $38,700 to $82,500 - 24 percent: $82,500 to $157,500 - 32 percent: $157,500 to $200,000 - 35 percent: $200,000 to $500,000 - 37 percent: $500,000 and above ### Corporate Tax Rate **Current law:** 35 percent **Proposed:** 21 percent, beginning in 2018. ### Corporate Alternative Minimum Tax **Current law:** Applies a 20 percent rate as part of a parallel tax system that limits tax benefits to prevent large-scale tax avoidance. Companies must calculate their ordinary tax and AMT tax, and pay whichever is higher. **Proposed:** Repealed. ### Individual Alternative Minimum Tax **Current law:** Individual AMT can apply after exemption level of $54,300 for singles and $84,500 for married, joint filers, and the exemptions phase out at higher incomes. **Proposed:** Increase the exemption to $70,300 for singles and $109,400 for joint filers. Increase the phase-out threshold to $500,000 for singles and $1 million for joint filers. The higher limits would expire on Jan. 1, 2026. ### Expensing Equipment **Current law:** Businesses must take depreciation, spreading the recognition of their equipment costs for tax purposes over several years. **Proposed:** Businesses could fully and immediately deduct the cost of certain equipment purchased after Sept. 27, 2017 and before Jan. 1, 2023. After that, the percentage of cost that could be immediately deducted would gradually phase down. ### Repatriation **Current law:** The U.S. taxes multinationals on their global earnings at the corporate rate of 35 percent, but allows them to defer taxes on those foreign earnings until they bring them back to the U.S., or “repatriate” them. **Proposed:** U.S. companies’ overseas income held as cash would be subject to a 15.5 percent rate, while non-cash holdings would face an 8 percent rate. ### Pass-Through Deduction **Current law:** Pass-through businesses, which include partnerships, limited liability companies, S corporations and sole proprietorships, pass their income to their owners, who pay tax at their individual rates. **Proposed:** Owners could apply a 20 percent deduction to their business income, subject to limits that would begin at $315,000 for married couples (or half that for single taxpayers). ### Obamacare Individual Mandate **Current law:** An individual who fails to buy health insurance must pay penalties of $695 (higher for families) or 2.5 percent of their household income — whichever is higher, but capped at the national average cost of the most basic, low-premium, high-deductible plan. **Proposed:** Repeal the penalties. ### Standard Deduction and Personal Exemptions **Current law:** $6,350 standard deduction for single taxpayers and $12,700 for married couples, filing jointly. Personal exemptions of $4,050 allowed for each family member. **Proposed:** $12,000 standard deduction for single taxpayers and $24,000 for married couples, filing jointly. Personal exemptions repealed. ### Individual State and Local Tax Deductions **Current law:** Individuals can deduct the state and local taxes they pay, but the value is subject to certain limits for high earners. **Proposed:** Individuals can deduct no more than $10,000 worth of the deductions, which could include a combination of property taxes and either sales or income taxes. Mortgage Interest Deduction **Current law:** Deductible mortgage interest is capped at loans of $1 million. **Proposed:** Deductible mortgage interest for new purchases of first or second homes would be capped at loans of $750,000 starting on Jan. 1, 2018. ### Medical Expense Deduction **Current law:** Qualified medical expenses that exceed 10 percent of the taxpayer’s adjusted gross income are deductible. **Proposed:** Reduce the threshold to 7.5 percent of AGI for 2017 and 2018. ### Child Tax Credit **Current law:** A $1,000 credit for each child under 17. The credit begins phasing out for couples earning more than $110,000. The credit is at least partially refundable to qualified taxpayers who earned more than $3,000. **Proposed:** Double the credit to $2,000 and provide it for each child under 18 through 2024. Raise the phase-out amount to $400,000, and cap the refundable portion at $1,400 in 2018. ### Estate Tax **Current law:** Applies a 40 percent levy on estates worth more than $5.49 million for individuals and $10.98 million for couples. **Proposed:** Double the thresholds so the levy applies to fewer estates. The higher thresholds would sunset in 2026. Please contact your Warady & Davis LLP advisor at (847) 267-9600 to discuss your current situation and any steps that can be taken before year-end. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Tax Legislation --- ### [Federal government shutdown creates tax filing uncertainty](https://waradydavis.com/federal-government-shutdown-creates-tax-filing-uncertainty/) **Published:** January 14, 2019 **Author:** Leslie Flinn **Content:** ## Tax filing deadlines are still in effect **Despite the government shutdown, the fourth (and final) estimated quarterly tax payment for 2018 is due January 15th**. The IRS has announced that it will begin accepting paper and electronic tax returns for the 2018 tax year on January 28th. **Regardless of how IRS operations proceed, taxpayers still need to comply with the filing deadlines.** Individual taxpayers in every state but Maine and Massachusetts must file by April 15, 2019; filers in those two states have until April 17, 2019. Individuals who obtain a filing extension have until October 15, 2019, to file their returns but should pay the taxes owed by the April deadline to avoid penalties. **[See 2019 Federal Tax due dates here.](https://waradydavis.com/2019-tax-deadlines-and-extension-deadlines/)** Much remains to be seen about how the ongoing shutdown of the federal government will affect this year’s filings. Although the Trump administration has stated that the IRS will pay refunds during the closure — a shift from IRS practice in previous government shutdowns — it’s not clear how quickly such refunds can be processed. ## Effects of the shutdown on the IRS so far An estimated 800,000 federal government workers have been furloughed since December 22, 2018, due to the impasse between President Trump and Congress over funding for a southern border wall. The most recent contingency plan published for the IRS lapsed on December 31, 2018, but it provided that only 12.5% of the tax agency’s approximately 80,000 employees would be deemed essential and therefore continue working during a shutdown. The furloughs are necessary because the standoff over the border wall has prevented the enactment of several of the appropriations bills that fund the federal government. Tax refunds aren’t paid with appropriated funds, but IRS employees are. In the past, the IRS hasn’t paid tax refunds during shutdowns because it didn’t have the appropriated funds it needed to pay the employees who process refunds. Trump administration attorneys, however, have determined that the agency can issue refunds during a shutdown. The IRS likely will need far more than 12.5% of its employees on the job to process refunds when it starts accepting filings. In 2018, the IRS received 18.3 million returns and processed 6.1 million refunds in the first week of tax season. By just one week later, it had received 30.8 million returns and issued 13.5 million refunds. Even though the IRS has indicated that it intends to recall “a significant portion of its workforce” to work, it has provided few details, and those employees would have to work without pay. The IRS says it will release an updated contingency plan “in the coming days.” ## TCJA complicates the picture The implementation of the federal tax overhaul could further complicate matters for taxpayers. The 2018 tax year is the first to be subject to the Tax Cuts and Jobs Act (TCJA), which brought sweeping changes to the tax code, as well as new tax forms. Various TCJA implementation activities, such as the development of new publications and instructions, will continue because they’re funded by earlier appropriations legislation. Be aware that taxpayers and their accountants may not be able to contact the IRS with questions. When the IRS’s main number on January 9 was called, this recorded message was received: “Live telephone assistance is not available at this time. Normal operations will resume as soon as possible.” During the 2013 government shutdown, taxpayers also couldn’t receive live telephone customer service from the IRS, and walk-in taxpayer assistance centers were shuttered. At that time, the IRS website was available, but some of its interactive features weren’t. Treasury Secretary Steve Mnuchin has stated that the IRS will call back enough employees to work to answer 60% to 70% of phone calls seeking tax assistance during this shutdown, which could lead to widespread taxpayer frustration. If you have questions about tax filing, please contact us at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Should you reconsider your business entity choice?](https://waradydavis.com/should-you-reconsider-your-business-entity-choice/) **Published:** June 12, 2019 **Author:** Leslie Flinn **Content:** For tax years beginning in 2018 and beyond, the **Tax Cuts and Jobs Act (TCJA)** created a flat 21% federal income tax rate for C corporations. Under prior law, C corporations were taxed at rates as high as 35%. Meanwhile, the TCJA also reduced individual income tax rates, which apply to sole proprietorships and owners of pass-through entities, including partnerships, S corporations, and, typically, limited liability companies (LLCs). The top rate, however, dropped only slightly, from 39.6% to 37%. What does all of this mean for business owners? Among other things, it means now might be a good time to reconsider your company’s entity choice — if not this year, then perhaps for the 2020 tax year. On the surface, switching to (or staying) a C corporation may seem like a no-brainer. But there are many other considerations involved. ### **Conventional wisdom** Under prior tax law, conventional wisdom was that most small businesses should be set up as sole proprietorships or pass-through entities to avoid the double taxation of C corporations. A C corporation pays entity-level income tax and then shareholders pay tax on dividends — and on capital gains when they sell the stock. For pass-through entities, there’s no federal income tax at the entity level. Although C corporations are still potentially subject to double taxation under the TCJA, their new 21% tax rate helps make up for it. This issue is further complicated, however, by another provision of the TCJA that allows noncorporate owners of pass-through entities to take a deduction equal to as much as 20% of qualified business income (QBI), subject to various limits. But, unless Congress extends it, the break is available only for tax years beginning in 2018 through 2025. ### **Scenarios to ponder** There’s no one-size-fits-all answer when deciding how to structure a business. The best choice depends on your company’s distinctive circumstances, as well as your financial situation and objectives as owner. For instance, if your business consistently generates tax losses, there’s no advantage to operating as a C corporation. Losses from C corporations can’t be deducted by their owners. So, converting to a pass-through entity may make sense because, as their name indicates, these business structures allow losses to *pass through* to the owners’ personal tax returns. Another example involves companies that distribute profits to owners. For a profitable business that does so, operating as a pass-through entity generally will be better if significant QBI deductions are available. If not, it’s probably a toss-up in terms of tax liability. ### **Is your company focused on growth?** Some companies — particularly start-ups and those in “hot” industries — may turn a profit but hold on to those bottom-line dollars to fund future growth. For these businesses, operating as a C corporation generally is advantageous if the corporation is a qualified small business (QSB). Why? A 100% gain exclusion may be available for QSB stock sale gains. If QSB status is unavailable, operating as a C corporation could still be preferred — unless significant qualified business income deductions would be available at the owner level. ### **Many considerations** These are only a few of the issues to consider when rethinking your company’s business structure. We can help you evaluate your options. For more information, please contact Warady & Davis LLP at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Home equity borrowers get good news from the IRS](https://waradydavis.com/home-equity-borrowers-get-good-news-from-the-irs/) **Published:** February 27, 2018 **Author:** WaradyDavis **Content:** Passage of the **Tax Cuts and Jobs Act (TCJA)** in December 2017 has led to confusion over some of the changes to longstanding deductions, including the deduction for interest on home equity loans. In response, the IRS has issued a statement clarifying that the interest on home equity loans, home equity lines of credit and second mortgages will, in many cases, remain deductible under the TCJA — regardless of how the loan is labeled. **Previous provisions** Under prior tax law, taxpayers could deduct “qualified residence interest” on a loan of up to $1 million secured by a qualified residence, plus interest on a home equity loan (other than debt used to acquire a home) up to $100,000. The home equity debt couldn’t exceed the fair market value (FMV) of the home reduced by the debt used to acquire the home. For tax purposes, a qualified residence is the taxpayer’s principal residence and a second residence, which can be a house, condominium, cooperative, mobile home, house trailer or boat. The principal residence is where the taxpayer resides most of the time; the second residence is any other residence the taxpayer owns and treats as a second home. Taxpayers aren’t required to use the second home during the year to claim the deduction. If the second home is rented to others, though, the taxpayer also must use it as a home during the year for the greater of 14 days or 10% of the number of days it’s rented. In the past, interest on qualifying home equity debt was deductible regardless of how the loan proceeds were used up to the $100,000 limit. Above that, the interest tracing rules took over to decide deductibility. A taxpayer could, for example, use the proceeds to pay for medical bills, tuition, vacations, vehicles and other personal expenses and still claim the itemized interest deduction. **The TCJA rules** The TCJA limits the amount of the mortgage interest deduction for taxpayers who itemize through 2025. Beginning in 2018, a taxpayer can deduct interest only on mortgage debt of $750,000. The congressional conference report on the law stated that it also suspends the deduction for interest on home equity debt. And the actual bill includes the section caption “DISALLOWANCE OF HOME EQUITY INDEBTEDNESS INTEREST.” As a result, many people believed the TCJA eliminates the home equity loan interest deduction. On February 21, the IRS issued a release (IR 2018-32) explaining that the law suspends the deduction only for interest on home equity loans and lines of credit that aren’t used to buy, build or substantially improve the taxpayer’s home that secures the loan. In other words, the interest isn’t deductible if the loan proceeds are used for certain personal expenses, but it is if the proceeds go toward, for example, a new roof on the home that secures the loan. The IRS further stated that the deduction limits apply to the combined amount of mortgage and home equity acquisition loans — home equity debt is no longer capped at $100,000 for purposes of the deduction. Some examples from the IRS help show how the TCJA rules work: **Example 1:** A taxpayer took out a $500,000 mortgage to buy a principal residence with an FMV of $800,000 in January 2018. The loan is secured by the residence. In February, he takes out a $250,000 home equity loan to pay for an addition to the home. Both loans are secured by the principal residence, and the total doesn’t exceed the value of the home. The taxpayer can deduct all of the interest on both loans because the total loan amount doesn’t exceed $750,000. If he used the home equity loan proceeds to pay off student loans and credit card bills, though, the interest on that loan wouldn’t be deductible. **Example 2:** The taxpayer from the previous example takes out the same mortgage in January. In February, he also takes out a $250,000 loan to buy a vacation home, securing the loan with that home. Because the total amount of both mortgages doesn’t exceed $750,000, he can deduct all of the interest paid on both mortgages. But, if he took out a $250,000 home equity loan on the principal home to buy the second home, the interest on the home equity loan wouldn’t be deductible. **Example 3:** In January 2018, a taxpayer took out a $500,000 mortgage to buy a principal home, secured by the home. In February, she takes out a $500,000 loan to buy a vacation home, securing the loan with that home. Because the total amount of both mortgages exceeds $750,000, she can deduct only a percentage of the total interest she pays on them. **Stay tuned** The new IRS announcement highlights the fact that the nuances of the TCJA will take some time to shake out completely. We’ll keep you updated on the most significant new rules and guidance as they emerge. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2018 All Rights Reserved. **Categories:** Tax Legislation --- ### [A review of significant TCJA provisions affecting businesses](https://waradydavis.com/a-review-of-significant-tcja-provisions-affecting-businesses-copy/) **Published:** June 21, 2018 **Author:** WaradyDavis **Content:** Now is a good time for businesses and their owners to review some of the provisions of the **Tax Cuts and Jobs Act (TCJA)** that may significantly impact their taxes for 2018 and beyond. Generally, the changes apply to tax years beginning after December 31, 2017, and are permanent, unless otherwise noted. ### Corporate taxation - Replacement of graduated corporate rates ranging from 15% to 35% with a flat corporate rate of 21% - Replacement of the flat personal service corporation (PSC) rate of 35% with a flat rate of 21% - Repeal of the 20% corporate alternative minimum tax (AMT) ### Pass-through taxation - Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% — through 2025 - New 20% qualified business income deduction for owners — through 2025 - Changes to many other tax breaks for individuals — generally through 2025 ### New or expanded tax breaks - Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets — effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023 - Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million (these amounts will be indexed for inflation after 2018) - New tax credit for employer-paid family and medical leave — through 2019 ### Reduced or eliminated tax breaks - New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply) - New limits on net operating loss (NOL) deductions - Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction — effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers - New rule limiting like-kind exchanges to real property that is not held primarily for sale (generally no more like-kind exchanges for personal property) - New limitations on excessive employee compensation - New limitations on deductions for certain employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation ### Don’t wait to start 2018 tax planning This is only a sampling of some of the most significant TCJA changes that will affect businesses and their owners beginning this year, and additional rules and limits apply. The combined impact of these changes should inform which tax strategies you and your business implement in 2018, such as how to time income and expenses to your tax advantage. The sooner you begin the tax planning process, the more tax-saving opportunities will be open to you. So don’t wait to start; contact your Warady & Davis LLP advisor at (847) 267-9600 today. For more detailed information and resources on TCJA provisions affecting you and your business, please visit the **[Tax Reform Center](https://waradydavis.com/tax-cuts-and-jobs-act-key-provisions-affecting-individual-taxpayers/)** on **[waradydavis.com/.](https://waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2018 All Rights Reserved. **Categories:** Tax Legislation --- ### [Uncertainty Surrounds the SBA PPP and EIDL Programs](https://waradydavis.com/uncertainty-surrounds-ppp-eidl/) **Published:** April 7, 2020 **Author:** Leslie Flinn **Content:** **The U.S. Small Business Administration reported Saturday morning that banks had approved more than 725,000 loans from its $349 billion** **Paycheck Protection Program, totaling over $182 billion.** That is progress, coming a week after business owners could first begin applying, a launch marked by confusion caused by lacking and conflicting guidance. Adding to the concern over application and disbursement delays is the reality that the PPP’s funding isn’t enough. The government has already approved more than half the fund, and this before the April 10th date for the self-employed and independent contractors to apply. Last week, Senate Democrats and Republicans each proposed increasing the program’s funds by $250 billion, but disagree on how to allocate the money. As demand spikes for federal funds, new guidance and stalled payouts from the SBA on its Economic Injury Disaster Loans and advance grants are adding to small business owner frustrations and fears. Demand for the loans has been so high that it has overwhelmed the agency, even though Congress set aside billions of dollars last month to help the program make loans and grants to small businesses hurt by the novel coronavirus. The EIDL program was to provide small businesses running out of cash due to the pandemic “with working capital loans of up to $2 million,” according to the Small Business Administration’s website. Small businesses that apply for the loans could also get a cash advance of up to $10,000. Small businesses have applied for $372 billion worth of Economic Injury Disaster Loans but the amount authorized for the EIDL program by Congress is just a fraction of that amount. As a result, without additional funding, the EIDL program could be a lot less generous and timely than previously expected. While, the CARES Act provides hundreds of billions of dollars in aid to small businesses, much of this vital money is already running short. It appears, however, that additional help is on the way. Congress is expected to shore up both programs with additional funding and as part of the CARES Act, the Federal Reserve announced preliminary information on a new $600 billion Main Street Lending and other programs. ### **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [PPP forgiveness simplified for loans of $50,000 or less](https://waradydavis.com/ppp-forgiveness-simplified-for-loans-of-50000-or-less/) **Published:** October 12, 2020 **Author:** Leslie Flinn **Content:** Recipients of Paycheck Protection Program (PPP) loans of $50,000 or less will be able to apply for forgiveness using a [simplified application](https://www.sba.gov/sites/default/files/2020-10/PPP%20Loan%20Forgiveness%20Application%20Form%203508S.pdf) that was released Thursday by Treasury and the U.S. Small Business Administration (SBA). A new [interim final rule](https://www.sba.gov/sites/default/files/2020-10/PPP%20-%20IFR%20--%20Additional%20Revisions%20to%20Loan%20Forgiveness%20and%20Loan%20Review%20Procedures%20Interim%20Final%20Rules.pdf) (IFR) provides new guidance concerning forgiveness and loan review processes for PPP loans of $50,000 or less. Under the IFR, PPP borrowers of $50,000 or less are exempted from any reductions in forgiveness based on: - Reductions in full-time-equivalent (FTE) employees; and - Reductions in employee salary or wages. Of the 5.2 million PPP loans approved by the SBA, about 3.57 million were for $50,000 or less, according the IFR. Those loans accounted for about $62 billion of the $525 billion in PPP loans. About 1.71 million PPP loans of $50,000 or less were made to businesses that reported having zero employees or one employee. ## **Lender responsibilities** - The IFR streamlines the forgiveness process for PPP borrowers of $50,000 or less because they will not be required to perform potentially complicated FTE or salary reduction calculations. Borrowers of $50,000 or less still will have to make some certifications and provide documentation to the lender for payroll and nonpayroll costs. - The new application form, SBA Form 3508S, can be used by PPP borrowers applying for forgiveness on PPP loans with a total loan amount of $50,000 or less, unless those borrowers together with their affiliates received loans totaling $2 million or more. [Instructions for Form 3508S](https://www.sba.gov/sites/default/files/2020-10/PPP%20Loan%20Forgiveness%20Application%20Form%203508S%20Instructions.pdf) also were released. ##### For PPP loans of all sizes, the IFR also contains guidance on lender responsibilities with respect to the review of borrower documentation of eligible costs for forgiveness in excess of a borrower’s PPP loan amount. According to the IFR, when a borrower submits Form 3508S or the lender’s equivalent form, the lender will be required to: - Confirm receipt of the borrower certifications contained in the form; and - Confirm receipt of the documentation the borrower is required to submit to aid in verifying payroll and nonpayroll costs, as specified in the instructions to the form.In addition, the IFR addresses what a lender should do if a borrower submits documentation of eligible costs that exceed the borrower’s PPP loan amount. According to the IFR, the amount of loan forgiveness that a borrower may receive cannot exceed the principal amount of the PPP loan. ##### “Today’s action streamlines the forgiveness process for PPP borrowers with loans of $50,000 or less and thousands of PPP lenders who worked around the clock to process loans quickly,” Treasury Secretary Steven Mnuchin said in a news release. “We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds. We continue to favor additional legislation to further simplify the forgiveness process.” ## **The PPP in brief** - Whether a borrower submits SBA Form 3508, 3508EZ, or 3508S, or a lender’s equivalent form, the lender is required to confirm receipt of the documentation the borrower is required to submit to aid in verifying payroll and nonpayroll costs. If applicable, the lender also is required to confirm the borrower’s calculations on the loan forgiveness application, up to the amount required to reach the requested forgiveness amount. - The borrower is responsible for providing an accurate calculation of the loan forgiveness amount. The borrower will attest to the accuracy of the reported information and calculations on the loan forgiveness application. Lenders are permitted to rely on borrower representations, according to the IFR. Congress created the PPP as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, which was signed into law March 27. The legislation authorized Treasury to use the SBA’s 7(a) small business lending program to fund loans of up to $10 million per borrower that qualifying businesses could spend to cover payroll, mortgage interest, rent, and utilities. PPP borrowers can qualify to have the loans forgiven if the proceeds are used to pay certain eligible costs. The program stopped accepting applications on Aug. 8 with almost $134 billion of congressionally approved funds remaining unspent. W&D is available to help you with the PPP forgiveness process. From keeping you informed of the latest legislation developments to answering PPP forgiveness related questions, or to full engagements to assist you in preparing your PPP loan forgiveness application, please do not hesitate to reach out. Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCES: ###### *The Journal of Accountancy* ###### The AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The CAA brings COVID-19 relief (and more) to individuals](https://waradydavis.com/the-caa-brings-covid-19-relief-and-more-to-individuals-2/) **Published:** January 6, 2021 **Author:** Leslie Flinn **Content:** The nearly 5,600-page **Consolidated Appropriations Act (CAA)** contains billions of dollars in long-awaited COVID-19 and economic relief and numerous other tax, payroll and retirement provisions. Here are some of the key aspects of the new law likely to affect individual taxpayers. ## **Recovery rebates** The most headline-grabbing component of the CAA is the second round of direct payments. The law calls for nontaxable “recovery rebates” of $600 per eligible taxpayer ($1,200 for married couples filing jointly) plus an additional $600 per qualifying child. The payments begin phasing out at $75,000 of modified adjusted gross income (MAGI) for single filers, $112,500 for heads of household and $150,000 for married couples filing jointly. Payments are reduced by $5 for every $100 of income above these thresholds, and phaseouts reduce the total payment amount, including the amounts for qualifying children. The CAA expands eligibility for the payments to so-called mixed-status households, meaning those where not every family member has a Social Security Number (SSN). This change is retroactive to the CARES Act. Eligible families who didn’t receive a payment in the first round because one spouse lacked an SSN can claim a credit for that payment on their 2020 federal tax returns. Because the rebates are based on your 2019 tax returns, you could receive a payment that’s less than you’re entitled to under the law. If your income was lower in 2020 or your family grew, you may be able to claim an additional credit for the difference on your 2020 tax return. But, if you receive a payment and it turns out your actual 2020 income is high enough that your payment should have been phased out, you won’t have to repay the difference. ## **Unemployment benefits** The CAA provides an extra $300 per week in unemployment benefits, over and above state unemployment benefits, for 11 weeks. It also extends for 11 weeks the Pandemic Unemployment Assistance program, which makes unemployment benefits available to workers who typically don’t qualify, including the self-employed, gig economy workers and others in nontraditional employment. ## **Housing relief** The new law includes multiple types of relief for those struggling with their housing costs. For example, the federal eviction moratorium is extended through January 31, 2021. The CAA also offers rental assistance for families affected by COVID-19. Eligible households can apply the funds to rent, utilities and energy costs — including amounts in arrears. And mortgage insurance premiums remain deductible through 2021 (subject to phaseout limits). ## **Retirement relief** The CARES Act provides several forms of temporary relief related to retirement plan requirements. For example, it permits penalty-free withdrawals from certain retirement plans for expenses related to COVID-19 and lifts the limit on retirement plan loans. The CAA clarifies that money purchase pension plans are included among the retirement plans subject to the temporary relief measures under the CARES Act. Unfortunately, the pandemic wasn’t the only disaster to befall taxpayers this year, and the CAA recognizes that. It includes tax relief for taxpayers in federally declared disaster areas for major disasters (not related to COVID-19) declared from January 1, 2020, through February 25, 2021. The relief under the CAA mirrors some of the relief afforded under the CARES Act. For example, it provides that residents of qualified disaster areas can take distributions of up to $100,000 from retirement plans without the normal 10% early withdrawal penalty. A “qualified disaster distribution” must be made no later than June 25, 2021. The CAA also contains special rules for the recontribution of retirement plan distributions applied to a home purchase in a qualified disaster area and raises the limit for retirement plan loans made following a qualified disaster. Be aware that the CAA doesn’t extend the CARES Act’s temporary waiver of required minimum distributions. Affected taxpayers should plan on resuming those distributions for 2021. ## **Earned income and child tax credits** The CAA includes a temporary change that could result in larger earned income tax credits (EITCs) and child tax credits (CTCs). It allows lower-income individuals to use their earned income from the 2019 tax year to determine their EITC and the refundable portion of their CTC for the 2020 tax year. This could produce larger credits for eligible taxpayers who earned lower wages in 2020 due to the pandemic. ## **Medical expense deductions** For tax years beginning before January 1, 2021, you could claim an itemized deduction for unreimbursed medical expenses that exceeded 7.5% of your adjusted gross income (AGI). The threshold was scheduled to jump to 10% of AGI for 2021, which would make it more difficult to qualify for a medical expense deduction. The CAA permanently sets the threshold at 7.5% of AGI for tax years beginning after December 31, 2020. ## **Charitable contributions** Under the CARES Act, taxpayers who don’t itemize their deductions on their tax returns can nonetheless claim a $300 “above-the-line” deduction for cash contributions to qualified charitable organizations in 2020. The CAA extends that deduction through 2021 and doubles the deduction for married filers to $600. Contributions to donor-advised funds and supporting organizations don’t qualify for the deduction. The CARES Act also loosened the limitations on charitable deductions for cash contributions made in 2020, boosting it from 50% to 100% of AGI. The CAA carries that over for 2021. Cash contributions remain limited to the excess of AGI over the amount of all other charitable contributions. Any excess cash contributions are carried forward to later years. ## **Student loans** Under the CARES Act, employers can provide up to $5,250 annually toward employee student loan payments on a tax-free basis before January 1, 2021. The payment can be made to the employee or the lender. The CAA extends the exclusion through 2025. The longer term may make employers more willing to offer this benefit. The CARES Act also temporarily halted collections on defaulted loans, suspended loan payments and reduced the interest rate to zero through September 30, 2020. Subsequent executive branch actions extended this relief through January 31, 2021. The CAA leaves in place that expiration date. ## **Education tax credits** Qualified taxpayers generally can claim an education tax break with the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). Previously, though, the two credits were subject to different phaseout rules, with the AOTC available at a greater MAGI than the LLC. In addition, before the new law, taxpayers could claim a “higher education expense deduction” for qualified tuition and related expenses. The CAA adopts a single phaseout for both the AOTC and the LLC, effective for tax years beginning after December 31, 2020. The credits will phase out beginning at $80,000 for single filers and ending at $90,000. For joint filers, they will begin to phase at $160,000 and disappear at $180,000. The new law also repeals the higher education expense deduction. Instead, taxpayers can apply the LLC credit. ## **Discharged mortgage debt** The tax code provision allowing taxpayers to exclude the discharge of qualified debt on their principal residence up to $2 million (or $1 million for married individuals filing separately) from their gross income was scheduled to expire at the end of 2020. The CAA extends the exclusion to such debt discharged through 2025. But it also reduces the maximum acquisition debt limits to $750,000 for individuals — and $375,000 for married individuals filing separately — for debt discharged after 2020. ## **Flexible Spending Accounts** The CAA loosens certain rules related to health and dependent care Flexible Spending Accounts (FSAs) that could lead to taxpayers forfeiting unspent funds. It allows unused amounts from 2020 FSAs to roll over to 2021and unused amounts from 2021 FSAs to roll over to 2022. Grace periods for plan years ending in 2021 or 2022 may be extended to 12 months after the end of the plan year. For 2021, employees can make mid-year prospective changes in their FSA contribution amounts without a change in status. These changes are voluntary for employers. If you have an FSA, check with your employer to see if it’s adopting the available relief. ## **Repayment of deferred payroll taxes** In August 2020, President Trump issued an executive order allowing employees to defer their share of Social Security taxes. Subsequent IRS guidance allowed, but didn’t require, employers to suspend withholding of such taxes. If your Social Security taxes were deferred, the CAA includes a change that could affect your expected cash flow for 2021. Originally, the IRS issued guidance requiring employees to pay any deferred employment taxes on a prorated basis from January 1, 2021, through April 30, 2021. The CAA gives employees the entire year in 2021 to make up those deferred payments. That means you could have modestly more cash flow than you would have without the law. ## **There’s more** The CAA is one of the longest pieces of legislation in congressional history, and the provisions outlined above are only a sampling of those that could affect you. As has been the case with these COVID-19 stimulus acts, there will almost certainly be additional guidance, announcements, and interpretations to come. We will continue to keep you updated and informed on what you need to know in order to maximize your benefits and make proper financial, tax and business decisions. ## **Questions? Contact your Warady & Davis advisorat 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: SBA, U.S. Treasury and IRS ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, Tax Legislation --- ### [Ready to file for PPP Forgiveness?](https://waradydavis.com/ready-to-file-for-ppp-forgiveness/) **Published:** October 2, 2020 **Author:** Leslie Flinn **Content:** There is no question that PPP loan borrowers who wish to apply for forgiveness and release the burden of their PPP loan are eager to move forward. Uncertainty, however, remains. Although there is much talk about automatic forgiveness for PPP loans under a certain dollar amount, several rounds of stimulus legislation containing PPP modifications have failed in Congress. Proposals are still being made and discussed, including the most recent round of coronavirus stimulus legislation which passed in the House. It is still not clear, however, what changes will be made, if any, and when. Meanwhile, earlier this week, the Treasury Department announced it will begin forgiving PPP loans granted to small-business owners. Applications are generally expected to be approved quickly, with the exception of loans above $2 million that will get added scrutiny. ## **So what should PPP loan Recipients be Doing Now?** Just because banks are now accepting applications and the Treasury is starting to approve them, does that mean you should race to apply? The process will vary slightly from bank to bank, and like all elements of the PPP program, the rules may change. In general, if you are eligible and can get your funds forgiven now, you may want to get started. At a minimum, if you haven’t done so already, start to work on the application and gather required documentation. But, on the other hand, with so much up in the air, it may be more advantageous to wait until Congress finalizes the forgiveness rules. ## **Two main issues remain with PPP forgiveness:** **Blanket forgiveness:** Most PPP loans were for $150,000 or less. Because the PPP loan forgiveness process can be tedious, complicated and potentially expensive, members of Congress have proposed legislation that would allow for a much simpler process of streamlined forgiveness for loans under a certain amount. The commonly discussed threshold is loans of $150,000 and below, but that could change, and there’s a possibility that blanket forgiveness won’t ever be granted. **Deductibility of expenses:** Forgiven PPP loans are not taxable income, but IRS [Notice 2020-32](https://www.irs.gov/pub/irs-drop/n-20-32.pdf) declared that no tax deduction is allowed for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a PPP-covered loan. The position is that allowing the deductibility of expenses paid with PPP funds would result in a double-dipping scenario. According to The Journal of Accountancy, the AICPA is among hundreds of organizations that that have urged Congress to allow full deductions for PPP-related business expenses. Given the severity of the pandemic’s impact on U.S. businesses, the AICPA believes Congress intended PPP expenses to be deductible. Lawmakers from both parties have voiced support for this position, but that has not yet translated into congressional action. ## **How to apply:** ### **Forgiveness application due date:** There is no defined deadline for borrowers submitting the forgiveness application, but borrower payments will be required 10 months after the end of the covered period as explained in FAQ No. 3 of the [PPP Loan Forgiveness FAQs](https://home.treasury.gov/system/files/136/PPP--Loan-Forgiveness-FAQs.pdf). Borrower submission of a forgiveness application does trigger deadlines for lenders and the SBA. Section 2(a) of the [Interim Final Rule on Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures](https://home.treasury.gov/system/files/136/PPP--IFR--Revisions-to-Loan-Forgiveness-Interim-Final-Rule-and-SBA-Loan-Review-Procedures-Interim-Final-Rule.pdf) gives lenders 60 days after the forgiveness application is received to issue a decision to the SBA. The SBA then has 90 days after receiving the decision from the lender to review the application and remit the forgiveness amount to the lender with any interest accrued through the date of the payment. ### **Early applications for loan forgiveness:** The PPP Flexibility Act, P.L. 116-142, signed into law June 5 extended the covered period from eight weeks to 24 weeks. Whether it’s eight or 24 weeks, borrowers may apply for forgiveness before the end of the covered period, once all PPP monies are spent. But doing so lowers the maximum eligible compensation. Additionally, any salary or wage reduction would be extrapolated to the full covered period. If you plan to apply earlier, check your forgiveness calculations carefully to make sure you do not need the extra time to achieve the maximum amount of forgiveness possible in your situation. **NOTE:** The AICPA has a **[loan forgiveness calculator](https://future.aicpa.org/resources/download/ppp-loan-forgiveness-calculator-excel)** (***updated as of current guidance September 16, 2020***) that will make it easier for you to run different timeline and expense scenarios and is a good tool to assist in preparing your application. ### **Types of Forgiveness applications** **[SBA Form 3508EZ](https://www.sba.gov/document/sba-form-paycheck-protection-program-ez-loan-forgiveness-application)** **[SBA Form 3508](https://www.sba.gov/document/sba-form-paycheck-protection-program-loan-forgiveness-application)** ##### The EZ version applies to borrowers that: - Are self-employed and have no employees; OR - Did not reduce the salaries or wages of their employees by more than 25% and did not reduce the number or hours of their employees; OR - Experienced reductions in business activity as a result of health directives related to COVID—19 and did not reduce the salaries or wages of their employees by more than 25%. The application requires fewer calculations and less documentation for eligible borrowers. You can determine if you are able to use the EZ application by reviewing the **[Checklist for Using SBA Form 3508EZ (PDF)](https://www.sba.gov/sites/default/files/2020-06/PPP%20Loan%20Forgiveness%20Application%20Form%20EZ%20Instructions%20%28Revised%2006.16.2020%29-508.pdf)** on the SBA’s website. The longer version of the application has the adjustments for Full-Time Equivalency (FTE) and Salary/Hourly Wage Reductions. Make sure to take your time and **[get your documents together](https://www.sba.gov/document/sba-form-paycheck-protection-program-loan-forgiveness-application-instructions-borrowers)** before you start that process. ### **Required Documentation** Some of the substantiation you may need includes: #### **Payroll:** - ***Bank account statements or third-party payroll service provider reports*** documenting the amount of cash compensation paid to employees. - ***Tax forms*** (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period: Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and ii. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state. #### **Nonpayroll:** ***(For obligations/services prior to February 15, 2020 and eligible payments from the Covered Period.)*** - ***Business mortgage interest payments:*** You’ll need a copy of the lender amortization schedule and receipts or cancelled checks that verify eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments. - ***Business rent or lease payments:*** You’ll have to provide either a copy of your current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments. - ***Business utility payments:*** Gather all the invoices you’ve paid since February 2020 through the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments. ## **Use your best judgment:** Be aware of the guidance, read the application and application instructions thoroughly, run your forgiveness numbers and use that information to come to a reasonable conclusion regarding when it is most advantageous to apply for forgiveness. W&D is available to help you with the PPP forgiveness process. From keeping you informed of the latest legislation developments to answering PPP forgiveness related questions, or to full engagements to assist you in preparing your PPP loan forgiveness application, please do not hesitate to reach out. Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.co**m](mailto:info@waradydavis.com). You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCES: ###### *AICPA* ###### *The Journal of Accountancy* ###### *U.S. Treasury* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [IRS denies deductibility of PPP loan expenses](https://waradydavis.com/irs-clarifies-deductibility-of-ppp-loan-expenses/) **Published:** November 23, 2020 **Author:** Leslie Flinn **Content:** Business owner who took a forgivable loan this year under the Paycheck Protection Program can’t write off certain expenses on their taxes if they expect the debt will be forgiven, according to the **[IRS and Treasury Department](https://home.treasury.gov/news/press-releases/sm1187).** The IRS recently released[ **Revenue Ruling 2020-27**](https://www.irs.gov/pub/irs-drop/rr-20-27.pdf) and **[Revenue Procedure 2020-51](https://www.irs.gov/pub/irs-drop/rp-20-51.pdf)** to clarify the rules for deducting expenses paid with PPP funds. *Here’s what you need to know.* ## **Some background** Generally, applicants are eligible for loan forgiveness if they use at least 60% of the proceeds on payroll costs. Businesses that fall short may be eligible for partial forgiveness. Earlier this year, [the IRS said ](https://www.irs.gov/pub/irs-drop/n-20-32.pdf)that while forgiveness of the loan would be tax-free, borrowers would be unable to deduct their expenses. In May, IRS notice **[2020-32](https://www.irs.gov/pub/irs-drop/n-20-32.pdf)** stated that “no deduction is allowed for an eligible expense that is otherwise deductible if the payment of the eligible expense results in forgiveness of the covered loan.” That meant that a loan that was supposed to be excluded from income was now getting brought back in through the back door. In other words, you get the benefit of the money, but you can’t deduct payments for expenses such as payroll, rent, interest on covered mortgage obligations and any covered utility payments. That effectively increases net business income. Though the program generated plenty of interest – more than 5 million loans were approved, [accounting for $525 billion](https://www.sba.gov/sites/default/files/2020-08/PPP_Report%20-%202020-08-10-508.pdf) – questions have lingered on whether small businesses would be allowed to claim deductions for costs covered by PPP funding. ## **The latest guidance** The IRS and Treasury action seems to resolve the question of deductibility of forgivable PPP expenses. Businesses that received forgiveness or “reasonably believe” their loan will be forgiven in the future may not deduct those costs – whether they have filed for forgiveness or not, [the agencies said](https://home.treasury.gov/news/press-releases/sm1187#:~:text=Press%20Releases-,Treasury%20and%20IRS%20Issue%20Guidance%20Clarifying%20the%20Deductibility%20of%20Expenses,Business%20Received%20a%20PPP%20Loan&text=Since%20businesses%20are%20not%20taxed,paid%20anything%20out%20of%20pocket). Permitting both tax-free forgiveness and deductibility would be a double benefit, the agency concluded. The Ruling gives two examples. In one, the taxpayer (designated as B) hasn’t applied for forgiveness by the end of 2020 (which will be the case for many) but has satisfied all of the requirements under the CARES Act and expects to apply for forgiveness in 2021. The rule states “at the end of 2020 B both knew the amount of eligible expenses that qualified for reimbursement in the form of covered loan forgiveness and has a reasonable expectation of reimbursement.” Because that reimbursement of the loan was “foreseeable,” B may not deduct her eligible expenses. ## **No forgiveness? You may deduct** While the IRS won’t permit applicants to take both forgiveness and a tax deduction, [the IRS also said](https://www.irs.gov/pub/irs-drop/rp-20-51.pdf) business owners whose PPP loans aren’t forgiven may be able to deduct their expenses. In that case, filers can take the write-offs on their returns for 2020 or 2021. The Rev. Proc. provides a safe harbor which allows taxpayers to claim a deduction in 2020 if: - The eligible expenses are paid or incurred during the taxpayer’s 2020 taxable year - The taxpayer received a PPP loan and at the end of the year the taxpayer expects the loan forgiven in a taxable year after 2020, and - In that subsequent taxable year, the taxpayer’s request for forgiveness is denied or the taxpayer never requests forgiveness. Under the above scenario, the taxpayer is allowed to deduct expenses originally thought to be non-deductible on a timely filed return or can amend the return in the taxable year. Sums that aren’t forgiven must be repaid. PPP loans have an interest rate of 1%. Generally, loans issued before June 5th mature in two years, while those issued after that date mature in five years. ## **Congressional Pressure** Lawmakers on both sides of the aisle disagreed with the recent IRS ruling and have proposed legislation that would permit the write-offs, [The Small Business Expense Protection Act of 2020](https://www.congress.gov/bill/116th-congress/senate-bill/3612/cosponsors?searchResultViewType=expanded). In addition, lawmakers said they are working to include language in year-end legislation clarifying that taxpayers qualify for expense deductions even if their loans are forgiven. That could be included in government spending legislation that Congress must pass by Dec. 11 before federal funding runs out. There is also the possibility that Congress may tackle the issue in another Covid-19 relief bill. When that will happen is still uncertain, as lawmakers have spent most of the year fighting over the next round of aid. ## **Waiting might make sense** Like most PPP guidance, the new clarification creates more questions, and with the end of the year fast approaching, the vast majority of borrowers haven’t even applied for forgiveness. The new Rev. Rul. and Rev. Proc. reduce the incentive for taxpayers to apply for forgiveness before the new administration and Congress take power in January. Even with this guidance from the IRS, there’s still a reasonable chance, but no guarantee, that Congress may come up with the legislation to allow the deductibility of forgiven expenses. ## Applying for forgiveness W&D is available to help you with the PPP forgiveness process. From keeping you informed of the latest legislation developments to answering PPP forgiveness related questions, or to full engagements to assist you in preparing your PPP loan forgiveness application, please do not hesitate to reach out. Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCES: ###### **IRS and Treasury Department** ###### The AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved **Categories:** COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Navigating the Road Ahead for the Affordable Care Act](https://waradydavis.com/navigating-the-road-ahead-for-the-affordable-care-act/) **Published:** January 21, 2017 **Author:** WaradyDavis **Excerpt:** With the inauguration of President Trump, the next era of U.S. healthcare reform has begun and Congress has taken initial steps to repeal the Affordable Care Act (ACA). **Content:** > With the inauguration of President Trump, the next era of U.S. healthcare reform has begun and Congress has taken initial steps to repeal the Affordable Care Act (ACA). One of Trump’s first acts as President was to sign an executive order giving federal agencies broad powers to unwind regulations created under the Affordable Care Act. The executive order directs agencies to grant relief to all constituencies affected by the sprawling 2010 health-care law: consumers, insurers, hospitals, doctors, pharmaceutical companies, states and others. It does not describe specific federal rules to be softened or lifted, but it appears to give room for agencies to eliminate an array of ACA taxes and requirements. ### First Steps Toward Repeal Taken On Jan. 12, the U.S. Senate took the first step toward repealing the ACA by passing a budget resolution by a vote of 51-48. This budget resolution provides direction for how Republicans can start rolling back the ACA. The U.S. House of Representatives then passed the same budget resolution Jan. 13 by a vote of 227-198. The budget resolution is noteworthy because it authorizes the House and Senate to produce legislation, called “budget reconciliation,” that will enable Congress to repeal and replace some parts of the ACA. ### The Budget Reconciliation Process Several Senate and House Committees have been instructed to report budget reconciliation legislation by Jan. 27, including some repeal and replacement provisions of the ACA, i.e., they could repeal the individual and employer mandate penalties. Reconciliation bills receive special consideration in the Senate, including that they require a simple majority of 51 votes for passage. However, the bill and amendments must comply with rules that govern the contents of a reconciliation bill, such as provisions must have a direct budgetary impact. For example, changes to insurance market reforms, such as age rating changes, may not have a direct spending impact and may not be allowable in the reconciliation legislation. In 2015, the Republican Congress passed a [budget reconciliation bill](https://www.congress.gov/bill/114th-congress/house-bill/3762) to repeal the penalties associated with the employer and individual mandates, repeal the subsidies and cost-sharing available on public Marketplaces (Exchanges), repeal all the health-related taxes and repeal the Medicaid expansion, to name a few policies, only for it to be vetoed by President Obama in early 2016. Republicans could likely utilize this legislation as a “playbook” for what they include in this year’s budget reconciliation. ### Limitations Without a Super Majority in the U.S. Senate Currently, Republicans do not hold a 60 seat majority in the Senate, as the Democrats did when drafting and passing the ACA. As a result, they lack the ability to exercise more control over passage of any legislation and prevent a filibuster (a procedure where debate over a proposed piece of legislation is extended, allowing one or more Senators to delay or entirely prevent a vote on the proposal). Most legislation in the Senate requires 60 votes. Absent this super majority, Republicans are relying on the budget reconciliation process to repeal the ACA. Again, because only certain policies may be considered for a vote in this unique process, the Republicans cannot use this tool to repeal the law in its entirety, nor can they use it to implement a replacement plan in its entirety. ### Transition Timeline May be Two or Three Years Working within these limitations, Congress is expected to produce a budget reconciliation bill with similar repeal provisions as 2015, but also including several “replace” policies, i.e., a policy that could alter the advance premium tax credits (premium subsidies to buy coverage on a public Marketplace) to encourage younger individuals to purchase coverage, and provide a new to-be-determined transition period of two or three years before an eventual replacement plan takes effect. Reconciliation is expected to include some “replace” policies that could, in part, counteract the impact of nullifying the individual mandate to encourage market stability for consumers and plans. ### An Evolving Landscape – and ACA Remains in Effect Until Official Guidance Otherwise There are more questions than answers about what lies ahead for 2017, 2018, 2019 or even 2020, as Republicans continue to reach consensus on important philosophical and policy questions. Expect more details to be unveiled in the weeks ahead while the incoming Trump Administration takes the reins and, possibly, attempts to tackle the ACA using executive and regulatory authority. Meanwhile, employers, individuals, insurers and other stakeholders should continue to comply with ACA rules unless and until formal guidance relieves some or all of their responsibilities. Please make sure to follow us on [LinkedIn](https://www.linkedin.com/company/warady-&-davis-llp) and [Twitter ](https://twitter.com/WaradyDavisLLP)to receive updates, news and webinar alerts. If you have any questions please contact our office at 847-267-9600. ##### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Source:** [GCG Financial](https://gcgfinancial.com/) **Categories:** E-Alerts --- ### [2015 Tax Tips for You and Your Business](https://waradydavis.com/2015-tax-tips-for-you-and-your-business/) **Published:** February 1, 2015 **Author:** WaradyDavis **Content:** ### 1. Claim your full write‐offs. Tax limits, thresholds, and ceilings change from year to year, so don’t assume that deduction limits or tax rules from prior years apply now. Failing to learn what’s new could result in you shortchanging yourself. For example, there is an increased tax credit for paying at least half the cost of health coverage for employees…but check eligibility rules. If you’re self‐employed, don’t forget to deduct one‐half of your self‐employment tax. Although it’s considered a personal (non‐business) deduction, you don’t need to itemize to claim it. ### 2. Make decisions about writing off equipment purchases. For 2014, there are three possible ways to deduct the cost of equipment (such as smartphones and tablets) and machinery: - Regular depreciation, which spreads deductions for the cost over 5, 7, or other periods fixed by law for the type of property you buy. - Bonus depreciation, which allows 50% to be deducted immediately. - First‐year (Section 179) deduction, which limits the first‐year write off to $500,000; it can be combined with regular and bonus depreciations for an even greater deduction in 2014. The deduction rules vary with each option. Work with a tax advisor to review not just your 2014 tax picture, but look ahead to determine which write‐off is best for your situation. ### 3. Take post year‐end action. Even though the tax year has closed, it is not too late to make certain payments that can still reduce your taxes: - Contributions to qualified retirement plans. Depending on the type of plan, you may be able to both set‐up and make a tax‐ deductible contribution for tax year 2014 during 2015. - Contributions to health savings accounts (HSAs). If you were covered by a high‐deductible health plan (HDHP) in 2014, you can contribute to a health savings account for 2014 up to April 15, 2015 (no extra time is allowed, even if you obtain a filing extension). As long as you had HDHP coverage for all of December, you can make a full year’s HSA contribution. ### 4. Get a filing extension if you need it. While the IRS may start to accept returns shortly, the filing deadline for 2014 returns is March 16, 2015 (March 15 is on a Sunday this year) for calendar year corporations, and April 15, 2015, for individuals, partnerships, and limited liability companies (in most cases). If you do not have all the information you need to complete your return or for any other reason, you can request a filing extension. Individuals requesting a filing extension should use Form 4868; partnerships, limited liability companies, and corporations use Form 7004. The extended due date for filing a 2014 return depends on your return: - Corporations (both C and S), partnerships, and limited liability companies: September 15, 2015. This is also the deadline for S corporations, partnerships, and limited liability companies to give Schedule K‐1s to their owners. - Individuals: October 15, 2015. ### 5. Pay estimated taxes for 2015 If you report your share of business income on your personal return, you probably have to pay estimated taxes to cover your anticipated tax bill for 2015. The first estimated tax payment for the year is due on April 15, 2015. This date applies even if you obtain a filing extension for your 2014 income tax return. **Caution: Don’t wait until you file your return for the year to pay the tax you expect to owe. This will cost you in tax penalties. Better to pay in installments, as required.** ### The Last Word Action on your part can minimize your tax bill for 2014 and avoid interest and penalties both this year and next. The sooner you start, the easier it is to complete actions on time. ## 2015 QUICK TIPS ### Individual Returns - Begin the process early - Contribute to a taxadvantaged account to reduce taxable income - Discuss all possible deductions with your tax advisor - For same sex spouses, choose your federal filing status - Use your 2014 tax return tostart planning your 2015 tax strategy - Review your retirement plan ### Business Returns - Properly classify your office equipment - Keep tabs on travel and entertaining expenses - Keep track of deductions - Review choice of entity - Prepare for new Affordable Care Act Requirements - Plan for succession ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Last Minute 2015 Year-End Planning](https://waradydavis.com/last-minute-year-end-planning/) **Published:** November 1, 2015 **Author:** WaradyDavis **Excerpt:** Although 2015 is quickly coming to a close, there is still time, with careful planning, to execute some last minute tax strategies. In many cases, these strategies can help minimize the tax burden. **Content:** Although 2015 is quickly coming to a close, there is still time, with careful planning, to execute some last minute tax strategies. In many cases, these strategies can help minimize the tax burden. Of course, every individual’s situation is different, so please contact your Warady & Davis LLP advisor at for specific details about a year-end tax planning strategy customized to you. ## Traditional techniques The roster of traditional year-end tax planning strategies is lengthy and often involves methods to shift income between 2015 and 2016. To postpone income to 2016, taxpayers can consider delaying plans to sell appreciated assets, redeem U.S. savings bonds, completing Roth IRA conversions, and so on. If possible, it may be worthwhile to postpone any bonuses until after 2015. In contrast, some taxpayers may want to accelerate income into 2015. This can be particularly valuable if a taxpayer expects to be in a higher tax bracket in 2016 compared to 2015. When considering traditional year-end techniques, keep in mind the 3.8-percent net investment income (NNI) tax. The NII tax applies to the lesser of (1) an individual’s net investment income (NII) or (2) the excess of the individual’s modified adjusted gross income (MAGI) over the threshold amount. The thresholds are $250,000 for married taxpayers filing a joint return and surviving spouses; $125,000 for married taxpayers filing a separate return; and $200,000 for all other taxpayers. ## Gift-making Gift-making is an important year-end tax strategy that can be overlooked. The Tax Code allows taxpayers to give away up to an “annual exclusion amount” per recipient per year free of gift tax. For 2015, the annual exclusion amount is $14,000. If property is given instead of cash, the value of the gift is the fair market value of the property. If spouses consent to split all gifts that are made by either one of them during any year and each spouse is also a U.S. citizen or resident, then the gifts can be deemed as having been made one half by each spouse. As a result, spouses who consent to split their gifts can transfer twice the annual per-recipient exclusion amount each year, free of gift tax ($28,000 for 2015). If you have any questions about year-end tax planning, please contact Warady & Davis LLP at [(847) 267-9600](). We can develop a personalized year-end tax planning strategy for you and your business. **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [2015 Tax Filing Season Challenges](https://waradydavis.com/2015-filing-season-challenges/) **Published:** February 15, 2015 **Author:** WaradyDavis **Excerpt:** The 2015 filing season is well underway and the IRS, taxpayers and tax professionals are expecting some challenges. In addition to the huge number of returns the IRS must process, the agency also must ensure that individuals are in compliance with new requirements under the Affordable Care Act and prevent the growing problem of refund fraud. The IRS has cautioned that its resources this filing season are stretched thin because of budget cuts. **Content:** The 2015 filing season is well underway and the IRS, taxpayers and tax professionals are expecting some challenges. In addition to the huge number of returns the IRS must process, the agency also must ensure that individuals are in compliance with new requirements under the Affordable Care Act and prevent the growing problem of refund fraud. The IRS has cautioned that its resources this filing season are stretched thin because of budget cuts. ### Filing season As 2014 drew to a close, there was concern that the filing season would be delayed because of late tax legislation. In past years, the IRS had delayed the start of the filing season in order to reprogram its return processing systems for new tax laws. Congress passed, and President Obama signed, the Tax Increase Prevention Act of 2014 in mid-December. Despite the late date of the new law, the IRS successfully reprogrammed its return processing systems in time for the filing season to open on January 20, 2015. ### Identity theft One important concern as the filing season unfolds is refund fraud. Typically, identity thieves file fraudulent returns early in the filing season. Taxpayers often discover they are victims of identity theft when they attempt to file their legitimate return and learn that a fraudulent return had already been filed. The IRS has upgraded its refund fraud filters and has enhanced its outreach to victims of identity theft. Nonetheless, refund fraud is a growing problem. Starting this year, the IRS will limit the number of direct deposit refunds to a single financial account or pre-paid debit card to three. Fourth and subsequent valid refunds will convert to paper checks and be mailed to the taxpayer. These measures are intended to help curb refund fraud. The IRS also is educating taxpayers about telephone scams. Since October 2013, nearly 3,000 individuals have been victims of criminals making unsolicited calls to taxpayers fraudulently claiming to be IRS officials and demanding that they make a cash or credit card payment. The IRS reminded taxpayers that it does not ask for payment by pre-paid debit card or wire transfer. ### Affordable Care Act The Affordable Care Act requires individuals to have minimum essential health coverage – unless exempt – or make a shared responsibility payment. The IRS reminded taxpayers that individuals with employer-provided coverage, or who obtain coverage through Medicare, Medicaid, TRICARE, the ACA Marketplace, and other government programs, generally will only have to check a box on their return indicating they had minimum essential coverage in 2014. Individuals without minimum essential coverage in 2014 will need to calculate their payment. Before making that calculation, individuals should explore if they are eligible for an exemption. The Affordable Care Act provides for a number of exemptions, some based on economic hardship and others on personal situations. We will keep you posted of developments this filing season. As always, please contact our Warady & Davis LLP at (847) 267-9600 if you have any questions. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Avoid a Trip to the DMV](https://waradydavis.com/avoid-a-trip-to-the-dmv/) **Published:** January 1, 2016 **Author:** WaradyDavis **Content:** The state of Illinois is no longer sending out the vehicle sticker reminder letters (see the link below for state website). However, you can sign up to receive electronic reminders via e-mail, which may allow you to avoid having to go to the DMV to pick up the stickers. When signing up, you will need your current Registration Identification Card.which lists the Registration ID and the PIN Number required to set-up reminders. Visit: [Cyber Drive Illinois](https://www.cyberdriveillinois.com/) If you have any questions, as always, please contact your Warady & Davis LLP advisor at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [7 Things Every Business Owner Should Do in 2016](https://waradydavis.com/7-things-every-business-owners-should-do-in-2016/) **Published:** January 1, 2016 **Author:** WaradyDavis **Excerpt:** If you own or manage your own business, you’re probably busy monitoring operations and dealing with everyday problems. But there are a few things that you should make time to do every year. These are important for your long term business and personal success. **Content:** ### By Steve Brillion, CPA, Partner, Warady & Davis LLP If you own or manage your own business, you’re probably busy monitoring operations and dealing with everyday problems. But there are a few things that you should make time to do every year. These are important for your long term business and personal success. 1. **Review your business tax strategy.** A month or so after you’ve filed your tax return; make an appointment with your tax advisor. Go over your return together and identify opportunities for tax savings. Question everything, starting with whether you’re using the right form of business entity. Ask about recent changes in the tax code and how they might benefit your business. Make your advisor a “partner” in your business strategy. 2. **Update succession planning for your business.** Review your succession planning annually. You should have a specific plan for each key manager position, including yourself. Be prepared for a short-term absence or a permanent vacancy. Your plan might mean promoting from within or recruiting externally. An up-to-date plan can be invaluable if you have an unexpected vacancy. 3. **Review and update your personal estate planning.** If you’re a business owner, your company is likely to be a significant part of your estate. A good estate plan is essential if you hope to pass it on to your heirs. But your company, your personal circumstances, and the tax laws are continually changing. You should take time each year to make sure your plans are current. 4. **Review Your Information Technology Usage and Needs.** Is your computer system giving you the information you need to run your business? Are your hardware and systems up-to-date and secure? Who do you turn to when you have a technology problem? Today, technology is essential to any businesses’ success. At a minimum, on an annual basis, you and your IT staff or outside advisors should review your in place technology – hardware, software and support – to identify areas that need to be addressed to maximize business performance. 5. **Review Your Internal Controls.** Although most companies have some form of internal controls to prevent the misuse or theft of company assets, fraud still costs American businesses billions annually. It is essential that sound internal controls be implemented to safeguard your most vulnerable and liquid assets such as cash, accounts receivable, inventory, etc. Review your controls and make sure they are followed and monitored. 6. **Review your business banking relationships.** Annually, you should go over your cash balances and banking relationships with your controller or CFO. Then both of you should meet with your banker. Ask about new products or services that could help your company. Address any service concerns or problems you might have had. Look for ways to reduce idle cash, boost interest earned, and improve cash flows. 7. **Review your business insurance coverage.** Don’t just automatically write a check to renew your insurance policies when they come due. Instead, you should sit down with your insurance agent every year. Review your business operations, focusing on any changes. Discuss types of risk that could arise. Ask about new developments in business insurance. Use your agent’s expertise to identify risk areas and suggest suitable coverage. These are just some of business planning strategies to consider for 2016. Please contact us or your tax advisor for more details. If you have any questions , as always, please contact your Warady & Davis LLP advisor at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [Supreme Court Upholds ACA Code Sec. 36B Premium Tax Credit Regs](https://waradydavis.com/supreme-court-upholds-aca-code-sec-36b-premium-tax-credit-regs/) **Published:** June 30, 2015 **Author:** WaradyDavis **Excerpt:** After months of waiting, the U.S. Supreme Court announced its decision on the fate of the Code Sec. 36B premium assistance tax credit on June 25 in King v. Burwell, 2015-1 ustc ¶50,356. In a 6 to 3 decision, the Court held that enrollees in both federally-facilitated Marketplaces and state-run Marketplaces can claim the credit, which helps offset the cost of health insurance. The decision leaves in place the current IRS regulations on the credit and the regime for administering and claiming the credit. **Content:** After months of waiting, the U.S. Supreme Court announced its decision on the fate of the Code Sec. 36B premium assistance tax credit on June 25 in *King v. Burwell, 2015-1 ustc* ¶50,356. In a 6 to 3 decision, the Court held that enrollees in both federally-facilitated Marketplaces and state-run Marketplaces can claim the credit, which helps offset the cost of health insurance. The decision leaves in place the current IRS regulations on the credit and the regime for administering and claiming the credit. ## Code Sec. 36B credit The Affordable Care Act (ACA) created both the Marketplaces (previously called Exchanges) and the Code Sec. 36B credit. The Marketplaces connect eligible individuals with health insurance issuers. Some states have set up their own Marketplaces. In other states, the Marketplaces are operated by the federal government. Qualified enrollees may take advantage of the Code Sec. 36B credit if their incomes are within certain guidelines and they satisfy other requirements. When the IRS issued regulations on the Code Sec. 36B credit, the agency made the credit available to enrollees in state-run Marketplaces and federally-facilitated Marketplaces. This decision by the IRS sparked controversy. A number of law suits were filed challenging the IRS’s regulations. According to the challengers, the ACA limited the availability of the tax credits to enrollees in state-run Marketplaces. Enrollees in federally-facilitated Marketplaces could not claim the credit. In the King case, both a federal district court and the Fourth Circuit Court of Appeals ruled against the challengers. The Supreme Court agreed to take up the case and heard oral arguments in March of this year. **Note.** Not all of the challenges to the Code Sec. 36B regulations were unsuccessful in the lower courts. In a case very similar to King, the Court of Appeals for the District of Columbia Circuit struck down the IRS regulations as contrary to the plain language of the ACA. The split among the circuits left the outcome of the controversy far from certain. ## Supreme Court’s decision Chief Justice John Roberts delivered the Court’s decision in King. “Congress based the Affordable Care Act on three major reforms: first, the guaranteed issue and community rating requirements; second, a requirement that individuals maintain health insurance coverage or make a payment to the IRS; and third, the tax credits for individuals with household incomes between 100 percent and 400 percent of the federal poverty line. In a State that establishes its own Exchange, these three reforms work together to expand insurance coverage. Under petitioners’ reading, however, the Act would operate quite differently in a State with a Federal Exchange. As they see it, one of the Act’s three major re-forms – the tax credits – would not apply,” Roberts wrote. This outcome, the Court found, was not what Congress intended. “The combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner,” Roberts added. Three justices dissented in *King*. They would have found in favor of the challengers. “The Congress that wrote the Affordable Care Act knew how to equate two different types of Exchanges when it wanted to do so,” the dissent wrote. According to the dissent, the government did not show why the Court should have departed from the language of the ACA. ## Impact Since enactment of the ACA, the IRS and the U.S. Department of Health and Human Services (HHS) have issued instructions and guidance for enrollees in Marketplace coverage. The Marketplaces make initial determinations of eligibility for the credit. The IRS administers how enrollees claim the credit when they file their federal income tax returns. According to HHS, nearly 80 percent of all enrollees in Marketplace coverage have been eligible and have used the Code Sec. 36B credit to offset the cost of health insurance. The decision by the Supreme Court in *King* leaves the IRS regulations on Code Sec. 36B undisturbed. Going forward, nothing is expected to change for enrollees. *If you have any questions about pending tax legislation or tax reform, as always, please contact your Warady & Davis LLP advisor at (847) 267-9600.* Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Developments Continue to Impact Mortgage Interest Deduction](https://waradydavis.com/developments-continue-to-impact-mortgage-interest-deduction/) **Published:** September 1, 2015 **Author:** WaradyDavis **Content:** The mortgage interest deduction is widely used by the majority of individuals who itemize their deductions. In fact, the size of the average mortgage interest deduction alone persuades many taxpayers to itemize their deductions. It is not without cause, therefore, that two recent developments impacting the mortgage interest deserve being highlighted. These developments involve new reporting requirements designed to catch false or inflated deductions; and a case that effectively doubles the size of the mortgage interest deduction available to joint homeowners. ## More Detailed Form 1098 Coming The 2015 Surface Transportation Act (aka the Highway bill), which was signed into law on July 31, 2015, will require that Form 1098, Mortgage Interest Statement, filed with the IRS and provided to homeowners, include information on: 1. the amount of outstanding principal of the mortgage as of the beginning of the calendar year, 2. the address of the property securing the mortgage, and 3. the loan origination date. These items are in addition to the information that parties were already required to provide to the IRS and payors under existing law. The Government Accountability Office (GAO) had expressed concern that the information reported on Form 1098 is insufficient to allow the IRS to enforce compliance with the deductibility requirements for qualified residence interest. This criticism has included in particular, but not limited to, the dollar limitations imposed on acquisition indebtedness and home equity indebtedness. While the modifications are intended to boost compliance with the deductibility requirements for qualified residence interest, they also impose a new burden on mortgage service providers. To give mortgage service providers time to reprogram their systems, the additional reporting requirements apply to returns and statements required to be furnished after December 31, 2016. ## Joint Ownership Another major development impacting on some homeowners’ mortgage interest deduction also took place this summer. Reversing the Tax Court, a panel of the Court of Appeals for the Ninth Circuit has found that when multiple unmarried taxpayers co-own a qualifying residence, the debt limit provisions apply per taxpayer and not per residence (Voss, CA-9, August 7, 2015). The question was one of first impression in the Ninth Circuit, the court observed. Background. The taxpayers, registered domestic partners, obtained a mortgage to purchase a house (the Rancho Mirage property). In 2002, the taxpayer refinanced and obtained a new mortgage. That same year, the taxpayers purchased another house (the Beverly Hills property) with a mortgage, which they subsequently refinanced and obtained a home equity line of credit totaling $300,000. The total average balance of the two mortgages and the line of credit during the tax years at issue was approximately $2.7 million. Both taxpayers filed separate income tax returns. Each individual claimed home mortgage interest deductions for interest paid on the two mortgages and the home equity line of credit. The IRS calculated each taxpayer’s mortgage interest deduction by applying a limitation ratio to the total amount of mortgage interest that each petitioner paid in each taxable year. The limitation ratio was the same for both: $1.1 million ($1 million of home acquisition debt plus $100,000 of home equity debt) over the entire average balance, for each tax year, on the Beverly Hills mortgage, the Beverly Hills home equity line of credit, and the Rancho Mirage mortgage. The taxpayers challenged the IRS’s calculations but the Tax Court ruled in favor of the agency. Court’s analysis. Code Sec. 163(h)(3), the court found, provides that interest on a qualified residence, by a special carve-out, is not considered “personal interest,” which would otherwise be nondeductible by taxpayers who are not corporations. A qualified residence is the taxpayer’s principal residence and one other residence of the taxpayer which is selected by the taxpayer for the tax year and which is used by the taxpayer as a residence. The court further found the Tax Code limits the aggregate amount treated as acquisition indebtedness for any period to $1 million and the aggregate amount treated as home equity indebtedness for any period to $100,000. In the case of a married individual filing a separate return, the debt limits are reduced to $500,000 and $50,000. Looking at the language of the Tax code, the court found that the debt limit provisions apply per taxpayer and not per residence. There was no reason not to extend this treatment to unmarried co-owners, the court concluded. Thus, each of the homeowners were entitled to the $1 million limit. Whether this holding will hold up in jurisdictions other than the Ninth Circuit (California and other western states, including Hawaii), and whether it will apply to joint ownership situations for vacation homes, for example, remains to be tested. If you have any questions regarding how best to maximize your mortgage interest deduction, please contact us at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Supreme Court's Same Sex Marriage Decision Affects Taxation](https://waradydavis.com/supreme-courts-same-sex-marriage-decision-affects-taxation/) **Published:** June 30, 2015 **Author:** WaradyDavis **Excerpt:** The Supreme Court’s decision in Obergefell v. Hodges (2015-1 ustc ¶50,357) on June 26, 2015 continues what was set in motion in 2013: the expansion of tax benefits to same-sex married couples. In Obergefell, the Court ruled 5 to 4 that the Fourteenth Amendment requires a state to license a marriage between two people of the same sex. The Court further held that states must recognize a marriage between two people of the same sex when a marriage was lawfully licensed and performed out of state. **Content:** The Supreme Court’s decision in *Obergefell v. Hodges* (2015-1 ustc ¶50,357) on June 26, 2015 continues what was set in motion in 2013: the expansion of tax benefits to same-sex married couples. In Obergefell, the Court ruled 5 to 4 that the Fourteenth Amendment requires a state to license a marriage between two people of the same sex. The Court further held that states must recognize a marriage between two people of the same sex when a marriage was lawfully licensed and performed out of state. ### **Background** In 2013, the Supreme Court decided *Windsor v. U.S* (2013-2 ustc ¶50,400). Windsor was an estate tax case, which challenged Section 3 of the federal Defense of Marriage Act (DOMA). Section 3 defined marriage as a man-woman relationship for federal purposes. The Court in *Windsor* struck down Section 3 as unconstitutional. After *Windsor*, the IRS issued Rev. Rul. 2013-17. The IRS announced that it would take a place of celebration approach to same-sex marriage. The IRS would recognize, for federal tax purposes, a marriage of same-sex individuals that was validly entered into even if the married couple is domiciled in a state that did not recognize the validity of same-sex marriages. In Notice 2014-19, the IRS issued guidance for retirement plans, reflecting *Windsor*. Since *Windsor*, a number of cases challenging state bans on same-sex marriage moved through the federal courts, including *Obergefell*. The Supreme Court agreed to hear *Obergefell*. ### **Obergefell decision** Justice Anthony Kennedy delivered the Court’s opinion in *Obergefell*. Kennedy wrote that the “the Fourteenth Amendment requires a State to license a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-State.” State prohibitions on same-sex marriage, Kennedy added, “abridge central precepts of equality. Same-sex couples are denied all the benefits afforded to opposite-sex couples and are barred from exercising a fundamental right. The Equal Protection Clause, like the Due Process Clause, prohibits this unjustified infringement of the fundamental right to marry.” However, four justices dissented. The dissenting judges would have held that the fundamental right to marry does not include a right to make a State change its definition of marriage. “The people of a State are free to expand marriage to include same-sex couples, or to retain the historic definition.” ### **Going forward** For federal tax purposes, the treatment of same-sex couples as on par with opposite-sex couples since the Windsor decision will continue unchanged. The IRS is likely to issue more guidance to reflect the Court’s decision in *Obergefell*. Many other federal agencies, such as the Social Security Administration, also are expected to issue guidance reflecting *Obergefell*. The *Obergefell* decision also impacts retirement, pension and health care benefits of many same-sex married couples. For state tax purposes, same-sex married couples in states that did not recognize their marriages have had to file as single individuals for state tax purposes. Under the *Obergefell* decision, these couples have a Constitutional right to file amended returns as married at the state level. Whether the normal three-year limitations period for filing these amended returns will apply remains to be tested. Also uncertain may be whether same-sex married couples must now retroactively file jointly or whether re-filing will be made optional, either state-by-state or nationwide. If you have any questions about the Supreme Court’s decision in *Obergefell* and its impact on taxes, please contact us at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Fiduciary “Carve-Outs”](https://waradydavis.com/fiduciary-carve-outs/) **Published:** June 7, 2016 **Author:** WaradyDavis **Content:** The DOL provides exemptions to the above broad fiduciary rule through “carve-outs.” For example, a person won’t be considered a fiduciary for providing the following investment advice: - Statements or recommendations made to a “large plan investor with financialexpertise” by counterparties involved in an arm’s length transaction or a swap or security-based swap that’s regulated under the Securities Exchange Act or the Commodity Exchange Act, - Statements or recommendations provided to an ERISA plan fiduciary by an employee of the plan sponsor if the employee receives no fee beyond his or her normal compensation, - Marketing or making available a platform of investment alternatives to be selected by a plan fiduciary for an ERISA participant-directed individual account plan, and - The identification of investment alternatives that meet objective criteria specified by an ERISA plan fiduciary or the provision of objective financial data to such fiduciary. - In addition, the rules carve out a fiduciary status exemption for providing information and materials that constitute investment or retirement education. However, the revised rule prohibits distribution of materials that discuss specific investment products, investment managers, or the value of particular securities or property. If the education includes asset allocation models, those models must be generic and cannot identify specific investments available to plan participants. ## Concerns for sponsors Although the DOL’s reproposed regulations will govern the behavior of investment advisors and financial institutions that provide services to retirement plans and their participants, the rules affect plan sponsors as well, and not always positively. For example, critics argue that the rules will constrain the availability of investment services, particularly for smaller plans, by pushing their regulatory compliance costs unsustainably high. The DOL has responded to this criticism by stating that the current system in which firms can benefit from hidden fees found in the fine print of retirement investments with high costs and low returns isn’t fair. ## SEC gets in the mix Meanwhile, the Securities and Exchange Commission is planning to propose a fiduciary standard for brokers who recommend investments, whether to individuals or retirement plan sponsors. It’s unclear how those proposals will mesh with [the DOL’s proposed regulations](https://waradydavis.com/dol-reproposes-erisa-fiduciary-investment-advice-regulations/). Either way, 2015 is shaping up to be a big year for investment-advice fiduciaries. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Employee Benefit Plans, Perspectives on Employee Benefits --- ### [IRS extends some (but not all) employee benefit plan deadlines](https://waradydavis.com/irs-extends-some-but-not-all-employee-benefit-plan-deadlines/) **Published:** April 23, 2020 **Author:** Leslie Flinn **Content:** The IRS recently issued Notice 2020-23, expanding on previously issued guidance extending certain tax filing and payment deadlines in response to the novel coronavirus (COVID-19) crisis. This guidance applies to specified filing obligations and other “specified actions” that would otherwise be due on or after April 1, 2020, and before July 15, 2020. It extends the due date for specified actions to July 15, 2020. Specified actions include any “specified time-sensitive action” listed in Revenue Procedure 2018-58, including many relating to employee benefit plans. The relief applies to any person required to perform specified actions within the relief window, and it’s automatic — your business doesn’t need to file any form, letter or other request with the IRS. Filing extensions beyond July 15, 2020, may be sought using the appropriate extension form, but the extension won’t go beyond the original statutory or regulatory extension date. Here are some highlights of Notice 2020-23 specifically related to employee benefit plans: **Form 5500.** The relief window covers Form 5500 filings for plan years that ended in September, October or November 2019, as well as Form 5500 deadlines within the window as a result of a previously filed extension request. These filings are now due by July 15, 2020. Notably, the relief window *does not* include the July 31, 2020 due date for 2019 Form 5500 filings for calendar-year plans. Those plans may seek a regular extension using Form 5558. **Retirement plans.** The extended deadlines apply to correcting excess contributions and excess aggregate contributions (based on nondiscrimination testing) and excess deferrals. They also apply to: - Plan loan repayments, - The 60-day time frame for rollover completion, and - The deadline for filing Form 8955-SSA to report information on separated plan participants with undistributed vested benefits. The relief for excess deferrals is a change from previous guidance indicating that 2019 excess deferrals still needed to be corrected by April 15, 2020. In addition, while loan relief is already available to certain individuals for specified reasons related to COVID-19, this relief appears to apply more broadly — albeit for a shorter period. The Form 8955-SSA due date is the same as for the plan’s Form 5500, so the extension applies in the same manner. **Health Savings Accounts (HSAs).** The notice extends the 60-day timeframe for completing HSA or Archer Medical Savings Account (MSA) rollovers. It also extends the deadline to report HSA or Archer MSA contribution information by filing Form 5498-SA and furnishing the information to account holders. The regular deadline for the 2019 Form 5498-SA would be June 1, 2020, placing it squarely within this relief period. Business owners and their plan administrators should carefully review Notice 2020-23 in conjunction with Revenue Procedure 2018-58 to determine exactly what relief may be available. For example, the revenue procedure covers various cafeteria plan items, but many deadlines may fall outside the notice’s window. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Employee Benefit Plans **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago CPA, Chicago CPA Firm, Chicago Small Business, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Economic Injury Disaster Loans, EIDL, EIDL funding, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Interim Stimulus Plan, Northshore CPA, Paycheck Protection Program, PPP funding, PPP Loans, small business coronavirus, small business covid-19, small business stimulus relief, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [ERC Update 2023: There’s Still Time to Apply for ERC](https://waradydavis.com/erc-update-2023-theres-still-time-to-apply-for-erc/) **Published:** June 8, 2023 **Author:** Leslie Flinn **Excerpt:** Amid IRS warnings to taxpayers not to fall for schemes, employers may still qualify for the employee retention credit and have time to file their Form 941X. **Content:** **Key highlights** 1. The IRS has issued a renewed warning to taxpayers not to fall for schemes related to the Employee Retention Credit (ERC). 2. Many employers may still qualify for the credit and have time to file their Form 941X — assuming they meet eligibility test(s) and have wages related to the credit. ## False claims can generate Employee Retention Credit compliance risks The IRS issued a renewed warning to taxpayers not to fall for schemes related to the [Employee Retention Credit (ERC)](https://waradydavis.com/is-your-business-eligible-employee-retention-tax-credit/). In this warning, the IRS reinforced its statement from October 2022 urging taxpayers to fully consider their eligibility for the credit prior to amending payroll tax returns. **The IRS is reacting to the deluge of misleading advertising dubious ERC companies are broadcasting to create a sense of urgency surrounding the deadline to apply for ERC.** The warning reminded taxpayers that incorrect claims may be subject to significant interest and penalties. The IRS also asked taxpayers and advisors to report inappropriate solicitations to the[ IRS Lead Development Center in the Office of Promoter Investigations.](https://www.irs.gov/about-irs/office-of-promoter-investigations-at-a-glance) The IRS can audit an employee retention credit request within five years after it has been filed, and they may ask for proof of eligibility, backup of gross receipts, and proof of impact due to government orders in order to support the greater than 10% nominal impact safe harbor. **Given the IRS warnings, the takeaway is clear.** First, employers who have not yet claimed the ERC but who are trying to determine whether they qualify should seek a tax opinion from a qualified tax professionals. Second, employers who have already claimed the ERC, particularly those employers who claimed the ERC through third-party promoters, should reach out to a qualified tax professional to have an independent determination made as to whether the employer truly qualifies and, if so, whether the employer complied with all parts of the law applicable to the ERC. ## Still time to benefit from employment credits Despite unscrupulous ERC providers, many employers may still qualify for the ERC and have time to file their Form 941X — ***assuming they meet the eligibility test and have wages related to the credit.*** To be an eligible employer, the organization must have experienced a significant decline in gross receipts or been more than nominally impacted by a government order fully or partially suspending business operations. ### Deadline to Apply The Employee Retention Credit deadline has been a moving target since it was first introduced in 2020. Fortunately, we now have [clarification from the IRS.](https://www.irs.gov/newsroom/employee-retention-credit-2020-vs-2021-comparison-chart) **The ERC filing window closes only once for each year of the ERC:** - **2020** – for all quarters in 2020, the deadline to apply is April 15, 2024 - **2021** – for quarters 1, 2 and 3 in 2021, the deadline to apply is April 15, 2025 While there is still ample time, applying for ERC credits can be a time-consuming process. Depending on your route to qualification and your timely submission of key documents, it can occasionally take months to build an ERC claim. Once your tax amendment is submitted, the IRS generally takes up to six months to process it, and up to nine months to deliver your refund check. ## What is the ERC? Originally available from March 13, 2020, through December 31, 2020 and then extended through September 30, 2021, the ERC is a refundable payroll tax credit created as part of the CARES Act. The purpose of the ERC was to encourage employers to keep their employees on payroll during the pandemic. For 2020, qualifying employers could claim up to 50% of qualified wages or $5,000 annually, whichever is smaller, including eligible health insurance expenses. The Consolidated Appropriations Act (CAA) expanded the ERC. Employers that qualified in 2021 can claim a credit of 70% in qualified wages, up to $7,000 per quarter for the first 3 quarters. The CARES Act does prohibit self-employed individuals from claiming the ERC for their own wages. You also can’t claim wages for specific individuals who are related to you, but you can claim the credit for wages paid to employees. ## Who is eligible for the ERC? Whether or not you qualify for the ERC depends on the time period you’re applying for. To be eligible for 2020, you need to have run a business or tax-exempt organization that experienced a significant decline in sales—50% or more of comparable gross receipts compared to the same quarter in 2019. If you’re trying to qualify for 2021, you must show that you experienced a decline in gross receipts of 20% or more compared to the same quarter in 2019. If you were not in business in 2019, you can compare your gross receipts to 2020. Alternatively, a qualifying employer may be one whose trade or business was fully or partially suspended during a calendar quarter due to governmental orders related to COVID-19. If an employer’s business operations continued, but the operations were subject to modification due to a governmental order, the modification can be considered a partial suspension of business operations if the required modification had more than a nominal effect (10% or greater) on the business operations under all the facts and circumstances. In addition to being tied to specific government shutdown order(s), the nominal effect must be documented and supported. ### [![Employee Retention Credit](https://waradydavis.com/wp-content/uploads/2023/06/Is-your-business-eligible-for-the-ERC-for-2021.png "Is your business eligible for the ERC for 2021 | Warady & Davis LLP")](https://waradydavis.com/wp-content/uploads/2023/06/Is-your-business-eligible-for-the-ERC-for-2021.png) ### How to claim the tax credit Some businesses, especially those that received Paycheck Protection Program loans, Restaurant Revitalization or Shuttered Venue Operator Grants, mistakenly believed they did not qualify for the ERC. If you now realize that you are eligible for the ERC, you can retroactively apply by filling out the Adjusted Employer’s Quarterly Federal Tax Return (941-X). If you are eligible to receive credits, you will also need to amend your federal business returns to reflect the ERC credit for those years in which qualified wages were expensed (2020 and/or 2021). The wage expense will need to decrease in the amount of the credit received, which will result in an increase of income. This may also affect the shareholders/partners of that business, who could then need to amend their personal returns for those years. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [5 ways to strengthen your business in 2020](https://waradydavis.com/5-ways-to-strengthen-your-business-in-2020/) **Published:** January 22, 2020 **Author:** Leslie Flinn **Content:** The end of one year and the beginning of the next is a great opportunity for reflection and planning. You have 12 months to look back on and another 12 ahead to look forward to. Here are five ways to strengthen your business for 2020 by doing a little of both: 1\. **Compare 2019 financial performance to budget**. Did you meet the financial goals you set at the beginning of the year? If not, why? Analyze variances between budget and actual results. Then, evaluate what changes you could make to get closer to achieving your objectives in 2020. And if you did meet your goals, identify precisely what you did right and build on those strategies. 2\. **Create a multiyear capital budget.** Look around your offices or facilities at your equipment, software and people. What investments will you need to make to grow your business? Such investments can be both tangible (new equipment and technology) and intangible (employees’ technical and soft skills). Equipment, software, furniture, vehicles and other types of assets inevitably wear out or become obsolete. You’ll need to regularly maintain, update and replace them. Lay out a long-term plan for doing so; this way, you won’t be caught off guard by a big expense. 3\. **Assess the competition.** Identify your biggest rivals over the past year. Discuss with your partners, managers and advisors what those competitors did to make your life so “interesting.” Also, honestly appraise the quality of what your business sells versus what competitors offer. Are you doing everything you can to meet — or, better yet, exceed — customer expectations? Devise some responsive competitive strategies for the next 12 months. 4\. **Review insurance coverage.** It’s important to stay on top of your property, casualty and liability coverage. Property values or risks may change — or you may add new assets or retire old ones — requiring you to increase or decrease your level of coverage. A fire, natural disaster, accident or out-of-the-blue lawsuit that you’re not fully protected against could devastate your business. Look at the policies you have in place and determine whether you’re adequately protected. 5\. **Analyze market trends.** Recognize the major events and trends in your industry over the past year. Consider areas such as economic drivers or detractors, technology, the regulatory environment and customer demographics. In what direction is your industry heading over the next five or ten years? Anticipating and quickly reacting to trends are the keys to a company’s long-term success. These are just a few ideas for looking back and ahead to set a successful course forward. We can help you review the past year’s tax, accounting and financial strategies, and implement savvy moves toward a secure and profitable 2020 for your business. **Contact Warady & Davis LLP at 847-267-9600.** **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [What the Stimulus Act Means for You and Your Business](https://waradydavis.com/what-the-stimulus-act-means-for-you-and-your-business/) **Published:** March 25, 2020 **Author:** Leslie Flinn **Content:** ## **Highlights of the Coronavirus Aid, Relief and Economic Security Act (CARES)** The House has passed and the President is expected to sign the [**CARES** ](https://www.documentcloud.org/documents/6819206-CARES-ACT-FINAL-TEXT.html)Act, which includes thousands of dollars in direct payments to most Americans, and significant loan packages designed to help keep small businesses and corporations afloat. [View 883-page Act.](https://www.documentcloud.org/documents/6819206-CARES-ACT-FINAL-TEXT.html) ### **Here’s what’s in the bill**: - **Recovery rebate:** Americans will receive a one-time rebate of up to $1,200, and married couples will get $2,400, plus an additional $500 per child. Amounts are phased-out for incomes up to $75,000 for individuals and $150,000 for married couples. This is true even for those who have no income, as well as those whose income comes entirely from non-taxable, means-tested benefit programs, such as Social Security. - **Use of retirement funds:** The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, retroactive to Jan. 1. - **Small businesses:** $350 billion is being dedicated to prevent layoffs and business closures while workers have to stay home during the outbreak. Companies with 500 employees or fewer that maintain their payroll during coronavirus can receive up to 8 weeks of cash-flow assistance. If employers maintain payroll, the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven. **For a regularly updated list of COVID-19 Business Loans and Disaster Relief Resources, [CLICK HERE](https://waradydavis.com/business-loans-and-disaster-relief/)**. - **The unemployed:** The program’s $250 billion extended unemployment insurance program — “unemployment on steroids,” as Sen. Chuck Schumer calls it — expands eligibility and offers workers an additional $600 per week for four months, on top of what state programs pay. It also extends UI benefits through Dec. 31 for eligible workers. The deal applies to the self-employed and independent contractors. - **Hospitals and health care:** The deal provides over $140 billion in appropriations to support the U.S. health system, $100 billion of which will be injected directly into hospitals. The rest will be dedicated to providing personal and protective equipment for health care workers, testing supplies, increased workforce and training, accelerated Medicare payments, and supporting the CDC, among other health investments. - **Coronavirus testing:** All testing and potential vaccines for COVID-19 will be covered at no cost to patients. - **Large corporations:** $500 billion will be allotted to provide loans, loan guarantees, and other investments, overseen by a Treasury Department inspector general. These loans will not exceed five years and cannot be forgiven. - **Airlines** will receive $50 billion (of the $500 billion) for passenger air carriers, and $8 billion for cargo air carriers. - **Payroll taxes:** The measure allows individuals to delay the payment of their 2020 payroll taxes until 2021 and 2022. - **States and local governments** will get $150 billion, with $8 billion set aside for tribal governments. - **Agriculture:** The deal would increase the amount the Agriculture Department can spend on its bailout program from $30 billion to $50 billion, according to a press release issued by Sen. John Hoeven (R-N.D.) **Go deeper:** - Read the [883-page Act](https://www.documentcloud.org/documents/6819206-CARES-ACT-FINAL-TEXT.html). ## We are here to help. We will be issuing more detailed information on the CARES Act soon including small business assistance and available business loans and disaster relief. Also, look for upcoming COVID-19 related webinars. Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [COVID-19 stimulus package offers relief to affected individual taxpayers](https://waradydavis.com/covid-19-stimulus-package-offers-relief-to-affected-individual-taxpayers/) **Published:** April 6, 2020 **Author:** Leslie Flinn **Content:** To help mitigate the financial and health crises related to the coronavirus (COVID-19), on Friday, March 27, 2020, President Trump signed into law the largest economic relief package in modern U.S. history. The $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is intended to shore up the country on multiple fronts and includes several components aimed at individuals. ## Recovery rebates One of the aspects receiving the most attention is the CARES Act’s “recovery rebates.” The federal government will generally make direct payments of up to $1,200 to those who file their federal income tax returns as single filers or heads of households; married couples filing jointly can receive up to $2,400. Additional $500 payments will generally be made per qualifying child. The nontaxable rebates are subject to phaseouts based on adjusted gross income (AGI) as reported on taxpayers’ federal 2019 income tax returns. If 2019 returns haven’t been filed, the 2018 tax returns will be used. The phaseouts begin at $75,000 for singles, $112,500 for heads of household and $150,000 for married couples. Payments are completely phased-out for single filers with AGIs exceeding $99,000 and for joint filers with no qualifying children and AGIs exceeding $198,000. For a head of household with one child, the payment is completely phased out when AGI exceeds $146,500. ## Expanded unemployment benefits The CARES Act increases unemployment compensation benefits significantly, providing an extra $600 per week for up to four months, over and above state unemployment benefits. The expansion generally applies to those who can’t work as a direct result of COVID-19. The law generally provides temporary full federal funding of the first week of unemployment benefits through December 31, 2020, for states that opt to pay recipients as soon as they become unemployed, rather than requiring a one-week waiting period. And it provides an additional 13 weeks of unemployment benefits through year end, generally for those who remain unemployed after state unemployment benefits are no longer available. The law also creates a temporary ***Pandemic Unemployment Assistance*** program through the end of the year. The program generally will extend unemployment benefits to workers who traditionally don’t qualify for them — meaning self-employed individuals, independent contractors, those with limited work histories and others. ## Penalty-free early retirement distributions The CARES Act waives the 10% early distribution penalty for COVID-19-related withdrawals from IRAs, 401(k) plans and certain other retirement plans made on or after January 1, 2020, and through December 31, 2020. The waiver applies to distributions made to an individual: - Who’s diagnosed with COVID-19, - Whose spouse or dependent is diagnosed with COVID-19, or - Who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care because of COVID-19, or the closing or a reduction of hours of a business owned by the individual due to COVID-19. Eligible individuals can withdraw up to $100,000 penalty-free. They can repay withdrawn funds within three years of the day after the distribution without regard to the applicable cap on annual contributions. To the extent such early distributions aren’t repaid within this period, the related income tax will be prorated over three years. ## Waived required minimum distribution rules The CARES Act similarly waives the required minimum distribution (RMD) rules for certain defined contribution plans and IRAs for calendar year 2020. This will help individuals avoid a financially imprudent sale of retirement assets during the stock market downturn. The waiver covers both 2019 RMDs required to be taken by April 1, 2020, and RMDs required for 2020. It applies for calendar years beginning after December 31, 2019. ## Expanded charitable contribution deductions Individual taxpayers can take advantage of a new above-the-line $300 deduction for cash contributions to qualified charities in 2020. “Above-the-line” means the deduction reduces AGI and is available to taxpayers regardless of whether they itemize deductions. The CARES Act also loosens the limitation on charitable deductions for cash contributions made to public charities in 2020, boosting it from 60% to 100% of AGI. ## Student loan relief Under the CARES Act, employers can provide up to $5,250 annually toward employee student loan payments on a tax-free basis before January 1, 2021. The payment can be made to the employee or the lender. (The employee can’t take a student loan interest deduction for any loan payment for which the exclusion is available.) The law also allows individuals to stop making payments on federal student loans through September 30, 2020, without incurring penalties or late fees. In addition, no interest will accrue on federal student loans during this period. And the government is temporarily suspending garnishments to collect on federal student loans. ## Mortgage and foreclosure relief Homeowners with federally backed mortgages can request forbearance, regardless of their delinquency status and without incurring penalties, fees or interest. Eligible homeowners must submit a request to their loan servicers and affirm financial hardship during the COVID-19 emergency. A servicer is required to grant forbearance for up to 180 days and to extend it for an additional period of up to 180 days at the borrower’s request. Further, except for vacant or abandoned property, servicers of federally backed mortgages can’t initiate any foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale for at least 60 days, starting March 18, 2020. Borrowers with federally backed mortgages on multifamily properties can request a forbearance for up to 30 days if they were current on their loans on February. 1, 2020. They also can request two additional 30-day extensions. ## The swiftly changing environment No one knows when the COVID-19 public health emergency will end, or for how long the economic repercussions will linger. We’ll keep you informed on the latest developments and help you plan for a more stable financial future. ## We Are Here to Help Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Wayfair revisited — review your sales tax obligations](https://waradydavis.com/wayfair-revisited-review-your-sales-tax-obligations/) **Published:** January 23, 2020 **Author:** Leslie Flinn **Content:** In its 2018 decision in South Dakota v. Wayfair, the U.S. Supreme Court upheld South Dakota’s “economic nexus” statute, expanding the power of states to collect sales tax from remote sellers. Today, nearly every state with a sales tax has enacted a similar law, so if your company does business across state lines, it’s a good idea to reexamine your sales tax obligations. ## What’s nexus? A state is constitutionally prohibited from taxing business activities unless those activities have a substantial “nexus,” or connection, with the state. Before Wayfair, simply selling to customers in a state wasn’t enough to establish nexus. The business also had to have a physical presence in the state, such as offices, retail stores, manufacturing or distribution facilities, or sales reps. In Wayfair, the Supreme Court ruled that a business could establish nexus through economic or virtual contacts with a state, even if it didn’t have a physical presence. The Court didn’t create a bright-line test for determining whether contacts are “substantial,” but found that the thresholds established by South Dakota’s law are sufficient: Out-of-state businesses must collect and remit South Dakota sales taxes if, in the current or previous calendar year, they have 1) more than $100,000 in gross sales of products or services delivered into the state, or 2) 200 or more separate transactions for the delivery of goods or services into the state. ## Nexus steps The vast majority of states now have economic nexus laws, although the specifics vary:Many states adopted the same sales and transaction thresholds accepted in Wayfair, but a number of states apply different thresholds. And some chose not to impose transaction thresholds, which many view as unfair to smaller sellers (an example of a threshold might be 200 sales of $5 each would create nexus). If your business makes online, telephone or mail-order sales in states where it lacks a physical presence, it’s critical to find out whether those states have economic nexus laws and determine whether your activities are sufficient to trigger them. If you have nexus with a state, you’ll need to register with the state and collect state and applicable local taxes on your taxable sales there. Even if some or all of your sales are tax-exempt, you’ll need to secure exemption certifications for each jurisdiction where you do business. Alternatively, you might decide to reduce or eliminate your activities in a state if the benefits don’t justify the compliance costs. ## Need help? **Note:** If you make sales through a “marketplace facilitator,” such as Amazon or Ebay, be aware that an increasing number of states have passed laws that require such providers to collect taxes on sales they facilitate for vendors using their platforms. If you need assistance in setting up processes to collect sales tax or you have questions about your responsibilities, please contact Warady & Davis LLP at 847-267-9600. ###### **Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved.** **Categories:** Tax, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [An important reason to file your 2020 tax return early](https://waradydavis.com/an-important-reason-to-file-your-2020-tax-return-early/) **Published:** January 1, 2021 **Author:** Leslie Flinn **Content:** The [IRS](https://www.irs.gov) announced it is opening the 2020 individual income tax return filing season on February 12. (This is later than in past years because of the Consolidated Appropriations Act 2021 that was enacted late in December.) Even if you typically don’t file until much closer to the April 15 deadline (or you file for an extension), consider filing earlier this year. Why? You can potentially protect yourself from tax identity theft — and there may be other benefits, too. ### **How is a person’s tax identity stolen?** In a tax identity theft scheme, a thief uses another individual’s personal information to file a fraudulent tax return early in the filing season and claim a bogus refund. The real taxpayer discovers the fraud when he or she files a return and is told by the IRS that the return is being rejected because one with the same Social Security number has already been filed for the tax year. While the taxpayer should ultimately be able to prove that his or her return is the legitimate one, tax identity theft can be a hassle to straighten out and significantly delay a refund. Filing early may be your best defense: If you file first, it will be the tax return filed by a potential thief that will be rejected — not yours. **Note:** **You can get your individual tax return *prepared* by us before February 12 if you have all the required documents. It’s just that processing of the return will begin after IRS systems open on that date.** ### **When will you receive your W-2s and 1099s?** To file your tax return, you need all of your W-2s and 1099s. January 31 is the deadline for employers to issue 2020 Form W-2 to employees and, generally, for businesses to issue Form 1099s to recipients of any 2020 interest, dividend or reportable miscellaneous income payments (including those made to independent contractors). If you haven’t received a W-2 or 1099 by February 1, first contact the entity that should have issued it. If that doesn’t work, you can contact the [IRS](https://www.irs.gov) for help. ### **How else can you benefit by filing early?** In addition to protecting yourself from tax identity theft, another benefit of early filing is that, if you’re getting a refund, you’ll get it faster. The [IRS](https://www.irs,gov) expects most refunds to be issued within 21 days. The time is typically shorter if you file electronically and receive a refund by direct deposit into a bank account. Direct deposit also avoids the possibility that a refund check could be lost, stolen, returned to the IRS as undeliverable or caught in mail delays. If you haven’t received an Economic Impact Payment (EIP), or you didn’t receive the full amount due, filing early will help you to receive the amount sooner. EIPs have been paid by the federal government to eligible individuals to help mitigate the financial effects of COVID-19. Amounts due that weren’t sent to eligible taxpayers can be claimed on your 2020 return. ## **Questions? Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: SBA, U.S. Treasury, IRS and AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [After you file your tax return: 3 issues to consider](https://waradydavis.com/after-you-file-your-tax-return-3-issues-to-consider/) **Published:** July 14, 2020 **Author:** Leslie Flinn **Content:** Happy Tax Day! The tax filing deadline for 2019 tax returns was extended until July 15 this year, due to the COVID-19 pandemic. After your 2019 tax return has been successfully filed with the IRS, there may still be some issues to bear in mind. Here are three considerations.. ### **1. Some tax records can now be thrown away** You should keep tax records related to your return for as long as the IRS can audit your return or assess additional taxes. In general, the statute of limitations is three years after you file your return. So you can generally get rid of most records related to tax returns for 2016 and earlier years. (If you filed an extension for your 2016 return, hold on to your records until at least three years from when you filed the extended return.) However, the statute of limitations extends to six years for taxpayers who understate their gross income by more than 25%. You’ll need to hang on to certain tax-related records longer. For example, keep the actual tax returns indefinitely, so you can prove to the IRS that you filed a legitimate return. (There’s no statute of limitations for an audit if you didn’t file a return or you filed a fraudulent one.) When it comes to retirement accounts, keep records associated with them until you’ve depleted the account and reported the last withdrawal on your tax return, plus three (or six) years. And retain records related to real estate or investments for as long as you own the asset, plus at least three years after you sell it and report the sale on your tax return. (You can keep these records for six years if you want to be extra safe.) ### **2. You can check up on your refund** The IRS has an online tool that can tell you the status of your refund. Go to irs.gov and click on “Get Your Refund Status” to find out about yours. You’ll need your Social Security number, filing status and the exact refund amount. ### **3. You can file an amended return if you forgot to report something** In general, you can file an amended tax return and claim a refund within three years after the date you filed your original return or within two years of the date you paid the tax, whichever is later. So for a 2019 tax return that you file on July 15, 2020, you can generally file an amended return until July 15, 2023. However, there are a few opportunities when you have longer to file an amended return. For example, the statute of limitations for bad debts is longer than the usual three-year time limit for most items on your tax return. In general, you can amend your tax return to claim a bad debt for seven years from the due date of the tax return for the year that the debt became worthless. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Don’t forget to take required minimum distributions](https://waradydavis.com/dont-forget-to-take-required-minimum-distributions/) **Published:** January 1, 2021 **Author:** Leslie Flinn **Content:** If you have a traditional IRA or tax-deferred retirement plan account, you probably know that you must take required minimum distributions (RMDs) when you reach a certain age — or you’ll be penalized. **The CARES Act, which passed last March, allowed people to skip taking these withdrawals in 2020 but now that we’re in 2021, RMDs must be taken again.** ### **The basics** Once you attain age 72 (or age 70½ before 2020), you must begin taking RMDs from your traditional IRAs and certain retirement accounts, including 401(k) plans. In general, RMDs are calculated using life expectancy tables published by the IRS. If you don’t withdraw the minimum amount each year, you may have to pay a 50% penalty tax on what you *should* have taken out — but didn’t. (Roth IRAs don’t require withdrawals until after the death of the owner.) You can always take out more than the required amount. In planning for distributions, your income needs must be weighed against the desirable goal of keeping the tax shelter of the IRA going for as long as possible for both yourself and your beneficiaries. In order to provide tax relief due to COVID-19, the CARES Act suspended RMDs for calendar year 2020 — ***but only for that one year***. That meant that taxpayers could put off RMDs, not have to pay tax on them and allow their retirement accounts to keep growing tax deferred. ### **Begin taking RMDs again** Many people hoped that the RMD suspension would be extended into 2021. However, the Consolidated Appropriations Act, which was enacted on December 27, 2020, to provide more COVID-19 relief, didn’t extend the RMD relief. That means if you’re required to take RMDs, you need to take them this year or face a penalty. **Note:** The IRS may waive part or all of the penalty if you can prove that you didn’t take RMDs due to reasonable error and you’re taking steps to remedy the shortfall. In these cases, the IRS reviews the information a taxpayer provides and decides whether to grant a request for a waiver. ## **Questions? Contact your Warady & Davis advisor at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: SBA, U.S. Treasury, IRS and AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [3 last-minute tips that may help trim your tax bill](https://waradydavis.com/3-last-minute-tips-that-may-help-trim-your-tax-bill/) **Published:** December 26, 2019 **Author:** Leslie Flinn **Content:** If you’re starting to fret about your 2019 tax bill, there’s good news — you may still have time to reduce your liability. Three strategies are available that may help you cut your taxes before year-end, including: ## **1. Accelerate deductions/defer income** Certain tax deductions are claimed for the year of payment, such as the mortgage interest deduction. So, if you make your January 2020 payment this month, you can deduct the interest portion on your 2019 tax return (assuming you itemize). Pushing income into the new year also will reduce your taxable income. If you’re expecting a bonus at work, for example, and you don’t want the income this year, ask if your employer can hold off on paying it until January. If you’re self-employed, you can delay your invoices until late in December to divert the revenue to 2020. You shouldn’t pursue this approach if you expect to land in a higher tax bracket next year. Also, if you’re eligible for the qualified business income deduction for pass-through entities, you might reduce the amount of that deduction if you reduce your income. ## **2. Maximize your retirement contributions** What could be better than paying yourself instead of Uncle Sam? Federal tax law encourages individual taxpayers to make the maximum allowable contributions for the year to their retirement accounts, including traditional IRAs and SEP plans, 401(k)s and deferred annuities. For 2019, you generally can contribute as much as $19,000 to 401(k)s and $6,000 for traditional IRAs. Self-employed individuals can contribute up to 25% of your net income (but no more than $56,000) to a SEP IRA. ## **3. Harvest your investment losses** Losing money on your investments has a bit of an upside — it gives you the opportunity to offset taxable gains. If you sell underperforming investments before the end of the year, you can offset gains realized this year on a dollar-for-dollar basis. If you have more losses than gains, you generally can apply up to $3,000 of the excess to reduce your ordinary income. Any remaining losses are carried forward to future tax years. ## **We can help** The strategies described above are only a sampling of strategies that may be available. Contact Warady & Davis LLP at 847-267-9600 if you have questions about these or other methods for minimizing your tax liability for 2019. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The benefits of filing your 2019 tax return early](https://waradydavis.com/the-benefits-of-filing-your-2019-tax-return-early/) **Published:** January 22, 2020 **Author:** Leslie Flinn **Content:** The IRS announced it is opening the 2019 individual income tax return filing season on January 27. Even if you typically don’t file until much closer to the April 15 deadline (or you file for an extension), consider filing as soon as you can this year. The reason: You can potentially protect yourself from tax identity theft — and you may obtain other benefits, too. ## Tax identity theft explained In a tax identity theft scam, a thief uses another individual’s personal information to file a fraudulent tax return early in the filing season and claim a bogus refund. The legitimate taxpayer discovers the fraud when he or she files a return and is informed by the IRS that the return has been rejected because one with the same Social Security number has already been filed for the tax year. While the taxpayer should ultimately be able to prove that his or her return is the valid one, tax identity theft can cause major headaches to straighten out and significantly delay a refund. Filing early may be your best defense: If you file first, it will be the tax return filed by a would-be thief that will be rejected, rather than yours. Note: You can get your individual tax return prepared by us before January 27 if you have all the required documents. It’s just that processing of the return will begin after IRS systems open on that date. ## Your W-2s and 1099s To file your tax return, you must have received all of your W-2s and 1099s. January 31 is the deadline for employers to issue 2019 Form W-2 to employees and, generally, for businesses to issue Form 1099 to recipients of any 2019 interest, dividend or reportable miscellaneous income payments (including those made to independent contractors). If you haven’t received a W-2 or 1099 by February 1, first contact the entity that should have issued it. If that doesn’t work, you can contact the IRS for help. Other advantages of filing early Besides protecting yourself from tax identity theft, another benefit of early filing is that, if you’re getting a refund, you’ll get it faster. The IRS expects most refunds to be issued within 21 days. The time is typically shorter if you file electronically and receive a refund by direct deposit into a bank account. Direct deposit also avoids the possibility that a refund check could be lost or stolen or returned to the IRS as undeliverable. And by using direct deposit, you can split your refund into up to three financial accounts, including a bank account or IRA. Part of the refund can also be used to buy up to $5,000 in U.S. Series I Savings Bonds. What if you owe tax? Filing early may still be beneficial. You won’t need to pay your tax bill until April 15, but you’ll know sooner how much you owe and can plan accordingly. ## Be an early-bird filer If you have questions about tax identity theft or would like help filing your 2019 return early, please contact Warady & Davis at 847-267-9600. We can help you ensure you file an accurate return that takes advantage of all of the breaks available to you. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Be alert to tax fraud](https://waradydavis.com/be-alert-to-tax-fraud/) **Published:** June 4, 2020 **Author:** Leslie Flinn **Content:** Fraudsters are on attack, using malicious email, text message and telephone scams designed to steal tax refunds and government stimulus checks being distributed to eligible individuals. Don’t fall for common scams: ### **Internal Revenue Service (IRS) Checks** - No business/service can get you a check faster. - No third party is being used by the IRS to “hold” or sort checks. - Funds are issued directly from the IRS to you via direct deposit or U.S. Postal Service mail. Stimulus checks are issued based on how you filed your 2018 or 2019 taxes. - The IRS will not ask for PINs, passwords or confidential access information for credit cards or bank accounts over the phone or email. ### **Phone Scams** Scammers may pose as IRS agents or bank employees to request sensitive information or to ask you to verify sensitive information, such as bank account credentials and Social Security Numbers. - Let all incoming calls from unknown numbers/callers go directly to voice mail. - Confirm any request with the alleged organization/business. - Use a known phone number or one published on the organization’s official website. ### **Email and Text Message Scams** Email or text messages may tempt you to click on a link to infect your device with malware or call a fake number promising urgent news about your stimulus check or asking you to share personal or banking information. These cyber attacks, known as phishing, are sometimes created to look like official bank and other types of correspondence. - Do not click on links or open attachments. - Confirm the message is from a trusted source using a known phone number. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or [info@waradydavis.com.](mailto:info@waradydavis.com) ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Tax Scams **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [401(K) Rollovers](https://waradydavis.com/401k-rollovers/) **Published:** August 1, 2015 **Author:** WaradyDavis **Excerpt:** High workforce mobility means that many employees leave a collection of “orphan” 401(k) plan balances in their wake. As a plan fiduciary, why should you care? Helping new employees roll over their accounts from former employers can be beneficial for both parties. **Content:** ## How rollovers to your plan can benefit everyone High workforce mobility means that many employees leave a collection of “orphan” 401(k) plan balances in their wake. As a plan fiduciary, why should you care? Helping new employees roll over their accounts from former employers can be beneficial for both parties. ### Dealing with orphans One reason participants orphan their previous employers’ plans is that the process of rolling over an old 401(k) plan balance to a new employer’s plan can be cumbersome. Leaving a trail of orphan accounts may be the path of least resistance; however, many employees fail to properly manage their accounts even when they have only one plan to look after, let alone two or three former employer 401(k) accounts. As for employers, small orphaned accounts add to plan administration costs, including the possibility of going over the threshold where an independent audit is required. To manage your 401(k) plan participant roster, you can roll accounts of terminated participants worth between $1,000 and $5,000 to an IRA in the participant’s name. You’ll need to perform due diligence in selecting an IRA provider, and you may be able to set up an automatic process. If your plan doesn’t roll over former participants’ accounts to an outside IRA, what can be done? Consider advising former participants to consult with an independent investment advisor who can help them roll their balances into an IRA. Is this good for participants? Maybe. The overall fees that individuals pay on relatively small IRA accounts can be higher than those on accounts held in a 401(k) plan. Also, depending on the investments available to the participant on the rolled over funds, the former participant might be better off leaving funds in the investments available in the 401(k) plan. ### Accepting rollovers into a plan Even though a former employer might benefit from having smaller accounts rolled out of the plan after an employee’s departure, the new employer can benefit from having dollars rolled into its 401(k). This is especially true for larger accounts. Generally, the larger a 401(k) plan’s total assets and participant head count, the greater its ability to negotiate competitive fees for plan services. In addition, an Investment Company Institute study identified another asset size-fee relationship: the larger the average participant account size, the lower the fees. This pattern is independent of the plan’s overall size. For example, the median “all-in” fee for small plans (with assets between $1 million and $10 million) was 1.29%, if the average account balance was $25,000. But the median all- in fee was 1.03% if average account sizes fell between $25,000 and $100,000. And they dropped to 0.96% for plans with average account sizes exceeding $100,000. The study found the same pattern for plans with substantially more assets — plus, the all- in fees were much lower for all account size categories. For example, the median all-in fees for very large plans with aggregate assets exceeding $500 million were 0.43%, 0.39% and 0.29%, based on the same average account size groupings. ### Doing the right thing Reducing plan fees deducted from participant accounts even by a small percentage can have a significant impact on the value of the accounts at retirement. Encouraging your new employees to roll assets from their former employer’s 401(k) plan into yours may improve employees’ retirement preparedness. Lower administrative costs for the plan and increased savings for the participants can benefit both your company and its employees. ## IRS provides safe harbor examples for rollover eligibility What standard are plan administrators held to when determining if a rollover into a 401(k) plan on behalf of a new employee is proper? IRS Revenue Ruling 2014-9 provided two safe harbor scenarios. In the first, the employee received a distribution from the former plan’s trustee in the form of a check written out to the employee’s account in the new plan. To make sure the distribution was eligible for a rollover, the new plan’s administrator checked the former plan’s Form 5500 to determine if the former plan was a qualified plan. In the second scenario, the facts were the same except that the source of the rollover was the new employee’s IRA. The new employee certified that she was below age 70½ — the age at which she would have to begin receiving minimum distributions. The revenue ruling addressed whether the administrator of the employee’s new plan could reasonably rely on this evidence to determine that the checks were suitable for a rollover — even if they were misrepresentations. The IRS ruled that, without any evidence to the contrary, the answer is yes. But if the plan later determines that the rollover amount is an invalid rollover contribution, it must distribute the amount rolled over plus any attributable earnings to the employee within a reasonable time. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Employee Benefit Plans, Perspectives on Employee Benefits --- ### [Give Employees More Bang for their Buck](https://waradydavis.com/give-employees-more-bang-for-their-buck/) **Published:** December 1, 2015 **Author:** WaradyDavis **Excerpt:** According to a Plan Sponsor Council of America survey, only 46% of defined contribution plans automatically enroll participants. The most common default deferral rate for those that do is 3%. Are you telling your employees that they can afford to retire by saving just 3% of their salary each year? Some participants may think so. **Content:** ## How to use default deferral rates and auto-escalation clauses According to a Plan Sponsor Council of America survey, only 46% of defined contribution plans automatically enroll participants. The most common default deferral rate for those that do is 3%. Are you telling your employees that they can afford to retire by saving just 3% of their salary each year? Some participants may think so. ### Avoiding advice? Studies by the Employee Benefit Research Institute suggest that, when plans default participants into a 3% deferral rate, participants stay at that level. This happens even when the participants were willing to defer more (typically 6%) to get the maximum employer match before the plan established its auto-enrollment feature. A slim majority (55%) of plans with a default participation feature automatically boost deferral rates annually, typically by one percentage point. A Towers Watson survey of large employers found that fewer than 22% gave employees a specific suggestion of what a reasonable retirement savings rate might be. Of those that did, 39% suggested a figure of at least 10%. For many participants, depending on the age at which they began saving for retirement, 15% might be more in order — although trying to default participants in at that rate likely would backfire. Yet employees often are less resistant to higher default rates than many plan sponsors believe. Doubling the auto-deferral rate from 3% to 6% seldom creates a participant backlash. In fact, a majority of employees in a OneAmerica online survey said they would appreciate being nudged into higher deferral levels through an auto-escalation feature. ### What does it cost? Company budgetary considerations sometimes can draw a veto to proposals to boost auto-enroll and auto-escalation default numbers. Naturally if you match, for example, 50 cents on the dollar up to a 6% deferral level, moving the default deferral from 3% to 6% will increase your plan’s cost. But offering a 33% match up to a 9% deferral rate would cost you the same 3% of pay for each participant going for the maximum match, and those participants would then be saving at a 12% of pay rate with the match added in. That’s three points higher than the prior combined rate. Also, the 33% match capped at 9%, in the case of some participants, might wind up costing you less, but still inspire employees to increase deferrals. For example, while it may not prompt a participant to increase his or her deferral all the way up to the 9% ceiling, that participant may choose to increase it instead to 7% or 8%. With the 33% match, the participant would still wind up with a higher total deferral (9.31% and 10.64%, respectively). However, your cost would actually drop from the original 3% of payroll amount, to 2.33% and 2.66%, respectively. ### The end game Encouraging participants to do more for themselves by deploying more aggressive plan designs can deliver better results for everyone. Contact your benefits advisor to see if you and your employees can profit from increased deferral rates and auto-escalation provisions. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Employee Benefit Plans, Perspectives on Employee Benefits --- ### [DOL Reproposes ERISA Fiduciary investment Advice Regulations](https://waradydavis.com/dol-reproposes-erisa-fiduciary-investment-advice-regulations/) **Published:** August 1, 2015 **Author:** WaradyDavis **Excerpt:** Most everyone in the employee benefits industry agrees: protecting retirement plans and their participants from investment advisors who may focus more on their own financial interests than those of plan participants is a good idea. However, whether the Department of Labor’s (DOL’s) reproposed ERISA fiduciary investment advice regulations, if adopted essentially as proposed, will be able to do that isn’t certain **Content:** Most everyone in the employee benefits industry agrees: protecting retirement plans and their participants from investment advisors who may focus more on their own financial interests than those of plan participants is a good idea. However, whether the Department of Labor’s (DOL’s) reproposed ERISA fiduciary investment advice regulations, if adopted essentially as proposed, will be able to do that isn’t certain. ## A little background The DOL first issued proposed regulations in 2010 with the intent to broaden the scope of advisors included in the status of a fiduciary. The objective was to protect plan sponsors and participants from abuses by some advisors. The proposals were met with a barrage of industry criticism and were eventually dropped — until now. The 2015 reproposed regulations, although very similar to the original proposed regulations, shift their emphasis to IRAs as a primary focus. Currently, the DOL is scheduled to hold public hearings on the proposals in August. If all goes according to the original schedule, the rules should be finalized in the fall and then take effect eight months later. However, because of anticipated criticism that the regulations’ complexity and broad reach prevent compliance within this time span, the timetable may be extended. There will no doubt be many comments on the reproposed regulations, some critical. However, because the reproposed regulations reflect feedback on the original proposals, substantive changes are unlikely to be made to the final regulations. ## Proposed fiduciary definition Currently, a five-part test determines fiduciary status for people providing investment advice, with a broad presumption of fiduciary status. The proposed rules replace this presumption with new “principles-based” prohibited transaction exemptions and change several existing prohibited transaction class exemptions. Under the proposed regulations, a person is an investment advisor fiduciary if, for a fee, he or she provides investment recommendations directly to a: - Plan, - Plan fiduciary, plan participant or beneficiary, or - IRA or IRA owner to purchase or sell investments, take a distribution, execute a rollover, or retain a particular investment manager. A recommendation is a “communication that, based on its content, context and presentation, would reasonably be viewed as a suggestion that the recipient engage in or refrain from a particular course of action.” ## Fiduciary Carve-Outs The DOL provides exemptions to the above broad fiduciary rule through “carve-outs.” For example, a person won’t be considered a fiduciary for providing the following investment advice: - Statements or recommendations made to a “large plan investor with financialexpertise” by counterparties involved in an arm’s length transaction or a swap or security-based swap that’s regulated under the Securities Exchange Act or the Commodity Exchange Act, - Statements or recommendations provided to an ERISA plan fiduciary by an employee of the plan sponsor if the employee receives no fee beyond his or her normal compensation, - Marketing or making available a platform of investment alternatives to be selected by a plan fiduciary for an ERISA participant-directed individual account plan, and - The identification of investment alternatives that meet objective criteria specified by an ERISA plan fiduciary or the provision of objective financial data to such fiduciary. - In addition, the rules carve out a fiduciary status exemption for providing information and materials that constitute investment or retirement education. However, the revised rule prohibits distribution of materials that discuss specific investment products, investment managers, or the value of particular securities or property. If the education includes asset allocation models, those models must be generic and cannot identify specific investments available to plan participants. ## Concerns for sponsors Although the DOL’s reproposed regulations will govern the behavior of investment advisors and financial institutions that provide services to retirement plans and their participants, the rules affect plan sponsors as well, and not always positively. For example, critics argue that the rules will constrain the availability of investment services, particularly for smaller plans, by pushing their regulatory compliance costs unsustainably high. The DOL has responded to this criticism by stating that the current system in which firms can benefit from hidden fees found in the fine print of retirement investments with high costs and low returns isn’t fair. ## SEC gets in the mix Meanwhile, the Securities and Exchange Commission is planning to propose a fiduciary standard for brokers who recommend investments, whether to individuals or retirement plan sponsors. It’s unclear how those proposals will mesh with the DOL’s proposed regulations. Either way, 2015 is shaping up to be a big year for investment-advice fiduciaries. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Perspectives on Employee Benefits --- ### [Building a Better Audit Committee](https://waradydavis.com/building-a-better-audit-committee/) **Published:** January 2, 2015 **Author:** WaradyDavis **Excerpt:** Public companies have been required to have an audit committee for about a decade now (due to the Sarbanes-Oxley Act of 2002), and many nonprofits have started their own such committees during that time. The result? Some organizations have learned the hard way that good intentions aren’t enough to ensure an effective audit committee — both the nonprofit and committee members must fully understand the committee’s role and responsibilities. **Content:** ## Start with a clear picture of its roles and responsibilities Public companies have been required to have an audit committee for about a decade now (due to the Sarbanes-Oxley Act of 2002), and many nonprofits have started their own such committees during that time. The result? Some organizations have learned the hard way that good intentions aren’t enough to ensure an effective audit committee — both the nonprofit and committee members must fully understand the committee’s role and responsibilities. ### Understanding the mission An audit committee should operate as the arm of the board of directors that assures proper financial management. As such, it’s an integral part of good governance, making it relevant for nonprofits of all sizes. After all, poor governance and accountability can cost any organization support, financial and otherwise. The committee’s job largely comes down to oversight, which is usually focused on financial reporting, external and internal audit functions, compliance with legal and regulatory requirements and the internal controls over these areas. An effective audit committee can lead to improved financial practices and reporting, reduced fraud and enhanced internal and external audits. Smaller nonprofits may be tempted to assign audit committee functions to their finance committee, but that committee has different responsibilities — it’s tasked primarily with monitoring the budget and approving the distribution of the organization’s financial resources. ### Overseeing financial reporting The audit committee should take a much broader view, overseeing the conduct and integrity of financial reporting, including establishing and implementing accounting policies and internal controls to promote good financial stewardship. The goal is to protect the nonprofit’s assets, strengthen the reliability and accuracy of financial reporting, and reduce the risk of fraud. On a practical level, financial reporting oversight translates to, among other things: - Reviewing Forms 990 and reporting to regulatory agencies, - Looking for red flags in financial statements that might signal improper revenue recognition or other kinds of fraud (for example, unexplained fluctuations in revenues or expenses), - Reviewing audit results, the nonprofit’s responses and follow-up actions, and - Evaluating the appropriateness of getting a second opinion on auditing issues. Ultimately, the audit committee should ensure that all financial reports are accurate and transparently portray the organization’s performance. ### Managing risk The committee must understand the nonprofit’s overall risk profile (as determined by a comprehensive risk assessment). The risk profile considers, among other things, investment practices, disaster recovery plans, insurance coverage, and compliance with laws, regulations and donor and grantor requirements. It also looks at internal policies and procedures. The organization’s risks are evaluated in light of its “appetite for risk.” The committee should assess internal controls over those risks and, if necessary, see that remedial measures are effectively implemented. ### Interacting with auditors The audit committee should regularly interact with both internal and external auditors, which includes approving the annual internal audit plan and reviewing internal auditors’ reports. The committee also may be responsible for approving the appointment of the head of internal audit. Additionally, the audit committee is responsible for hiring, compensating and overseeing external auditors and is therefore considered the auditors’ client. It should have regular communications with the auditors, including meetings to discuss a workplan before the audit and to review any findings before they’re presented to the board. ### Maintaining independence Besides the roles and responsibilities described above, the committee must maintain its independence. That means audit committee members can’t accept any consulting, advisory or other compensatory fee from the organization. Independence from management also is critical. Committee members shouldn’t have been an officer or employee of the nonprofit in the prior three years, or the immediate family member of such a person. The American Institute of Certified Public Accountants recommends that some audit committee members also be members of the board of directors. But some states limit the number of audit committee members who also are on the finance committee. ### Better safe than sorry Audit committees may seem like just one more layer of bureaucracy, but they’re rapidly becoming a nonprofit “best practice.” Your CPA can help you establish a new committee or make sure that your existing committee is operating as it should be. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Not All Funds Are Created Equal](https://waradydavis.com/not-all-funds-are-created-equal/) **Published:** January 2, 2015 **Author:** WaradyDavis **Excerpt:** Nonprofit organizations typically depend on a variety of funding to keep them alive and well. They need funds to pay their bills, pay their staffs and pay for the costs of running their programs. But savvy nonprofits know that not all that’s green has equal value and flexibility. Types of funding vary greatly in how they can — or cannot — be used. **Content:** Nonprofit organizations typically depend on a variety of funding to keep them alive and well. They need funds to pay their bills, pay their staffs and pay for the costs of running their programs. But savvy nonprofits know that not all that’s green has equal value and flexibility. Types of funding vary greatly in how they can — or cannot — be used. ### Understanding the types of gifts Your nonprofit should decide from the onset what type of funds it wants to solicit, and what types it’s willing to accept. Here are the three main categories to consider: Permanently restricted funds. Often called endowments, these funds are subject to lasting donor stipulations, which mandate that the funds be “held in perpetuity.” The donor can limit earnings to use for a specific purpose or allow them to support operations. **Temporarily restricted funds.** These gifts are subject to donor-imposed stipulations that can be removed with the passing of time or when spent for the purpose intended by the donor. Unrestricted funds. These funds are free of donor stipulations. Board-designated funds are included in this category. Although the board has decided to use these funds for a certain purpose, it can “undesignate” the funds at a future date. ### Pursuing what works best Charitable organizations need cash to carry out their daily operations and unanticipated costs. Thus, having an adequate and steady stream of funds without strings attached — unrestricted funds — is the best way to keep a charity’s operations and programs strong and sustainable. Unlike temporarily or permanently restricted funds, unrestricted funds can be used to cover the cost of operating expenses, such as rent, utilities, salaries and other day-to-day expenses. The grants and individual donations a nonprofit receives for general operating support allow management to refocus its efforts from raising funds to improving programs and responding to emerging community needs. ### Facing public opinion Before an organization sets out to solicit unrestricted funds from individual and corporate donors, it should understand what it’s up against: There’s a public sensitivity toward nonprofits that spend too much money on administrative costs and too little on programs that fulfill their missions. To secure funds without restrictions, prove to donors that you’ll use their money wisely. One way to do that is by presenting a healthy program service expense ratio and results-focused information on your Form 990, which is made publicly available. ### Being straightforward with your constituents When asking for unrestricted funds, being direct is best. Explain in your fundraising materials how unrestricted gifts offer greater flexibility than restricted gifts and how they help ensure you have adequate funds to keep the doors open. Moreover, encourage donors to make multiyear commitments for unrestricted gifts. Having funding dedicated to future years allows management to plan with more foresight. Ask funders to designate their donations “as unrestricted funds that help the organization.” You also might consider naming a fund after families or individuals who give only unrestricted funds. It might just help encourage contributions of this type. Sometimes grantors, such as government agencies or foundations, require that funds be restricted to a particular program or function. If that’s the case, you may still be able to factor in an administrative component of, say, 8%–10% to help cover operational costs. ### Don’t get boxed in When contributions, large and small, shrink during tough economic times, you’ll want to have enough “money in the bank” to help you ride out the storm. Unrestricted funds offer flexibility for funding programs to meet your mission and take care of operational costs. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Executive Compensation - A Hot Button Issue](https://waradydavis.com/executive-compensation-a-hot-button-issue/) **Published:** March 1, 2015 **Author:** WaradyDavis **Excerpt:** When it comes to executive compensation and benefits, the public expects charities to be transparent and accountable. The idea that organizations that receive public support would provide executives with exorbitant compensation packages does not sit well. Appropriately documenting the process for determining executive compensation is crucial to satisfying public and regulatory concerns regarding excessive compensation. Here are some steps to help minimize risk and avoid the potential problems associated with awarding excessive executive compensation packages: **Content:** ### **A Hot Button Issue** When it comes to executive compensation and benefits, the public expects charities to be transparent and accountable. The idea that organizations that receive public support would provide executives with exorbitant compensation packages does not sit well. Appropriately documenting the process for determining executive compensation is crucial to satisfying public and regulatory concerns regarding excessive compensation. Here are some steps to help minimize risk and avoid the potential problems associated with awarding excessive executive compensation packages: - A compensation arrangement should be approved in advance by the board of directors or other governing body composed entirely of individuals who do not have a conflict of interest, - The board should use data from similar organizations when setting compensation, and - Discussions, proposals, and the board’s decisions should be adequately documented. Include the terms and approval date of each transaction, the members present when each transaction was debated, and the members who cast a vote. In addition to setting the salaries of the CEO and other executives, the organization’s compensation committee or board is responsible for reviewing any and all other benefit arrangements (qualified and nonqualified retirement plans and severance, if provided) and perks to ensure they are compatible with the organization’s compensation philosophy and its charitable mission. **What’s going on in the world of nonprofit executive compensation?** The 2014 GuideStar Nonprofit Compensation Report sheds some light on how executives are faring post-recession. The report, based on data for 2012, shows that chief executive officers (CEOs) of large charities received median pay increases of about 4% in 2012. Median pay increases for top executives of small charities (those with annual budgets of less than $250,000) were around 1%. Overall, the median increase for incumbent CEOs was 2.2%. **Benchmarking Compensation** IRS regulations allow small organizations (those with annual gross receipts of under $1 million) to use compensation data from three comparable organizations in the same or similar communities as benchmarks. Larger organizations often use surveys or consultants. **IRC Section 4958** IRC Section 4958 applies to public charities defined in IRC section 501(c)(3). This section imposes an excise tax on compensation that constitutes an excess benefit transaction, which occurs when a disqualified person receives more than reasonable compensation for his/her services. Disqualified persons are those that are able to exercise significant influence over the affairs of the exempt organization (i.e. officers, directors, trustees and key employees.) Reasonable compensation is understood to be the amount that ordinarily would be paid for like services by a like organization in like circumstances. If the organization follows the three steps defined in the Section 4958 regulations under the “rebuttable presumption” rules, the burden of proof of determining whether compensation was not reasonable is on the IRS. - An independent body must review and approve the amount of compensation (salary & benefits.) - Reliance should be placed on appropriate comparability data when setting the compensation amount, and - Contemporaneous documentation relating to the compensation setting process must be kept. IRS Form 990 Part VI, Line 15 currently requests information relating to these three steps of the rebuttable presumption process. If you have any questions about your nonprofit organization, please contact Warady & Davis LLP at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Payroll Tax Dos and Don’ts](https://waradydavis.com/payroll-tax-dos-and-donts/) **Published:** March 1, 2015 **Author:** WaradyDavis **Excerpt:** Tax-exempt organizations generally don’t have to pay any federal income tax. But an organization that has paid employees must collect payroll taxes and timely remit them to the IRS. As tempting as it may be to use those funds to relieve financial pressures, don’t do it. **Content:** Tax-exempt organizations generally don’t have to pay any federal income tax. But an organization that has paid employees must collect payroll taxes and timely remit them to the IRS. As tempting as it may be to use those funds to relieve financial pressures, don’t do it. Employers (both for-profit and nonprofit) essentially act as tax collectors for the IRS. The federal income taxes and FICA (Social Security and Medicare) taxes deducted from employees’ paychecks are considered to be held “in trust” for the government. Employers are required to remit the withheld taxes, along with the organization’s FICA contributions, on a defined schedule. Failure to pay could spell trouble for both the organization and any “responsible person(s).” **What are the FICA tax rates?** The current Social Security tax rate is 12.4%, evenly split between employee and employer, on the first $118,500 of an employee’s wages (for 2015). The current Medicare tax rate, also split down the middle, is 2.9% on all wages. An additional 0.9% Medicare tax must be withheld once an employee’s wages go over $200,000. Employers are not required to match the additional 0.9% Medicare tax. **Who are “responsible persons”?** The definition of a responsible person is very broad. It includes anyone with the duty to collect, account for, and pay the withheld taxes. The IRS is interested in who has the power to see that the taxes are paid. An organization’s paid executives as well as volunteer board members who are involved in an organization’s activities or financial operations are among those who may be considered responsible persons. **What are the penalties?** The IRS may collect a penalty equal to 100% of the unpaid payroll tax amount from a responsible person(s) who willfully failed to collect, account for, and/or pay over the taxes. Note that the IRS does not distinguish between for-profit and nonprofit organizations when it comes to collecting unpaid payroll taxes. It pursues both with equal gusto. **How can you protect yourself?** Follow the rules and use common sense. Don’t use the payroll taxes you collect for other purposes. Make sure everyone who is a responsible person is fully aware of his or her roles and responsibilities. And make sure your directors and officers (D&O) liability insurance policy provides adequate coverage. ### **Here are some additional employment tax issues:** - Worker classification: Properly distinguishing between employees and independent contractors can be a thorny issue because they are treated differently for income-tax withholding and employment-tax purposes. - Fringe benefits: Fringe benefits are taxable and must be included in the recipient’s pay and reported on the employee’s Form W-2 unless specifically excluded under the tax code. - Reimbursed expenses: Employee or officer business expenses reimbursed under an “accountable plan” are not subject to employment taxes. However, amounts paid under a nonaccountable plan represent taxable income and are subject to all applicable employment taxes. To be an accountable plan, the employer’s reimbursement or allowance arrangement must include all of the following rules: - Your expenses must have a business connection – that is you must have paid or incurred deductible expenses while performing services as an employee of your employer - You must adequately account to your employer within a reasonable period of time. - You must return any excess reimbursement or allowance within a reasonable period of time. If you have any questions about your nonprofit organization, please contact Warady & Davis LLP at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Keeping an eye on UBI: Understand Unrelated Business Income and How to Avoid Excess Amounts](https://waradydavis.com/keeping-an-eye-on-ubi-understand-unrelated-business-income-and-how-to-avoid-excess-amounts/) **Published:** January 2, 2015 **Author:** WaradyDavis **Excerpt:** Like other nonprofits, your organization probably has searched for new sources of revenue during the recession and economic slump. Hopefully, though, you haven’t run into problems accumulating too much unrelated business income (UBI). That kind of income can subject your nonprofit to taxes — and even threaten your tax-exempt status. Here’s what to watch out for going forward on the UBI front. **Content:** ## W&D’s last Nonprofit Executive Briefing and Networking event focused on Unrelated Business Income (UBI). **Here are some highlights:** Like other nonprofits, your organization probably has searched for new sources of revenue during the recession and economic slump. Hopefully, though, you haven’t run into problems accumulating too much unrelated business income (UBI). That kind of income can subject your nonprofit to taxes — and even threaten your tax-exempt status. Here’s what to watch out for going forward on the UBI front. ### The IRS defines UBI According to the IRS, an activity generally is an unrelated business and its income, therefore, is subject to UBI tax if the activity is a trade or business carried on regularly, and not substantially related to furthering your nonprofit’s exempt purpose. Typically, all three factors must exist for the income to be considered UBI. ### Certain product sales count The types of activities that can generate UBI often are activities that you might consider fundraising. For example, the IRS counts as UBI the sale of products that are unrelated to your purpose. Examples might include sales from a park restaurant or a museum gift shop. To determine if the revenue is UBI, the IRS suggests that you ask: 1) Are you regularly — that is, frequently and continually — selling the goods to make a profit? and 2) would a for-profit organization want to carry on this kind of activity? If you answer “yes” to these questions, you’ll likely need to report the income from the activity as UBI. ### Ad space revenue is UBI, too Do you sell ad space in your organization’s journal, magazine or newsletter or on its website? Language that induces the reader to buy or use a product or service typically is considered advertising — for instance, a description of the product’s or service’s quality or a favorable comparison to a similar product or service. And the income from that activity is considered UBI. On the other hand, a brief acknowledgment — listing, for instance, the supporter’s name and logo in a program — probably isn’t advertising, but rather is sponsorship and considered a donation. ### Selling unrelated services also matters Let’s say that an organization owns a parking lot and opens it regularly to the general public. The parking fee income collected from the lot is taxable. That’s because the activity — charging a fee for public parking — isn’t substantially related to the not-for-profit’s exempt purpose. But, if only members and visitors use the parking lot while participating in the organization’s activities, the parking fee income isn’t taxable. Income from certain investments, from selling membership lists and from gaming activities (see below) also can produce UBI. ### Exceptions to the rules exist There are many exceptions to the rules — for instance, when your volunteers run the activity. According to the IRS, income from any trade or business where uncompensated volunteers perform a substantial amount of the work is exempt from UBI tax. A transaction’s structure also can exclude the resulting income from taxation. While being paid to directly promote products compatible with your mission probably will result in UBI, receiving royalties for licensing others to use your name or logo to promote such products may avoid it. Other situations in which your nonprofit’s income may be exempt from tax include the sale of merchandise that’s largely donated, such as in a book sale, or activities related to a convention, trade show or annual meeting. See IRS Publication 598, Tax on Unrelated Business Income of Exempt Organizations, for more exemptions. ### Gaming is ticklish The revenue from charitable gaming activities is usually considered UBI and is subject to tax — with the exception of traditional bingo. Newer forms of bingo generally don’t qualify for the tax exception, including scratch-off and pull-tab games. Also, to be eligible for the exception, the wagers must be placed, winners must be determined and prizes must be awarded while all players are present. ### Report UBI carefully All 501(c)(3) organizations should be aware of what is considered unrelated business income. UBI can be a good source of revenue as long as it doesn’t overshadow your nonprofit’s exempt activities. If you do bring in some revenue of this type, report it accurately. If your nonprofit is audited, it’s likely that the IRS will examine your records to see whether your record keeping mirrors reality. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Valuing Volunteers](https://waradydavis.com/valuing-volunteers/) **Published:** March 1, 2015 **Author:** WaradyDavis **Excerpt:** How valuable are volunteers? The quantifiable answer is $22.55 per hour.* But that number doesn’t account for the intangibles, such as enthusiasm, creativity, and dedication, that volunteers may bring to the table. **Content:** How valuable are volunteers? The quantifiable answer is $22.55 per hour.\* But that number doesn’t account for the intangibles, such as enthusiasm, creativity, and dedication, that volunteers may bring to the table. Nonprofit organizations are faced with many challenges: to implement programs, to maintain operations, and to carry out their mission. The difference between successfully meeting these challenges and falling short may be dependent, at least in part, on the organization’s volunteers. Prospective volunteers can pick and choose among numerous charitable organizations. If you want to attract and retain talented volunteers, give them as many reasons as possible to choose yours. **Not “Just” Volunteers** Volunteers and paid employees are alike in more ways than they are different. Be sure that those who offer their time and talents free of charge are not treated as “just” volunteers. You can help them feel like they’re part of the team right away by introducing them to staff members, executives, and board members. It also helps to create written job descriptions for all volunteer positions. Give new recruits an overall picture of how they fit in and explain the roles that other volunteers play. You might even want to create job titles. Meet with volunteers frequently to get their feedback, and encourage them to attend staff meetings (when appropriate). Volunteers coming from the for-profit world may need time to transition to the nonprofit model. Encouraging their feedback during this period could provide you with valuable ideas and insight. **Building Teams** Your volunteers probably spend less time working than your paid staff does. To keep them up to speed and engaged, you’ll want to provide adequate oversight and supervision, especially in the beginning. Not all volunteers will be happy doing everything you ask. Whenever possible, match a volunteer’s skills and interests with suitable tasks. Be sure you have the tools and resources volunteers need to do their jobs. And try to rotate mundane or uninteresting jobs among volunteers. **Boosting Retention** Volunteers who have a meaningful and satisfying experience will be more committed. But keeping them engaged and empowered can be a challenge. High volunteer turnover can be as disruptive as high staff turnover. If volunteer retention is a problem, you may need to do some rearranging so you can better accommodate volunteers. Professionals are used to being involved at high levels. If you have a highly skilled volunteer who is still working, would you be willing to rearrange some work schedules to accommodate that person? Would you consider involving that person in the decision-making process? **Just Rewards** Reward valued volunteers by publicly recognizing their commitment and dedication to your organization. Create a “volunteer of the month” program, for example. Or present certificates of appreciation. If you publish a print or electronic newsletter, profile one or two volunteers each issue or dedicate an entire issue to your volunteers each year. If you have the resources, consider organizing a volunteer appreciation ceremony or event. **Help with Technology** These days, volunteers will expect you to have at least the basics when it comes to technology. If you’ve had to put it on the back burner or your capabilities are lagging due to a lack of technology expertise, look for volunteers who have the necessary skills to bring your organization up to speed. **Here Come the Baby Boomers** Their careers are behind them and they have lots of free time. As large numbers of the Baby Boomer generation (those born from 1946 to 1964) reach retirement age, many are looking for opportunities to “give back” through volunteering. This could be your opportunity to recruit some highly talented volunteers. There are some fundamental differences between previous generations of retirees and Baby Boomers. Baby Boomers don’t like to think of themselves as getting older. It’s generally best to stay away from terms like “seniors” in your recruitment materials. Members of this generation are driven to succeed. But they also want credit for what they accomplish. Instead of asking people to “volunteer,” consider asking them to “share their skills.” Finally, many Baby Boomers are comfortable with social networks, blogs, and other online communities, so plan to expand your volunteer search by reaching out over the Internet. If you have any questions about your nonprofit organization, please contact Warady & Davis LLP at (847) 267-9600. ###### \* Estimated value of volunteer time for 2013, Independent Sector ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Important Changes to OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards](https://waradydavis.com/changes-to-ombs-uniform-administrative-requirements-cost-principles-and-audit-requirements-for-federal-awards/) **Published:** January 1, 2015 **Author:** WaradyDavis **Excerpt:** In December 2014, the Obama administration finalized the Office of Management and Budget’s (OMB’s) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, commonly referred to as the Uniform Guidance. The rules are effective for new awards made on or after December 26, 2014. The Uniform Guidance has been described as historic reform that will make long-term changes to the federal government’s financial assistance programs. There are several key policy reforms **Content:** In December 2014, the Obama administration finalized the Office of Management and Budget’s (OMB’s) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, commonly referred to as the Uniform Guidance. The rules are effective for **new** awards made on or after December 26, 2014. The Uniform Guidance has been described as historic reform that will make long-term changes to the federal government’s financial assistance programs. There are several key policy reforms ### **Reimbursement of Indirect Costs** This reform is getting a lot of attention. The Uniform Guidance allows nonprofits and other organizations that have never been reimbursed for indirect costs (e.g., administrative expenses and overhead) to begin applying a standard minimum rate to secure reimbursement for a portion of such costs or perhaps negotiate a higher rate. Note that the reimbursement reform applies to both federal agencies and “pass-through entities” that carry out part of a federal program (e.g., state and local governments receiving federal funding). This change is significant because prior to the Guidance, many pass-through entities did not pay indirect costs, even if a nonprofit had an established indirect cost rate. The new rules could be interpreted as an affirmation that indirect costs are essential for many nonprofit organizations that struggle to carry out their missions. In turn, the reform may make it easier for nonprofits that don’t receive federal funding to convince donors to support their indirect costs. ### **Required Audit Threshold** This change is also notable. When a nonprofit organization receives federal funding, there are various requirements, including a required single audit where federal award spending for the year is over a certain amount. The final Uniform Guidance rules raise the required audit threshold from $500,000 in federal awards in a year to $750,000, effective for fiscal years beginning on or after December 26, 2014. If you have any questions about your nonprofit organization, please contact Warady & Davis LLP at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Business Owner Q&A: New COVID-19 Requirements](https://waradydavis.com/important-business-owner-qa-new-covid-19-employer-requirements/) **Published:** March 24, 2020 **Author:** Leslie Flinn **Content:** ## Warady & Davis LLP has compiled a list of questions and answers to help you navigate and manage the new requirements of the Families First Coronavirus Response Act (FFCRA). **UPDATE: 3.26.2020 – DOL Issues Emergency Paid Sick Leave Act (EPSLA) and Emergency Family Medical Leave Act (EFMLA) Guidance.** DOL guidance provides good news for employers struggling with state ordered closures. It appears based on guidance points below that employers **do NOT have to pay two weeks EPSLA due to lay-offs or state ordered closures either before or after FFCRA effective date (April 1, 2020)**. Instead, employees may be eligible for expanded unemployment benefits On March 18, 2020, Congress passed, and the President signed into law, the **[Families First Coronavirus Response Act](https://www.congress.gov/bill/116th-congress/house-bill/6201/text),** an economic stimulus plan intended to cushion the impact of the COVID-19 outbreak on Americans and introducing paid sick leave and an expanded family and medical leave act to the nation’s employers. The Act includes many provisions applicable to employers, such as paid sick leave for employees impacted by COVID-19 and those serving as caregivers for individuals with COVID-19. Two provisions provide paid leave to employees forced to miss work because of the COVID-19 outbreak: (1) an emergency expansion of the **[Family and Medical Leave Act (FMLA)](https://www.dol.gov/agencies/whd/fmla);** and (2) a new federal paid sick leave law. **Each provision has its own qualifying criteria.** **Following are key questions and answers for EACH provision.** ## **The Emergency Paid Sick Leave Act** **Q. When does the Emergency Paid Sick Leave go into effect?** **A.** This program will become effective on **April 2, 2020**, and there is no expiration date. **Q: How do I know if my company is impacted?** **A:** The Emergency Paid Sick Leave Act (the paid leave provision) requires employers with *fewer than 500* employees and public employers with at least one employee to provide employees with **up to two weeks of paid sick leave**. Employers of health care providers or emergency responders may elect not to provide this leave to those specific employees. In addition, the Secretary of Labor may exempt small businesses (defined as fewer than 50 employees) if the required leave would jeopardize the viability of their business. **Q: We are a small business (fewer than 50 employees). How can we apply for an exemption?** **A:** The latest **DOL Guidance** states: To elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, **which will be addressed in more detail in forthcoming regulations**.. **Q: How long do employees need to be working at my company before they get emergency paid leave?** **A:** All employees, regardless of their tenure with the organization or full- or part-time status are eligible to receive this benefit. **Q: When do covered employers need to provide emergency paid leave?** **A:** Covered employers are required to provide emergency paid leave to an employee who is unable to work or work remotely because: 1. the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19; The DOL clarified in its recent FFCRA guidance that ***State ordered closures and lay-offs DO NOT qualify employees for EPSLA. Instead, they may be entitled to unemployment.*** 2. the employee has been advised by a health care provider to self-quarantine because of COVID-19; 3. the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; 4. the employee is caring for an individual subject (or advised) to quarantine or isolation; 5. the employee is caring for a son or daughter whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 precautions; or 6. the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and **NOTE:** Caring for another who is subject to an isolation order or advised to self-quarantine as described above is not limited to family members. **Q: How much pay are employees entitled to?** **A:** Covered employers are required to provide employees with two weeks of paid sick leave. - **Full-time employees:** 80 hours at their regular rate of - **Part-time employees:** the number of hours that the employee works, on average, over a two week **NOTE:** Once the employee returns to work the employer is not required to provide any further emergency paid sick leave. **Q: Are the payments subject to caps?** **A:** Yes, payments are capped at $511 a day ($5,110 in total) for dealing with an employee’s own illness or quarantine (reasons 1, 2 and 3 above). Employees who are caring for an individual affected by COVID-19 and those whose children’s schools have closed (reasons 4, 5 and 6 above) receive up to two-thirds of their pay, and that benefit is limited to $200 a day ($2,000 in total). **Q: Do we still need to provide emergency paid sick leave if we have existing paid leave via sick days and PTO?** **A:** Yes. The emergency leave is *in addition to* any paid leave provided by employers. **Q: When can employees start using emergency paid leave?** **A:** The effective date is April 2, 2020. Any paid leave provided *before the* law is enacted *cannot b*e credited against the employee’s paid leave entitlement. **Q: Do employees need to exhaust their PTO or sick leave before using emergency paid leave?** **A:** No. Employers may not require employees to exhaust their current sick leave, PTO or similar benefit before using this emergency paid sick leave. **Q: Will employees be entitled to this benefit in 2021?** **A:** No. Hours cannot be carried over after December 31, 2020 (when the legislation sunsets). **Q: Are employers eligible for reimbursement for providing these additional paid benefits to employees?** **A:** To ease some of the financial burden this will place on employers, a limited refundable tax credit will be allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes), equal to payments made to the employee. For example, under the Emergency Paid Sick provision, employers can claim up to $511 or $200 for any day of absence for the reasons outlined above, to a maximum of ten days per employee for the year. Please consult your tax attorney or accountant for specific guidance on caps and credits. **Q: How does the refundable tax credit apply to tax-exempt employers?** **A:** In the past, other employer tax credit programs have been claimed as a credit against social security tax on all wages paid to employees, for tax-exempt employers. It is uncertain whether the IRS/SSA will follow suit and handle the Families First credits similarly; we anticipate employers will receive additional guidance on this. ## **Emergency Family and Medical Leave Expansion Act (EFMLA)** **Q. When does the Emergency Family Medical Leave Expansion Act go into effect?** This program will become effective on **April 2, 2020**, and remain in effect until **December 31, 2020**. **Q: How do I know if my company is impacted by EFMLA?** **A:** The EFMLA expands the protections of the Family and Medical Leave Act (FMLA). The EFMLA requires employers with *fewer than 500 employees* and public employers with at least one employee to provide paid benefits in certain situations. Employers of health care providers or emergency responders may elect not to provide this leave to those specific employees. In addition, the Secretary of Labor may exempt small businesses (defined as fewer than 50 employees) if the required leave would jeopardize the viability of their business. **Q: We are a small business (fewer than 50 employees). How can we apply for an exemption?** A: At this time, guidance has not been issued on this aspect, however it is expected by the April 2nd effective date. **Q: How long do employees need to be working at my company before they are eligible to receive EFMLA?** **A:** Any full-time or part-time employee that has been on the employer’s payroll for 30 days prior to taking the leave is eligible. **NOTE:** This is a significant departure from the FMLA’s usual requirement that the employee work for the employer for 12 months and 1,250 hours in the 12 months prior to taking leave. **Q: When do covered employers need to provide EFMLA?** A: Employees will be entitled to take up to 12 weeks of job-protected leave if an employee is unable to work (or remote work) due to caring for the employee’s son or daughter (who is under 18) because the child’s school or place of care has been closed or his or her childcare provider is unavailable due to the public health emergency. **Q: How much pay are employees entitled to under EFMLA?** **A:** The EFMLA provides for a combination of unpaid and paid leave. The first 10 days of EFMLA may be unpaid. An employee may choose to take any existing pay benefit (i.e. PTO or sick leave) during the 10-day unpaid period. After ten days of unpaid leave, employees are entitled to 10 weeks of job-protected leave of at least two- thirds their usual pay. The cap of this entitlement is $200 per day ($10,000 in the aggregate). Part-time employees are entitled to be paid based on the average number of hours worked for the six months prior to taking the leave. **Q: Have the employee protections changed?** **A:** As with the traditional FMLA, the EFMLA is job-protected leave. However, EFMLA’s job restoration requirements will apply to employers *with 25 or more employees.* For employers with *less* than 25 employees, job restoration is not required if: - The employee takes EFMLA; - The position held by the employee does not exist due to economic conditions or other changes in operating conditions that affect employment and are caused by a public health emergency during the period of leave; - The employer makes reasonable efforts to restore the employee to an equivalent position **NOTE:** If no equivalent positions are available at the time the employee tries to return from leave, the employer must attempt to contact the employee if an equivalent position becomes available in the next year. **Q: What is the effective date and will employees be entitled to this benefit in 2021?** **A:** The EMFLA is effective on April 2, 2020, and will remain in place until the end of 2020, when the legislation sunsets. **Q: Are employers eligible for reimbursement for providing these additional paid benefits to employees?** **A:** To ease some of the financial burden this will place on employers, a limited refundable tax credit will be allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes), equal to payments made to the employee. For example, under the EFMLA, employers can claim up to $200 for each day of qualifying leave up to $10,000 per employee for the year. Please consult your tax attorney or accountant for specific guidance on caps and credits. **Q: How does the refundable tax credit apply to tax-exempt employers?** **A:** In the past, other employer tax credit programs have been claimed as a credit against social security tax on all wages paid to employees, for tax-exempt employers. It is uncertain whether the IRS/SSA will follow suit and handle the Families First credits similarly; we anticipate employers will receive additional guidance on this. ## We are Here For You The COVID-19 situation is fluid and rapidly evolving. We know that many of you have questions and concerns during this unprecedented time. Please be sure to consult your attorney and do not hesitate to reach out to your Warady & Davis business advisor for help and guidance. Call 847-267-9600 or email info@waradydavis.com. [**SOURCE: www.MRANET.org**](https://www.mranet.org) ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [U.S. House passes the Build Back Better Act](https://waradydavis.com/u-s-house-passes-the-build-back-better-act/) **Published:** November 19, 2021 **Author:** Leslie Flinn **Content:** The U.S. House of Representatives passed a crucial part of President Biden’s agenda by a vote of 220-213 on November 19. The Build Back Better Act (BBBA) includes numerous provisions related to areas ranging from health care, climate change and immigration to education, social programs and, of course, taxes. ## **Impact on the deficit** The House vote came after the Congressional Budget Office (CBO) released its score on the legislation on Nov. 18. The CBO estimates that the legislation will increase the deficit by $367 billion over a 10-year period. However, the CBO score doesn’t take into account any additional revenues generated by improved compliance with federal tax laws. The BBBA allocates $80 billion for the IRS to heighten enforcement (which the CBO did include in its calculation), likely to target primarily high-wealth individuals, businesses and overseas transactions. The U.S. Treasury Department “conservatively” estimates increased IRS enforcement will lead to $400 billion in additional revenues over the 10-year period. ## **Significant tax proposals** Funding for the sweeping package largely comes from tax increases on high-income individuals and businesses, but the law also includes tax breaks for eligible taxpayers. Some of the most notable tax-related provisions include: **State and local taxes (SALT) deduction.** The BBBA would amend the Tax Cuts and Jobs Act (TCJA) to raise the cap on the so-called SALT deduction from $10,000 to $80,000 ($40,000 for married taxpayers filing separately) for tax years 2021 through 2031. The limit would return to $10,000 in 2032. **Child tax credit (CTC).** The American Rescue Plan Act (ARPA) expanded the CTC from $2,000 per child to $3,000 per child ages six through 17 and $3,600 per child under age six. The BBBA would extend the expansion through 2022. **Premium tax credits (PTCs).** The ARPA expanded the availability of PTCs for health insurance purchased through Affordable Care Act exchanges (for example, Healthcare.gov) for 2021 and 2022. The BBBA would extend the expansion through 2025. **High-income surtax.** The BBBA would create a 5% surtax on individuals with a modified adjusted gross income (MAGI) that exceeds $10 million ($5 million for married taxpayers filing separately). It adds another 3% surtax on MAGI exceeding $25 million ($12.5 million for married taxpayers filing separately). The surtax would take effect for 2022. **Net investment income tax (NIIT).** The BBBA would expand the 3.8% NIIT to apply to the trade or business income of high-income individuals, regardless of whether they’re actively involved in the business. The income thresholds are over $500,000 for joint filers, over $400,000 for single filers and over $250,000 for married couples filing separately. The NIIT currently applies to business income only if the income is passive. **Retirement savings.** The BBBA includes several limitations on the ability of high-income taxpayers with large retirement account balances to take advantage of certain tax breaks. For example, beginning in 2029, it would prohibit additional contributions to a Roth IRA or traditional IRA for a tax year if a taxpayer’s income exceeds a certain amount and the contributions would cause the total value of an individual’s IRA and defined contribution accounts as of the end of the prior tax year to exceed $10 million. The bill also would impose new mandatory distribution requirements on such taxpayers. But some retirement-related provisions would go into effect as soon as 2022, such as ones that would restrict and, in some circumstances, eliminate Roth conversions. **Minimum corporate tax rate.** The BBBA would impose a 15% minimum tax on the profits of corporations that report more than $1 billion in profits to shareholders (book income vs. tax income), for tax years beginning after 2022. **Excess business losses.** The BBBA would make permanent the Tax Cuts and Jobs Act’s limit on the amount of excess business losses that pass-through entities and sole proprietors can use to offset ordinary income. It also would create a new carryforward for unused excess business losses, rather than carrying them forward as net operating losses. **Excise tax on stock buybacks.** The BBBA includes a 1% excise tax on the fair market value of stock buybacks by publicly traded U.S. corporations, which would be effective for repurchases after 2021. **Business interest deduction.** The BBBA would add a new limit on the amount of net interest expense that certain corporations that are part of an international financial reporting group can deduct, for tax years beginning after 2022. ## **Moving on to the Senate** Now that the bill has been passed by the House, it still must fight its way through the Senate, where it faces additional debate. A Senate vote isn’t expected to take place until late December. Most likely the Senate will make some changes to the bill, which could include changes to some of the tax provisions. We’ll keep you apprised of the important developments. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Business, Business Management, Hot Topics, Tax Legislation --- ### [2021 year-end tax planning for individuals](https://waradydavis.com/2021-year-end-tax-planning-for-individuals/) **Published:** November 11, 2021 **Author:** Leslie Flinn **Content:** ## Potential tax law changes and year-end tax planning for individuals As if another year of the COVID-19 pandemic wasn’t enough to produce an unusual landscape for year-end tax planning, Congress continues to negotiate the budget reconciliation bill. The proposed [Build Back Better Act (BBBA)](https://taxfoundation.org/build-back-better-plan-reconciliation-bill-tax/) is certain to include some significant tax provisions, but much uncertainty remains about their impact. **While we wait to see which tax provisions are ultimately included in the BBBA, following are some individual year-end tax planning strategies to consider to reduce your 2021 tax liability. *View 2021 year-end tax planning considerations for businesses HERE.*** ### **Accelerate and defer with care** One of the most reliable year-end tactics for reducing taxes has long been to accelerate your deductible expenses and defer your income. For example, self-employed individuals who use cash-basis accounting can delay invoices until late December and move up the planned purchase of equipment or the payment of estimated state income taxes from early next year to this year. This technique has always carried the caveat that you generally shouldn’t pursue it if you expect to be in a higher tax bracket the following year. Potential provisions in the BBBA also may make it advisable for certain taxpayers to reverse the strategy for 2021 — that is, accelerate income and defer deductible expenses. The current version of the BBBA would impose a new “surtax” of 5% on modified adjusted gross income (MAGI) that exceeds $10 million, with an additional 3% on income of more than $25 million. As a result, the highest earners could pay a 45% federal marginal income tax on wages and business income (the current 37% income tax rate plus 8%). It could be even higher when combined with the net investment income tax, which might be expanded to include active business income for pass-through entities. In addition, there’s a proposal to temporarily increase the $10,000 cap on the state and local tax deduction to $80,000. Individuals in high-tax states should consider whether there may be an advantage to accelerating a 2022 property or estimated state income tax payment into 2021, or whether the deduction might be more valuable next year, particularly if they’ll face a higher effective tax rate. ### **Leverage your losses** Taxpayers with substantial capital gains in 2021 could benefit from “harvesting” their losses before year-end. Capital losses can be used to offset capital gains, and up to $3,000 ($1,500 for married persons filing separately) of excess losses (those that exceed the amount of gains for the year) can be applied against ordinary income. Any remaining losses can be carried forward indefinitely. ***Beware, however, of the wash-sale rule.*** Generally, the rule prohibits the deduction of a loss if you acquire “substantially identical” investments within 30 days, before or after, of the date of the sale. Taxpayers who itemize their deductions could compound their tax benefits by donating the proceeds from the sale of a depreciated investment to a charity. They can both offset realized gains and claim a charitable contribution deduction for the donation. ### **Satisfy your charitable inclinations** For 2021, charitable contributions can reduce taxes for both itemizers and non-itemizers. Taxpayers who take the standard deduction can claim an above-the-line deduction of $300 ($600 for married couples filing jointly) for cash contributions to qualified charitable organizations. The adjusted gross income limit for cash donations is 100% for 2021; it’s scheduled to return to 60% for 2022. That means you could offset all of your taxable income with charitable contributions this year. (Donations to donor advised funds and private foundations don’t qualify, though.) Taxpayers who don’t generally itemize can benefit by “bunching” their charitable contributions. In other words, delaying or accelerating contributions into a tax year to exceed the standard deduction and claim itemized deductions. For example, if you usually make your donations at the end of the year, you could bunch donations in alternative years — say, donate in January and December of 2022 and January and December of 2024. Retired taxpayers who are age 70½ and older can reduce their taxable income by making qualified charitable contributions of up to $100,000 from their non-Roth IRAs. Retired or not, individuals age 72 and older can use such contributions to satisfy their annual required minimum distributions (RMDs). **Note that RMDs were suspended for 2020 but are effective for 2021.** So long as the assets would be considered long-term if they were sold, donations of appreciated assets offer a double-barreled tax benefit. You avoid the capital gains tax on the appreciation and can deduct the asset’s fair market value as of the date of the gift. ### **Convert traditional IRAs to Roth IRAs** As in 2020, when many taxpayers saw lower than typical income, 2021 could be a smart time to convert funds in traditional pre-tax IRAs to an after-tax Roth IRA. Roth IRAs have no RMDs, and distributions are tax-free. You’ll have to pay income tax on the converted funds, but it’s better to do so while subject to lower tax rates. Similarly, if you convert securities that have dropped in value, your tax may well be lower now than down the road — and any subsequent appreciation while in the Roth IRA will be tax-free. It’s worth noting that BBBA may limit the ability of wealthy individuals to engage in Roth conversions. There was a lot of back-and-forth with respect to these provisions, and the latest version of the House bill includes certain restrictions. Whether these provisions will make it past any Senate amendments remains to be seen, but the proposal could be a harbinger of future proposed restrictions. ### **Proceed with caution** The strategies outlined above always come with pros and cons, but perhaps never more so than now, when potentially significant tax legislation that would take effect next year is under negotiation. We can help you chart the best course in light of any developments. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Hot Topics, Tax, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, PPP2 loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [CARES Act offers new hope for cash-strapped nonprofits](https://waradydavis.com/cares-act-offers-new-hope-for-cash-strapped-nonprofits/) **Published:** April 10, 2020 **Author:** Leslie Flinn **Content:** On March 27, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. How is this massive $2 trillion recovery package poised to help your not-for-profit organization? It depends on your group’s size, financial condition and other factors. But most nonprofits affected by the coronavirus (COVID-19) outbreak are eligible for some relief under the CARES Act. ### **Paycheck Protection Program (PPP)** This $349 billion loan program (administered by the Small Business Administration) is intended to help U.S. employers, including nonprofits, keep workers on their payrolls. To potentially qualify, you must be a 501(c)(3) or 501(c)(19) organization with less than 500 full- or part-time employees. PPP loans can be as large as $10 million. But most organizations will receive smaller amounts — usually equal to 2.5 times their average monthly payroll costs. If you receive a loan through the program, proceeds may be used only for paying certain expenses, including: - Payroll, - Health care benefits, - Mortgage interest, - Rent, - Utilities, and - Interest on debt incurred before February 15, 2020. You *can’t* use these loans to pay your mortgage principal or to *prepay* mortgage interest. Perhaps the most reassuring aspect of PPP loans is that they can be forgiven — so long as you follow the rules. To have your full loan amount forgiven (except for loan interest), you must retain employees and not reduce their regular salary or wages more than 25%. If you’ve already laid off staffers, rehiring them by June 30 may enable you to qualify for full loan forgiveness. ### **Industry Stabilization Fund (ISF)** Nonprofits with more than 500 employees, such as hospitals and educational institutions, may be eligible for ISF low-interest loans. When applying for one, you’ll be required to certify (among other things) that loan proceeds will be used to retain (or rehire) at least 90% of your workforce at full pay and benefits through at least September 30. Unlike PPP loans, ISF loans won’t be forgiven. However, you aren’t required to pay principal or interest for at least the first six months after receiving an ISF loan. There’s a 2% interest-rate cap on these loans. ### **Immediate help** If you’d like to apply for financial assistance under the CARES Act, talk directly to your bank. And contact us for help navigating the many provisions of recent legislation — including other lending programs, emergency grants and new payroll tax breaks. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved **Categories:** COVID, Not-for-Profit, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Moving Forward: 2016 Not-for-Profit Sector Outlook](https://waradydavis.com/moving-forward-2016-not-for-profit-sector-outlook/) **Published:** February 1, 2016 **Author:** WaradyDavis **Excerpt:** While nonprofit organizations have rebounded from the most crippling effects of the 2008 economic crisis, the recenty published State of the Nonprofit Sector Survey* shows many still have significant challenges ahead. For the seventh year in a row, a majority of the more than 5,000 organizations surveyed reported that people -- particularly those in low-income communities -- are going without needed services because nonprofits can’t meet the demand. **Content:** **While nonprofit organizations have rebounded from the most crippling effects of the 2008 economic crisis, the recenty published State of the Nonprofit Sector Survey\* shows many still have significant challenges ahead.** For the seventh year in a row, a majority of the more than 5,000 organizations surveyed reported that people — particularly those in low-income communities — are going without needed services because nonprofits can’t meet the demand. - 76% of respondents reported an increased demand for their services. - 52% (versus 56% in 2014) said they couldn’t meet the demand. - 71% of the organizations that couldn’t meet demand said clients’ needs go unmet when they can’t provide needed services. In addition, many nonprofits continue to be hampered by insufficient funding and a lack of investment in long-term sustainability. More than half (53%) reported three months or less of cash on hand, and many organizations listed financial concerns as top challenges. - 32% cited long-term sustainability as a challenge. - 25% had concerns about their ability to offer competitive pay and/or retain staff. - 19% were concerned about raising enough funding to meet all expenses. On a more positive note, financial indicators are improving for some nonprofits. Forty-seven percent of the organizations ended 2014 with a surplus, the highest percentage since 2008. Nonprofits are also taking positive steps to invest in their futures. - 51% collaborated with another organization to increase or improve services. - 44% hired employees for new positions. - 33% upgraded computer hardware or software - 29% engaged in long-term strategic or financial planning. ###### \* Conducted by the Nonprofit Finance Fund If you have any questions about your nonprofit organization’s performance and plans for the future, please contact Warady & Davis LLP at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Expense Reimbursement Arrangements](https://waradydavis.com/expense-reimbursement-arrangements/) **Published:** February 1, 2016 **Author:** WaradyDavis **Excerpt:** Does your not-for-profit organization reimburse staff and volunteers for expenses they incur while conducting business or traveling on behalf of the organization? If so, you’ll want to have a clear written policy for paying or reimbursing those expenses. **Content:** Does your organization reimburse staff and volunteers for expenses they incur while conducting business or traveling on behalf of the organization? If so, you’ll want to have a clear written policy for paying or reimbursing those expenses. ## **Two Alternatives** Under IRS guidelines, nonprofits may have either an accountable or nonaccountable arrangement for reimbursements. An accountable plan requires the recipient to properly account for the actual expenses incurred. As long as the plan meets all of the IRS requirements, you don’t have to include the expense payments in your employee’s gross income (or report them as income to a volunteer). An accountable plan also benefits your organization, because you won’t have to pay the employer’s share of any payroll taxes that otherwise would be due on the payments. If the nonprofit has a nonaccountable plan — that is, one that fails to meet each of the requirements for an accountable plan — then all amounts advanced to the employee or volunteer are includable in his or her gross income and subject to both income and payroll taxes. ### **Accountable Plan Requirements** Reimbursements have to meet three basic requirements for an arrangement to qualify as an accountable plan. - The expense must be related to your nonprofit activities and must be reasonable. - The recipient must provide adequate documentation or accounting within a reasonable period of time after the expense is incurred. - If you pay an advance on expenses, the person must return any unused or unsubstantiated amount to your organization within a reasonable period. The IRS generally considers 60 days after an expense is paid or incurred to be a reasonable period for an employee or volunteer to substantiate an expense. Excess reimbursements should be returned to your organization within 120 days. Alternatively, you may provide employees and volunteers with periodic statements (at least quarterly) that require them to either account for or return any advances within 120 days of the statement. We can answer any questions you may have about reimbursement requirements. Please contact Warady & Davis LLP at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [A Look at Donor Retention](https://waradydavis.com/a-look-at-donor-retention/) **Published:** April 1, 2015 **Author:** WaradyDavis **Excerpt:** A recent report* suggests that retaining donors remains challenging for many organizations. **Content:** A recent report\* suggests that retaining donors remains challenging for many organizations. The report examines the 2013 – 2014 fundraising results of 8,025 U.S. nonprofit organizations — most of them small to midsize organizations — averaging $833,475 in annual giving. Among the findings: - The median donor retention rate in 2014 was 43% (meaning only 43% of 2013 donors made repeat gifts to participating nonprofits in 2014) - Year over year, there was a 3% net loss in donors (3.615 million new and previously lapsed donors compared to 3.713 million lapsed donors) Overall, gift dollars grew by $173 million. However, for every $100 gained in 2014, $95 was lost through attrition (i.e., reduced gifts and lapsed donors). For purposes of the analysis, funds raised include cash gifts, pledge payments, recurring gift payments, gifts of marketable securities, and the gift portion of special event income. ###### \* *2015 Fundraising Effectiveness Project Survey Report,* Association of Fundraising Professionals, 2015 **Keep Them Giving** Raising money from new donors is important. But turning those donors into repeat donors is also critical to the long-term success of an organization’s fundraising efforts. Typically, an organization spends more money to attract a new donor than to encourage an existing donor to give again. As a result, the positive financial impact of improving donor retention rates can be significant over time. **Strategies To Consider** Organizations that strive to build ongoing relationships with their donors are more likely to be rewarded with continued support. The suggestions that follow may prove helpful. **Say thank you.** Acknowledging each gift the organization receives with a personalized communication — and doing so promptly — gets the donor relationship off to a good start. In addition to sending written acknowledgments, organizations might consider phoning at least some of their donors to thank them for their contributions. **Engage and inform.** Opportunities to interact with donors and let them know about the organization’s work and upcoming events have proliferated. Whether it’s through social media, e-mail, traditional mailings, or a combination, organizations should have a plan to keep their name in front of donors and enhance engagement — without being viewed as intrusive. **Watch timing.** Along the same line, organizations should be cautious not to solicit contributions from past donors too often. Instead of motivating donors to give more, asking for money too frequently could have the opposite effect and only serve to alienate them. **Encourage regular giving.** Having a monthly giving program in place that interested donors can sign up for voluntarily helps avoid this problem. To help get the word out, an organization should highlight its giving program at every opportunity. **Connect with younger adults.** They may not be able to make big cash contributions now, but the Millennials are a large generation with significant potential as a future funding source. Establishing a connection with them now can be a smart long-term strategy. Organizations that view fundraising in a positive light — as an opportunity to promote and support their mission — are likely to have more success than those that see fundraising as a drain on their time and resources. When mission and values come first, donor relationship building becomes a shared responsibility, involving everyone from executives and board members to staff and volunteers. Organizations should identify a clear message they want to convey to donors about their mission and values. Taking steps to ensure that everyone involved in donor communications understands and is on board with that message can avoid any confusion in the minds of donors that might make them hesitant to commit more money to the organization. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Should You Have D&O Liability Insurance?](https://waradydavis.com/should-you-have-do-liability-insurance/) **Published:** November 15, 2015 **Author:** WaradyDavis **Excerpt:** Nonprofit directors and officers often view their personal liability exposure as much lower than that of their for-profit counterparts. Consequently, many nonprofits carry no or inadequate personal liability insurance for directors and board members. In reality, claims naming nonprofit directors and officers are as widespread as those against for-profit corporations and can cost organizations hundreds of thousands of dollars or more. **Content:** Nonprofit directors and officers often view their personal liability exposure as much lower than that of their for-profit counterparts. Consequently, many nonprofits carry no or inadequate personal liability insurance for directors and board members. In reality, claims naming nonprofit directors and officers are as widespread as those against for-profit corporations and can cost organizations hundreds of thousands of dollars or more. **The Need** When someone joins your organization’s board, that person assumes a level of responsibility for running and managing your organization in a proper manner. That means your organization’s director and officers (who may be volunteers) could be named personally in a lawsuit against your nonprofit. General liability insurance isn’t enough. The typical general liability policy doesn’t cover the consequences of mismanagement by officers and directors. Directors and officers (D&O) liability insurance covers the cost of defending directors and officers and pays monetary damages resulting from mismanagement claims. **What Is Covered?** Generally, D&O policies provide coverage for claims based on failure to govern, breach of fiduciary duty, and improper employment practices — none of which are normally included in general liability policies. Additionally, with the recent proliferation of [cybersecurity breaches](https://waradydavis.com/irs-cyber-security-customer-service/), you may want to look for cybersecurity coverage in a D&O policy or ask for a specific rider. Employment practices liability coverage is especially important since such a large percentage of the claims made are employment practices claims. These may include claims based on alleged discrimination, harassment, defamation, wrongful termination, failure to hire, failure to accommodate a disability, and retaliation. Claims are also frequently made for improper employee classification (exempt/nonexempt and independent contractor/employee). If you have any questions about your nonprofit organization, please contact Warady & Davis LLP at (847) 267-9600. Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Inside the Numbers: Financial Information for the Board](https://waradydavis.com/inside-the-numbers-financial-information-for-the-board/) **Published:** April 1, 2016 **Author:** WaradyDavis **Excerpt:** To properly oversee and manage a nonprofit organization, its board members need to receive accurate and timely information about the organization’s finances. But which financial information will be most helpful, and how detailed should it be? There is no single best approach. Much depends on the makeup of the board. In many organizations, not every board member has the necessary financial expertise to decipher complex financial reports. At the same time, informed decision-making and planning require a good understanding of the organization’s financial situation. **Content:** To properly oversee and manage a nonprofit organization, its board members need to receive accurate and timely information about the organization’s finances. But which financial information will be most helpful, and how detailed should it be? There is no single best approach. Much depends on the makeup of the board. In many organizations, not every board member has the necessary financial expertise to decipher complex financial reports. At the same time, informed decision-making and planning require a good understanding of the organization’s financial situation. **Determining What’s Essential** To help focus the effort, management and the board should determine the specific types of financial information to be reviewed on a monthly or quarterly basis. Among other items, essential information typically would include a comparison of the organization’s actual revenues and expenses to prior results and to the budget, with variances noted in both dollars and percentages. A look at longer term trends in key areas, such as total revenues and program expenses, can also be useful for analysis purposes. **Looking at Ratios** The board also may be interested in reviewing key financial ratios. For example, the current ratio is a measure of liquidity (the organization’s ability to pay its obligations on time). A ratio of 1:1 or more indicates that as of the measurement date, the organization has enough cash and other assets that can be converted into cash in the next 12 months to cover the liabilities that will come due in the next 12 months. As for activity measures, it’s useful to see how total expenses in different categories — management and general, program services, and fundraising — compare with total support and revenue for the period. Tracking these and other ratios over time can highlight potential problems that may need to be addressed. **Focusing on the Big Picture** Detailed financial information, including the organization’s financial statements, should always be made available to the board. But for many purposes, summarized information is more accessible and can help keep the board’s focus on big picture issues. Board members may also appreciate seeing certain information presented in graphic format. Pie charts, bar charts, and other visuals, as appropriate, can make complex financial information easier to digest. Including explanatory text where necessary can also help board members put financial data in context and interpret the numbers. **Call on Us** Communicating up-to-date financial information that is both accurate and understandable allows board members to engage in meaningful discussions and make informed financial decisions. For assistance in developing useful financial metrics and reports for your nonprofit organization, please don’t hesitate to contact us at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Building a Strong Board](https://waradydavis.com/building-a-strong-board/) **Published:** November 15, 2015 **Author:** WaradyDavis **Excerpt:** Serving on a nonprofit board entails many responsibilities. Board members are expected to advocate for the organization, make prudent decisions, ensure the organization complies with regulations, and plan for the future. Filling a vacant seat is an important board function. Because there will always be turnover, and there may be some degree of urgency at times, it’s wise to have a recruitment process in place to help you search more effectively and efficiently whenever the time comes. **Content:** Serving on a nonprofit board entails many responsibilities. Board members are expected to advocate for the organization, make prudent decisions, ensure the organization complies with regulations, and plan for the future. Filling a vacant seat is an important board function. Because there will always be turnover, and there may be some degree of urgency at times, it’s wise to have a recruitment process in place to help you search more effectively and efficiently whenever the time comes. ### **Assessment** The first step is to identify the skills and experience needed to fill the vacancy. These may be different from those of the departing board member. Once your needs have been identified, draft a job description. Include key duties and responsibilities and any necessary requirements. ### **Search** Some organizations maintain a file of potential board candidates. If you have such a list, start there. If you don’t have a list or if there are no suitable candidates for the vacancy you need to fill, solicit referrals from your inner circle (i.e., board members, executives, and volunteers). If no viable candidates result, widen the circle as necessary by making an announcement in a newsletter or blog or posting the opening on your Facebook page. If you need to cast a wider net, consider placing an ad in a local newspaper and/or posting your opening online. (There are websites devoted to nonprofit board recruitment.) ### **Screening** Filling a board seat is similar to hiring an employee. Use the interview process to determine whether a candidate’s skills and experience match your organization’s needs. Develop questions that provide insight into the candidate’s values and attitudes. Discuss the candidate’s background and any potential conflicts of interest. ### **Onboarding** Once a new board member has been selected, follow up with an orientation period. Provide the newcomer with information about the organization, including your strategic plan, current financial reports, recent board meeting minutes, and contact information for board members and staff. If you have any questions about your nonprofit organization, please contact Warady & Davis LLP at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Attorney General’s Office Reports of Interactive E-mail Scam Targeting Illinois Charities](https://waradydavis.com/attorney-generals-office-reports-of-interactive-email-scam-targeting-illinois-charities/) **Published:** June 9, 2016 **Author:** WaradyDavis **Excerpt:** Attorney General Lisa Madigan warns Illinois charities of elaborate donation scam. Madigan’s office has been notified by several Illinois charities that were suspicious of a potential scam after engaging in lengthy and believable email conversations with a supposed donor. Luckily, the charities did not fall victim to the scam, but passed along information in an effort to warn others. **Content:** Attorney General Lisa Madigan warns Illinois charities of elaborate donation scam. This sophisticated email scam is offering Illinois charitable organizations large and unsolicited donations from a man who claims to be carrying out the final wishes of his deceased mother. Madigan’s office has been notified by several Illinois charities that were suspicious of a potential scam after engaging in lengthy and believable email conversations with a supposed donor. Luckily, the charities did not fall victim to the scam, but passed along information in an effort to warn others. Madigan’s office understands the scam to be centered on a donor who identifies himself as “Rob Whitlock” of Great Britain. He promises to donate a large sum of money in memory of his mother who passed away earlier in the year. The emails detail his mother’s wishes and her support of a specific charity’s mission, using emotional pleas to increase the authenticity of the proposal. Upon conducting basic internet research, the charities find that “Rob Whitlock” appears to exist and a business website includes a photo and telephone number. But in reality, the website is fake. Whitlock’s scam involves sending a check that includes a larger amount than promised, which is designed to be received as a welcome gift. However, emails follow claiming Whitlock’s accountant made a mistake and the additional funds need to be wired back to him immediately because he has promised to help a local family with medical support for their ailing daughter. It appears that some charitable organizations have caught on to the scam and contacted their banks about the unsolicited donation to learn the check is being returned by the bank because it is altered or fictitious. Other charities appear to have, unfortunately, fallen for the scam and “returned” the overage to Whitlock, losing a large amount of money. Madigan urges Illinois charities to be on the lookout for this elaborate and persuasive type of donation scam. “Unfortunately like many scams we see, this situation is too good to be true,” Madigan said. “We are certain these emails are the handiwork of at least one scammer looking to take advantage of Illinois charities that could use unsolicited gifts to support their missions.” Madigan’s office offers the following tips for charities considering accepting a donation: - If it seems too good to be true, it probably is. - Take time to research donors thoroughly. Do not rely solely on the internet. Take time to speak with industry peers and others to gather their insights and feedback on potential donors. - Real donors can be trusted to share important details and will offer to meet in person. - Their communication typically does not include spelling or grammar mistakes. - Do not refund any money until you have checked with your bank to confirm the funds have cleared. Madigan encourages Illinois charities to report suspicious solicitations by contacting the Charitable Trust Bureau at (312) 814-2595. ***Source: Illinois Attorney General’s Office 6.9.16*** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [New Requirement for Social Welfare Organizations](https://waradydavis.com/new-requirement-for-social-welfare-organizations/) **Published:** November 2, 2016 **Author:** WaradyDavis **Excerpt:** Recently established social welfare organizations must now notify the IRS that they are operating as tax-exempt organizations under Code Section 501(c)(4) of the tax law. The new requirement was included as a provision in the Protecting Americans from Tax Hikes (PATH) Act of 2015. **Content:** #### Recently established social welfare organizations must now notify the IRS that they are operating as tax-exempt organizations under Code Section 501(c)(4) of the tax law. The new requirement was included as a provision in the Protecting Americans from Tax Hikes (PATH) Act of 2015. ### The Submission Process Organizations are required to submit Form 8976, Notice of Intent to Operate Under Section 501(c)(4), to the IRS within 60 days after the organization is established. The notification should include the organization’s name, address, and taxpayer identification number; the organization date; the state or other jurisdiction under which the entity was organized; the annual accounting period; and a statement of purpose. The IRS may assess penalties of $20 per day, up to a maximum of $5,000, for failing to submit the notification by the due date without reasonable cause. ### Some Relief The new regulations contain some exceptions. Social welfare organizations that either applied to the IRS for a written determination of tax-exempt status or filed at least one annual return or notice on Form 990, Form 990-EZ, or Form 990-N after December 18, 2015, but on or before July 8, 2016, are not required to submit the notification. ### Not a Substitute Organizations should bear in mind that submitting the notification is not a request for an IRS determination of tax-exempt status. Organizations seeking 501(c)(4) status must apply separately to the IRS for a written determination. Please contact us at (847) 267-9600 if you have questions about these requirements. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [New Not-for-Profit Tax Developments](https://waradydavis.com/new-not-for-profit-tax-developments/) **Published:** June 3, 2016 **Author:** WaradyDavis **Content:** The following are some recent tax-related developments of interest to nonprofit organizations. **Donee reporting regulations.** The IRS has withdrawn proposed regulations regarding the contemporaneous written acknowledgments taxpayers must have on hand to substantiate their charitable contributions of $250 or more. The regulations would have given organizations the option of reporting the information their donors require for substantiation purposes on a new IRS information return to be sent to the IRS and the donor. Although the proposed donee reporting method was to be optional, organizations and charity regulators expressed concerns about it. A key concern was the potential for taxpayer identity theft, since organizations electing to use the new method would have been required to obtain, store, and send to the IRS their donors’ personal information (names, addresses, and Social Security or other taxpayer identification numbers). **Social welfare organizations.** The IRS has announced its intention to issue temporary regulations implementing a [new tax law provision](https://waradydavis.com/top-ten-tax-developments-for-2014-impacting-2015/) added by the Protecting Americans from Tax Hikes (PATH) Act of 2015 that requires a Code Section 501(c)(4) social welfare organization formed after December 18, 2015, to provide the IRS with notification that it is operating as a Code Section 501(c)(4) organization. Certain existing social welfare organizations also must provide the notification. Affected organizations will have at least 60 days from the date the regulations are issued to submit the notification. **Transportation fringe benefits.** For 2016, employers may provide up to $255 a month in transit passes or transportation in a commuter highway vehicle as a nontaxable fringe benefit. This figure reflects the PATH Act provision creating parity between the exclusion for transportation fringe benefits and the exclusion for qualified parking benefits. **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Noncash Gifts? Mind Your Gift Acceptance Policy](https://waradydavis.com/noncash-gifts-mind-your-gift-acceptance-policy/) **Published:** November 2, 2016 **Author:** WaradyDavis **Content:** #### Nonprofit organizations welcome gifts of cash. But what if a donor wants to give a noncash gift, such as real estate, appreciated stock, or a work of art? Some gifts may not be appropriate for your organization, while others may have hidden costs. Having a formal gift acceptance policy in place provides much-needed structure — for both your organization and potential donors. ### Purpose of a Gift Acceptance Policy A gift acceptance policy serves three primary functions. It defines the types of assets you will or will not accept; it sets guidelines for the circumstances under which gifts are accepted; and it defines how certain gifts will be handled. For example, suppose you wish to accept vehicles as donations. Your gift acceptance policy should define what types of vehicles are considered acceptable and in what condition, how the vehicle will be transferred and transported, what paperwork will be required by the donor, and how the value will be determined. Another reason to have a gift acceptance policy is tax compliance. An exempt organization reporting more than $25,000 of aggregate noncash contributions on Form 990 — or that, during the year, received contributions of art, historical treasures, or qualified conservation contributions — must complete Schedule M (Noncash Contributions). Schedule M specifically asks whether the organization has a gift acceptance policy that requires “non-standard contributions” to be reviewed. Remember, stock donations are noncash contributions. ### What To Include Gift acceptance policies vary based on the nature and resources of the organization. In general, however, a well-constructed gift acceptance policy will address the following: - Type and form of acceptable and unacceptable gifts - Procedures for accepting specific noncash gifts, such as vehicles or real estate - Circumstances when the organization should seek professional advice prior to receiving a gift - Description of criteria for acknowledgement and donor recognition and details of how such recognition is to be carried out - Reporting requirements and responsibilities The policy should also identify the circumstances when appraisals are required and what is a “qualified appraisal” under the tax rules. You’ll also want to have the policy reviewed by legal counsel and establish a procedure for making future amendments. When completed, the policy should be posted to your website so that it is easily accessible to current and prospective donors. Outlining the types of gifts you will accept lays the groundwork for decision-making and provides your leadership and development staff with guidance about the types of gifts they can solicit and the types they should avoid. A well-thought-out gift acceptance policy also provides donors and their professional advisors with the guidance they need for tax and other purposes. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Newsbits: Do most nonprofits benefit from mergers?](https://waradydavis.com/do-most-nonprofits-benefit-from-mergers/) **Published:** July 18, 2017 **Author:** WaradyDavis **Excerpt:** 88% of nonprofits involved in a merger felt that their organization was better off post merger in terms of achieving organizational goals and increasing impact. **Content:** In a recent study, 88% of nonprofits involved in a merger felt that their organization was better off post merger in terms of achieving organizational goals and increasing impact. So discovered a team of Northwestern University researchers who studied 25 nonprofit mergers in the Chicago area (and four cases that ultimately didn’t result in mergers). Interviews with participants found that the most successful mergers were mission-driven and motivated by the desire to provide higher-quality services or to expand into new areas. If your organization’s management or board is considering a merger, please discuss with your Warady & Davis LLP advisor as they are an invaluable resource in planning and reporting considerations. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Newsbit: Nonprofit hiring challenges](https://waradydavis.com/newsbit-nonprofit-hiring-challenges/) **Published:** April 10, 2017 **Author:** WaradyDavis **Excerpt:** According to this year’s Nonprofit Employment Practices Survey™ from Nonprofit HR and GuideStar, the ability to pay competitive wages ranks as the top staffing challenge faced by nonprofits for the fifth consecutive year. **Content:** According to this year’s *Nonprofit Employment Practices Survey*™ from Nonprofit HR and GuideStar, the ability to pay competitive wages ranks as the top staffing challenge faced by nonprofits for the fifth consecutive year. Since 2014, the second largest challenge has been finding qualified staff. Organizations have the most trouble retaining employees in direct services (positions that work directly with clients), followed by fundraising development. And these are areas where the most job growth is expected in the coming year, suggesting the possibility of more staffing problems going forward. The survey report asserts that the increasing number of “entities that are blending purpose and profit” (for example, Ben & Jerry’s and Patagonia) means job seekers have more opportunities to engage in mission-driven work than ever before. **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Simplified PPP Loan Forgiveness Application](https://waradydavis.com/simplified-ppp-loan-forgiveness-application/) **Published:** January 25, 2021 **Author:** Leslie Flinn **Content:** The US Small Business Administration (SBA) and Treasury have published updated Paycheck Protection Program (PPP) loan forgiveness guidance and forms, including a one-page application for borrowers that received a PPP loan of $150,000 or less – **Form 3508S.** Before the program reopened, that threshold covered about 4.6 million of the program’s total 5.2 million loans. The new forgiveness application makes PPP even more attractive to qualifying businesses by streamlining the process for getting loans forgiven. Following is an in-depth look at the new app. **Form 3508EZ** and **Form 3508** are also now updated to reflect recent guidance and changes under the ***The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act**, P.L. 116-260*** **“Economic Aid Act,” part of the Consolidated Appropriations Act of 2021.** ## **Identifying Information** At only one page in length, the 3508S form is shorter and easier to complete. Significantly, it no longer requires borrowers to show the calculations you use to determine how much of your loan should be forgiven. ### **NAICS 72 Borrowers (Hospitality Industry)** The first section asks for identifying information, including, for the first time, your NAICS code (or industry classification). This is especially important for borrowers with **[code beginning with 72](https://www.naics.com/naics-code-description/?code=72)** — that’s restaurants, hotels, food service and hospitality. For companies in these industries, **[the maximum loan amount is 3.5 times average monthly payroll, rather than 2.5 times average monthly payroll.](https://waradydavis.com/ppp-reopens/)** ### **EIDL Advance** There’s one other significant change. The application no longer requires information from your Economic Injury Disaster Loan (EIDL) advance. These funds were originally supposed to offset your forgiveness amount but no longer do so. ![Simplified PPP Loan Forgiveness Application Form](https://waradydavis.com/wp-content/uploads/2021/01/Picture1.jpg "Picture1 | Warady & Davis LLP") ### Other requested information, includes: - SBA PPP Loan Number (the loan number assigned by the SBA at the time of approval) - Lender PPP Loan Number (the loan number assigned to the PPP Loan by your lender) - PPP Loan amount - PPP Loan disbursement date - Employees at the time of loan application - Employees at the time of forgiveness of the application - The covered period (this is the eight- to 24-week period following the disbursement of the loan) - Amount of Loan Spent on Payroll Costs - Requested Loan Forgiveness amount ### **IMPORTANT NOTE:** **Borrowers still must meet all forgiveness requirements.** ## **The Certifications** Next are two certifications. The first certifies that you complied with all PPP rules, including: - Eligible uses of PPP loan proceeds (remember [this list was recently expanded)](https://waradydavis.com/ppp-reopens/) - The amount of PPP loan proceeds that must be used for payroll (at least 60% of the requested loan forgiveness amount) - The calculation and documentation of your revenue reduction (if applicable), and - The calculation of your loan forgiveness amount. While you are certifying that you complied with all requirements, you don’t have to show the supporting numbers. The second certification is that the information you provide is true and correct “in all material aspects.” Knowingly making a false statement could result in up to five years in prison and/or a fine up to $250,000. If you deceive a federally insured institution, that increases to up to 30 years and or a fine of not more than $1,000,000. After you completed those steps, you sign and print your name, date it and you’re ready to apply through your lender’s portal. ## **Important Considerations** The new application is significantly simpler, but there are still several things to keep in mind. **Documentation Requirements** You must retain your records to prove compliance for four years for employment records and three years for other records. Additionally, the SBA can ask for additional documentation if necessary. **Demographic Questions** While optional, the SBA states that it is important to answer the form’s demographic questions, so that they can track PPP’s impact on minority business owners. This information can go a long way in making sure the people who need the funds the most are receiving what they need. **Lender’s Portal** While the SBA provides this template, your lender will likely create its own electronic version of the form for the application. Use the SBA document as a working draft to have on hand when completing the application process through your lender’s portal. **Covered Period Changes** Due to the Consolidated Appropriations Act, 2021, your covered period can be anywhere from eight **TO** 24 weeks (in the past you could only choose 8 OR 24 weeks). Most borrowers will opt to take the longest covered period so that they have more time to spend the money on covered expenses. **Employee Retention Tax Credit** Also remember that you can now use PPP in conjunction with [the Employer Retention Credit (ERC),](https://waradydavis.com/is-your-business-eligible-employee-retention-tax-credit/) but you must use different qualifying wages for each. In short, make sure you are keeping track of which wages you’ve used for PPP forgiveness and which wages you’d like to use for the ERC. And as with the former forgiveness applications, for each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed the annual salary of $100,000 annualized for the covered period. If you are not eligible for the 3508S form, you need to use the [Form 3508](https://www.sba.gov/document/sba-form-3508-paycheck-protection-program-loan-forgiveness-application) or [3508EZ](https://www.sba.gov/document/sba-form-3508ez-paycheck-protection-program-ez-loan-forgiveness-application), both of which have also been updated to reflect changes under the Economic Aid At 2021. This is a large step forward in making the forgiveness process easier for many borrowers. ## **Questions? Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: SBA, U.S. Treasury, IRS and AICPA ###### **This information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [SBA streamlines forgiveness for smaller PPP loans](https://waradydavis.com/sba-streamlines-forgiveness-for-smaller-ppp-loans/) **Published:** August 12, 2021 **Author:** Leslie Flinn **Content:** The Small Business Administration (SBA) has released **[new guidance](https://waradydavis.com/ppp-forgiveness-and-repayment/)** intended to expedite the forgiveness process for certain borrowers under the Paycheck Protection Program (PPP). The simplified process generally is available for loans of $150,000 or less, which the SBA reports account for 93% of outstanding PPP loans. The guidance comes at a time when many borrowers are nearing a critical deadline regarding their applications for forgiveness. ## **SBA’s process improvements** The popularity of the PPP, as well as the requirement that lenders make forgiveness determinations within 60 days of receiving an application, has left many smaller lenders overwhelmed. Some are even limiting the time periods during which they’ll accept forgiveness applications. This, in turn, has created confusion and concern among borrowers. In response, the SBA recently issued an Interim Final Rule (IFR). The rule streamlines the forgiveness process for smaller loans through two avenues: **1) Direct borrower forgiveness.** The SBA is providing a direct borrower forgiveness process for lenders that choose to opt in. At the time the guidance was released, more than 600 banks (primarily smaller lenders) had opted in, enabling more than 2.17 million borrowers to apply through a new online portal scheduled to launch on August 4, 2021. Participating lenders will receive notice when a borrower applies through the SBA platform and will review applications and issue forgiveness decisions inside the platform. The SBA hopes this will reduce the wait time and uncertainly associated with applying through lenders. **2) COVID Revenue Reduction Score.** The IFR also creates an alternative process for “second-draw” borrowers with loans of $150,000 or less to document their reduced revenue. To qualify for such loans, a borrower must have experienced a revenue reduction of at least 25% during one quarter of 2020 compared with the same quarter in 2019. If a borrower didn’t produce the necessary documentation when applying for the loan, it must do so on or before the date of application for forgiveness. To make the revenue reduction confirmation process easier for such loans, an independent SBA contractor will assign every eligible second-draw loan a score based on several factors, including industry, geography, business size and current economic data. The score will be stored in the forgiveness platform and visible to lenders to document revenue reduction. If a borrower’s score doesn’t meet the value required to confirm the reduction, the borrower must provide documentation. If it does, no documentation is required. ## **Appeals and deferments** The IFR also extends the loan deferment period for borrowers who timely appeal a final SBA loan review decision. Under the previous rule, an appeal didn’t extend the period so borrowers had to begin making payments of principal and interest on the unforgiven amount. The IFR amends that rule to extend the deferment period until the SBA’s Office of Hearings and Appeals issues a final decision. Appeals must be filed within 30 calendar days of receipt of the final SBA loan review decision, and borrowers should notify their lenders of appeals. ## **More to come** The SBA will release additional guidance regarding both the direct borrower forgiveness option and the COVID Revenue Reduction Score. ***The W&D team is here to help. Please contact us with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ##### **SOURCE: IRS** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** PPP **Tags:** 000, Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, PPP2 loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The American Rescue Plan Act: What’s in it for you?](https://waradydavis.com/the-american-rescue-plan-act-whats-in-it-for-you/) **Published:** March 11, 2021 **Author:** Leslie Flinn **Content:** President Biden has signed into law the 628-page **[The American Rescue Plan Act 2021 (ARPA)](https://www.congress.gov/bill/117th-congress/house-bill/1319/text)**, which includes $1.9 trillion in funding for individuals, businesses, and state and local governments. This is the latest legislation aimed at providing economic and other relief from the COVID-19 pandemic that has haunted the country for the last year. The ARPA extends and expands some of the critical provisions in the CARES Act and the Consolidated Appropriations Act (CAA). It also includes some new provisions that should come as welcome news to many families and businesses. ## **Key provisions for individuals, businesses and other employers** Here’s a broad overview of some of the provisions that may affect you: #### **Individuals** - Additional direct payments (or recovery rebates) of $1,400 — plus $1,400 per dependent (including adult dependents) will be made to eligible individuals. To qualify, individuals must have an adjusted gross income (AGI) of up to $75,000 per year, ($150,000 for married couples filing jointly and $112,500 for heads of households). The payments phase out and are no longer made when AGI exceeds $80,000 for individuals, $160,000 for married joint filers and $120,000 for heads of household. - For eligible individuals, the Child Tax Credit (CTC) increases to $3,000 for each child age six to 17 and $3,600 per year for children under age six. To be eligible for the full payment, you must have a modified AGI of under $75,000 for singles, $112,500 for heads-of-households and $150,000 for joint filers and surviving spouses. The credit phases out at a rate of $50 for each $1,000 (or fraction thereof) of modified AGI over the applicable threshold. - Parents will begin receiving advance payments of part of the CTC later this year. Under the ARPA, the IRS must establish a program to make monthly payments (generally by direct deposits) equal to 50% of eligible taxpayers’ 2021 CTCs, from July 2021 through December 2021. - Some taxpayers who aren’t eligible to claim an increased CTC in 2021, because their income is too high, may be able to claim the regular CTC of up to $2,000, subject to the existing phase-out rules. - For 2021, there’s an expanded child and dependent care tax credit of up to $4,000 for childcare expenses for one child and up to $8,000 for two or more children for households making up to $125,000. - Any student loan debt forgiven between December 31, 2020, and January 1, 2026, will receive tax-free treatment. - An additional $300 per week in unemployment benefits will be paid through September 6, 2021. In addition, the first $10,200 in unemployment benefits received beginning in 2020 isn’t included in gross income for taxpayers with AGIs under $150,000. (However, for joint filers below the AGI limit, the $10,200 exclusion applies separately to each spouse.) - There’s expanded availability of and increased Affordable Care Act (ACA) subsidies for those who obtain insurance in the ACA marketplaces, for 2021 and 2022. - Federal rental assistance is included for families affected by COVID-19, applicable to past due rent, future rent payments, and utility and energy bills. - There’s expanded eligibility for low-income individuals with no qualifying children to claim the Earned Income Tax Credit. #### **Businesses and other employers** - Pandemic assistance grants will be made to eligible businesses serving food or drinks, including restaurants, bars, lounges and food trucks. - There will be additional funding for forgivable loans to eligible businesses under the Paycheck Protection Program (PPP), which is currently scheduled to expire on March 31, 2021. - Nonprofit organizations and online news services will receive expanded PPP eligibility. - New targeted Economic Injury Disaster Loan grants will be available for eligible small businesses in low-income communities. - The Employee Retention Tax Credit is extended for eligible employers that continue to pay employee wages during COVID-19-related closures or experience reduced revenue through December 31, 2021. This includes “recovery start-up businesses” (those businesses that launched after February 15, 2020, with average annual gross receipts of $1 million or less). - Tax credits for paid sick and family leave are modified and extended to September 30, 2021. - The excess business loss limitation is extended through December 31, 2026. - The Section 162(m) limits on the tax deduction that public companies can take for executive compensation is extended to cover the CEO, the CFO and the five next highest paid employees, beginning in 2027. ## **Make the most of the benefits** With vaccination rates climbing, the ARPA may be the last of the major legislative relief packages addressing the effects of the pandemic. **In a series of upcoming e-Alerts and webinar(s), we will provide you with more information on how you can make the most of the benefits available to you, your family and/or your business.** ***Please contact your Warady & Davis LLP advisor with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act Individuals, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, American Rescue Plan Act Unemployment, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [5 Steps to Take Now to Cut Your 2022 Tax Liability](https://waradydavis.com/5-steps-to-take-now-to-cut-your-2022-tax-liability/) **Published:** December 6, 2022 **Author:** Leslie Flinn **Excerpt:** Are you interested in reducing your 2022 tax liability? **Content:** ## Year-end Tax Planning Steps to Reduce Your 2022 Tax Liability It has been quite a year — high inflation, rising interest rates and a bear stock market. While there’s not a lot you can do about any of these financial factors, you may have some control over how your federal tax bill for the year turns out. Here are some strategies to consider executing before year end that may reduce your 2022 or future tax liability. ### 1. Convert your traditional IRA to a Roth IRA The down stock market could make this an especially lucrative **[time to convert all or some of the funds in a traditional pre-tax IRA to an after-tax Roth IRA](https://waradydavis.com/now-might-be-the-time-for-a-roth-ira-conversion/)**. Although you must pay income tax on the amount converted in 2022, Roth accounts hold some significant advantages over their traditional counterparts. Unlike traditional IRAs, for example, Roths aren’t subject to required minimum distributions (RMDs). The funds in a Roth will appreciate tax-free. Qualified future distributions also will be tax-free, which will pay off if you’re subject to higher tax rates at that time, whether due to RMDs or other income. How does the poorly performing stock market incentivize a Roth conversion? If your traditional IRA contains stocks or mutual funds that have lost significant value, you can convert more shares than you could if they were worth more, for the same amount of tax liability. Roth conversions are also advisable if you have lower income and therefore are in a lower tax bracket this year. Perhaps you lost your job at the end of 2021 and didn’t resume working until this past summer, or you’re retired but not yet receiving Social Security payments. You may be able to save by converting before the end of the year. Currently, you can use a Roth conversion as a workaround for the income limits on your ability to contribute to Roth IRAs — what’s known as a backdoor Roth IRA — because converted funds aren’t treated as contributions. But be aware that, if you’re under age 59½, you can’t access the transferred funds without penalty. Further, be aware that a Roth conversion will likely increase your adjusted gross income (AGI). As such, it could affect your eligibility for tax breaks that phase out based on AGI or modified adjusted gross income (MAGI). ### 2. Defer or Accelerate Income and Deductions A common tax reduction technique is to defer income into the next year and accelerate deductions into the current year. Doing so can allow you to make the most of tax breaks that phase out based on income (such as the IRA contribution deduction, child tax credits and education tax credits). If you’re self-employed, for example, you might delay issuing invoices until late December (increasing the odds they won’t be paid until 2023) and make equipment purchases in December, rather than January (assuming you use cash-basis accounting). On the other hand, you might want to defer deductions and accelerate income if you expect to land in a higher tax bracket in the future. You can accelerate income by, for example, realizing deferred compensation, exercising stock options, recognizing capital gains or engaging in a Roth conversion. High-income individuals should think about income deferral from the perspective of the 3.8% net investment income tax (NIIT), too. The NIIT kicks in when MAGI is more than $200,000 for single and head of household filers, $250,000 for married filing jointly and $125,000 for married filing separately. Deferring investment income could mean escaping that potentially hefty tax bite. ### 3. Manage Your Itemized Deductions Wisely Accelerating deductions generally is helpful only if you itemize your deductions, of course. If you don’t think you’ll qualify to itemize, think about “bunching” itemized deductions so that they exceed the standard deduction (in 2022, $12,950 for single filers, $25,900 for married filing jointly and $19,400 for heads of household). If you claim itemized deductions this year and the standard deduction next year, you could end up with a larger two-year total deduction than if you took the standard deduction both years. Potential expenses ripe for bunching include medical and dental expenses (if you qualify to deduct eligible expenses that exceed 7.5% of your AGI), charitable contributions, and state and local tax (SALT). For example, you could get dental services before year end, make your 2022 and 2023 charitable donations in December of this year, and pre-pay property taxes due next year, if possible. The deduction for SALT-like property tax generally is subject to a $10,000 cap. Check, though, to determine if you might be able to take advantage of a pass-through entity (PTE) tax. More than two dozen states and New York City have enacted these laws, which permit a PTE to pay state tax at the entity level, rather than the individual taxpayer level. PTEs aren’t subject to a federal limit on SALT deductions. ### 4. Give to Charity The **[AGI limit for deductible cash donations](https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions)** has returned to 60% of AGI for 2022. But the possibility for substantial savings from making a charitable donation remains. For example, if you donate appreciated assets that you’ve held at least one year, you can deduct their fair market value and avoid income tax on the amount of appreciation if you itemize. A qualified charitable distribution (QCD) from your IRA may confer tax benefits. Taxpayers who are age 70½ years or older can make a direct transfer of up to $100,000 per year from their IRAs to a qualified charity — and exclude the transferred amount from their gross income. (Note that transfers to a donor-advised fund or supporting organization don’t qualify). If you’re age 72 or older, a QCD can count toward your RMDs, as well. You also may want to explore establishing a donor-advised fund. You can set it up and contribute assets in 2022 to claim a deduction for this year, while delaying your selection of the recipient charity and the actual contribution until 2023. ### 5. Harvest Your Capital Losses This is another way to leverage the poor market performance in 2022 — selling off your investments that have lost value to offset any capital gains. If your capital losses exceed your capital gains, you can deduct up to $3,000 ($1,500 for married filing separately) a year from your ordinary income and carry forward any remaining excess indefinitely. You could further juice the benefit of loss harvesting by donating the proceeds from the sale to charity. You’ll offset realized gains while boosting your charitable contribution deduction (subject to AGI limitations on the charitable contribution deduction). Take heed of the wash-rule, though. It says you can’t write-off losses if you acquire “substantially identical” securities within 30 days before or after the sale. ### Act Now It’s been a rocky financial year for many people, and uncertainty about the economy will continue into next year. One thing is certain, though — everyone wants to cut their tax bills. Contact your Warady & Davis LLP advisor at (847) 267-9600 to help with your year-end tax planning. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2022 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Be Careful What You Toss](https://waradydavis.com/be-careful-what-you-toss/) **Published:** October 1, 2021 **Author:** WaradyDavis **Excerpt:** As far as the IRS is concerned, you can’t save too many retirement plan documents. Plan sponsors, on the other hand, might reasonably feel the need to free up file storage space every now and again by purging documents no longer needed. Where do you draw the line? **Content:** ## Plan record retention requirements As far as the IRS is concerned, you can’t save too many retirement plan documents. Plan sponsors, on the other hand, might reasonably feel the need to free up file storage space every now and again by purging documents no longer needed. Where do you draw the line? ### The law The Internal Revenue Code provides that “books or records … must be kept available at all times for inspection by authorized internal revenue officers or employees, and must be retained so long as the contents … may become material in the administration of any internal revenue law.” Fortunately, those documents don’t necessarily have to be maintained in hard copy form. Under Department of Labor regulations, it’s acceptable to maintain most records in electronic form, so long as: - The recordkeeping system has reasonable controls to ensure the integrity, accuracy, authenticity and reliability of the records kept in electronic form, - The electronic records are maintained in reasonable order, in a safe and accessible place, and in such manner as they may be readily inspected or examined, - The electronic records can be readily converted into legible paper copies, - You establish and implement adequate records management practices, and - The electronic recordkeeping system isn’t subject to any agreement or restriction that would compromise a person’s ability to comply with any ERISA reporting and disclosure requirement. Many retirement plan sponsors use third-party administrators (TPAs) for various plan services. According to the IRS, using a TPA for services involving electronic records doesn’t relieve the taxpayer (the plan sponsor) of its legal record keeping obligations and responsibilities. Even though a properly structured TPA service agreement allows some delegation of this responsibility, remember that final responsibility rests with the sponsor. ## What to keep ### Here’s a list of documents you should keep: **Plan documents.** These files include the basic plan document, adoption agreement, amendments (if any), IRS determination letters, summary plan descriptions, summary of material modifications, annuity contracts, board and adopting resolutions, and trust records such as investment statements, balance sheets and income statements. **Fiduciary records.** These records include plan committee meeting materials for review of fees and investments, fee disclosures, engagement letters, and TPA / service provider contracts. **Participant records.** These files include enrollment forms, beneficiary designation forms, census data, account balances, contributions and earnings, qualified domestic relations orders, compensation data, and participant statements and notices. In addition, include distribution documentation, loan records and hardship withdrawal records. **Annual filings**. Be sure to keep copies of each year’s Form 5500, including required schedules and supporting documents, summary annual reports, independent auditors’ reports (if your plan requires one), records of contribution allocations and required annual testing for coverage and nondiscrimination, and board minutes or similar declarations of the employer contribution amounts. Also maintain copies of any determination letter applications or similar filings (Form 5300 series). Sponsors should keep these records until six years after terminating the plan and distributing all benefits. ### Getting it right Keeping all your plan records can seem like an overwhelming and daunting task, but it’s better to be safe than sorry. Consult with an ERISA attorney to assure full compliance with all applicable federal record retention requirements. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Employee Benefit Plans --- ### [Year End Notices: Staying on Top of the Requirements](https://waradydavis.com/year-end-notices-staying-on-top-of-the-requirements/) **Published:** October 1, 2021 **Author:** WaradyDavis **Excerpt:** As the turn of the calendar year nears, annual notices should be on the minds of most plan sponsors. For plans using the calendar year, numerous notices are due to be given in the next few months. Here are some highlights of notices that must be sent to either participants, the IRS or the Department of Labor (DOL) in the next three months. **Content:** As the turn of the calendar year nears, annual notices should be on the minds of most plan sponsors. For plans using the calendar year, numerous notices are due to be given in the next few months. Here are some highlights of notices that must be sent to either participants, the IRS or the Department of Labor (DOL) in the next three months. ## October to December Many notices due during this time period deal with safe harbor plans and plans that include automatic enrollment opportunities. They include: ### Safe harbor 401(k) plan annual notices. Sponsors of traditional safe harbor 401(k) plans must provide an annual notice to participants describing the safe harbor employer contributions. The notice must also provide details on other plan features, such as withdrawal provisions. You must give the notice at least 30 days, but not more than 90 days, before the first day of the plan year. Thus, for calendar-year plans, notice can be provided as early as October 2, but no later than December 1. ### Safe harbor contingent notices. Plans may also have to provide a safe harbor contingent notice if they want to preserve the ability to adopt a 3% qualified nonelective contribution safe harbor design before the end of the plan year. This notice must be given to eligible employees that this action may be taken. The timing of this notice is the same as for the safe harbor 401(k) annual notice. ### Automatic contribution arrangement notices. There are three types of automatic contribution arrangements: 1. Automatic contribution arrangements, 2. Qualified automatic contribution arrangements, which contain certain employee and employer contribution requirements that exempt the plan from annual nondiscrimination testing requirements, making it a “safe harbor” plan, and 3. Eligible automatic contribution arrangements, which permit penalty-free distribution of “accidental” automatic deferrals and provide a six-month period to distribute excess contributions and excess aggregate contributions without imposition of a 10% excise tax. Notices for these arrangements must provide employees with information that enumerates their rights and obligations under the plan, explain the employee’s right to elect not to have deferral contributions made or elect a different contribution percentage, and detail the default investment provisions in the absence of an investment election. Generally, for all three types of automatic contribution plans, you must provide an initial notice of eligibility to the participant generally at least 30 days, but not more than 90 days, from eligibility. Then annually you must give the notice at least 30 days, but not more than 90 days, before the first day of the plan year. Thus, for calendar-year plans, notice can be provided as early as October 2, but no later than December 1. ### Savings Incentive Match Plans for Employees (SIMPLE) IRA election notices. When an employer adopts a SIMPLE IRA, it must notify each employee before the beginning of the election period. The notice must explain the employee’s opportunity to make or change a salary reduction choice under a SIMPLE IRA, the employer’s choice to make either matching contributions or nonelective contributions, a summary description provided by the financial institution, and written notice that the employee’s balance can be transferred without cost or penalty if the employer uses a designated financial institution. The SIMPLE IRA election period is generally the 60-day period immediately before January 1 of a calendar year (November 2 to December 31 of the preceding calendar year). The dates of this period are modified if the employer sets up a SIMPLE IRA midyear or if the 60-day period falls before the first day an employee becomes eligible to participate in the SIMPLE IRA. ### Required minimum distributions (RMDs) . For employees receiving RMDs, employers must make these by December 31. ### Annual participant fee disclosure notice. Employers must provide this notice, sometimes referred to as a Section 404(a)(5) notice, to participants annually within a 12-month period. Many plan sponsors choose to provide this notice with other year end required notices. ## January and beyond Starting in January, plan sponsors have several IRS filings to be aware of: ### IRS Form 1099-R. Plans use this form to report distributions, including direct rollovers, from qualified plans or 403(b) plans. You must provide it to plan participants by January 31 of the year following the calendar year in which the distribution was made. Plans will then have to file the form with the IRS by February 28 (or March 31 if filed electronically) of the year following the calendar year in which the distribution was made. ### IRS Form 945. This form reports income tax withheld from distributions made from qualified plans and 403(b) plans. It must also be provided to participants by January 31 of the year following the calendar year in which the distributions were made. You can extend the filing deadline by 10 days if tax payments were made on time and in full. ### Get noticed These are just some of the annual notices and reports that employee benefit plans must provide each year. For a comprehensive list for your specific plan, contact your Warady & Davis LLP advisor or benefit plan specialist. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Employee Benefit Plans --- ### [Now Might Be the Time for a Roth IRA Conversion](https://waradydavis.com/now-might-be-the-time-for-a-roth-ira-conversion/) **Published:** August 9, 2022 **Author:** Leslie Flinn **Excerpt:** Traditional IRAs that have dropped in value, can garner the benefits of a Roth IRA Conversion at a reduced tax cost **Content:** ## If the Value of Your Traditional IRA has reduced significantly, You May Want to Consider a Roth IRA Conversion The current market volatility may pose an ideal opportunity for IRA account holders to save money on a Roth IRA Conversion. How? Because the diminished portfolio valuation caused by a **[down market](https://www.advisorstream.com/read/dont-make-these-3-critical-mistakes-when-stock-investing-in-a-bear-market/?c=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJub2RlX2lkIjozNDgwNiwicHJldmlldyI6ZmFsc2UsImNvbW1faWQiOjYxNTE4MTgsImRlc3RfaWQiOjgyODMzODUsInJlYWRlcl9pZCI6bnVsbH0.ygJHUjcYe15-UzUxX74qrguYRzpIAnuLzs23lKLWhIo)** could result in less taxation over the long term. The **[tax liability on a Roth Conversion](https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras#:~:text=115%2D97)%2C%20a%20conversion,or%20403(b)%20plans.)** is based on the IRA’s fair market value at the time of the conversion. For that reason, converting your traditional IRA account now, when the market value has significantly reduced, you can potentially avoid tax on income and gains that will accrue in your Roth IRA when the market recovers. In time, after age 59½, you can take tax-free withdrawals when your marginal tax rate may be higher than it is right now. ### Advantages of a Roth IRA: - Generally, contributions can be withdrawn tax free at any time, for any reason. - Contributions and earnings grow tax free. - There are no annual required distributions during the account owner’s lifetime. Therefore, funds can grow tax free in the account longer than in a traditional IRA. ### Disadvantages of a Roth IRA: - **You pay tax on the conversion amount**. However, if your traditional IRA balance is at a depressed level (or possibly your **[overall income level is lower this year](https://waradydavis.com/2022-cost-of-living-adjustments/)**), the tax hit might be minimal. - **The “five-year rule.”** If you convert a traditional IRA to a Roth IRA, you must wait at least five years to get the converted amount out free of tax. - **You may not benefit if your tax rate is lower in the future.** ### Bottom Line Taking advantage of the possible low tax liability in addition to the potential to avoid tax on income and gains that will accumulate in your Roth IRA when the stock market recovers may make a Roth IRA Conversion beneficial for you. However, keep in mind that there are many variables to consider based on your unique circumstances. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2022 All Rights Reserved **Categories:** Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [What’s in the Fiscal Responsibility Act?](https://waradydavis.com/whats-in-the-fiscal-responsibility-act/) **Published:** June 8, 2023 **Author:** Leslie Flinn **Excerpt:** President Biden signed the Fiscal Responsibility Act of 2023 into law on Saturday, with a financial crisis averted, let’s take a look at the highlights. **Content:** The White House has signed into law the new debt ceiling agreement. [The Fiscal Responsibility Act (FRA)](https://docs.house.gov/billsthisweek/20230529/BILLS-118hrPIH-fiscalresponsibility.pdf) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. The FRA also makes a variety of changes related to domestic spending, although it falls far short of the cuts included in the Republican bill that the House passed in April 2023, with no changes to Social Security and Medicare. The Congressional Budget Office (CBO) projects the law will reduce the federal deficit by about $1.5 trillion over 10 years. ## The main provisions The new law primarily tackles discretionary spending. Notable provisions address: **IRS funding.** [The Inflation Reduction Act (IRA)](https://waradydavis.com/inflation-reduction-act/), which was enacted in 2022, included an additional $80 billion in funding for the tax agency, with much of it designated for heightened enforcement activity against wealthy taxpayers. The FRA immediately rescinds $1.39 billion and reduces the funding by about $10 billion each year for 2024 and 2025. However, White House officials have indicated that they expect the funding cuts to make little difference in the IRS’s pending expansion plans because the agency planned to spend the original funding over several years. It may be able to spend some of the funds earmarked for later years earlier and then return to Congress to request more funding in the future. **Spending caps.** One of the more contentious focuses of the negotiations was non-defense discretionary funding for programs such as scientific research, domestic law enforcement, forest management, environmental protection, air traffic control and nutritional assistance for mothers. The final result is a virtual freeze on this spending, facilitated in part by the reduced funding for the IRS. The spending will drop by about $1 billion in the 2024 fiscal year, compared to this fiscal year, with a 1% increase slated for the 2025 fiscal year. This amounts to a cut, as inflation is expected to grow at a rate greater than 1%. The final non-defense figures are $704 billion for 2024 and $711 billion for 2025. **Defense and veterans affairs spending.** The FRA provides Biden’s budgeted funding for the military and veterans affairs for 2024, adjusted for inflation. Total defense spending will grow to $886 billion in 2024 and $895 billion in 2025. **Student loan debt.** The new law codifies Biden’s previous announcement that the moratorium on student loan payments precipitated by the COVID-19 pandemic won’t be extended beyond this summer. His plan to cancel student loan debt for many borrowers — to the tune of $430 billion — isn’t part of the law. (However, the plan currently is under review by the U.S. Supreme Court.) **Work requirements.** Certain recipients of Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) benefits will face new work requirements, although Medicaid recipients won’t. Specifically, the FRA raises the top age at which adults without children living in their homes must work to receive SNAP assistance, from 49 to 54, phased in over three years. However, the law includes exemptions for the homeless, veterans and individuals age 24 or younger who were children in foster care. It also includes provisions that could increase the number of individuals who must satisfy work requirements to receive TANF benefits from their state programs. Yet, the CBO estimates that the various changes will actually result in more people receiving assistance. **COVID-19.** Much of the remaining unspent COVID-19 relief funds, estimated to equal $30 billion to $70 billion, will be “clawed back.” Portions of that funding will be retained, though, including a certain amount for vaccines. **Permitting for energy projects.** The FRA includes rules designed to make it easier for new energy projects, including fossil fuel projects, to obtain permit approval. ## The leftovers As noted, the original House debt ceiling bill was much more aggressive. Republicans sought larger spending cuts and tighter work requirements. They also aimed to repeal hundreds of billions in tax incentives in the IRA intended to increase the use of renewable energy and combat climate change. On the other side of the aisle, Democrats hoped to raise taxes on corporations and taxpayers who earn more than $400,000. In addition, they wanted to institute measures to reduce Medicare spending on prescription drugs. None of these priorities are included in the new law. ## The bottom line Experts have noted that the outcome of the latest debt ceiling challenge largely resembles the likely outcome of budget negotiations in a divided government, albeit with much more drama and potential implications for the global economy. Moreover, additional bills related to appropriations — what the parties have referred to as “agreed upon adjustments” — are expected in coming months, which could reduce the effects of some of the spending cuts. *© 2023* ### **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at** [847-267-9600](tel:847-267-9600);* . **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [American Innovation and Jobs Act Aims to Repeal Section 174 Amortization Requirements and Expand R&D Tax Credit](https://waradydavis.com/american-innovation-and-jobs-act-rd-tax-credit-section-174/) **Published:** March 28, 2023 **Author:** Leslie Flinn **Excerpt:** On March 17, 2023, Sens. Maggie Hassan (D-NH) and Todd Young (R-IN) reintroduced the American Innovation and Jobs Act (“The Act”) to expand R&D tax credit. **Content:** A new legislative proposal, the American Innovation and Jobs Act, seeks to eliminate Section 174 amortization requirements and enhance the R&D tax credit for U.S. businesses. On March 17, 2023, the bipartisan [American Innovation and Jobs Act](https://www.hassan.senate.gov/imo/media/doc/rd.pdf "Link to PDF with information about American Innovation and Jobs Act on Senator Hassan's government website") (“The Act”) was reintroduced to reverse the 2017 tax law that requires the amortization of specified research and experimental expenditures (Section 174). If enacted, this change will ensure that companies can return to fully deducting R&D investments annually. Additionally, the proposed Act would expand the R&D Tax Credit by extending it to more startups and small businesses. Previously, Section 174 of the Internal Revenue Code allowed taxpayers to choose whether to deduct research and experimental expenditures as current expenses or capitalize and amortize them over time. This treatment incentivized businesses to invest in research and development, leading to significant increases in innovation and growth in the U.S. in recent decades. As of 2022, businesses can no longer immediately deduct their R&D expenses, including software development costs, in the year in which they are incurred. Instead, the current rule states that research and experimental expenditures are required to be capitalized and amortized ratably over 60-months (180 months for foreign R&E expenditures) which makes R&D much more expensive to undertake. The Act has received support from both parties, and its primary objective is to restore incentives for R&D investments in the United States. **Aside from reinstating the full expensing of R&D expenses, The Act would significantly expand the Section 41 Credit for increasing research activities for startup companies by:** - Doubling the cap for the refundable portion of the R&D credit from $250,000 to $500,000 and ultimately raising it to $750,000 in ten years - Expanding the credit rate for startups from 14% to 20% - Expanding eligibility for the payroll tax credit by increasing the gross receipts threshold to $15M from $5M - Regarding gross receipts, anything under 25K is ignored - Increasing the period startups can claim the refundable credit from 5 years to 8 years While this new Act aims to restore immediate expensing of Section 174 costs, it would also significantly expand the population of companies that would qualify for the payroll tax credit. A [new report from the Information Technology and Innovation Foundation (ITIF)](https://itif.org/publications/2023/02/15/estimated-state-level-employment-impact-of-enhancing-federal-r-and-d-tax-incentives/ "Link to ITIF.org website page titled Estimated State Level Employment Impact of Federal R&D incentives"), a science and technology policy think tank , states that R&D tax incentives in the United States are well below those of other advanced economies. The recent removal of first-year full expensing of R&D expenditures has only worsened these problems. If the Act passes, the report estimates that restoring the tax credit would create 81,000 direct jobs, while doubling the tax credit rates would create another 188,000 jobs. 75% of R&D spending is on wages, connecting the dots between a higher cost of R&D and reduced employment. The American Innovation and Jobs Act should encourage U.S. companies to invest in R&D and new equipment to spur innovation, productivity, and growth across the economy. We will keep you posted on new developments as the Act is debated in Congress. Stay tuned. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at [847-267-9600](tel:18472679600 "Call Warady & Davis LLP's office");* [info@waradydavis.com](mailto:info@waradydavis.com "Email Warady & Davis with question or requests for more information").** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [When Electronic Disclosure Isn’t Enough Under ERISA](https://waradydavis.com/when-electronic-disclosure-isnt-enough-under-erisa/) **Published:** October 1, 2016 **Author:** WaradyDavis **Excerpt:** ERISA’s disclosure rules require plan administrators to inform participants of circumstances that may cause a loss of benefits. But just what counts as a disclosure? This question was recently litigated in the U.S. District Court for the Eastern District of New York. The case involved the denial of a payout from a group life insurance policy after an employee died without completing a waiver of premium request. **Content:** ERISA’s disclosure rules require plan administrators to inform participants of circumstances that may cause a loss of benefits. But just what counts as a disclosure? This question was recently litigated in the U.S. District Court for the Eastern District of New York. The case involved the denial of a payout from a group life insurance policy after an employee died without completing a waiver of premium request. The plaintiff was the beneficiary of his sister’s two group life policies provided by her employer. The sister later ceased working because of disability and stopped paying premiums. She never returned to work and ultimately died in 2008. The insurance policies’ summary plan description (SPD) provided that a waiver-of- premium option was available for employees who became disabled, but they had to submit proof of their disability status within a set time period, which the sister failed to do. The plaintiff stated that his sister had never received information explaining the waiver of premium standard. The employer countered that it had disclosed the information by posting the SPD — along with hundreds of other pages of information regarding various benefits — on the company’s intranet site. Because of the large amount of information on the intranet site, a benefits administrator testified that employees rarely read every page of the information available and rely on benefit summaries. The court noted that ERISA requires more than simply making the SPD available — the delivery method must be reasonably calculated to ensure actual receipt. Based on this information, the judge found that the sister hadn’t been adequately informed of the eligibility requirements for the premium waiver. This verdict may add some clarity to what “disclosure” actually means in a real world setting. Bottom line: Don’t count on an intranet posting to satisfy a disclosure requirement for an SPD. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Employee Benefit Plans, Perspectives on Employee Benefits --- ### [IRS Checklist Offers a Convenient Compliance Self-Check Up](https://waradydavis.com/irs-checklist-offers-a-convenient-compliance-self-checku/) **Published:** February 1, 2016 **Author:** WaradyDavis **Excerpt:** As a plan sponsor, you have a fiduciary responsibility to ensure that your qualified plan complies with all current employee benefits laws and regulations and operates within the plan’s current provisions. Do you know if your plan is current? If not, it’s time for an annual self-checkup. **Content:** As a plan sponsor, you have a fiduciary responsibility to ensure that your qualified plan complies with all current employee benefits laws and regulations and operates within the plan’s current provisions. Do you know if your plan is current? If not, it’s time for an annual self-checkup. ## Help from the IRS The IRS wants to nip possible 401(k) plan compliance lapses in the bud. To help do this, it has issued a checklist of common plan administration oversights, some more egregious than others. Beware, though: While the checklist summarizes major compliance issues, it’s not meant to be used as a comprehensive guide. It provides general definitions, examples and methods for correcting possible errors. Because each plan is different, consult your benefits specialist or visit the IRS website (irs.gov) for more information. ## Say yes The IRS 401(k) Plan Checklist contains yes/no questions. Let’s take a look at some (not all) of the issues the checklist covers. If you respond “no” to any of these questions, it’s time to take action. 1. **Have you updated your plan document within the last few years to reflect current law?** If not, chances are it doesn’t reflect recent legislative or regulatory changes. Each year, the IRS releases a publication containing a cumulative list of plan qualification requirements. New requirements are listed by Internal Revenue Code (IRC) section. For example, your plan must comply with the Supreme Court decision in U.S. v. Windsor regarding same-sex marriage. 2. **Are your plan’s operations based on the terms of your plan document?** If you’re not sure, conduct an independent review of your plan document provisions compared with their operation. This is especially true if you’ve amended your plan recently to make sure you’re operating the plan according to those amendments. If you find inconsistencies, use a reasonable correction method that places affected participants in the position they would be in if there were no operational plan defects. And remember, the plan sponsor generally is responsible for ensuring that the plan operates according to its terms even when employing third-party administrators or ERISA attorneys. 3. **Is your plan’s compensation definition for all deferrals and allocations used correctly?** Many plans have more than one definition of compensation, depending on the purpose. For example, some definitions of compensation include items such as fringe benefits and bonuses. Review your definitions to be sure that you’re applying the correct definition found in your plan document. And remember, for 2015, the IRS has capped the total compensation permitted for contribution purposes at $265,000. 4. **Have you identified all eligible employees and given them the opportunity to make an elective deferral?** Depending on your plan document’s terms, not all employees will be immediately eligible to participate. Some plans defer eligibility based on age, service and hours worked. Provide your plan recordkeeper with a regularly updated W-2 employee roster to minimize the chances you’ve overlooked anyone. 5. **Have you deposited employee elective deferrals on a timely basis?** You must deposit deferrals to the trust as soon as you can segregate them from employer assets. The Department of Labor (DOL) requires the employer to deposit deferrals as soon as reasonably possible, but no later than the 15th business day of the following month. Operationally, if you can make the deposits within one to three business days of the payroll date, you must do so. The DOL clearly states that the 15-business- day-rule is only guidance and cannot be relied on if you can make deposits sooner. For plans with fewer than 100 participants, the DOL mandates a seven-business- day safe harbor rule. Failure to make timely deposits may be deemed a prohibited transaction, resulting in possible plan disqualification by the IRS. 6. **Do participant loans satisfy your plan document’s requirements?** One problem the IRS sometimes encounters is that plans have made loans to participants, even though the plan document doesn’t provide for such loans. You must follow your plan’s loan provisions to avoid a prohibited transaction. Loans cannot exceed 1) the greater of $10,000 or half of the participant’s account balance, or 2) $50,000, whichever is lower. Amounts exceeding those limits are taxable to the participant. Failure to comply with the DOL regulations may result in a prohibited transaction. 7. **Did you make hardship distributions properly?** “Hardship” is defined as an “immediate and heavy financial need” that cannot be met by other resources. According to the IRS, you make this eligibility determination based on “all relevant facts and circumstances.” The IRS also identifies several expense categories and circumstances that automatically satisfy the test. This includes medical expenses, costs related to the purchase of a principal residence or repairing damage to that home, family funeral expenses, postsecondary education tuition, room and board expenses for the next 12 months, and payments necessary to prevent eviction because of a mortgage foreclosure. A financial need may be immediate and heavy even if it was reasonably foreseeable or voluntarily incurred by the employee. A hardship distribution may not exceed the amount of the employee’s need; however, the amount may include amounts necessary to pay any taxes or penalties resulting from the distribution. If you made hardship distributions without a plan provision, you must amend your plan document retroactively. ## Avoiding and fixing mistakes Answering “no” to any of these questions can have serious consequences for the plan. To avoid problems for your plan, make it routine to review your plan document. Use a calendar to note when to complete amendments. Keeping your plan up to date and operating according to its terms will help you avoid prohibited transactions and possible disqualification. If you find operational errors in your plan, use the IRS’s corrective program before the IRS discovers the error to avoid substantial penalties. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Employee Benefit Plans, Perspectives on Employee Benefits --- ### [SECURE 2.0 - A Game Changer for Retirement Planning](https://waradydavis.com/secure-2-0-a-game-changer-for-retirement-planning/) **Published:** February 7, 2023 **Author:** Leslie Flinn **Excerpt:** Included in Consolidated Appropriations Act of 2023 is a package of enhanced retirement benefits, otherwise known as the SECURE 2.0 Act. **Content:** ## SECURE 2.0 On December 23, 2022, Congress passed the Consolidated Appropriations Act of 2023. The sprawling year-end spending “omnibus” package includes two important new laws that could affect your financial planning: the Setting Every Community Up for Retirement Enhancement – **[SECURE 2.0 Act](https://www.congress.gov/bill/117th-congress/house-bill/2954/text)** (also known as SECURE 2.0) and the **Conservation Easement Program Integrity Act.** ## Bolstering retirement savings The **[original SECURE Act, enacted in 2019](https://waradydavis.com/new-law-helps-businesses-make-their-employees-retirement-secure/),** was a significant bipartisan law related to retirement savings. In the spring of 2022, with an eye toward building on the reforms in that law, the U.S. House of Representatives passed the Securing a Strong Retirement Act. Despite strong bipartisan support, the bill stalled. Then, the U.S. Senate introduced its own retirement legislation, dubbed the Enhancing American Retirement Now Act. SECURE 2.0 incorporates provisions from both bills and addresses a wide array of areas that make major changes to retirement planning, including: ### Required minimum distributions (RMDs) The first SECURE Act generally raised the age at which you must begin to take RMDs — and pay taxes on them — from traditional IRAs and other qualified plans, from 70½ to 72. The new law increases the age to 73, starting January 1, 2023, and boosts it to 75 on January 1, 2033. This change allows people to delay taking RMDs and paying tax on them. The law also relaxes the penalties for failing to take full RMDs, reducing the 50% excise (or penalty) tax to 25%. If the failure is corrected in a “timely” manner, the penalty would drop to 10%. ### Catch-up contributions Beginning January 1, 2025, individuals who are ages 60 to 63 can make catch-up contributions to 401(k) plans and SIMPLE plans up to the greater of $10,000 or 50% more than the regular catch-up amount. The increased amounts are indexed for inflation after 2025. (The annual dollar limit on catch-up contributions is $7,500 for 2023, up from $6,500 for 2022.) The law also changes the taxation of catch-up contributions, though, which could reduce the upfront tax savings for those who max out their annual contributions. Catch-up contributions will be treated as post-tax Roth contributions. Previously, you could choose whether to make catch-up contributions on a pre- or post-tax basis. An exception is provided for employees whose compensation is $145,000 or less (indexed for inflation). ### Qualified charitable distributions (QCDs) QCDs have gained in popularity as a way to satisfy RMD requirements while also fulfilling philanthropic goals. With a QCD, you can distribute up to $100,000 per year directly to a 501(c)(3) charity after age 70½. You can’t claim a charitable deduction, but the distribution is removed from taxable income. Under the new law, you also can make a one-time QCD transfer of up to $50,000 through a charitable gift annuity or charitable remainder trust (as opposed to directly to the charity). The law also indexes for inflation the annual IRA charitable distribution limit of $100,000. ### Automatic enrollment Beginning in 2025, new 401(k) [plans must automatically enroll participants](https://waradydavis.com/increasing-participation-in-retirement-plans/) when they become eligible. However, the employees may opt out. The initial contribution amount is at least 3% but no more than 10%. Then, the amount is automatically increased every year until it reaches at least 10% but no more than 15%. Existing plans are exempt, and the law provides exceptions for small and new businesses. ### Annuities Annuities can help reduce retirees’ risk of depleting their savings before they die. But RMD regulations have interfered with the availability of annuities in qualified plans and IRAs. For example, the regulations prohibit annuities with guaranteed annual increases of only 1% to 2%, return of premium death benefits and period-certain guarantees. SECURE 2.0 removes these RMD barriers to annuities. The law also makes qualified longevity annuity contracts (QLACs) — inexpensive deferred annuities that don’t begin payment until the end of the individual’s life expectancy — more appealing. Among other things, it repeals the 25% cap on the maximum annuity purchase and allows up to $200,000 (indexed for inflation) from an account balance to be used to purchase a QLAC. ### Matching contributions on student loan payments The law also aims to help employees who miss out on their employers’ matching retirement contributions because their student loan obligations prevent them from making retirement contributions. It allows them to receive matching contributions to retirement plans based on their qualified student loan repayments. Employers can make matching contributions to 401(k) plans or SIMPLE IRAs. These provisions are effective for contributions made for plan years beginning January 1, 2024. ### Part-time employee eligibility SECURE 2.0 lowers the hurdles for long-term, part-time employees to participate in 401(k) plans. They’ll still need to work at least 500 hours before becoming eligible but they’ll have to work for only two consecutive years, rather than the three years required by the first SECURE Act. The provision takes effect for plan years beginning January 1, 2025. ### Small business tax credits To incentivize small businesses to establish retirement plans, SECURE 2.0 creates or enhances some tax credits. For example, it increases the startup credit from 50% to 100% of administrative costs for employers with up to 50 employees. An additional credit is available for some non-defined benefit plans, based on a percentage of the amount the employer contributes, up to $1,000 per employee. ### Tax-free rollovers from 529 plans to Roth IRAs The new law permits a beneficiary of a 529 college savings account to make direct rollovers from a 529 account in his or her name to a Roth IRA without tax or penalty. This provides an option for 529 accounts that have a balance remaining after the beneficiary’s education is complete. The 529 account must have been open for more than 15 years and other rules apply. The provision is effective for distributions beginning in 2024. ### Cracking down on certain tax shelters The retirement provisions in the omnibus law are partially offset by the law addressing conservation easements. Current law generally allows taxpayers to claim a charitable deduction for qualified donations of real property to charity. According to the IRS, though, promoters have twisted the relevant tax provision to develop abusive “syndicated” conservation easements that use inflated appraisals and partnership arrangements to reap “grossly inflated” deductions. Going forward, the Conservation Easement Program Integrity Act disallows charitable deductions for qualified conservation contributions if the claimed deduction exceeds 2.5 times the sum of each partner’s relevant basis in the partnership making the contribution. An exception is granted if the contribution meets a three-year holding period test, substantially all of the partnership is owned by family members or the contribution relates to the preservation of a certified historic structure. More to come. These are only some of the provisions in the new law. The entire omnibus law is sure to generate additional questions and guidance. We’ll keep you apprised of the developments that could affect your financial health. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [2015 Tax Legislation Update](https://waradydavis.com/2015-tax-legislation-update/) **Published:** May 1, 2015 **Author:** WaradyDavis **Content:** Congress returned to work in April after a two week recess and the House immediately passed a slew of tax-related bills. In rapid succession, House lawmakers voted to repeal the federal estate tax, make permanent the state and local sales tax deduction, and make reforms to the IRS. ### **Tax Bills** While tax reform discussions continue between the White House and GOP leaders in Congress, the House moved forward with votes on a number of stand-alone tax bills. In April, the House approved: - HR 622, the State and Local Sales Tax Deduction Fairness Bill, which extends permanently the deduction for state and local sales taxes in lieu of state and local income taxes. - HR 1058, the Taxpayer Bill of Rights Bill of 2015, which codifies taxpayer rights before the IRS; - HR 1152, which prohibits IRS employees from using personal email accounts to conduct official business; - HR 1295 and HR 1314, which make reforms to the process for requesting tax-exempt status; - HR 709, the Prevent Targeting at the IRS Bill, which makes political targeting a terminating offense at the IRS; and - HR 1104, the Fair Treatment for All Gifts Bill, intended to ensure fair and equal gift tax audit treatment for taxpayers who donate to tax-exempt organizations. **Estate Tax Repeal** The Death Tax Repeal Bill (HR 1105) was approved by the House, 240-to-179, mainly along party lines. In addition to repealing the federal estate tax, the bill repeals generation-skipping transfer (GST) tax for all future transfers. GOP leaders in the Senate have indicated their support for the bill but have not yet scheduled a vote. Because of Senate rules, tax votes generally require a super majority of 60 votes and it is unclear if estate tax repeal has the requisite support. President Obama has said he would veto any legislation to repeal the federal estate tax. **IRS Levy** On April 16, President Obama signed the Medicare Access and CHIP Reauthorization Act of 2015 (HR 2), also known as the “doc fix” bill. While the new law largely enacts reforms to Medicare, one provision impacts the IRS. The law authorizes the IRS to levy up to 100 percent of a qualified payment owed to a Medicare provider with unpaid tax liabilities. Previously, the IRS could levy up to 30 percent. *If you have any questions about pending tax legislation or tax reform, as always, please contact your Warady & Davis LLP advisor at (847) 267-9600.* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Congress Addresses Busy Tax Agenda this Fall](https://waradydavis.com/congress-addresses-busy-tax-agenda-this-fall/) **Published:** September 1, 2015 **Author:** WaradyDavis **Excerpt:** Congress returns to work in September with a full agenda of tax legislation. Lawmakers will search for revenue to pay for a long-term federal highway and transportation bill, debate the fate of popular but temporary tax breaks, and decide on a funding level for the IRS. **Content:** Congress returns to work in September with a [full agenda of tax legislation](https://waradydavis.com/congress-faces-busy-tax-agenda-before-the-presidential-election/). Lawmakers will search for revenue to pay for a long-term federal highway and transportation bill, debate the fate of popular but temporary tax breaks, and decide on a funding level for the IRS. As passage of the Surface Transportation Act in late July showed, tax law changes can appear suddenly and can make significant changes. **Highway Bill** The Surface Transportation Act is merely a temporary extension of federal highway funding and is scheduled to sunset before year-end. To pay for the Surface Transportation Act, Congress revised some return due dates, imposed additional reporting requirements for mortgage servicers, and passed other new and expanded tax compliance measures. Now, lawmakers must find more revenue sources to pay for any longer extension or a multi-year highway and transportation bill. Among the revenue proposals are a one-time, 14-percent tax on untaxed foreign earnings of U.S. companies (supported by President Obama). Some lawmakers have endorsed a hike in the federal gas tax (currently at 18.4 cents per gallon). **Tax Extenders** The Senate Finance Committee (SFC) approved before the August recess a two-year extension of many expired tax breaks, known as tax extenders. These include the state and local sales tax deduction, teachers’ classroom expense deduction, incentives for biodiesel and alternative fuels, the Production Tax Credit, the Work Opportunity Tax Credit, and more. Unless extended, these incentives will be unavailable when taxpayers file their 2015 returns. The House, however, has taken a different approach to the extenders. The House, unlike the SFC, has not grouped all of the extenders in one package. Since January, the House has approved several stand-alone bills extending or making permanent some of the extenders, such as the state and local sales tax deduction. These bills have been referred to the Senate where they have yet to be taken up; and the likelihood of the Senate ever taking them up is unclear. If the past is any guide, lawmakers are likely to defer action on the extenders until close to the end of the year. **IRS Budget** President Obama and the GOP-controlled Congress have very different proposals to fund the IRS for fiscal year (FY) 2016. The President has proposed to fund the IRS at more than $13 billion for FY 2016. The House Appropriations Committee, in contrast, approved a $10.1 billion budget and the Senate Appropriations Committee came in at $10.475 billion. Whatever level of funding the House and Senate agree on, it is expected to be below the President’s request, and lower than the IRS’s budget for FY 2015. The IRS struggled with customer and practitioner service [during the 2015 filing season](https://waradydavis.com/2015-filing-season-challenges/), which it attributed to budget cuts. How the agency will react to more budget cuts, and how they may impact the 2016 filing season, remains to be seen. One area where the administration and Congress may find some agreement is funding for cybersecurity at the IRS. In August, [the IRS reported that the May 2015](https://waradydavis.com/2015-tax-legislation-update/) breach of its online Get Transcript app was larger than originally believed. According to the IRS, as many as 220,000 more taxpayers may have had their information compromised or stolen. In an update to his FY 2016 budget request, President Obama urged Congress to increase funding for IRS cybersecurity. The President called for an extra $242 million, reflecting a 72 percent increase over FY 2015. If you have any questions about Congress’ Fall agenda, please contact us at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [New Illinois Sales Tax Rate Increases Effective 7-1-2016](https://waradydavis.com/new-illinois-sales-tax-rate-increases-effective-7-1-2016/) **Published:** May 31, 2016 **Author:** WaradyDavis **Excerpt:** Effective July 1, 2016, certain taxing jurisdictions have imposed a local sales tax or changed their local sales tax rate on general merchandise sales. Increases range from none to 1%+. **Content:** As Illinois lawmakers face a growing state deficit and a budget deadline, talk of tax hikes loom in Springfield. An income tax increase and an expansion of the sales tax onto more purchases are under consideration. In the meantime, ***effective July 1, 2016***, certain taxing jurisdictions have imposed a local sales tax or changed their local sales tax rate on general merchandise sales. Increases range from none to 1%+. The following taxes are affected: • business district sales tax • county public facilities tax • county school facilities tax • home rule sales tax • non-home rule sales tax ## ACTIONS TO TAKE NOW If your business collects Illinois sales tax, you must adjust your cash register and any computer program so that beginning on July 1, 2016, you will collect and pay the correct sales tax. You need to contact your software vendor if you use software to create your forms. ## HOW DO I DETERMINE NEW SALES TAX RATES? To verify your new combined sales tax rate (i.e., state and local sales taxes), go to the Tax Rate Database on The Illinois Department of Revenue website at tax.illinois.gov and select rates for July 2016. If you have questions regarding the new Illinois sales tax rates and how they may impact your business or organization, please contact Warady & Davis LLP at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** E-Alerts --- ### [Overtime Updates Will Extend Protections to 4.2 Million Workers](https://waradydavis.com/overtime-updates-will-extend-protections-to-4-2-million-workers-2/) **Published:** May 17, 2016 **Author:** WaradyDavis **Excerpt:** The Obama administration has announced that it is making millions more employees eligible for overtime pay. The Department of Labor (DOL) estimates that this new ruling will affect 194,000 workers in Illinois alone. If you are a not-for-profit organization, the new rules are complex. **Content:** The Obama administration has announced that it is making millions more employees eligible for overtime pay. The Department of Labor (DOL) estimates that this new ruling will affect 194,000 workers in Illinois alone. If you are a not-for-profit organization, the new rules are complex. ***(See below for more information.)*** In 2014, President Obama directed the Secretary of Labor to update the overtime regulations to reflect the original intent of the Fair Labor Standards Act (FLSA), and to simplify and modernize the rules so they’re easier for workers and businesses to understand and apply. On May 17, 2016, the DOL issued the final rules which update the overtime regulations. These rules define which white collar workers are protected by the FLSA’s minimum wage and overtime standards. The rules focus primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. **Following are the key provisions of the rules:** 1. Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker); 2. Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and 3. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption. Additionally, the final rules amend the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level. **The effective date of the new rules is December 1, 2016.** The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020. **Impact on Employers and Employees** The change is expected to play out in a variety of ways. Once the rules go into effect on Dec. 1, many workers will receive more pay when they work overtime, but others may end up working fewer hours if employers move to limit their time at work. In other cases, employers may decide to increase the salaries of some workers to push them over the cutoff so that the employers will not have to pay overtime or hire additional workers after limiting hours for existing employees. ## Not-for-Profit Organizations As the FLSA rules applicable to not-for-profits can be confusing, the Department of Labor issued both an overview and detailed guidance as to when the FLSA applies to not-for-profit organizations. These documents provide an excellent discussion as to when the overtime rules may be applicable to your organization. #### FAQ ##### Is there an exemption for nonprofit organizations from the FLSA or the Department’s final rule? #### Case Study ##### [US Department of Labor recovers $799K in back wages, damages owed to 110 employees denied overtime by Chicago-area car care centers](https://www.dol.gov/newsroom/releases/sol/sol20240920 "US DOL Recovers $799K owed to Chicago area Car Care Centers - Link opens in new window.") If you have questions regarding the new overtime regulations and how they may impact your business or organization, please contact Warady & Davis LLP at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** E-Alerts --- ### [Necessity questionnaire for PPP loans over $2 million](https://waradydavis.com/ppp-questionnaire/) **Published:** November 23, 2020 **Author:** Leslie Flinn **Content:** A questionnaire asking borrowers to justify their $2 million-plus Paycheck Protection Program loans is confusing and burdensome, says the AICPA. The U.S. Small Business Administration and the Treasury Department want to know more about businesses that borrowed $2 million or more in the Paycheck Protection Program (PPP). So, in early November, they started sending to lenders a new questionnaire to get more information about the operations and financial conditions of PPP borrowers during the pandemic. More than 80 business groups, including the AICPA, recently sent a letter to Congressional leaders. It says the questionnaire “introduces a confusing and burdensome process” for both borrowers and lenders. The coalition also fears it could “lead the agencies to inappropriately question thousands of qualified PPP loans made to struggling small businesses.” The new form, [Form 3509](https://www.google.com/search?q=sba+form+3509&rlz=1C5CHFA_enUS911US911&oq=sba+fo&aqs=chrome.0.69i59j0i67i457j69i57j0i395i433j0i20i263i395j69i60l3.2602j1j7&sourceid=chrome&ie=UTF-8), which ***only applies to businesses that borrowed $2 million or more***, requests specifics on the borrower’s gross revenues, capital improvement projects, dividend payments, and compensation, including whether any employees earned more than $250,000. The completed form is due back to the lender within 10 business days of when the borrower receives it, which the letter states is an unrealistic time frame. “The nine-page questionnaire demands a level and type of reporting never previously required from borrowers by statute or in any process in PPP lending thus far,” the coalition says in its letter. In addition, the new forms ask for liquidity and revenue data, which could expose the personal finances of small business owners. “The CARES Act did not include a means-based test, revenue reduction test, liquidity test or any other metric to assess financial standing in order to assign prioritization of PPP loans to certain borrowers over others,” said the letter. The letter also sites problems with the questionnaire’s comparative time frames and multiple other concerns. The new form is designed to collect supplemental information that SBA loan reviewers will use in evaluating the good-faith certification borrowers made on their PPP applications that economic uncertainty made their loan request necessary. In its letter, the business coalition recommends that instead of using the form the agencies require the borrower to provide a narrative statement and any documentation the borrower believes is appropriate to demonstrate that the loan was critical to support its ongoing operations. The PPP program review comes at a time when many businesses are applying for loan forgiveness on their PPP debt. Loan recipients are eligible for forgiveness, generally, if they devoted at least 60% of the loan’s proceeds to payroll expenses. The AICPA says the loan forgiveness applications — SBA Forms [3508](https://www.sba.gov/sites/default/files/2020-06/PPP%20Loan%20Forgiveness%20Application%20%28Revised%206.16.2020%29-fillable_0-508.pdf), [3508EZ](https://www.sba.gov/document/sba-form-paycheck-protection-program-ez-loan-forgiveness-application), and [3508S](https://www.sba.gov/document/sba-form-3508s-ppp-loan-forgiveness-form-3508s) — could also be used to “…allow the agencies to examine, in greater detail and prior to the approval of loan forgiveness, relevant facts to ensure that the PPP loan funds were used in the way Congress intended.” Borrowers may submit a loan forgiveness application any time before the maturity date of the loan. That would be either two or five years from the loan’s origination, depending on the borrower’s agreement. Principal and interest payments, however, will begin 10 months from the end of the PPP loan covered period. ## Applying for forgiveness W&D is available to help you with the PPP forgiveness process. From keeping you informed of the latest legislation developments to answering PPP forgiveness related questions, or to full engagements to assist you in preparing your PPP loan forgiveness application, please do not hesitate to reach out. Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCES: ###### **IRS and Treasury Department** ###### The AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved **Categories:** COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, necessity questionnaire, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP necessity questionnaire, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Employee Payroll Tax Deferral is Optional, IRS Confirms](https://waradydavis.com/employee-payroll-tax-deferral-is-optional-irs-confirms/) **Published:** September 16, 2020 **Author:** Leslie Flinn **Content:** Recent IRS guidance provides some explanation of how employers can defer withholding and remitting an employee’s share of Social Security tax when wages are below a certain amount. The guidance was issued to implement the presidential executive action signed in early August. The deferral applies to employees whose wages or compensation, payable during any biweekly pay period, generally are less than $4,000, or the equivalent amount with respect to other pay periods. Amounts can be deferred without penalties, interest or additions to the tax. **Significantly, the payroll tax deferral for employees is optional**, the IRS confirmed Sept. 3, resolving ambiguity that had persisted since President Donald Trump’s announcement of the relief measure last month. “Employers may, but are not required, to utilize the relief,” Kelly Morrison-Lee, an attorney with the Internal Revenue Service, said during the agency’s monthly payroll industry teleconference. Private employers still have questions and concerns about whether, and how, to implement the ***optional*** deferral. The President’s action only defers the employee’s share of Social Security taxes; it doesn’t forgive them, meaning employees will still have to pay the taxes later unless Congress acts to eliminate the liability. **NOTE: Under the CARES Act, employers can already defer paying *their portion* of Social Security taxes through December 31, 2020. All 2020 deferred amounts are due in two equal installments — one at the end of 2021 and the other at the end of 2022.** ## **New guidance** The IRS on Aug. 28 issued guidance on the tax deferral plan, but questions remained over numerous issues, including whether employees could have a say in opting in or out. - The deferral enables the employee portion of Social Security tax assessed on compensation paid to employees from Sept. 1 to Dec. 31, 2020—which employers normally would withhold from the compensation and then pay to the government—***to instead be withheld and paid to the government from Jan. 1 to April 30, 2021.*** - Employers, and not employees, have the controlling choice of whether to implement this payroll tax deferral, Morrison-Lee said. - An employer would not be obligated to implement the deferral if employees want their portion of Social Security tax to be deferred. The guidance states that “if necessary,” the employer “may make arrangements to collect the total applicable taxes” from an employee. This appears to answer one question that employers have about what happens if an employee leaves a job later this year or before the deferred taxes are due. However, no additional details are given on how an employer should make arrangements to collect unpaid tax. ## **Many employers opting out** Several business groups have stated that their members won’t participate in the deferral. For example, the U.S. Chamber of Commerce and more than 30 trade associations sent a letter to members of Congress and the U.S. Department of the Treasury calling the deferral “unworkable.” The Chamber is concerned that employees will get a temporary increase in their paychecks this year, followed by a decrease in take-home pay in early 2021. “Many of our members consider it unfair to employees to make a decision that would force a big tax bill on them next year… Therefore, many of our members will likely decline to implement deferral, choosing instead to continue to withhold and remit to the government the payroll taxes required by law,” the group explained. Businesses are also worried about having to collect the taxes from employees who may quit or be terminated before April 30, 2021. And since some employees are asking questions about the deferral, many employers are also putting together communications to inform their staff members about whether they’re going to participate. If so, they’re informing employees what it will mean for next year’s paychecks. ## **Going forward** There are still unanswered questions about the payroll tax deferral. If you need assistance or have questions about how to proceed at your business, contact Warady & Davis LLP at 847-267-9600 or info@waradydavis.com. We can help you evaluate whether to participate and how to go forward. **SOURCE: IRS and Bloomberg Tax** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, payroll tax deferral, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA, Trump Executive Orders --- ### [Highlights of Consolidated Appropriations Act of 2021](https://waradydavis.com/highlights-of-consolidated-appropriations-act-of-2021/) **Published:** December 30, 2020 **Author:** Leslie Flinn **Content:** The nearly 5,600-page **Consolidated Appropriations Act of 2021**, which is now law, expands and extends several critical provisions of the CARES Act enacted in the spring of 2020 to deal with the emerging financial and health care crisis. ## **Key provisions for individuals, businesses and employers** Here’s a broad overview of some of the provisions that may affect you: #### ***Individuals*** - Additional payments (called recovery rebates) of $600 to individuals making up to $75,000 per year and $1,200 per married couple filing jointly earning up to $150,000 per year (based on 2019 tax returns) — with payments phased out at $99,000 and $198,000 respectively — plus $600 per qualifying child; - An additional $300 per week in unemployment benefits, including for the self-employed, gig-economy workers and others in nontraditional employment, through March 14, 2021, with the maximum period for state-paid benefits extended to 50 weeks; - An extended eviction moratorium; - Federal rental assistance for families affected by COVID-19, applicable to past due rent, future rent payments, and utility and energy bills; - Clarification that money purchase pension plans are included among the retirement plans subject to temporary relief measures under the CARES Act (for example, waiver of penalties on COVID-19-related early distributions); - Potentially larger earned income tax credits and child tax credits for some taxpayers; - Loosened requirements for medical expense deductions beginning in 2021; - Extended expansion of charitable contribution tax deductions for non-itemizers through 2021; - An extended exclusion for certain employer payments of student loans; and - New rules for disaster-related distributions from retirement plans. #### ***Businesses and other employers*** - New funding for first-time and so-called “second draw” forgivable loans to eligible businesses under the Paycheck Protection Program (PPP), with dedicated set-asides for very small businesses and lending through community-based financial institutions; - Expanded PPP-eligible expenses (for example, certain operating expenses, property damage costs, supplier costs and worker protection expenses); - Expanded PPP eligibility for nonprofits, local newspapers, and TV and radio broadcasters; - Clarification of tax treatment for PPP loans, certain loan forgiveness and other financial assistance under COVID-19 legislation; - New targeted Economic Injury Disaster Loan grants from the Small Business Administration (SBA) for businesses in low-income communities; - Continued SBA debt relief payments; - Dedicated funding for live venues, independent movie theaters and cultural institutions; - An extended and expanded retention tax credit for eligible employers that continue to pay employee wages during COVID-19 closures or after experiencing reduced revenue; - Extended tax credits for paid sick and family leave; - Extended mandatory paid sick and family leave for qualifying COVID-19-related reasons; - 100% business meals tax deduction for 2021 and 2022 for food purchased from restaurants; - Aid to farmers and ranchers; - Enhanced Low Income Housing Tax Credit; - Extended repayment period for deferred payroll taxes; and - Extended Work Opportunity Tax Credit, New Markets Tax Credit and Empowerment Zone tax incentives. ## **Additional details to come** This is just a quick look at the latest COVID-19 aid package. We’ll dig more deeply into the provisions most likely to affect you or your business in the near future. In the meantime, please contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: SBA, U.S. Treasury and IRS ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a forma **Categories:** COVID, PPP, Tax Legislation --- ### [PPP Updates and Loan Forgiveness Calculator](https://waradydavis.com/ppp-guidance-and-updated-calculator-2/) **Published:** July 2, 2020 **Author:** Leslie Flinn **Content:** **New PPP rules, applications and guidance are almost a daily occurrence and last week was no exception.** The June 22 Interim Final Rule officially updates the language of the Final Rules to include the changes enacted by the PPP Flexibility Act of 2020. This includes the 24-week extension, the 60% rule, the extended loan payment deferral period, the extension of the “employee rehire amnesty” period, the expanded employee reduction exceptions to forgiveness reductions, and the new EZ Forgiveness Application. In addition, the SBA confirmed some items and provided new information: 1. Borrowers can file for forgiveness during the 24-week period immediately after the PPP monies are spent in their entirety. 2. Forgiveness for owners (including S or C Corporation shareholders) will be limited to 15.385% for the 8-week period or 20.833% for the 24-week period of their 2019 compensation with other limitations. 3. State required closings, and the inability to rehire or find qualified replacement employees will be interpreted in a borrower-friendly manner. ## You have the option to file for forgiveness as soon as PPP monies are spent but it may be expensive. With the addition of the 24 week period, W&D clients are now asking how long they have to wait to file for loan forgiveness. What can a borrower who needs more than 8 – but less than 24 – weeks to spend a sufficient amount to have complete forgiveness do? Should they wait for the 24 weeks to end before they file for forgiveness or can they file sooner? Borrowers who received their loan prior to June 5th can elect to stay with the 8-week covered period as opposed to being forced to go the full 24 weeks. Those borrowers could choose to submit their loan forgiveness application on the time line they originally anticipated. For borrowers under the new 24- week covered period, the New Interim Final Rule reads as follows: 1. *When must a borrower apply for loan forgiveness or start making payments on a loan?* *A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan – including before the end of the covered period – if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness.* Accordingly, once a borrower has spent all PPP loan proceeds, they will be able to submit an application for forgiveness **at any point**. ### There’s A Catch For employees who earn $100,000 or less a year, if a borrower reduces wages by more than 25 percent, they must account for the excess salary forgiveness reduction for the full 8-week or 24-week covered period (whichever selected.) Additionally, if a borrower does not apply for forgiveness within 10 months after the last day of the covered period then the loan will no longer be deferred and the borrower must begin making payments. ## Why the Option to File for Forgiveness Early is Important The ability to file early will give business owners clarity regarding how much they may owe and facilitate future planning. A forgiveness decision will also allow borrowers to get the PPP loans off their books which may be necessary before securing other forms of debt. ## Maintaining Employee Headcount There also appears to be no “strings attached” after a borrower applies for loan forgiveness that would require the borrower to maintain employee headcount level throughout the entire 24 week period. If the borrower maintained the same number employees and the same pay rate for those employees through the date it files the forgiveness application (or restored employee headcount levels or pay rates using the FTE Reduction Safe Harbor on such date) there would be no reduction in the amount of loan forgiveness. ## Owner employee’s and self-employed payroll compensation On June 11th, independent contractors received the good news that the amount of automatic forgiveness they would be eligible for would be calculated via the exact same way that their original loan amount was calculated. This essentially meant that any independent contractor who did not pay wages to another employee, would have their loan automatically forgiven if they use the 24-week period. The revised Forgiveness Application and the June 22nd Interim Final Rule, addresses owner-employees. Compensation is capped at either: - **Eight weeks’ worth (8/52) of 2019 net profit (up to $15,385) for an eight-week covered period or** - **5 months’ worth (2.5/12) of 2019 net profit (up to $20,833) for a 24-week covered period.** - Excludes any qualified sick leave equivalent amount claimed under the Families First Coronavirus Response ACT (FFCRA). ### General Partners - The maximum partner compensation is capped at the 2019 Schedule K-1 net earnings from self-employment (reduced by claimed section 179 expense deduction, unreimbursed partnership expenses, and depletion from oil and gas properties), all multiplied by 0.9235. ### Health care expenses are NOT INCLUDED for: - Self-employed, independent contractors or sole-proprietors - General partners, or - Owner-employees of an S-corporation ### Retirement contributions are also NOT INCLUDED in forgiveness for: - Self-employed, independent contractors or sole-proprietors - General partners Retirement costs for S-Corporation owner-employees ARE eligible for forgiveness (health care costs are not.) ### C-Corporation owner-employees may include employer retirement (some limits may apply) and health insurance contributions made on their behalf. The SBA’s goal is to prevent borrowers from double dipping on forgiveness. The SBA does not want to allow forgiveness for expenses that were not already included in the borrower’s payroll calculation on which their loan amount is based. There is no mention of limiting retirement plan contributions attributable to the shareholder employee of a company to 20.833% of 2019 contributions for such shareholder, which is provided for in the EZ forgiveness application. Hopefully, this limitation is an error that will be deleted from the EZ application. ## New employee reduction exceptions created by the Flexibility Act The original CARES Act allowed borrowers to avoid reductions in forgiveness for a reduced number of employees compared to the “pre-COVID-19” period in the form of four exemptions: - the employee rejected a rehire offer; - the employee was fired for cause during the covered period; - the employee requested a reduction in hours; and - the employee voluntarily resigned. The Flexibility Act and recent guidance added the following additional exemptions: - **There was an inability to rehire individuals who were employees of the eligible recipient on February 15th,** - **There was an inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020, or,** - **There was an inability to return to the same level of business activity as before February 15th** (due to ***direct or indirect compliance*** with requirements established or guidance issued by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration during the period beginning on March 21, 2020, and ending December 31, 2020, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19.) The SBA has recognized that many state and local authorities are imposing restrictions based on guidance from these agencies, so the SBA is willing to allow borrowers suffering from those indirect impacts to still claim the exemption. Be on the lookout for additional exemptions added in the future. These have been described as “get out of jail free cards” for borrowers who would otherwise be subject to forgiveness reductions for have suffered reductions in employees. ## Updated AICPA Loan Forgiveness Calculator **The AICPA has updated its PPP loan forgiveness calculator as of guidance released June 25th. The current version of the calculator may be downloaded [HERE. ](https://future.aicpa.org/resources/download/ppp-loan-forgiveness-calculator-excel)** This is a powerful tool for helping borrowers plan for forgiveness, organize documentation and prepare the loan forgiveness application. Be sure to check the above link regularly for revisions to the calculator based on future guidance released. ### We Are Here to Help Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Will your PPP Loan be automatically forgiven?](https://waradydavis.com/will-your-ppp-loan-be-automatically-forgiven/) **Published:** July 27, 2020 **Author:** Leslie Flinn **Content:** ### To date, the Paycheck Protection Program (PPP) has provided over 5 million loans, totaling nearly $520 billion. More than $130 billion remains for new applicants. Now, however, the question is how to handle forgiveness applications for such a large number of loans in an efficient manner. ## **Call for PPP Loan Forgiveness** Last month, two bank lobbying organizations asked Congress to **[automatically forgive PPP Loans of less than $150,000](https://www.americanbanker.com/news/big-banks-call-for-blanket-forgiveness-of-ppp-loans-under-150-000).** At the time of the proposal, records showed that PPP Loans under $150,000 represented approximately 86% of loans made, but only 26% of loan dollars. Or to put it another way, only 14% of the total loans account for 74% of the funds borrowed under the program. These smaller loans are the least profitable for banks to manage and can place an administrative burden on small businesses at a time when many are struggling. Treasury Secretary Steven Mnuchin has suggested that not all PPP Loans should be verified. Mnuchin recommended any forgiveness program should include fraud protection. He went on to recommend additional loans targeted to help minority-owned small businesses and allowing businesses in industries that have been especially hard-hit to apply for a second PPP Loan. Any additional loans would include provisions to help prevent fraud, waste, and abuse. ## **Program Forgiveness Rules Are Complicated** Small businesses can have all or part of their PPP Loan forgiven if they meet certain criteria. These rules have changed numerous times since the program launched, causing confusion among many small business owners. In short, some or all of the funds borrowed under the PPP Loan program can be forgiven if 60% or more of the funds were used for payroll expenses. The remaining funds must be used for qualifying expenses in order to be forgiven. These qualifying expenses include rent, utilities, and interest payments on a mortgage. Funds are available, so if you have not applied for a PPP loan yet, you may want to consider doing so. The five-page PPP Loan Forgiveness Application is available **[HERE.](https://home.treasury.gov/system/files/136/PPP-Borrower-Application-Form.pdf)** ## **Forgiving the Smallest Loans Would Benefit More Than Just Small Business Owners** Forgiving loans of less than $150,000 could ultimately benefit small business owners, banks, and even the government. Providing blanket forgiveness for these loans, or loans under a similar threshold, frees up both bank and government resources toward processing higher-value loans. Government resources would be better served by focusing on larger loans and investigating potential fraud, including possible fraud under any potential forgiveness threshold. Banks will benefit due to reduced overhead. Banks are ultimately responsible for determining loan forgiveness. PPP Loans that are not forgiven are converted to either a 2-year or a five-year loan at 1% interest. Finally, small business owners would also greatly benefit by receiving blanket forgiveness. This would remove the burden of applying for loan forgiveness and allow the business owners to focus on keeping their businesses operational at a time when many owners are pressed for time and resources. ## **We Are Here to Help** When the SBA & Treasury release their PPP loan forgiveness *FAQs* and new stimulus legislation becomes law, we will provide e-alerts and webinars including a PPP loan forgiveness update. In the meantime, please contact us with your questions or concerns at 847-267-9600 or ****. You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us; we are here to help**[.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, PPP Loan Forgiveness EZ Form, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The SECURE Act's impact on retirement and estate plans](https://waradydavis.com/the-secure-act-likely-to-affect-your-retirement-and-estate-plans/) **Published:** February 23, 2020 **Author:** Leslie Flinn **Content:** In late 2019, the first substantial legislation related to retirement savings since 2006 became law. The Setting Every Community Up for Retirement Enhancement (SECURE) Act brings numerous changes to the retirement and estate planning landscape, and some of them should prompt careful review of your existing plans to ensure they’ll accomplish the desired outcomes, including minimizing taxes. ## The most significant provisions include the following changes: Later IRA contributions. Prior to the SECURE Act, you couldn’t contribute to traditional IRAs starting in the year for which you reach age 70½, even if you continued to work. The new law eliminates that restriction, instead allowing anyone with earned income to contribute. This change brings the rules for traditional IRAs in line with those for 401(k) plans and Roth IRAs. The longer period to contribute takes effect for contributions for the 2020 tax year. While contributions for 2019 can be made as late as April 15, 2020, those contributions are permitted only for individuals under the age of 70½ as of the end of 2019. **Delayed RMDs.** The SECURE Act eases the rules for required minimum distributions (RMDs) from traditional IRAs and other qualified plans. It generally raises the age at which you must begin to take RMDs — and pay taxes on them — from age 70½ to 72. This new rule, however, applies only to individuals who hadn’t reached the age of 70½ as of the end of 2019. Some taxpayers have turned to qualified charitable distributions (QCDs) as a tool for satisfying both their RMD requirements and their charitable inclinations. QCDs may be an attractive option because the Tax Cuts and Jobs Act (TCJA) has led more taxpayers to claim the standard deduction on their taxes, losing out on the federal tax benefits previously enjoyed by virtue of charitable contributions. With a QCD, you can distribute up to $100,000 per year directly to a 501(c)(3) charity once you reach age 70½, even if your RMD age is now 72. You don’t receive a charitable deduction, but the distribution is excluded from your taxable income. One wrinkle to note is that the aggregate amount of deductible IRA contributions made under the new rule extending the age for which deductible IRA contributions may be made (that is, those for years in which you’ve reached age 70½ and beyond) will reduce your QCD allowance going forward. This is the case only if those deductible IRA contributions haven’t already been used to reduce your QCD and aren’t below zero. Perhaps an oversimplified way of looking at it is that any deductible IRA contributions allowed because of the new rules will reduce what would otherwise be allowed as a QCD. For example, suppose that at ages 71 and 72 you made deductible IRA contributions that, in total, equal $10,000. Then, at age 73, you make a QCD of $50,000. The QCD is limited to $40,000 – $50,000 less $10,000. Thus, $10,000 of your distribution is taxable. Note, however, that because $10,000 went to charity you’ll be eligible to claim that amount as an itemized deduction. Effectively eliminated “stretch” RMDs. Perhaps more important for some estate plans, the SECURE Act eliminates so-called “stretch” RMD provisions that have allowed the beneficiaries of inherited defined contribution accounts to spread the distributions over their life expectancies. Younger beneficiaries could use the provision to take smaller distributions and defer taxes while the accounts grew. Under the SECURE Act, most beneficiaries must withdraw the entire balance of an account within 10 years of the owner’s death, albeit not according to any set schedule; they can wait and withdraw the entire amount at the end of 10 years if they wish.Be aware that the new rules apply only to those inheriting from someone who died after 2019. Thus, if you inherited an IRA years ago you won’t be subject to the new rules with respect to your RMDs. However, when your beneficiaries inherit the IRA from you, they’ll be subject to the new rules. ## The law recognizes exceptions for the following types of beneficiaries: Surviving spouses, Children younger than “the age of majority” (the 10-year rule applies when such beneficiaries reach the age of majority),Disabled or chronically ill individuals, and individuals who are no more than 10 years younger than the account owner. The 10-year requirement also applies to trusts, including see-through or conduit trusts, that use the age of the oldest beneficiary to stretch RMDs and prevent young or spendthrift beneficiaries from quickly depleting the inherited accounts. If you’ve counted on stretch RMDs, you might achieve the same goals by naming a charitable remainder trust (CRT) as the beneficiary of your account, with your children as the trust’s income beneficiaries. The CRT would provide your children an income stream for a specified number of years or until their deaths and then pass the remainder to charity. Plus, your estate could take a deduction equal to the present value of the charity’s remainder interest. Roth conversions are another avenue to consider. Moving money from a pre-tax IRA account to an after-tax Roth IRA during your retirement preempts RMDs during your life, and any subsequent growth in the account would be tax-free. Plus, your beneficiaries won’t be subject to tax on any distributions they take.Keep in mind that you’ll owe tax as a result of the conversion, though you needn’t convert the entire account at once. Making the conversions strategically, over a number of years, may help to manage the tax implications. Roth conversions require consideration of several factors, so consult with us before taking the plunge.Penalty-free withdrawals for birth or adoption. The SECURE Act creates a new exemption for qualified births or adoptions from the 10% tax penalty on early withdrawals from defined contribution plans. You can withdraw an aggregate of $5,000 from a plan without penalty within one year of the birth of a child or an adoption of a minor or an individual physically or mentally incapable of self-support.Couples in which both parents have separate retirement plans can withdraw an aggregate of $10,000 penalty-free. (Eligible adoptees don’t include the child of your spouse.) Such withdrawals are subject to ordinary income tax. **Expanded options for use of 529 plans.** Under the SECURE Act, you can use 529 plans to pay as much as $10,000 of principal and interest on qualified education loans for a plan beneficiary. The law also permits plan distributions, subject to the same limit, to pay off qualified student loan debt for the beneficiary’s siblings. 529 plans are expanded to include apprenticeship programs, too. Distributions can be made to such programs for costs related to fees, books, supplies and equipment necessary for program participation. **Kiddie tax reversion.** The TCJA changed the kiddie tax rules, generally making unearned income generated by children over a certain threshold taxable at the tax rates for trusts and estates, rather than the generally lower rates of their parents. The SECURE Act reverses course, so a child’s unearned income will return to being taxed at the parents’ highest marginal rate. The law provides the option to calculate the kiddie tax for 2019 under the TCJA or SECURE Act rules. You can also amend your 2018 tax returns to apply the new rule if financially worthwhile. Act now With most of the SECURE Act’s provisions already in effect, you can’t afford to stall on reviewing your plans and making the necessary adjustments to satisfy long-term objectives. Please contact Warady & Davis at 847-267-9600 with any questions. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [U.S. Supreme Court rules against the IRS on critical FBAR issue](https://waradydavis.com/u-s-supreme-court-rules-against-the-irs-on-critical-fbar-issue/) **Published:** March 24, 2023 **Author:** Leslie Flinn **Excerpt:** Bittner v. U.S., the U.S. Supreme Court ruled that the penalty for non-willingly failing to file an FBAR applied on a lower per-report basis, not on a per-account basis **Content:** ## U.S. Supreme Court rules against the IRS on critical FBAR issue The U.S. Supreme Court recently weighed in on an issue regarding a provision of the Bank Secrecy Act (BSA) that has split two federal courts of appeal. Its 5-4 ruling in [Bittner v. U.S.](https://www.supremecourt.gov/opinions/22pdf/21-1195_h3ci.pdf) is welcome news for U.S. residents who “non-willfully” violate the law’s requirements for the reporting of certain foreign bank and financial accounts on what’s generally known as an FBAR. The full name of an FBAR is the Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts. ### Reporting requirement The BSA requires “U.S. persons” to annually file an FBAR to report all financial interests in, or signature or other authority over, financial accounts located outside the country (with certain exceptions) if the aggregate value of the accounts exceeds $10,000 at any time during the calendar year. The term “U.S. person” includes a citizen, resident, corporation, partnership, limited liability company, trust or estate. According to related regulations, individuals with fewer than 25 accounts in a given year must provide details about each. Filers with 25 or more accounts aren’t required to list each or provide specific details; they need only provide the number of accounts and certain other basic information. FBARs generally are due on April 15, with an automatic extension to Oct. 15 if the April deadline isn’t met. Under the BSA, a willful violation of the requirement is subject to a civil penalty up to the greater of $100,000 or 50% of the balance of the account at issue. A provision prescribes a penalty of up to $10,000 for a non-willful violation of the filing requirement (with an exception for reasonable cause). Criminal penalties also may be imposed. ### Violations at issue The case before the Supreme Court was brought by Alexandru Bittner, a dual citizen of Romania and the United States. He testified that he learned of the reporting obligations after returning to the United States in 2011. Bittner subsequently submitted the required annual reports for 2007 through 2011. The IRS deemed his FBARs deficient because they didn’t include all of the relevant accounts. Bittner then filed corrected reports with information for each of his accounts. Although the IRS didn’t contest the accuracy of the new filings or find that his previous errors were willful, it determined the penalty was $2.72 million — $10,000 for each of 272 accounts reported in five FBARs. Bittner went to court to contest the penalty, arguing that it applies on a per-report basis, not per account — so he owed only $50,000 in penalties for his non-willful violations. The district court agreed, but the Fifth Circuit Court of Appeals reversed the ruling, siding with the IRS. By contrast, the Ninth Circuit, in *U.S. v. Boyd*, found in 2021 that the BSA authorized “only one non-willful penalty when an untimely, but accurate, FBAR is filed, no matter the number of accounts.” That meant it was up to the Supreme Court to settle the issue. ### High court’s ruling The Supreme Court agreed with Bittner’s interpretation of the BSA’s penalty provision for FBAR violations. It cited multiple sources that supported this conclusion. For example, the Court noted that Congress had explicitly authorized per-account penalties for some willful violations. When Congress includes particular language in one section of a statute but omits that language from another, it explained, the Court normally understands the difference in language as conveying a difference in meaning. In other words, Congress obviously knew how to tie penalties to account-level information if that was its intent. The Court also highlighted various public guidance from the IRS, including instructions for earlier versions of the FBAR and an IRS fact sheet. These references, the Court said, suggested to the public that the failure to file a report represents a single violation that exposes a non-willful violator to a single $10,000 penalty. (Note: The Supreme Court emphasized that such guidance wasn’t “controlling” or decisive, but only informed its analysis.) ### Implications for taxpayers The Supreme Court’s ruling significantly reduces taxpayers’ potential financial exposure for non-willful violations of the FBAR reporting requirements. The reports typically list multiple accounts, meaning the IRS’s interpretation could have led to tens of thousands of dollars in penalties for a single violation. As the Court also pointed out, an individual with only three accounts who made non-willful errors when providing account-specific details would face a potential penalty of $30,000, regardless of how slight the errors or the value of the accounts. But a person with 300 bank accounts would shoulder far less risk because he or she is required to disclose only the correct number of accounts, with no details. Similarly, a person with a $10 million balance in a single account who fails to report the account would be subject to a penalty of $10,000 — while someone who fails to report a dozen accounts with an aggregate balance of $10,001 would be subject to a penalty of $120,000. It’s important to note that the Supreme Court’s ruling applies only to non-willful failures to file. The penalties for violations that are knowing, intentional, reckless or due to willful blindness aren’t subject to the per-report limit and may be assessed on a per-account basis, with costly ramifications. ### Questions remain The Supreme Court’s ruling in *Bittner* should bring relief to taxpayers who’ve non-willfully violated the BSA’s filing requirement, but it didn’t clear all uncertainty around FBAR penalties. For example, the Court didn’t address the *mens rea* (level of intent) on the part of the taxpayer that the IRS must establish to impose a non-willful penalty or whether penalties for violations of the BSA’s recordkeeping requirements are determined on a per-account basis. [We can help you avoid these thorny questions by ensuring you properly comply with your FBAR obligations.](https://waradydavis.com/services/) **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Student Loan Forgiveness: Who is Eligible and When Can You Apply?](https://waradydavis.com/student-loan-forgiveness-who-is-eligible-and-when-can-you-apply/) **Published:** October 19, 2022 **Author:** Leslie Flinn **Excerpt:** The application website for Americans seeking student loan forgiveness opened in a beta period on Friday, October 14th, allowing applicants to sign up before the website is unveiled later this month. **Content:** ## Student Loan Forgiveness: Who is Eligible and When Can You Apply? **The application process for Americans seeking student loan forgiveness opened in a beta period on Friday evening, October 14th, allowing applicants to begin signing up before the website is formally unveiled later this month. The website is available at:** [**https://studentaid.gov/debt-relief/application**](https://studentaid.gov/debt-relief/application)**.** Anyone who applies for debt relief in the beta period will receive a confirmation email, but their application will not be processed until the site formally launches, expected at a to-be-announced date before the end of October. Once processing begins, most qualifying borrowers are expected to receive debt relief within 4-6 weeks. ***Borrowers are advised to apply by roughly November 15th in order to receive relief before the payment pause expires on December 31st.*** While some borrowers may automatically see their debt forgiven by the Department of Education without taking any additional steps, most will need to apply for forgiveness. You can choose to be notified when the application officially becomes available by going to the [**Department of Education subscription page**](https://www.ed.gov/subscriptions) and signing up to receive “Federal Student Loan Borrower Updates,” the first checkbox in a long list of education topics. ### Does My Loan Qualify for Forgiveness? Per the **[White House](https://waradydavis.com/2022-cost-of-living-adjustments/)**, more than 40 million student loan borrowers in the US may benefit from student loan forgiveness. Borrowers must have *federally-held* student loans to qualify. Qualifying loans **[include](https://studentaid.gov/debt-relief-announcement/one-time-cancellation)** Direct Stafford Loans, all Direct subsidized and unsubsidized federal student loans, Parent Plus and Grad Loans, for example. ***Private debt is not covered***. Borrowers whose federal student loans are guaranteed by the government but held by private lenders, many of which were made under the former Federal Family Education Loan program and Federal Perkins Loan program, are also currently excluded – unless a borrower applied to consolidate those loans into Direct loans by September 29. ### Eligibility Income Thresholds Individuals who earned less than $125,000 in either 2020 or 2021 and married couples who file a joint tax return with less than $250,000 of combined income in those years are eligible for up to $10,000 of their federal student loan debt forgiven. The income thresholds are based on adjusted gross income. You may also be eligible for an additional $10,000 in relief if you received federal Pell Grants while enrolled in college, which are typically awarded to lower income households. **Married Couples.** Questions surround eligibility for married couples based on their income and tax filing status. Additional guidance is expected. - For example, let’s say one spouse earns $150,000 but the other spouse makes $60,000. They qualify for forgiveness based on their $210,000 joint income. However, the higher-earning spouse’s income is over the $125,000 individual limit. Does this person qualify for debt relief, in addition to the lower-earning spouse? ***The answer is yes, according to a White House.*** - Another income question may arise for married couples. Let’s say one spouse makes $90,000 and the other earns $170,000. Their joint $260,000 of income exceeds the income cap. But would the lower-earning spouse qualify for forgiveness based on their individual income? ***As of now, the answer appears to be no.*** ### What if I Already Paid Off My Loan(s)? The debt forgiveness applies to borrowers with federal student loans disbursed by June 30, 2022. If you made payments on your loans during the payment moratorium (March 13, 2020 to December 31, 2022) you may also apply for a forgiveness. However, if your loans were paid off before the pause went into effect (pre-March 13, 2020), you are not eligible. Plus, if you made payments on your student loans during the moratorium, you can request a refund from your loan servicer. If you’re not eligible for the student loan forgiveness — or if you’ll still owe money after the debt is canceled — you **[won’t have to make a payment until January, 2023](https://www.cnet.com/personal-finance/loans/student-loan-payments-now-paused-until-2023-everything-to-know-about-the-latest-extension/).** ### What if My Loans are in Default? Defaulted loans are also eligible for relief. The administration has also introduced a **[Fresh Start](https://www.nerdwallet.com/article/loans/student-loans/fresh-start-what-student-loan-borrowers-in-default-need-to-know)** program that provides a path to good standing for 7.5 million borrowers. Defaulted borrowers who still have a balance after cancellation should consider this program. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2022 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Court Declares Biden's Student Loan Relief Plan Unlawful](https://waradydavis.com/bidens-student-loan-relief-plan-unlawful/) **Published:** November 16, 2022 **Author:** Leslie Flinn **Excerpt:** The U.S. District Court for the Northern District of Texas Fort Worth Division has ruled that President Biden's student loan debt relief plan to be unlawful and have vacated the program [Brown et al. v. U.S. Department of Education et al., N.D. Tex., Dkt. No. No.4:22-cv-0908-P, 11/10/22]. **Content:** ## Court Declares Biden’s Student Loan Relief Plan Unlawful The U.S. District Court for the Northern District of Texas Fort Worth Division has ruled that President Biden’s student loan debt relief plan to be unlawful and have vacated the program \[*Brown et al. v. U.S. Department of Education et al**.***, N.D. Tex., Dkt. No. No.4:22-cv-0908-P, 11/10/22\]. ### Executive Action on Student Loan Debt On August 24, 2022, President Biden announced a [**three-part student loan forgiveness plan**](https://waradydavis.com/student-loan-forgiveness-who-is-eligible-and-when-can-you-apply/) that further extends the suspension of collection actions and wage garnishments for student loans to provide additional assistance to borrowers through the end of 2022. The plan allows for a certain amount of debt forgiveness for certain individuals and extends the pause on student loan debt repayments until December 31, 2022. ### Prior Attempts to Forgive Student Loan Debt The Trump Administration considered its statutory authority under the Higher Education Relief Opportunities for Students Act of 2003 (“HEROES Act”) to forgive student loans due to the COVID-19 pandemic. However, the Department of Education concluded that it lacked such authority. House speaker Nancy Pelosi agreed with the decision and noted that student loan debt can be postponed by the President, forgiveness must be done through an act of Congress. **DOE changes tune.** According to the Court, the Biden Administration also instructed the DOE to explore legal avenues to justify a loan forgiveness program, which it did and changed course by saying that the HEROES Act allows the executive branch to create a loan-forgiveness program to address the financial harms of the COVID-19 pandemic. **HEROES Act.** The HEROES Act (P.L. 108-76) grants the Secretary of Education the authority to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs…in connection with a war or other military operation or national emergency.” **HEROES Act claim.** The Secretary claims that the pandemic was declared a national emergency by President Trump in 2020 and thus a “national emergency” under the HEROES Act. The Secretary further claims that every portion of the country is a “disaster area due to COVID-19,” and “every person with a federal student loan…is an affected individual.” **Plaintiff claims.** The plaintiffs in the case claim that they have student loans but are ineligible because the loans are commercially held and did not receive a Pell Grant. The Program did not undergo notice-and-comment rulemaking procedures under the Administrative Procedure Act. Therefore, the plaintiffs could not voice their disagreement. **Court conclusion.** The Court said that if the executive branch seeks to use its delegated power to create a law of vast economic and political significance, it must have clear congressional authorization. If not, the executive branch unconstitutionally exercises “legislative powers” vested in Congress, the Court explained. The Court further said that in this case, the HEROES Act does not provide the executive branch clear Congressional authorization to create a $400 billion student loan forgiveness program. It concluded that the program is an unconstitutional exercise of Congress’s legislative power and must be vacated. ### Federal Student Aid Webpage The U.S. government’s Federal Student Aid webpage notes that court have issued orders blocking the student debt relief program and is no longer accepting applications at this time. ### DOE Confirms DOJ Appealing Decision U.S. Secretary of Education Miguel Cardona [**said**](https://www.ed.gov/news/press-releases/statement-secretary-education-miguel-cardona-district-court-ruling-biden-harris-administration-student-debt-relief-program) that the DOE believes the student loan debt forgiveness program is lawful. He added that the U.S. Department of Justice appealed the decision on November 11, 2022 and that borrowers will be kept informed about further efforts. ### What About Student Loan Garnishments? One of the three parts of Biden’s student loan debt forgiveness program includes extending the suspension of collection actions and wage garnishments for student loans to provide additional assistance to borrowers through the end of 2022. According to the Court’s ruling, Pelosi claims that the President does have the power to postpone student debt. Also, these collection actions had been postponed before under President Biden and former President Trump. Although the Court ruled Biden’s program to be unlawful and vacated it, this may not mean student loan garnishments collection actions are beginning again. Even if the ruling includes the collection actions, it would seem possible for President Biden to order these actions suspended again until 2023 as a stand alone order without legal issues, since the focus of the case is the debt forgiveness. © 2022 Thomson Reuters/Tax & Accounting. All Rights Reserved **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2022 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [CHIPS Act to Boost U.S. Businesses](https://waradydavis.com/chips-act/) **Published:** August 15, 2022 **Author:** Leslie Flinn **Excerpt:** The CHIPS Act to bolster semiconductor production, economic competitiveness and among its provisions is an investment tax credit for manufacturing facilities and equipment. **Content:** ## CHIPS Act to boost U.S. Businesses The **Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS Act)** was recently signed into law by President Biden on August 9th, as part of the CHIPS and Science Act of 2022. The bill provides a $52 billion package which includes generous tax incentives to increase domestic production of semiconductors, also known as chips. While the incentives themselves are narrowly targeted, the expansion of semiconductor production should benefit a wide range of industries. In particular, it could reduce the risks of future supply chain issues for the many goods and devices that rely on semiconductor chips, from cell phones and vehicles to children’s toys. The law also is intended to address national security concerns related to the reliance on foreign production of semiconductors. ### The Impetus Although the United States developed and pioneered chip technology, many legislators have determined that the country has become too reliant on foreign producers. According to the government, American companies still account for almost half of all revenues in the global semiconductor industry, but the U.S. share of global chip production has fallen from 37% in 1990 to only 12% today. Seventy-five percent of semiconductor production occurs in East Asia. Government subsidies are responsible for up to 70% of the cost difference in producing semiconductors overseas, giving foreign producers a 25% to 40% cost advantage over U.S. producers. The grants in the CHIPS Act, combined with a new tax credit, are intended to fully make up for this cost differential and thereby incentivize the “re-shoring” of semiconductor production. ### The New Tax Credit The CHIPS Act creates a temporary ***“advanced manufacturing investment credit”*** for investments in semiconductor manufacturing property, to be codified in Section 48D of the Internal Revenue Code. The Sec. 48D credit amounts to 25% of qualified investment related to an advanced manufacturing facility — that is, a facility with the primary purpose of manufacturing semiconductors or semiconductor manufacturing equipment. **Qualified property is tangible property that:** - Qualifies for depreciation or amortization, - Is constructed, reconstructed or erected by the taxpayer or acquired by the taxpayer if the original use of the property begins with the taxpayer, and - Is integral to the operation of the advanced manufacturing facility. It also can include a building, a portion of a building (other than a portion used for functions unrelated to manufacturing, such as administrative services) and certain structural components of a building. The credit is available for qualified property placed in service after December 31, 2022, if construction begins before January 1, 2027. If construction began before the CHIPS Act was enacted, though, only the portion of the basis attributable to construction begun after enactment is eligible. Taxpayers generally are eligible for the credit if they aren’t designated as a ***“foreign entity of concern.”*** That term generally refers to certain entities that have been deemed foreign security threats under previous defense authorization legislation or those with conduct that has been ruled detrimental to U.S. national security or foreign policy. The CHIPS Act additionally excludes taxpayers that have made an “applicable transaction” (for example, the early disposition of investment credit property under Sec. 50(a)). Applicable transactions also include any “material expansion” of the taxpayer’s semiconductor manufacturing capacity in China or other designated “foreign countries of concern.” The law provides for recapture of the credit if a taxpayer enters such a transaction within 10 years of claiming the credit. **Notably, eligible taxpayers can claim the credit as a payment against tax — what’s known as “direct pay.” In other words, taxpayers can receive a tax refund if they don’t have sufficient tax liability to use the credit. Without this option, eligible taxpayers could struggle to monetize their credits.** ### Additional Provisions **The CHIPS Act also provides:** - $39 billion in subsidies to build, expand or modernize domestic facilities and equipment for semiconductor fabrication, assembly, testing, advanced packaging or research, and development. - $200 million for workforce development and training. - $1.5 billion to spur wireless supply chain innovation. It also includes almost $170 billion for governmental research and development. ### Stay tuned If your business might qualify for the new tax credit, keep an eye out for additional IRS guidance on just how it will work, including the direct pay provision. We can help you make the most of this and other tax credits. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2022 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Business benefits of the Consolidated Appropriations Act](https://waradydavis.com/business-benefits-of-the-consolidated-appropriations-act/) **Published:** January 7, 2021 **Author:** Leslie Flinn **Content:** The **Consolidated Appropriations Act of 2021 (CAA)** was signed into law in late December. The sprawling legislation contains billions of dollars in additional stimulus funding in response to the COVID-19 pandemic, as well as numerous unrelated provisions. Let’s take a closer look at the provisions that are most likely to affect your company’s bottom line. ## **Paycheck Protection Program** The CAA includes another $284 billion in funding for forgivable loans through the Paycheck Protection Program (PPP), for both first-time and so called “second draw” borrowers. New loans can be made through March 31, 2021, or until the funding is exhausted. The new law expands the allowable uses for PPP funds, provides a simplified forgiveness process for smaller loans, and clarifies the proper tax treatment of loan proceeds and forgiven amounts. ### “PPP2” The second draw PPP loans are intended for smaller and harder hit businesses. Eligible borrowers include businesses, certain nonprofits, self-employed individuals, sole proprietors and independent contractors. To qualify for a second draw, a borrower must: - have no more than 300 employees - have used (or will use) all of the proceeds of its first PPP loan - demonstrate at least a 25% reduction in gross receipts in one quarter of 2020 compared with the same quarter in 2019. - meet the economic uncertainty certification For loans of $150,000 or less, a borrower can submit a certification attesting that it meets the revenue loss requirements on or before the date it submits its loan forgiveness application. Loans are limited to 2.5 times average monthly payroll costs in the year prior to the loan or the calendar year, up to $2 million. Accommodation and food service businesses may receive loans for up to 3.5 times their average monthly payroll. Businesses can obtain only a single second draw loan, and businesses with multiple locations that are eligible under the initial PPP requirements can have no more than 300 employees per physical location. ### Expanded Forgivable Expenses The CARES Act, which created the PPP, limited the funds use to payroll, mortgage, rent and utility payments. The CAA allows businesses to also apply the funds to: - **Covered operating expenses**, including software or cloud computing services that facilitate business operations, product and service delivery, payroll processing, human resources, sales and billing, accounting or tracking supplies, inventory, records, and expenses, - **Uninsured costs** related to property damage, vandalism or looting during 2020 public disturbances, - Supplier costs according to a contract, purchase order or order for goods, in effect before taking out the loan, that are essential to the borrower’s operations, and - **Worker protection expenses** incurred to comply with federal or state health and safety guidelines related to COVID-19 (for example, personal protective equipment, ventilation systems and drive-through windows). As with the first round of PPP loans, full forgiveness requires a 60/40 cost allocation between payroll and nonpayroll costs. In other words, you must spend at least 60% of the funds on payroll over your covered period, which may range from eight to 24 weeks. ### Simplified Forgiveness for Loans Up to $150,000 The CAA creates a simplified forgiveness application for loans up to $150,000. Borrowers still, however, must meet all forgiveness requirements. Once available, the borrower will need to sign and submit to the lender a one-page certification form from the Small Business Administration (SBA). The certification requires a description of the number of employees retained due to the loan, the total loan amount and the estimated total amount of funds spent on forgivable payroll and non payroll expenses. Borrowers must retain relevant records regarding employment for four years and other records for three years. ### EIDL Advances will NOT be deducted from PPP Forgiveness Amount The CAA also eliminates the previous requirement that borrowers deduct the amount of any SBA Economic Injury Disaster Loan (EIDL) advances from their PPP forgiveness amount. ### Tax Treatment Additionally, the CAA addresses some of the confusion that had arisen regarding PPP tax issues. It specifies that a borrower need not include any forgiven amounts in its gross income. And — contrary to the position taken earlier by the IRS — it states that borrowers can deduct otherwise deductible expenses paid with forgiven PPP proceeds. The CAA also provides that tax basis and other attributes aren’t reduced by loan forgiveness (special rules apply to partnerships and S corporations). These tax provisions apply to second draw loans, too. ## **Other financial assistance** The CAA provides $20 billion for new EIDL grants for businesses in low-income communities and $15 billion for live venues, independent movie theaters and cultural institutions. On the tax front, it states that a borrower’s gross income doesn’t include forgiveness of certain loans, emergency EIDL grants and certain loan repayment assistance provided by the CARES Act. As with PPP loans, you can deduct your otherwise deductible expenses paid with such forgiven amounts, and forgiveness won’t reduce your tax basis and other attributes (special rules apply to partnerships and S corporations). Similar treatment applies to targeted EIDL advances and Grants for Shuttered Venues. ## **Employee Retention Credit** To encourage businesses to maintain their workforces, the CARES Act created the Employee Retention Credit, a refundable credit against payroll tax for employers whose: - Operations were fully or partially suspended due to a COVID-19-related governmental shutdown order, or - Gross receipts dropped more than 50% compared to the same quarter in the previous year (until gross receipts exceed 80% of gross receipts in the earlier quarter). Employers with more than 100 employees could receive the credit if they closed due to COVID-19. Those with 100 or fewer employees received the credit regardless of whether they were open for business. ### Changes Under the CAA Notably, as of January 1, 2021, the CAA hikes the credit from 50% of qualified wages to 70%. It also expands eligibility by reducing the requisite year-over-year gross receipt reduction from 50% to only 20% and raises the limit on per-employee creditable wages from $10,000 for the year to $10,000 per quarter. In addition, the threshold for a business to be deemed a “large employer” — and thus subject to a tighter standard when determining the qualified wage base — is lifted from 100 to 500 employees. The CAA includes some retroactive clarifications and technical improvements regarding the original credit, as well. For example, it provides that employers that receive PPP loans still qualify for the credit for wages not paid with forgiven PPP funds. ## **Deferred payroll taxes** Businesses were given the option to withhold their employees’ share of Social Security taxes from September 1, 2020, through December 31, 2020. Those that did were originally directed to increase the withholding and pay the deferred amounts on a prorated basis from wages and compensation paid between January 1, 2021, and April 30, 2021. Under the CAA, such employers now have all of 2021 to withhold and pay the deferred taxes. ## **Non-COVID-19 disaster relief** The CAA also acknowledges the recent disasters not related to the pandemic (for example, wildfires). Among other things, it provides a tax credit of up to $2,400 (40% of up to $6,000 of wages) per employee, to employers in qualified disaster zones. The credit applies to wages paid, regardless of whether services were actually performed in exchange for those wages. The CAA also modifies the CARES Act to allow corporations to make qualified disaster relief contributions of up to 100% of their 2020 taxable income. ## **Business meals deduction** For 2021 and 2022, you can deduct 100% (up from 50%) for food and beverages as long as they’re “provided by a restaurant.” The IRS will likely issue guidance on the deduction, particularly the meaning of the term “provided by a restaurant.” ## **Retirement plans** The tax code allows “qualified future transfers” of up to 10 years of retiree health and life costs from a company’s pension plan to a retiree’s health benefits or life insurance account within the plan. These transfers must meet certain requirements (for example, the plan must be 120% funded) that pandemic-related market volatility has made too difficult to meet in some cases. In response, the CAA allows employers to make a one-time election on or before December 31, 2021, to end any existing transfer period for any taxable year beginning after the election in certain circumstances. The law also includes a partial termination safe harbor for retirement plans in light of 2020’s pandemic-related workforce fluctuations. Plans won’t be treated as having a partial termination (which would trigger 100% vesting for affected participants) if the number of active participants on March 31, 2021, is at least 80% of the number covered by the plan on March 13, 2020. The safe harbor applies to plan years that include the period beginning on March 13, 2020, and ending on March 31, 2021. ## **Charitable deductions** The CAA extends, through 2021, the CARES Act provision that increases the limitation on corporations’ cash charitable contributions from 10% of taxable income to 25%. Any excess corporate cash contributions will be carried forward to subsequent tax years. The limitation on deductions for donations of food inventory, which the CARES Act increased to 25% for 2020, is similarly extended through 2021. ## **Tax extenders** The CAA incorporates several “extenders” of tax breaks. For example, it extends both the New Markets Tax Credit and the Work Opportunity Tax Credit through 2025. The employer credit for paid family and medical leave is extended through 2025 for wages paid in tax years after 2020. The law extends through 2025 the period for which an empowerment zone designation is in effect. But the enhanced expensing rules and nonrecognition of gain on rollover of empowerment zone investments are terminated for property placed in service in tax years beginning after December 31, 2020. Empowerment zone tax-exempt bonds and employment credits also weren’t extended beyond December 31, 2020. ## **A loaded law** At almost 5,600 pages, the CAA contains many more components that could impact your business and personal taxes. As has been the case with these COVID-19 stimulus acts, there will almost certainly be additional guidance, announcements, and interpretations to come. We will continue to keep you updated and informed on what you need to know in order to maximize your benefits and make proper financial, tax and business decisions. ## **Questions? Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: SBA, U.S. Treasury and IRS ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, PPP, Tax Legislation --- ### [What's in the ARPA for individuals?](https://waradydavis.com/whats-in-the-arpa-for-individuals/) **Published:** March 14, 2021 **Author:** Leslie Flinn **Content:** On March 11, 2021, President Biden signed [the American Rescue Plan Act (“the Act”),](https://www.congress.gov/bill/117th-congress/house-bill/1319/text) a $1.9 trillion COVID-19-relief stimulus package. The Act extends the unemployment benefits that were set to expire March 14, and provides expansive pandemic relief funding for individuals, businesses, and state and local governments, including numerous individual and family relief measures and tax benefits. See our blog post on [Business and Nonprofit Benefits](https://waradydavis.com/the-american-rescue-plan-act-of-2021-business-nonprofit-benefits/) for more information. ## INDIVIDUAL AND FAMILY PROVISIONS [Direct payments](https://www.irs.gov/coronavirus/get-my-payment) The ARPA allocates funds for a third economic impact payment to qualifying Americans in the amount of $1,400 ($2,800 in the case of a joint return), with an additional $1,400 for each of the taxpayer’s dependents for such taxable year. New for this round of payments. eligible qualifying dependents include full-time students under the age of 24 and adult dependents. The one-time stimulus payments are reduced for higher-income individual taxpayers and begin to phase out for individual taxpayers with an adjusted gross income (AGI) of $150,000 in the case of a joint return or surviving spouse, $112,500 for heads of household, and $75,000 for single filers. The IRS will base these amounts on the taxpayer’s 2020 tax return, or 2019 tax return if 2020 has not yet been filed. You can check the status of your payment through the [IRS – Get My Payment](https://www.irs.gov/coronavirus/get-my-payment) tool. ### Unemployment benefits Various pandemic-related unemployment assistance measures were set to expire on March 14, 2021, and have now been extended through Sept. 6, 2021. The Act extends the additional $300 per week Federal Pandemic Unemployment Compensation, the Pandemic Unemployment Assistance Program, and the Pandemic Emergency Unemployment Compensation Program. It also makes the first $10,200 of unemployment insurance received in 2020 nontaxable income for taxpayers. The federal tax break applies to individuals and married couples who made less than $150,000 in adjusted gross income in 2020. States may not waive the tax, however. More than half currently levy a state income tax on unemployment benefits. ### Health Insurance Premium Assistance Another temporary provision in the Act that applies only to the 2021 and 2022 taxable years increases the subsidies for eligible taxpayers with coverage purchased on the Affordable Care Act (ACA) marketplaces by making the insurance indexing adjustments inapplicable to the 2021 and 2022 tax years, as well as reducing the applicable premium percentages that are considered when calculating the premium assistance amount. Also for 2021 and 2022, the Act further expands the number of taxpayers eligible for assistance by allowing households with taxable income over 400% of the poverty line to claim assistance. ### COBRA Premiums Individuals entitled to group health plan COBRA continuation coverage during the second and/or third calendar quarters of 2021 will not have to pay for that coverage if they did not voluntarily terminate their employment, and the employer sponsoring the plan (for a self-insured plan) or the insurer (for a fully-insured plan) will be entitled to claim a fully refundable federal payroll tax credit for the amount of the premiums the individual was not required to pay. - The credit applies to premiums and wages paid after April 1, 2021. - Under new Sec. 6720C, a penalty is imposed for failure to notify a health plan of cessation of eligibility for the continuation coverage premium assistance. - Taxpayers who receive the COBRA continuation coverage premium assistance credit are not also eligible for the Sec. 35 health coverage tax credit. - Under new Sec. 139I, continuation coverage premium assistance is not included in the recipient’s gross income. ### Child tax credit The Act expands the Child Tax Credit, with the intent of bringing more children out of poverty, allowing taxpayers with qualifying children who are 17 or younger to claim the credit for the 2021 taxable year (changed from 16 or younger). Additionally, the Act increases the credit amount for each qualifying child for the 2021 taxable year from $2,000 to $3,000 ($3,600 for qualifying children who have not attained age 6 as of the close of the calendar year in which the taxable year of the taxpayer begins). As with the stimulus payments discussed above, the credit begins to phase out at $150,000 for joint returns or surviving spouses, $112,500 for heads of household, and $75,000 in any other case. The IRS is directed to estimate taxpayers’ child tax credit amounts and pay monthly in advance one-twelfth of the annual estimated amount. Payments will run from July through December 2021. ### Earned income credit The Act includes a provision intended to strengthen the Earned Income Tax Credit (EITC) for the 2021 taxable year for individuals with no qualifying children by generally allowing such taxpayers age 19 and older (previously age 25 and older) to claim the credit. For the 2021 taxable year, the Act eliminates the current maximum age of 64 for receiving the EITC for such taxpayers. For taxpayers with no qualifying children in the 2021 taxable year, the provision also increases both the credit percentage and phase-out percentage from 7.65% to 15.3%, as well as increases the EITC amount from $4,220 to $9,820 and the phase-out amount from $5,280 to $11,610. - The credit would be allowed for certain separated spouses. - The threshold for disqualifying investment income would be raised from $2,200 to $10,000. - Temporarily, taxpayers would be allowed to use their 2019 income instead of 2021 income in figuring the credit amount. ## Child and dependent care credit Another temporary provision in the Act, applicable only to the 2021 taxable year, increases the credit for dependent care assistance employment expenses. In the case where the taxpayer has one dependent, the amount increases from $3,000 to $8,000, and, in the case where the taxpayer has two or more dependents, from $6,000 to $16,000. The Act increases the percentage of these expenses that may be claimed as a credit from 35% to 50%, and begins to phase-out when an individual’s AGI exceeds $125,000. (There are additional phase-out guidelines for “high income individuals,” those with AGI of more than $400,000; see the [Act](https://www.congress.gov/bill/117th-congress/house-bill/1319/text) for details.) Also for the 2021 taxable year, the credit is refundable. For taxpayers who receive reimbursements from their employer, there is an exclusion from an individual’s gross income of amounts paid by an employer for dependent care assistance; the Act increases this exclusion amount from $5,000 to $10,500 (or from $2,500 to $5,250 for a separate return filed by a married individual), and the change only applies to the 2021 taxable year. ## Student loan forgiveness As part of student loan reform, the Act excludes from gross income certain student loans discharged after Dec. 31, 2020, and before Jan. 1, 2026. The provision applies to student loans provided by the federal government, state governments, and eligible educational institutions, as well as certain private education loans as defined in the Truth in Lending Act. ## Family and sick leave credits - The credits for sick and family leave originally enacted by the Families First Coronavirus Response Act (FFCRA), P.L. 116-127, would be extended to Sept. 30, 2021. - The bill increases the limit on the credit for paid family leave to $12,000. - The number of days a self-employed individual can take into account in calculating the qualified family leave equivalent amount for self-employed individuals increases from 50 to 60. - The paid leave credits will be allowed for leave that is due to a COVID-19 vaccination. - The limitation on the overall number of days taken into account for paid sick leave will reset after March 31, 2021. - The credits are expanded to allow 501(c)(1) governmental organizations to take them. ## Rental assistance There is $25 billion for emergency rental assistance, including $5 billion for emergency housing vouchers for people experiencing homelessness, survivors of domestic violence and victims of human trafficking. ### Support for low-income families The ARPA includes $4.5 billion for the Low Income Home Energy Assistance Program, known as LIHEAP, to help families with home heating and cooling costs. One provision would give the agriculture secretary the authority and funding to temporarily boost the value of cash vouchers for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) up to $35 per month for women and children for a four-month period during the pandemic. There is also $1.4 billion in funding for programs authorized under the Older Americans Act, including support for nutrition programs, community-based support programs and the National Family Caregiver Support Program. The bill provides $37 million to the Commodity Supplemental Food Program for low-income seniors. #### Questions In a series of upcoming e-Alerts and webinar(s), we will provide you with more information on how you can make the most of the benefits available to you, your family and/or your business. *Please contact your Warady & Davis LLP advisor with your questions at 847-267-9600;* . You can also visit the [Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/) for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act Individual Benefits, American Rescue Plan Act Individuals, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, American Rescue Plan Act Unemployment, ARPA Individuals, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Stimulus relief for indiviuals, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [White House announces PPP changes](https://waradydavis.com/white-house-ppp-changes/) **Published:** February 22, 2021 **Author:** Leslie Flinn **Content:** The Biden-Harris administration announced several reforms to further target the Paycheck Protection Program (PPP) to the smallest businesses and those that have been left behind in previous relief efforts. ***T*h*e following are specific changes:*** #### **1. Create 14-day period, starting Wednesday, Feb 24-2021, during which ONLY businesses with fewer than 20 employees can apply for PPP loans.** 98 percent of small businesses have fewer than 20 employees. And while smaller businesses have received more relief in this round of PPP, they often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender. The 14-day exclusive application period will allow lenders to focus on serving these smallest businesses. #### **2. Help sole proprietors, independent contractors, and self-employed individuals receive more financial support.** These types of businesses make up a significant majority of all businesses. Of these businesses, those without employees are **[70 percent](https://www.sba.gov/sites/default/files/advocacy/Nonemployer-Fact-Sheet.pdf)** owned by women and people of color. Yet many are structurally excluded from the PPP or were approved for as little as $1 because of how PPP loans are calculated. To address this problem, the White House in conjunction with the SBA will revise the loan calculation formula for these applicants so that it offers more relief. A $1 billion set aside for businesses in this category without employees located in low- and moderate-income (LMI) areas is also established. #### **3. Eliminate restriction on small business owners with prior non-fraud felony convictions** Currently, a business is ineligible for PPP if it is at least 20 percent owned by an individual who has either: (1) an arrest or conviction for a felony related to financial assistance fraud within the previous five years; or (2) any other felony within the previous year. To expand access to PPP, the White House will eliminate the second restriction (the one-year look-back) unless the applicant or owner is incarcerated at the time of the application. #### **4. Eliminate an exclusionary restriction that prevents small business owners who are delinquent on their federal student loans from obtaining relief through the Paycheck Protection Program.** Currently, the PPP is not available to any business with at least 20 percent ownership by an individual who is currently delinquent or has defaulted within the last seven years on a federal debt, including a student loan. Millions of Americans are delinquent on student loans, including a disproportionate number of Black borrowers. Working with the Departments of the Treasury and Education, the SBA will remove the student loan delinquency restriction to broaden access to the PPP. #### **5. Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers (ITINs) to apply for relief**. The PPP statute is clear that all lawful U.S. residents may access the program, but a lack of guidance from the SBA has created inconsistency in access for ITIN holders like Green Card holders or those here on a visa. The SBA will address this inconsistency by issuing clear guidance in the coming days that otherwise eligible applicants cannot be denied access to the PPP because they use ITINs to pay their taxes. ## In addition to these five changes, the following steps have been and will continue to be taken to ensure equitable distribution of relief: - **Address waste, fraud, and abuse across all federal programs.** Unlike the previous round of the PPP, loan guaranty approval is now contingent on passing SBA fraud checks, Treasury’s Do Not Pay database, and public records. The SBA now also conducts manual loan reviews for the largest loans in the PPP portfolio and a random sampling of other loans. The SBA has worked, and will continue to work, with its lender partners to create streamlined processes to resolve issues as quickly as possible, while still ensuring taxpayer dollars are spent wisely. - **Promoting transparency and accountability by improving the PPP loan application.** To encourage self-reporting of demographic data and better illustrate the impact the PPP is having across various population segments, demographic data will be moved from page 3 to page 1 of PPP applications. **[PPP1 Application – February 17, 2021.](https://home.treasury.gov/system/files/136/PPP-Borrower-Application-Form.pdf) [PPP2 Application – February 17, 2021](https://home.treasury.gov/system/files/136/PPP-Second-Draw-Borrower-Application-Form.pdf)** **Questions? Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: The White House and AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [SBA Answers More Key PPP Questions - Many Remain](https://waradydavis.com/sba-issues-ppp-guidance/) **Published:** April 3, 2020 **Author:** Leslie Flinn **Content:** UPDATE 4/4/20: The SBA has Issued a Second Round of Guidance – 13 CFR Part 121. This guidance primarily focuses on affiliation rules for businesses, not-for-profits and faith-based organizations. *See updated information below*. Despite not being ready on April 3rd as originally anticipated, many banks are now starting to accept applications. Check with your bank for when you can begin to apply and application process. Visit [www.sba.gov](https://www.sba.gov/)[ ](https://www.sba.gov/)for a list of SBA lenders. Time is of the essence as the SBA Guidance indicates that loans will be on a first come, first served basis. The Small Business Administration has now issued two rounds of Paycheck Protection Program (PPP) rules, with more expected. The Guidance provides additional implementation guidelines and requirements for PPP to aid small businesses, not-for-profits and others hit hard by the COVID-19 crisis. In the new guidance, SBA makes significant changes from its original plan, **including raising the fixed interest rate on loans made under the program from 0.5% to 1%** in response to feedback that the terms could prevent community banks from participating in the program. “Now that SBA and Treasury have shared key implementation details and made important changes to the program, I expect banks of all sizes will participate and provide this important financial lifeline to small business customers,” [said ABA President and CEO Rob Nichols](https://www.aba.com/about-us/press-room/press-releases/ABA-Statement-on-SBA-Paycheck-Protection-Program). “America’s banks are [already assisting their small business customers](https://www.aba.com/about-us/press-room/industry-response-coronavirus) across the country, and they stand ready to work in partnership with the federal government to get these new funds to small businesses in need as quickly as possible.” *Check With Your Bank For When You Can Begin to Apply and Application Process.* *Visit [Small Business Administration](https://www.sba.gov/)[ ](https://www.sba.gov/)for a list of SBA lenders.* ## WHAT’S IN THE NEW SBA GUIDANCE? **Clarification of criteria and certifications required of lenders.** Effective on issuance, the SBA provided critical guidance to lenders so that the PPP program can be implemented quickly. **Additional Eligibility Guidelines.** In addition to previously communicated **[eligibility criteria](https://waradydavis.com/qa-cares-act-emergency-loans-2/)**, the SBA defined additional items that disqualify organizations and individuals from participating including household employers, businesses and individuals engaging in illegal activities, owner with 20% of more equity in a business having current and prior felonies, incarceration, criminal indictments, etc. and having a currently delinquent SBA or federally guaranteed loan or defaulted on such within the last seven years and caused a loss to the government. ## Payroll Calculation Clarification The SBA guidance provided further payroll calculation clarification and examples. 1. **Step 1:** Aggregate payroll costs from the last twelve months for employees whose principal place of residence is the United States. 2. **Step 2:** Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year. **(NOTE**: **Since Independent contractors and sole proprietors may apply on their own, business applicants may NOT include payments to independent contractors in PPP payroll calculation. See below.)** 3. **Step 3:** Calculate average monthly payroll costs (divide the amount from Step 2 by 12). 4. **Step 4:** Multiply the average monthly payroll costs from Step 3 by 2.5. 5. **Step 5:** Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid). ### Example 1: No employees make more than $100,000 Annual payroll: $120,000 Average monthly payroll: $10,000 Multiply by 2.5 = $25,000 Maximum loan amount is $25,000 ### Example 2 Some employees make more than $100,000 Annual payroll: $1,500,000 Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000 Average monthly qualifying payroll: $100,000 Multiply by 2.5 = $250,000 Maximum loan amount is $250,000 ### Example 3 No employees make more than $100,000, outstanding EIDL loan of $10,000. Annual payroll: $120,000 Average monthly payroll: $10,000 Multiply by 2.5 = $25,000 Add EIDL loan of $10,000 = $35,000 Maximum loan amount is $35,000 ### Example 4 Some employees make more than $100,000, outstanding EIDL loan of $10,000 Annual payroll: $1,500,000 Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000 Average monthly qualifying payroll: $100,000 Multiply by 2.5 = $250,000 Add EIDL loan of $10,000 = $260,000 Maximum loan amount is $260,000 ## Answers for What Qualifies as Payroll Costs ### Payroll costs consist of: - compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or *****similar compensation (not defined)*;**** - cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); - payment for vacation, parental, family, medical, or sick leave; - allowance for separation or dismissal; - payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; - payment of state and local taxes assessed on compensation of employees; - and for an independent contractor, wages, commissions, income, or net earnings from self-employment. ### Specifically excluded is: - Any compensation of an employee whose principal place of residence is outside of the United States; - The compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary; - **Independent Contractors DO NOT** **count as employees for purposes of PPP loan calculations.** The SBA Guidance specifically states that since independent contractors have the ability to apply for a PPP loan on their own, so they do not count for purposes of a borrower’s PPP loan calculation. - Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees; - Qualified sick and family leave wages for which a credit is allowed under the Families First Coronavirus Response Act ### What the SBA has NOT answered: - **12-month period for PPP payroll calculation.** The interim final rule does not clarify the discrepancy between the CARES Act language stating that payroll costs are based on the 12-month period preceding the loan date and the SBA form application’s instruction providing that borrowers should use the average monthly payroll for 2019. - **What is included in $100K compensation limit.** The interim final rule does not clarify whether the $100,000 limit applies to the defined term “payroll costs” or to only the wage/salary component of payroll costs. However, the Treasury Department’s information sheet for borrowers implies that it has interpreted the $100,000 limit to apply to total “payroll costs,” including health care benefits. - ****What constitutes “similar compensation” for Partnerships and others.**** - **Organizational challenges hotels, real estate and others face***.* The SBA guidance did not address some of the real estate specific issues relating to PPP loans, including whether real estate borrowers can access and use loans to pay employees supplied by third-party management companies. Although SBA has stated informally that it is aware of these issues, the rule does not say whether additional guidance on that subject will be forthcoming. ## Can I Apply for More than One PPP Loan - No, This means that if you apply for a PPP loan you should consider applying for the maximum amount. While the Act does not expressly provide that each eligible borrower may only receive one PPP loan, the SBA has determined in consultation with the US Treasury, that because all PPP loans must be made on or before June 30, 2020, a one loan per borrower limitation is necessary to help ensure that as many eligible borrowers as possible may obtain a PPP loan. This limitation will also help advance Congress’ goal of keeping workers paid and employed across the United States. ## Affiliation Rules – What about Businesses with Multiple Entities? **NOTE: As of 4/5, even with the latest SBA Guidance, some of our clients’ banks are still recommending separate loan applications for each related company separately (unless the companies are all owned together by a holding company.) BE SURE TO CHECK WITH YOUR BANK.** **SBA Guidance 4/4 states:** - The SBA has clarified that In most cases, **a borrower will be considered together with its affiliates for purposes of determining eligibility for the PPP.** U****nder SBA rules, entities may be considered affiliates based on factors including stock ownership, overlapping management and identity of interest.**** - An entity generally is eligible for the PPP if it, **combined with its affiliates:** - is a small business as defined in section 3 of the Small Business Act (15 U.S.C. 632), or (1) has 500 or fewer employees whose principal place of residence is in the United States - or is a business that operates in a certain industry and meets applicable SBA employee-based size standards for that industry, - is a tax-exempt nonprofit organization described in section 501(c)(3) of the Internal Revenue Code (IRC) - a tax-exempt veterans organization described in section 501(c)(19) of the IRC - a Tribal business concern described in section 31(b)(2)(C) of the Small Business Act, or any other business concern. - On the most current sample **[PPP application](https://www.sba.gov/sites/default/files/2020-04/PPP%20Borrower%20Application%20Form_0.pdf)**, a business and each 20%-or-greater owner must certify on its [**application** ](https://www.sba.gov/sites/default/files/2020-04/PPP%20Borrower%20Application%20Form_0.pdf)that, among other things, it has not and will not receive another PPP loan. The CARES Act made 501(c)(3) nonprofit organizations not only eligible for the PPP, but also subjected them to SBA’s affiliation rules. Specifically, section 1102 of the Act provides that the provisions applicable to affiliations under 13 CFR 121.103 apply with respect to nonprofit organizations and veterans organizations in the same manner as with respect to small business concerns. **Exemption for Faith-Based Organizations.** The SBA’s PPP affiliation guidance specifically exempts otherwise qualified faith-based organizations from the affiliation rules. The SBA is aware of the existence of faith-based organizations that would qualify for relief under the CARES Act but for their affiliation with other entities as an aspect of their religious practice. The SBA accordingly must exempt faith-based organizations that would otherwise be disqualified from the PPP based on features of those organizations’ affiliations that are a matter of religious exercise. ## What About Foreign Owned Businesses? Generally, to be eligible for a 7(a) loan, an applicant must have its place of business located in the US and operate primarily within the US or make a significant contribution to the US economy through payment of taxes or use of US products, materials, or labor. Once that threshold is met, the applicant’s domestic **and** foreign employees (including the domestic and foreign employees of the applicant’s affiliates) count toward the number of employees considered for size determinations. - **Internationally owned organizations located in the US are eligible, if they meet small business and other criteria.** - **NOTE:** Under the CARES Act, a borrower may not use the proceeds of a PPP loan for compensation of employees whose principal place of residence is outside the US. ## What About Loan Forgiveness? Yes. The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest if the borrower uses all of the loan proceeds for forgivable purposes described below and employee and compensation levels are maintained. The actual amount of loan forgiveness will depend, in part, on the total amount of: - payroll costs - payments of interest on mortgage obligations incurred before February 15, 2020 - rent payments on leases dated before February 15, 2020 - utility payments under service agreements dated before February 15, 2020, over the eight-week period following the date of the loan. **IMPORTANT NOTE**: the SBA and US Treasury have determined that the **non-payroll portion of the forgivable loan amount is limited to 25%.** This is to ensure purpose of PPP and that finite program resources are devoted primarily to payroll. The SBA and US Treasury determined that 75 percent is an appropriate percentage in light of the CARES’ overarching focus on keeping workers paid and employed. **The SBA has indicated they will issue additional guidance regarding loan forgiveness. This e-Alert will be updated once issued.** ## Is a Business Eligible for PPP Forgiveness if it Has Already Laid Off Workers and/or Reduced Salaries? The CARES Act does not disqualify a business from loans under the PPP if it has already conducted reductions in force, furloughed, or otherwise laid off employees or reduced employee salaries. However, in instances other than seasonal employers, the SBA calculates the number of employees based on the average number of employees over the preceding 12 months. Also, as discussed above, the amount of the loan that is eligible for forgiveness is based on the number and salaries of employees at the time of an application, taking into account any reductions that have recently been made. Practically speaking, borrowers that lay off employees or reduce employee salaries between February 15, 2020 and April 26, 2020 should not be penalized with a reduction in loan forgiveness amount as long as they re-hire the employees that they previously laid off or eliminate the salary reductions by June 30, 2020. Otherwise, as discussed above, the amount of the 7(a) loan that is eligible for forgiveness is reduced as described above. ## Is the PPP First Come, First Served? Yes. It is to your advantage to work with your current lender if they are participating in the PPP program. ### Does Receiving One Type of Small Business Loan Make an Applicant Ineligible to Receive Another Type? - Under the PPP, **a business and each 20%-or-greater owner** must certify on its **[application](https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf)** that, among other things, **it has not and will not receive another PPP loan.** - A borrower that received an EIDL loan between January 31, 2020 and the date on which the PPP becomes available can still receive a PPP loan. - A borrower can also refinance an EIDL loan into a PPP loan for forgiveness purposes (see below for further details). We anticipate the SBA will provide further clarification regarding what it considers to be the same purpose with respect to loan eligibility. ### Does Participation in the PPP Preclude a Borrower From Taking Advantage of CARES Act Tax Relief Programs and Vice Versa? The CARES Act provides that borrowers that receive PPP loans are **ineligible to receive the employee retention tax credit.** Additionally, the **payroll tax deferral benefit is not available to a taxpayer that participates in the loan forgiveness program under the PPP.** ## I Don’t Have Any Payroll Costs. What Help is Available for Me? **The Economic Injury Disaster Loan (EIDL)** program is a pre-existing program available to certain small businesses located in areas subject to a presidential disaster declaration that have suffered a substantial economic injury as a result. Section 1107 of the CARES Act includes US $10 billion to expand the EIDL program to businesses beyond previous size limits to include those with up to 500 employees, with some relaxed eligibility requirements. Additionally, an EIDL “grant” provision allows applicants to request that SBA provide an immediate advance of up to US$10,000 within three days of an application in an effort to get money into the hands of small businesses as soon as possible. **Economic Injury Disaster Loan applications are already being accepted** - **[Apply Here Now: EIDL Online Application Website](https://disasterloan.sba.gov/ela) https://disasterloan.sba.gov/ela** ## PPP Resources - **The details**: The Small Business Administration has a dedicated page where you can learn about loan eligibility and forgiveness details. [Find it here](https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp). - **Where to apply?** Find the borrower application form [here](https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf) or [here](https://www.sba.gov/document/sba-form--paycheck-protection-program-borrower-application-form). - **Where to find a lender?** The SBA has a searchable tool for that **[here](https://www.sba.gov/paycheckprotection/find)**. ***I****f your current bank is participating, we recommend you work with them as existing customers will be given priority.*** ### We Are Here to Help Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [SBA Issues PPP Frequently Asked Questions; Gives Favorable Answers](https://waradydavis.com/us-treasury-provides-ppp-clarity/) **Published:** April 7, 2020 **Author:** Leslie Flinn **Content:** ### As banks start accepting and processing applications, and businesses and their advisors race to apply, all have struggled with limited PPP guidance and unanswered questions. Late Monday night, April 6, 2020, the US Treasury and the SBA released [FAQs on the Paycheck Protection Program (PPP)](https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequenty-Asked-Questions.pdf), the $349 billion small business relief program that is a key part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. **Many of our clients, banks, the W&D team and other advisors’ unanswered questions are addressed in this FAQ – particularly numbers 14, 15 and 16 below. These FAQs are critically important to help banks facilitate the funding of small businesses and to provide consistency and clarity in the application process for everyone.** **IMPORTANT NOTE: If you have already submitted your application but it has not yet been processed, while it is not required that you update it based on this new guidance, it may be to your benefit to do so.** 1. **Lenders are not required to thoroughly review the calculation of the payroll costs provided by the borrower.** It **is the responsibility of the borrower to accurately complete that calculation.** However, if the lender identifies errors, they will work with the borrower to fix the application. The SBA will likely review the loan amount at some point in time. 2. **Can a borrower have more than 500 employees?** **The answer is yes as long as they meet the definition of a “small business concern”.** You can have up to 1,500 employees based on some industries. Also, it appears you could have an unlimited number of employees if (1) the tangible net worth of the company is less than $15 million and (2) your average net income for the previous two years is not more than $5 million. 3. **Does a business have to qualify as a small business concern? The answer is no.** Any business with fewer than 501 employees automatically qualifies. This eliminates the “Small Business Concern” requirements. Businesses with fewer than 501 employees automatically regardless of revenue. **Also, the Q&A states that you do not include any non-US employees in your count.** 4. **Are the banks required to verify the affiliates of the applicant?** **The answer is no.** The applicant is required to verify all of the affiliates and how it affects their application. The affiliate rules prevent closely-related entities from spreading the employee count out. **All employees of the affiliated group will be counted to see if they meet the 500/industry employee limit.** 5. **Are applicants required to apply the SBA affiliation rules? Answer is yes.** As discussed in #4, these rules prevent groups of multiple companies from getting around the 500/industry group limit. However, if you think you are over 500 employees based on affiliation, make sure to review the industry size limits for each applicant. For example, you may have an agricultural based business with 400 employees and a manufacturing company with 800 employees. As an affiliated group, you are over 500, but the agricultural is under 500 and the manufacturing industry is allowed to have 1,250 employees. 6. **Can a minority shareholder give up their rights to control the business under the affiliation rules? The answer is yes and this would no longer require affiliation.** 7. **What does compensation in excess of $100,000 mean? The answer to this question is great news for all borrowers.** Only compensation in the form of wages, salaries, etc. is excluded. All other payroll related costs such as group insurance, retirement pay and state and local taxes are allowed. **For example**, suppose you have an employee who earns $125,000, has group insurance of $10,000, retirement payments of $6,000 and state and local taxes of $4,000. The limit is not $100,000 but $120,000 for the payroll costs calculation. 8. **Does the PPP cover paid sick leave?** **The answer is yes for purposes of calculating your loan amount.** However, paid Sick or Family leave under provided under the ***Family First Coronavirus Response Act is not allowed to be included as part of payroll costs when you determine your loan forgiveness amount.*** 9. **What time period should season employers used for their payroll calculation?** **L****enders may consider whether a seasonal** **borrower was in operation on February 15, 2020 or for an 8-week period between February 15, 2019 and June 30, 2019.** 10. **Can applicants use a third-party payer for payroll or a Professional Employer Organization (PEO)?** **SBA recognizes that many companies use these entities and will respect the labor costs reported. I**f these payers are related parties, however, there may be additional documentation required to verify which entity had which employees and the amount paid. This can become very important both for the loan application process and for the forgiveness calculation. 11. **Who can sign the application?** **Only one person is required to sign but needs to be an Authorized Representative of the applicant.** 12. **What if you have a felony conviction in the past?** **Generally only counts if convicted in last five years.** 13. **Can lenders use their own online portals?** **Yes**. 14. **What time period is used to calculate the maximum loan amount? Answer is EITHER 2019 calendar year OR previous 12 months.** 15. **Can payments to independent contractors be included in PPP payroll calculation. The April 6th Q&A Confirms you CANNOT use any payments to independent contractors.** ***The FAQ does not address how self-employment income of partners (through guaranteed payments or pass-through income) affects the partnership’s maximum loan amount.*** 16. **How should a borrower account for federal taxes when determining its payroll costs for purposes of the maximum loan amount, allowable uses of a PPP loan,** **and the amount of a loan that may be forgiven? The Q&A answer provided is really good news**. You will use **gross payroll and will not have to reduce your payroll costs by any federal payroll taxes imposed or withheld** such as the employee’s and employer’s share of Federal Insurance Contributions Act (FICA) and income taxes required to be withheld from employees. The wording in the original law was unclear. This FAQ simply states you don’t really do anything with them. You don’t include any of those taxes and you don’t subtract any of those taxes. **Use gross wages.** 17. **What if I already filed my loan application? Do I need to take updated action based on this guidance? No. Borrowers and lenders may rely on the laws, rules, and guidance available at the time of the relevant application.** **However, borrowers whose previously submitted loan applications have not yet been processed may revise their applications** based on clarifications reflected in these FAQs. This may be in your best interests. 18. **Are PPP loans for existing customers considered new accounts for FinCEN Rule CDD purposes?** **If the PPP loan is being made to an existing bank customer and the necessary information was previously verified, you do not need to re-verify the information.** These clarifications are going to have a significant impact on the total eligible funding amount available to small businesses and help minimize confusion for PPP applicants, their advisors and to provide consistency with lenders. The effectiveness of the PPP depends on the quick distribution of funds, so it’s crucial we answer lender questions and minimize complexity for small businesses that need support now. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Newsbits: Microsoft offers nonprofits free cloud services](https://waradydavis.com/newsbits-microsoft-offers-nonprofits-free-cloud-services/) **Published:** April 10, 2017 **Author:** WaradyDavis **Excerpt:** Microsoft’s philanthropic arm has announced that it’ll donate $1 billion in cloud computing resources over the next three years to nonprofits and nongovernmental organizations worldwide. **Content:** Microsoft’s philanthropic arm has announced that it’ll donate $1 billion in cloud computing resources over the next three years to nonprofits and nongovernmental organizations worldwide. The donation is part of an initiative that includes providing a suite of Microsoft cloud services, expanding access to cloud resources for 900 faculty researchers at universities and reaching 20 under served communities in 15 countries with broadband connectivity and cloud services. Microsoft’s goal is to serve 70,000 nonprofits through one or more of the offerings in its cloud services suite by the end of 2017. The company will focus on increasing that number in subsequent years. Nonprofits must work through TechSoup (Microsoft’s partner in the donation program) to satisfy a variety of eligibility requirements to participate. To determine if your organization is eligible, Visit: [Microsoft Corporate Responsibility](https://www.microsoft.com/en-us/corporate-responsibility). **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [What COVID-19 legislation means for nonprofits and their staffers](https://waradydavis.com/what-covid-19-legislation-means-for-nonprofits-and-their-staffers/) **Published:** March 28, 2020 **Author:** Leslie Flinn **Content:** Whether your not-for-profit is newly deluged with demand for services or you’ve closed doors temporarily, it’s important to keep up with legislation responding to the coronavirus (COVID-19) crisis. On March 18, the Families First Coronavirus Response Act was signed into law to provide American workers affected by the pandemic with extended sick and family leave benefits. The new law applies to your nonprofit if you have fewer than 500 employees, although you may be exempt if you have fewer than 50. Here are some details. ## **3 things to know** There are three important components of the new law: **1. Paid sick leave.** If a staffer is ill, is instructed to be isolated by a physician or government authority or is caring for a sick family member or child whose school has closed, your organization must provide two weeks of paid leave. Pay part-time workers based on their average hours over a two-week period. Benefits are capped at $511 per day and $5,110 total for employees on leave because of their own health issue, or $200 per day and $2,000 total to care for others. **2. Job-protected leave.** You must provide 12 weeks of job-protected leave for employees who need to take care of a child due to the closure of a school or day care center. This provision updates existing rules under the Family and Medical Leave Act. Employers are now required to pay workers two-thirds of their regular wages, not to exceed $200 per day and $10,000 total. You aren’t required to pay employees during the first 10 days off; however, they may choose to use accrued time off benefits at this time. **3. Employer payroll tax credits.** To help employers pay for time off, the law enables tax credits. You may claim a 100% refundable payroll tax credit on wages associated with paid sick and medical leave and other expenditures associated with health benefit contributions. Additional wages paid to staffers due to the law’s leave requirement aren’t subject to the employer portion of the payroll tax. **Unemployment assistance** The Cares Act provides extra unemployment insurance payments of $600 per week on top of current state unemployment benefits through July, 2020. If individuals are still unemployed when state benefits run out, the federal government will pay unemployment benefits of $600 per week for up to 13 additional weeks. **Staying afloat** If you have questions about how the Families First Act applies to your nonprofit, please contact us. Also, because many nonprofits operate on thin margins at the best of times, you may worry about staying afloat. We can analyze your position and help you come up with possible survival strategies. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** COVID, Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Nonprofit Trends: The 2016 M+R Benchmarks Study](https://waradydavis.com/nonprofit-trends-the-2016-mr-benchmarks-study-2/) **Published:** November 2, 2016 **Author:** WaradyDavis **Excerpt:** The 2016 M+R Benchmarks Study reveals how rapidly the nonprofit universe is changing in the face of online fundraising, marketing, and advocacy efforts. Currently in its tenth year, the study’s goal is to look at how nonprofits and their supporters are behaving today to help them prepare for changes in the future. **Content:** #### If there’s one important takeaway from the 2016 M+R Benchmarks Study, it may be how rapidly the nonprofit universe is changing in the face of online fundraising, marketing, and advocacy efforts. Currently in its tenth year, the study’s goal is to look at how nonprofits and their supporters are behaving today to help them prepare for changes in the future. The following are five key facts from the 2016 study that would have been unimaginable in 2006: 1. 13% of online gifts were made from mobile devices. This is likely the result of both user preference and the decision by nonprofits to facilitate mobile access. 2. For every 1,000 email subscribers, nonprofits had 355 Facebook fans, 132 Twitter followers, and 19 Instagram followers — all up from basically zero in 2006. 3. Nonprofits invested four cents in digital advertising for every one dollar of online revenue. Considering that overall online revenue rose by 19% during the last year, digital advertising is increasingly important for identifying, acquiring, and converting new donors and retaining current ones. 4. Email volume increased substantially. On average, nonprofits in the study sent the typical subscriber on their lists 49 email messages in 2015. 5. Monthly giving accounted for 17% of all online revenue and grew by 24% across all sectors in 2015. In the first Benchmarks Study in 2006, only about half of the nonprofit participants offered a recurring giving program. The study used data gathered from 105 nonprofit organizations of various sizes and in various sectors. The complete study is available at **[www.mrbenchmarks.com](https://www.mrbenchmarks.com).** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Is your nonprofit’s tap running dry?](https://waradydavis.com/is-your-nonprofits-tap-running-dry/) **Published:** July 20, 2020 **Author:** Leslie Flinn **Content:** The COVID-19 crisis has put enormous financial stress on many not-for-profits — whether they’re temporarily shut down or actively fighting the pandemic. If cash flow is a problem, your organization may need to do more than trim expenses. Here’s how to assess your financial condition and take appropriate action. ## **Put your board in charge** Ask your board of directors to lead your review and retrenchment efforts. In addition to having oversight experience and financial expertise, board members have a passion for your organization and will do whatever they can to assist. They may already have employer backing for your nonprofit, and those companies may be willing to step up their financial support. Or board members may be able to tap their social networks. The first order of business should be to review programs relative to your nonprofit’s mission. If you identify one that isn’t critical to your mission and is a drain on cash balances and staff resources, consider cutting it. Terminating a non-mission-critical program frees up funds for other initiatives or administrative necessities. If you can redirect clients to similar programs offered by other organizations, such changes can be made without a break in service. Your board may also be able to liberate cash from your investment portfolio. Your nonprofit may have investments or idle assets that aren’t generating operating income — for example, donated real estate, collections and other nonmarketable holdings. Divesting these possessions can raise critical operating funds. ## **Look to your endowment** Another potential source of operating funds is your organization’s permanently restricted endowment funds. Under the Uniform Prudent Management of Institutional Funds Act (UPMIFA), you may be able to spend what was once considered the untouchable original principal (or historical balance) of funds. Access generally is available when the donor of the original gift is silent about restrictions or hasn’t specified that UPMIFA provisions don’t apply. In some cases, an original condition or restriction may no longer be practicable or possible to achieve. Your nonprofit should consult an attorney to learn whether this is an option. If UPMIFA provisions don’t open up a source of funds, there’s another potential route — approach the original donor. Your organization can ask the donor to lift all or some of the spending restrictions so you may use a portion of the funds for operating costs. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Five Reasons Your Organization Needs an Audit Committee](https://waradydavis.com/five-reasons-your-organization-needs-an-audit-committee/) **Published:** April 10, 2021 **Author:** WaradyDavis **Excerpt:** Success for not-for-profits (NFPs), regardless of their type or size, is built on a firm foundation of fiscal accountability and governance. NFPs can access expertise in these areas - and in the process more successfully fulfill their strategic goals - by leveraging the knowledge and experience of audit committees. **Content:** Success for not-for-profits (NFPs), regardless of their type or size, is built on a firm foundation of fiscal accountability and governance. Achieving these oftentimes elusive goals requires more than traditional business know-how and insights into industry and sector trends. It calls for a robust combination of strong internal controls, budgetary and legal compliance, accurate and timely financial reporting and disclosure, sound business practices, and a culture of uncompromised moral and ethical behavior. NFPs can access expertise in all these areas – and in the process more successfully fulfill their strategic goals – by leveraging the knowledge and experience of audit committees. An effective audit committee can provide the following benefits: 1. **Provide actionable insights to oversee and improve financial practices and reporting.** In high-performing organizations, audit committees provide oversight. Audit committees meet with the CEO and financial officers to review and maintain effectiveness of organizational controls and external financial reporting. They often work in partnership with the finance committee, which is typically focused on internal reports, operational issues and financial strategy. 2. **Create and maintain effective anti-fraud programs**. With their insights and expertise in financial, legal, management and operational issues, audit committee members can play a proactive role working with an NFP’s leadership team and auditors in creating and periodically reviewing an organization-wide fraud prevention and detection program and ensuring that investigations are undertaken if fraud is uncovered. They can also encourage the organization’s leadership team to establish a comprehensive ethics and compliance program. The audit committee should play a similarly proactive role in the review and update of both of these programs. 3. **Enhance the internal audit function.** An organizational structure that has the internal audit team reporting directly to the audit committee contributes to the overall integrity of the internal audit function. Under this structure, the internal audit team can serve as the audit committee’s “eyes and ears” regarding the organization’s ability to meet its financial and compliance responsibilities and ensure that the organization adjusts practices and internal controls as needed. 4. **Oversee the organization’s external audit.** An audit committee meets with external auditors to monitor their services and activities to ensure that independence is maintained between the external auditor and the organization’s management team. An audit committee also meets with external auditors to discuss their independent observations on management’s ability to maintain strong internal controls, appropriate financial reporting and sound business practices. 5. **Strengthen credibility with stakeholders**. An NFP’s reputation is its greatest asset. An audit committee communicates a message of independence, reliability and trust. It also builds confidence among present and potential constituents, donors, creditors, and other stakeholders. NFPs and their audit committees can maintain and further build on this positive message by disclosing the audit committee’s role and composition, achieving transparency in financial disclosures, and communicating the organization’s compliance and ethics policy. **Source:** ***AICPA Not-for-Profit Section*** ##### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit --- ### [Portfolio Investing: Do You Know Where You Are Right Now Vs. Where You're Heading?](https://waradydavis.com/portfolio-investing/) **Published:** February 1, 2016 **Author:** WaradyDavis **Excerpt:** CEO's do it; athletes do it; in fact, anyone who needs to be able to achieve a certain level of performance in order to achieve a specific goal constantly assesses where they are in relation to where they want to be. For any long-term investment strategy to have the best opportunity for success, it must be based on a thorough assessment of your needs, priorities, investment preferences and your tolerance for risk and portfolio volatility. **Content:** CEO’s do it; athletes do it; in fact, anyone who needs to be able to achieve a certain level of performance in order to achieve a specific goal constantly assesses where they are in relation to where they want to be. For any long-term investment strategy to have the best opportunity for success, it must be based on a thorough assessment of your needs, priorities, investment preferences and your tolerance for risk and portfolio volatility. ### [Read More](https://www.rszfinancialadvisors.com/blog/portfolio-investing-do-you-know-where-you-are-right-now-vs-where-you-re-headed) ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [2021 business year-end tax planning](https://waradydavis.com/2021-business-year-end-tax-planning/) **Published:** November 11, 2021 **Author:** Leslie Flinn **Content:** ## Businesses must navigate 2021 year-end tax planning with new tax laws potentially on the horizon The end of the tax year is fast approaching for many businesses, but their ability to engage in traditional year-end planning may be hampered by the specter of looming tax legislation. [The budget reconciliation bill](https://www.congress.gov/bill/117th-congress/house-bill/5376/text), dubbed the [Build Back Better Act (BBBA)](https://www.congress.gov/bill/117th-congress/house-bill/5376/text), is likely to include provisions affecting the taxation of businesses — although its passage is uncertain at this time. While it appears that several of the more disadvantageous provisions targeting businesses won’t make it into the final bill, others may. In addition, some temporary provisions are coming to an end, requiring businesses to take action quickly to capitalize on them. **As Congress continues to negotiate the final bill, here are some areas where you could act now to reduce your business’ 2021 tax bill.** - View ideas for 2021 individual year-end tax planning. ### **Research and experimentation** **Section 174 research and experimental (R&E) expenditures** generally refer to research and development costs in the experimental or laboratory sense. They include costs related to activities intended to uncover information that would eliminate uncertainty about the development or improvement of a product. Currently, businesses can deduct R&E expenditures in the year they’re incurred or paid. Alternatively, they can capitalize and amortize the costs over at least five years. Software development costs also can be immediately expensed, amortized over five years from the date of completion or amortized over three years from the date the software is placed in service. However, under the Tax Cuts and Jobs Act (TCJA), that tax treatment is scheduled to expire after 2021. Beginning next year, you can’t deduct R&E costs in the year incurred. Instead, you must amortize such expenses incurred in the United States over five years and expenses incurred outside the country over 15 years. In addition, the TCJA requires that software development costs be treated as Sec. 174 expenses. The BBBA may include a provision that delays the capitalization and amortization requirements to 2026, but it’s far from a sure thing. You might consider accelerating research expenses into 2021 to maximize your deductions and reduce the amount you may need to begin to capitalize starting next year. ### **Income and expense timing** Accelerating expenses into the current tax year and deferring income until the next year is a tried-and-true tax reduction strategy for businesses that use cash-basis accounting. These businesses might, for example, delay billing until later in December than they usually do, stock up on supplies and expedite bonus payments. But the strategy is advised only for businesses that expect to be in the same or a lower tax bracket the following year — and you may expect greater profits in 2022, as the pandemic hopefully winds down. If that’s the case, your deductions could be worth more next year, so you’d want to delay expenses, while accelerating your collection of income. Moreover, under some proposed provisions in the BBBA, certain businesses may find themselves facing higher tax rates in 2022. For example, the BBBA may expand the net investment income tax (NIIT) to include active business income from pass-through businesses. The owners of pass-through businesses — who report their business income on their individual income tax returns — also could be subject to a new 5% “surtax” on modified adjusted gross income (MAGI) that exceeds $10 million, with an additional 3% on income of more than $25 million. ### **Capital assets** The traditional approach of making capital purchases before year-end remains effective for reducing taxes in 2021, bearing in mind the timing issues discussed above. Businesses can deduct 100% of the cost of new and used (subject to certain conditions) qualified property in the year the property is placed in service. You can take advantage of this bonus depreciation by purchasing computer systems, software, vehicles, machinery, equipment and office furniture, among other items. Bonus depreciation also is available for qualified improvement property (generally, interior improvements to nonresidential real property) placed in service this year. Special rules apply to property with a longer production period. Of course, if you face higher tax rates going forward, depreciation deductions would be worth more in the future. The good news is that you can purchase qualifying property before year-end but wait until your tax filing deadline, including extensions, to determine the optimal approach. ### Sec 179 Expensing You can also cut your taxes in 2021 with Sec. 179 expensing (deducting the entire cost). It’s available for several types of improvements to nonresidential real property, including roofs, HVAC, fire protection systems, alarm systems and security systems. The maximum deduction for 2021 is $1.05 million (the maximum deduction also is limited to the amount of income from business activity). The deduction begins phasing out on a dollar-for-dollar basis when qualifying property placed in service this year exceeds $2.62 million. Again, you needn’t decide whether to take the immediate deduction until filing time. ### **Business meals** Not every tax-cutting tactic has to be dry and dull. One temporary tax provision gives you an incentive to enjoy a little fun. For 2021 and 2022, businesses can generally deduct 100% (compared with the normal 50%) of qualifying business meals. In addition to meals incurred at and provided by restaurants, qualifying expenses include those for company events, such as holiday parties. As many employees and customers return to the workplace for the first time after extended pandemic-related absences, a company celebration could reap you both a tax break and a valuable chance to reconnect and re-engage. **Questions?** ***Please contact us with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Business, Business Management, Hot Topics, Tax, Tax Legislation **Tags:** 2021 business tax planning, Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Build Back Better Act, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, business tax planning 2021, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA, Year-end Tax planning for businesses 2021 --- ### [PPP loan increases, reapplications open January 19, 2021](https://waradydavis.com/how-to-increase-ppp-loans/) **Published:** January 19, 2021 **Author:** Leslie Flinn **Content:** ### If you received a first-draw PPP loan approved by Aug. 8, 2020 that has not been forgiven, you may be able to amend your original application to request a PPP loan increase. Borrowers can amend their original application to request increased loan amounts due to changes in **PPP loan rules** listed below if the original loan amount was less than amount for which they would have otherwise applied. *Increased loan amounts may not exceed the maximum PPP loan amount ($10 million for an individual borrower or $20 million for a corporate group).* #### Borrowers may NOT amend their original loan applications for errors and omissions except for what is noted below: ## **You may be eligible for an increased PPP loan amount under the following SBA rules changes:** - **05/19/20 Seasonal Employers Rule Update.** If a seasonal employer received a loan before the alternative criterion for such employers was posted on April 28, 2020, and would be eligible for a higher maximum loan amount under the alternative criterion, the lender may electronically submit a request an increase to the PPP loan amount - **05/19/20 Partnership Rule Update.** If a partnership received a loan that only included amounts necessary for payroll costs of the partnership’s employees and other eligible operating expenses, but did not include any amount for partner compensation, the borrower may request an increase to the loan amount to include appropriate partner compensation - **Amend your initial application to include expenses for insurance costs for group life, dental, vision, and disability insurance which were included in the new Act.** - **4.05/22/20 Rule Update for Tipped Employees:** The Interim Final Rule posted on 05/22 allows borrowers to factor tips paid by customers to employees into their calculation of payroll costs. - **Farmers and Ranchers: Recent legislation and guidance provides a new calculation of maximum loan amount.** If a farmer or rancher received a first-draw PPP loan and would be eligible for a higher maximum loan amount based on the formula described in subsection B.4.d. of the SBA [consolidated IFR](https://home.treasury.gov/system/files/136/PPP-IFR-Paycheck-Protection-Program-as-Amended-by-Economic-Aid-Act.pdf), the lender of record may electronically submit a request through E-Tran to increase the loan amount, again subject to the loan maximum and documentation requirements. In addition, SBA guidance provides that the following borrowers can reapply or request an increase for their original first round loan: - **Borrowers who returned all of their initial PPP loan amount.** Borrowers that returned or repaid a first-draw PPP loan are eligible to reapply for that loan provided the lender reported to the SBA before Dec. 27 that the borrower had fully repaid the loan or canceled the loan. The borrower may then apply for a new first-draw PPP loan in an amount the borrower is eligible for under current PPP rules. - **Borrowers who returned part of their initial PPP loan amount.** Borrowers that returned or repaid part of a first-draw PPP loan may request a loan increase equal to the difference between the amount not paid back by the borrower and the amount previously approved. The lender may disburse those funds to the borrower provided that the lender reported to the SBA before Dec. 27 that the loan had been partially repaid. For example, if a borrower returned $25,000 of a $100,000 PPP loan because the borrower could not spend the funds during the covered period, the lender can disburse $25,000 back to the borrower provided other conditions are met. - **Borrowers who did not accept the full amount of their initial PPP loan.** Borrowers that did not accept before Dec. 27 the full amount of a first-draw PPP loan for which they were approved may apply for an increase in the loan up to the amount previously approved. Lenders may approve the request and disburse the funds but must follow one of two processes detailed in the notice based on how they reported before Dec. 27 that the borrower did not accept the full amount of the PPP loan. ### **How to Request a First-Draw PPP Loan Increase or reapplication** **Contact your Lender**. Increases to first-draw PPP loans can be made **only by the lender of record for the loan**, i.e., the lender that is reflected in the SBA’s system as the current owner of the loan. If the loan was sold after it was originated, the lender that purchased the loan is the lender of record. SBA Guidance now provides that a borrower’s lender of record may submit an electronic request through the SBA’s E-Tran Servicing site to increase the PPP loan amount. The borrower will be required to provide the lender with documentation to support the calculation of the increase. Contact your original loan lender for details. The SBA will begin accepting original loan increase and reapplication requests on January 19, 2021. Requests must be submitted by March 31, 2021 but should be made as soon as possible as this is a first-come, first-serve program and funds are likely to run out unless Congress acts to replenish. ### **Important Note:** Loan increases or reapplications are prohibited for PPP loans if the SBA has remitted a forgiveness payment to the lender for the loan, though such borrowers may be eligible for a second-draw PPP loan. ## **Conclusion** **This information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors.** For the most part, the changes included in this legislation apply to all PPP loans except those already forgiven. In addition, the way the legislation is written, most provisions take effect immediately after the legislation is enacted, as if they were in the CARES Act that was passed March 27, 2020. ## **Questions? Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: SBA, U.S. Treasury, IRS and AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP loan increases, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [PPP Application Deadline Extended](https://waradydavis.com/ppp-application-deadline-extended-of-2021-business-nonprofit-benefits-copy/) **Published:** March 26, 2021 **Author:** Leslie Flinn **Content:** On Wednesday, March 31, 2021, the President signed the [PPP Extension Act of 2021](https://www.congress.gov/bill/117th-congress/house-bill/1799?q=%7B%22search%22%3A%5B%22PPP+extension+act+of+2021%22%5D%7D&s=2&r=1), H.R. 1799 which moves the Paycheck Protection Program (PPP) application deadline from March 31 to **May 31**. This provides an additional 60 days for businesses to apply for 1st and 2nd draw PPP loans and provides an additional 30 days for the SBA to finish processing applications received by May 31. In a news release, the AICPA said that the additional 60 days provided by the bill will greatly help small businesses, not-for-profits, and the CPAs that serve them complete existing PPP loan applications and file new ones. The extension act also provides the SBA time to address significant loan application process challenges, including confusing validation and error codes, delayed guidance, and changes to the PPP loan amount calculation for self-employed borrowers, the AICPA release said. The PPP Extension Act does not provide any additional funding for the current round of the PPP, which Congress provided with more than $290 billion to make forgivable loans to small businesses and not-for-profits. From the program’s opening on Jan. 11 through March 21, the [SBA has approved](https://www.sba.gov/sites/default/files/2021-03/PPP_Report_Public_210321-508.pdf) more than 3.1 million loans totaling nearly $196 billion. At the current lending rate, the SBA estimates that the PPP should have enough funding to last through mid-April. ## Questions ***Please contact your Warady & Davis LLP advisor with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ##### SOURCE: AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, PPP Application Deadline, PPP Deadline, PPP extended, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Covid-19 Financial Relief: Families First Coronavirus Response Act](https://waradydavis.com/covid-19-financial-relief/) **Published:** March 19, 2020 **Author:** Leslie Flinn **Content:** ## **Families First Coronavirus Response Act (FFCRA)** **The Families First Coronavirus Response Act** (FFCRA; “The Act”) was signed into law on March 18, 2020 and responds to the growing health and economic crises with provisions for paid sick leave, free testing, expanded unemployment benefits and more. FFCRA also generally requires employers with less than 500 employees to provide a certain amount of paid sick and paid leave to employees affected by COVID-19, and provides affected employers with a corresponding employment tax credit. In addition, the FFRCA temporarily expands Family and Medical Leave Act (FMLA) requirements to offer protected leave related to the coronavirus. **The paid sick leave requirements take effect 15 days after enactment (April 2, 2020) and they expire on December 31, 2020.** The legislation follows a first emergency funding bill, which allocated roughly $8 billion for coronavirus prevention, preparation and response efforts. Congress and the Administration are now working on “phase three” to further stem the impact of the outbreak on families and the economy. ## Highlights of FFCRA include: - **Expanded food assistance and unemployment benefits** through supplemental appropriations for health programs. - **Expanded unemployment benefits** through larger federal grants to the states to process and pay claims. - **Healthcare plans, including high deductible health plans, to provide for COVID-19 testing at no cost to the insured.** This includes diagnostic testing, including visits to a provider, urgent care center or emergency room. There is also a waiver of Medicare, Medicare Advantage, Medicaid and CHIP cost-sharing. In conjunction with previously issued IRS guidance, a participant in a high deductible health plan receiving this benefit would still be eligible to contribute to a Health Savings Account on a tax-advantaged basis. - **Emergency Paid Sick Leave.** A requirement that employers with 500 or fewer employees and government employers provide Emergency Paid Sick Leave to employees due to any of the following reasons: - Subject to a quarantine related to COVID-19; - Advised to self-quarantine related to COVID-19; - Experiencing symptoms of COVID-19 and seeking a medical diagnosis; - Caring for an individual who is subject to quarantine; - Caring for a son or daughter if the school or child-care provider is closed; - Any other substantially similar condition as specified by the Department of Health and Human Services. Full-time employees are entitled to 10 days of sick leave and part-time employees are entitled to the typical number of hours that they work in a typical two-week period, paid at two-thirds of the employee’s regular rate. The sick leave amount is calculated based on the employee’s “required compensation” (i.e., the largest of (i) regular rate of pay, (ii) federal minimum wage, or (iii) local minimum wage) multiplied by the number of hours normally scheduled to work, but capped at (i) $511 per day ($5,110 in total) for those described above in items 1-3; and (ii) $200 per day ($2,000 in total) for other employees. - **Emergency Family and Medical Leave Expansion Act (Emergency FMLA Act).** Employers with 500 or fewer employees and government employers must provide up to 12 weeks of job-protected Emergency Family and Medical Leave for a “qualifying need related to a public health emergency.” The technical corrections made to the original House bill limit the definition of a qualifying need to caring for a son or daughter under age 19 if their school or place of care has been closed or the child care provider is unavailable due to a public health emergency. - Paid Leave is calculated for an employee at an amount not less than 2/3 of the employee’s regular rate of pay (using the Fair Labor Standards Act of 1938) multiplied by the number of hours the employee would normally be scheduled to work. Under a Technical Corrections Act clarification, this amount of required paid leave cannot exceed $200 per day and $10,000 in total for an employee. - The law funds the Paid Sick Leave and Paid Family and Medical Leave for employers (including tax-exempt employers) through a refundable credit against payroll taxes. Self-employed taxpayers can receive a benefit through a refundable credit against income taxes for periods during which work cannot be done. We are closely monitoring all COVID-19 developments. If you have any questions, please do not hesitate to contact your Warady & Davis LLP advisor at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** COVID, Tax Legislation **Tags:** 2020 deadlines, Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Chicago audit, Chicago audit firm, Chicago Business Coronavirus Resources, Chicago COVID-19 Coronavirus Resources, Chicago CPA, Chicago Tax Planning, Coronavirus Business Resources, COVID-19 Business Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, payments and other actions are due. Chicago CPA Audit, Small Business Corona Virus Resources, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA, we’ve provided this summary of when various tax-related forms --- ### [SBA PPP Loans: IRS Issues Guidance on the Ability to Deduct Forgiven Expenses](https://waradydavis.com/sba-ppp-loans-irs-issues-guidance-on-the-ability-to-deduct-forgiven-expenses/) **Published:** April 29, 2020 **Author:** Leslie Flinn **Content:** The rules and guidance regarding the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) loans authorized in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) continue to evolve. The CARES Act provides that, “an eligible \[PPP loan\] recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of” payroll, mortgage interest, rent and utilities (all as defined in the CARES Act) incurred and paid during an eight week period following the funding of the loan. The CARES Act also provides that, “For purposes of the Internal Revenue Code of 1986, any amount which (but for this subsection) would be includible in gross income of the eligible recipient by reason of forgiveness described in subsection (b) shall be excluded from gross income.” In other words, the forgiveness of the PPP loan will not result in taxable income to the borrower. ## **So what has changed?** The CARES Act was silent regarding the tax treatment of the expenses paid with PPP loan proceeds that were subsequently forgiven. Late yesterday, the Internal Revenue Service (“IRS”) issued guidance ([Notice 2020-32](https://www.irs.gov/pub/irs-drop/n-20-32.pdf)) regarding the tax treatment of expenses paid with PPP loan proceeds. The notice “clarifies” that: …no deduction is allowed under the Internal Revenue Code (Code) for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan…and the income associated with the forgiveness is excluded from gross income for purposes of the Code… This guidance means that expenses paid using PPP loan proceeds that are later forgiven will not be deductible for tax purposes. ## **How does this new guidance impact you?** Prior to the IRS clarification, you may have been expecting a tax “benefit” generated by the deductibility of expenses paid using PPP loan proceeds. Since the loan forgiveness is not taxable (and still is not taxable), deducting expenses paid with forgiven loan proceeds would have resulted in a net tax benefit because the expenses would have been deducted without recognizing any revenue (i.e., the normally taxable loan forgiveness income). Based on this new guidance (and assuming it is not subsequently changed), your company will still not recognize loan forgiveness income but will also not be able to deduct expenses paid with the forgiven loan proceeds. This guidance makes the PPP loan forgiveness tax neutral rather than resulting in a tax benefit. Please note that expenses paid with PPP loan proceeds that are not forgiven are still deductible. ## **So what should you do?** If you are working on modeling what loan forgiveness might look like for your company, we encourage you to make the best decisions for your business regarding your employees, compensation, benefits and allowable operating expenses and then to consider how to those decisions fit within the context of maximizing the value of your loan proceeds. While the guidance regarding PPP loans continues to evolve, we do not think that this guidance from the IRS should change the way that you think about your company’s use of its PPP loan proceeds. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** COVID, PPP, Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [2020 tax calendar](https://waradydavis.com/2020-tax-calendar/) **Published:** February 24, 2020 **Author:** Leslie Flinn **Content:** To help you make sure you don’t miss any important 2020 deadlines, we’ve provided this summary of when various tax-related forms, payments and other actions are due. Please review the calendar and call 847-267-9600 if you have any questions about the deadlines or would like assistance in meeting them. ![](https://waradydavis.com/wp-content/uploads/2020/02/taxcalendar2020.jpg "taxcalendar2020 | Warady & Davis LLP") ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Treasury, IRS unveil online application to help with Economic Impact Payments](https://waradydavis.com/treasury-irs-unveil-online-application-to-help-with-economic-impact-payments/) **Published:** April 15, 2020 **Author:** Leslie Flinn **Content:** Working with the Treasury Department, the Internal Revenue Service today unveiled the new [***Get My Payment***](https://www.irs.gov/coronavirus/get-my-payment) with features to let taxpayers check on their Economic Impact Payment date and update direct deposit information. With an initial round of more than 80 million Economic Impact Payments starting to hit bank accounts over the weekend and throughout this week, this new tool will help address key common questions. *Get My Payment* will show the projected date when a deposit has been scheduled, similar to the *“Where’s My Refund tool”* many taxpayers are already familiar with. *Get My Payment* also allows people a chance to provide their bank information. People who did not use direct deposit on their last tax return will be able to input information to receive the payment by direct deposit into their bank account, expediting receipt. *Get My Payment* is updated once daily, usually overnight. The IRS urges taxpayers to only use *Get My Payment* once a day given the large number of people receiving Economic Impact Payments. ### **How to use Get My Payment** **Available only on [IRS.gov](https://irs.gov)**, the online application is safe and secure to use. Taxpayers only need a few pieces of information to quickly obtain the status of their payment and, where needed, provide their bank account information. Having a copy of their most recent tax return can help speed the process. - **For taxpayers to track the status of their payment**, this feature will show taxpayers the payment amount, scheduled delivery date by direct deposit or paper check and if a payment hasn’t been scheduled. They will need to enter basic information including: - Social Security number - Date of birth, and - ailing address used on their tax return. - **Taxpayers needing to add their bank account information** to speed receipt of their payment will also need to provide the following additional information: - Their Adjusted Gross Income from their most recent tax return submitted, either 2019 or 2018 - The refund or amount owed from their latest filed tax return - *Bank account type, account and routing numbers* *Get My Payment* cannot update bank account information after an Economic Impact Payment has been scheduled for delivery. To help protect against potential fraud, the tool also does not allow people to change bank account information already on file with the IRS. ### **Don’t normally file a tax return? Additional IRS tool helps non-filers** In addition to Get My Payment, Treasury and IRS have a second a [new web tool](https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMjcsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMDA0MTUuMjAxODE2ODEiLCJ1cmwiOiJodHRwOi8vd3d3Lmlycy5nb3Yvbm9uZmlsZXJlaXAifQ.dszi0JsRkZaMzY3fNuGjOIwARNjVdCpTkAqV9riOLoA/br/77426473454-l) allowing quick registration for Economic Impact Payments for those who don’t normally file a tax return. ***The Non-filers: Enter Payment Info tool*,** developed in partnership between the IRS and the Free File Alliance, provides a free and easy option designed for people who don’t have a return filing obligation, including those with too little income to file. The [**new web** **tool**](https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMjgsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMDA0MTUuMjAxODE2ODEiLCJ1cmwiOiJodHRwOi8vd3d3Lmlycy5nb3Yvbm9uZmlsZXJlaXAifQ.E1vmJj6BrpqSVpB2Mrkoyy39voXq2sLO3LOs4cHTCAM/br/77426473454-l) is available only on [IRS.gov](https://irs.gov), and users should look for *Non-filers: Enter Payment Info Here* to take them directly to the tool. *Non-filers: Enter Payment Info* is designed for people who did not file a tax return for 2018 or 2019 and who don’t receive Social Security retirement, disability (SSDI), or survivor benefits and Railroad Retirement benefits. Additional information is available at **[https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here](https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMjksInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMDA0MTUuMjAxODE2ODEiLCJ1cmwiOiJodHRwczovL3d3dy5pcnMuZ292L2Nvcm9uYXZpcnVzL25vbi1maWxlcnMtZW50ZXItcGF5bWVudC1pbmZvLWhlcmUifQ.XvL5om07GQT_oi5x0xFLjzRHI18R5noGEtoW_OvMIDc/br/77426473454-l).** ### **No action needed by most taxpayers** Eligible taxpayers who filed tax returns for 2019 or 2018 will receive the payments automatically. Automatic payments will also go in the near future to those receiving Social Security retirement, or disability (SSDI), or survivor benefits and Railroad Retirement benefits. General information about the Economic Impact Payments is available on a special section of IRS.gov: **[https://www.irs.gov/coronavirus/economic-impact-payment-information-center](https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMzAsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMDA0MTUuMjAxODE2ODEiLCJ1cmwiOiJodHRwczovL3d3dy5pcnMuZ292L2Nvcm9uYXZpcnVzL2Vjb25vbWljLWltcGFjdC1wYXltZW50LWluZm9ybWF0aW9uLWNlbnRlciJ9.j84htJk4SaNf7SgevfglgWicjTZEd24hUAButQp5svs/br/77426473454-l).** ### **Watch out for scams related to Economic Impact Payments** The IRS urges taxpayers to be on the lookout for scams related to the Economic Impact Payments. To use the new app or get information, taxpayers should visit IRS.gov. People should watch out for scams using email, phone calls or texts related to the payments. Be careful and cautious: The IRS will not send unsolicited electronic communications asking people to open attachments, visit a website or share personal or financial information. **Remember, go directly and solely to [IRS.gov](https://irs.gov) for official information**. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** COVID, Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Tax refund delays? Where is your money and how to track it.](https://waradydavis.com/tax-refund-delays-where-is-your-money-and-how-to-track-it/) **Published:** July 22, 2021 **Author:** Leslie Flinn **Content:** **The IRS is behind schedule with processing income tax returns.** Some taxpayers have been waiting months to get their tax refunds due to an IRS backlog of around 35 million unprocessed returns. On top of challenges created by the pandemic, the IRS has been disbursing stimulus checks, adjusting returns and calculating other tax credits. And it just issued another round of tax refunds for overpayment of taxes on 2020 unemployment compensation. Live assistance by phone is a rare occurrence; many callers wait on hold or aren’t connected due to high call volumes. So, how can you check the status of your money online without calling the IRS? Also, Is it possible to check your tax refund on 2020 unemployment benefits the same way? And does an IRS TREAS 310 transaction mean your refund has been deposited? ## **What’s creating the delays in issuing tax refunds this year?** Because of the pandemic, the IRS ran at restricted capacity in 2020, which put a strain on its ability to process tax returns and created a backlog. The combination of the shutdown, three rounds of stimulus payments, challenges with paper-filed returns and the tasks related to implementing new tax laws and credits caused a “perfect storm,” according to a [National Taxpayer Advocate review](https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2021/06/JRC22_FullReport.pdf) of the 2021 filing season to Congress. The IRS is currently processing mail, tax returns, payments, refunds and correspondence, but limited resources continue to cause delays. The IRS said it’s also taking more time for 2020 tax returns that need review, such as determining recovery rebate credit amounts for the first and second stimulus checks — or figuring earned income tax credit and additional child tax credit amounts. **Here’s a list of reasons your income tax refund might be delayed:** - Your tax return has errors. - It’s incomplete. - Your refund is suspected of identity theft or fraud. - You filed for the earned income tax credit or additional child tax credit. - Your return needs further review. - Your return includes [Form 8379 ](https://www.irs.gov/pub/irs-pdf/f8379.pdf)(PDF), injured spouse allocation — this could take up to 14 weeks to process. If the delay is due to a necessary tax correction made to a recovery rebate credit, earned income tax or additional child tax credit claimed on your return, the IRS will send you an explanation. If there’s a problem that needs to be fixed, the IRS will first try to proceed without contacting you. However, if it needs any more information, it will write you a letter. ## **How do I track my federal or state income tax refund online?** To check the status of your 2020 income tax refund using the [IRS tracker tools](https://www.irs.gov/refunds), [you’ll need to give some information](https://waradydavis.com/submit-your-tax-info/): your Social Security number or Individual Taxpayer Identification Number, your filing status — single, married or head of household — and your refund amount in whole dollars, which you can find on your tax return. Also, make sure it’s been at least 24 hours (or up to four weeks if you mailed your return) before you start tracking your refund. Using the IRS tool **Where’s My Refund**, go to the **[Get Refund Status](https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp) page**, enter your SSN or ITIN, your filing status and your exact refund amount, then press **Submit**. If you entered your information correctly, you’ll be taken to a page that shows your refund status. If not, you may be asked to verify your personal tax data and try again. If all the information looks correct, you’ll need to enter the date you filed your taxes, along with whether you filed electronically or on paper. The IRS also has a mobile app called [**IRS2Go** ](https://www.irs.gov/newsroom/irs2goapp)that checks your tax refund status. The IRS updates the data in this tool overnight, so if you don’t see a status change after 24 hours or more, check back the following day. Once your return and refund are approved, you’ll receive a personalized date to expect your money. **Where’s My Refund** has information on the most recent tax refund that the IRS has on file within the past two years, so if you’re looking for return information from previous years you’ll need to contact the IRS for further help. ## **What’s an IRS TREAS 310 bank transaction?** If you receive your tax refund by direct deposit, you may see **IRS TREAS 310** for the transaction. The 310 code simply [identifies the transaction](https://www.fiscal.treasury.gov/eft/faq-tax-refund.html) as a refund from a filed tax return in the form of an electronic payment (direct deposit). This would also apply to those receiving an automatic adjustment on their tax return or a refund due to March legislation on tax-free unemployment benefits. You may also see **TAX REF** in the description field for a refund. If you received **IRS TREAS 310** combined with a **CHILD CTC** description, that means the money is for a [monthly advance payment for the enhanced child tax credit.](https://waradydavis.com/should-you-opt-out-of-advanced-child-tax-credit-payments/) If you see a **449** instead of **310**, it means your refund has been offset for delinquent debt. ## **How can I check on my refund for 2020 unemployment benefits?** If you think there’s a delay in adjusting your tax return and getting a refund for the 2020 unemployment compensation, it might still be too soon to worry. The American Rescue Plan Act of 2021, implemented in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations for individuals and married couples who earned less than $150,000. That means taxpayers who treated their unemployment compensation as income are eligible for a tax break and could get a hefty sum of money back. In late May, the IRS began automatically correcting returns for those who overpaid taxes on those benefits, and the process is supposed to continue throughout the summer for the 13 million taxpayers who might be eligible. According to the IRS, the first batch for [more than 2.8 million refunds](https://www.irs.gov/newsroom/irs-sending-more-than-2-point-8-million-refunds-to-those-who-already-paid-taxes-on-2020-unemployment-compensation) went out in early June, and another batch of [nearly 4 million refunds](https://www.irs.gov/newsroom/irs-readies-nearly-4-million-refunds-for-unemployment-compensation-overpayments) will go out mid-July. That means that millions more will still have to wait a bit longer. However, it’s not easy to track the status of that refund using the online tools above. To find out when the IRS processed your refund and for how much, we recommend locating your tax transcript by [logging in to your account](https://www.irs.gov/payments/view-your-tax-account) and viewing the transactions listed there. ## **What are these IRS tax refund status messages about?** Both IRS tools (online and mobile app) will show you one of three messages to explain your tax return status. - **Received**: The IRS now has your tax return and is working to process it. - **Approved**: The IRS has processed your return and confirmed the amount of your refund, if you’re owed one. - **Sent**: Your refund is now on its way to your bank via direct deposit or as a paper check sent to your mailbox. ### **Can I call the IRS to see what’s holding up my refund?** Even though the chances of getting live assistance are slim, the IRS says you should only call if it’s been 21 days or more since you filed your taxes online, or if the [Where’s My Refund](https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp) tool tells you to contact the IRS. Here’s the number to call: **800-829-1040.** ### **Will my refund come by mail instead of direct deposit?** There are a couple of reasons that your refund would be mailed to you. Your money can only be electronically deposited into a bank account with your name, your spouse’s name or a joint account. If that’s not the reason, you may be getting multiple refund checks, and the IRS can only direct deposit up to three refunds to one account. Additional refunds must be mailed. Also, your bank may reject the deposit and this would be the IRS’ next best way to refund your money quickly. It’s also important to note that for refunds like the child tax credit, direct deposit isn’t always automatic. Some are stating that like stimulus checks, the first payments for the child tax credit are being mailed. Just in case, parents should sign in to the IRS site and portal to check that it has and is using their banking information. If not, parents can add it for the next payment in August. ## Questions ***Please contact your Warady & Davis LLP advisor with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ##### **SOURCE: IRS and CNET** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Tax **Tags:** 2020 IRS refund delays, Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act of 2021, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Irs delays 2021, IRS Refund Delays, Northshore CPA, Refund Delays, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA, Where's my refund? --- ### [Relief from not making employment tax deposits due to COVID-19 tax credits](https://waradydavis.com/relief-from-not-making-employment-tax-deposits-due-to-covid-19-tax-credits/) **Published:** April 13, 2020 **Author:** Leslie Flinn **Content:** The IRS has issued guidance providing relief from failure to make employment tax deposits for employers that are entitled to the refundable tax credits provided under two laws passed in response to the coronavirus (COVID-19) pandemic. The two laws are the Families First Coronavirus Response Act, which was signed on March 18, 2020, and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, which was signed on March 27, 2020. ### **Employment tax penalty basics** The tax code imposes a penalty for any failure to deposit amounts as required on the date prescribed, unless such failure is due to reasonable cause rather than willful neglect. An employer’s failure to deposit certain federal employment taxes, including deposits of withheld income taxes and taxes under the Federal Insurance Contributions Act (FICA) is generally subject to a penalty. ### **COVID-19 relief credits** Employers paying qualified sick leave wages and qualified family leave wages required by the Families First Act, as well as qualified health plan expenses allocable to qualified leave wages, are eligible for refundable tax credits under the Families First Act. Specifically, provisions of the Families First Act provide a refundable tax credit against an employer’s share of the Social Security portion of FICA tax for each calendar quarter, in an amount equal to 100% of qualified leave wages paid by the employer (plus qualified health plan expenses with respect to that calendar quarter). Additionally, under the CARES Act, certain employers are also allowed a refundable tax credit under the CARES Act of up to 50% of the qualified wages, including allocable qualified health expenses if they are experiencing: - A full or partial business suspension due to orders from governmental authorities due to COVID-19, or - A specified decline in business. This credit is limited to $10,000 per employee over all calendar quarters combined. An employer paying qualified leave wages or qualified retention wages can seek an advance payment of the related tax credits by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19. ### **Available relief** The Families First Act and the CARES Act waive the penalty for failure to deposit the employer share of Social Security tax in anticipation of the allowance of the refundable tax credits allowed under the two laws. IRS Notice 2020-22 provides that an employer won’t be subject to a penalty for failing to deposit employment taxes related to qualified leave wages or qualified retention wages in a calendar quarter if certain requirements are met. Contact us for more information about whether you can take advantage of this relief. ### **More breaking news** Be aware the IRS also just extended more federal tax deadlines. The extension, detailed in Notice 2020-23, involves a variety of tax form filings and payment obligations due between April 1 and July 15. It includes estimated tax payments due June 15 and the deadline to claim refunds from 2016. The extended deadlines cover individuals, estates, corporations and others. In addition, the guidance suspends associated interest, additions to tax, and penalties for late filing or late payments until July 15, 2020. Previously, the IRS postponed the due dates for certain federal income tax payments. The new guidance expands on the filing and payment relief. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [CARES ACT changes retirement plan and charitable contribution rules](https://waradydavis.com/cares-act-changes-retirement-plan-and-charitable-contribution-rules/) **Published:** April 6, 2020 **Author:** Leslie Flinn **Content:** As we all try to keep ourselves, our loved ones, and our communities safe from the coronavirus (COVID-19) pandemic, you may be wondering about some of the recent tax changes that were part of the CARES Act. The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains a variety of relief, notably the **“economic impact payments”** that will be made to people under a certain income threshold. But the law also makes some changes to retirement plan rules and provides a new tax break for people who contribute to charity. ### **Waiver of 10% early distribution penalty** IRAs and employer sponsored retirement plans are established to be long-term retirement planning accounts. As such, the IRS imposes a penalty tax of an additional 10% if funds are distributed before reaching age 59½. (However, there are some exceptions to this rule.) Under the CARES Act, the additional 10% tax on early distributions from IRAs and defined contribution plans (such as 401(k) plans) is waived for distributions made between January 1 and December 31, 2020 by a person who (or whose family) is infected with COVID-19 or is economically harmed by it. Penalty-free distributions are limited to $100,000, and may, subject to guidelines, be re-contributed to the plan or IRA. Income arising from the distributions is spread out over three years unless the employee elects to turn down the spread-out. Employers may amend defined contribution plans to provide for these distributions. Additionally, defined contribution plans are permitted additional flexibility in the amount and repayment terms of loans to employees who are qualified individuals. ### **Waiver of required distribution rules** Depending on when you were born, you generally must begin taking annual required minimum distributions (RMDs) from tax-favored retirement accounts — including traditional IRAs, SEP accounts and 401(k)s — when you reach age 70½ or 72. These distributions also are subject to federal and state income taxes. (However, you don’t need to take RMDs from Roth IRAs.) Under the CARES Act, RMDs that otherwise would have to be made in 2020 from defined contribution plans and IRAs are waived. This includes distributions that would have been required by April 1, 2020, due to the account owner’s having turned age 70½ in 2019. ### **New charitable deduction tax breaks** The CARES Act makes significant liberalizations to the rules governing charitable deductions including: - Individuals can claim a $300 “above-the-line” deduction for cash contributions made, generally, to public charities in 2020. This rule means that taxpayers claiming the standard deduction and not itemizing deductions can claim a limited charitable deduction. - The limit on charitable deductions for individuals that is generally 60% of modified adjusted gross income (the contribution base) doesn’t apply to cash contributions made, generally, to public charities in 2020. Instead, an individual’s eligible contributions, reduced by other contributions, can be as much as 100% of the contribution base. No connection between the contributions and COVID-19 is required. ### **Far beyond** The CARES Act goes far beyond what is described here. The new law contains many different types of tax and financial relief measures meant to help individuals and businesses cope with COVID-19 fallout. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [What's in the CARES Act for Nonprofits?](https://waradydavis.com/whats-in-the-cares-act-nonprofits/) **Published:** March 28, 2020 **Author:** Leslie Flinn **Content:** ## **Coronavirus Aid, Relief, and Economic Security Act (CARES):** What You Need to Know for Your Nonprofit #### The CARES Act includes a number of provisions of relevance to non-profit organizations, including: (1) expanded eligibility for non-profits to apply for Small Business Administration (SBA) loans; (2) opportunities for larger non-profits to apply for relief under a new program at the Department of Treasury; (3) expanded unemployment benefits to employees who lose their jobs due to COVID-19; and (4) tax incentives for employers to retain employees during the pandemic. #### **Nonprofit Eligibility for Small Business Loans and Grants (Paycheck Protection Program**. The CARES Act provides $349 billion for the new “Paycheck Protection Program” (PPP). **NOTE:** The PPP is open only to non-profit organizations tax-exempt under Section 501(c)(3) or veterans organization tax-exempt under Section 501(c)(19) of the US Internal Revenue Code. All other non-profit organizations are ineligible to participate. - **Date Eligibility:** Available to entities that existed on February 15, 2020 and had paid employees or paid independent contractors. - **Nonprofit Eligibility:** The PPP is available to any business that has already qualified as a “small business concern,” as well as businesses, 501(c)(3) charities, 501(c)(19) veterans organizations, and tribal business concerns with 500 or fewer employees, counting each individual – full time or part time (not including Full Time Equivalents \[FTEs\]). The law does not disqualify nonprofits that are eligible for payments under Title XIX of the Social Security Act (Medicaid), but does require that employees of affiliated nonprofits may be counted toward the 500 employee cap, depending on the degree of control of the parent organization. - **Personal Guarantee:** No personal guarantee or collateral will be required in securing a loan. - **Loan Amount:** The lesser of $10 million or 2.5 times the average total monthly payroll (including benefits) costs from the one-year period prior to the date of application. - **Loan Use:** Loan funds can be used to make payroll and associated costs, including health and retirement benefits, facilities costs, and debt service. - **Can these loans be forgiven?** Yes, nonprofits that take out these loans can get some or all of their loans forgiven. Generally speaking, as long as employers continue paying employees at normal levels during the eight weeks following the origination of the loan, then the amount they spent on payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments can be combined and that portion of the loan will be forgiven. This, in essence, turns the loan into a general operating support grant. **Section 1106**. - **Impact on other relief provided by stimulus package**. By participating in the PPP, however, otherwise eligible entities may become ineligible for other relief provided in the Act. For example, an employer who receives a PPP loan is ineligible for the employee retention credit (detailed below). In addition, as explained below, there are consequences for having the PPP loan forgiven. However, the CARES Act does allow an eligible entity to receive both a PPP loan and an economic injury disaster loan (EIDL) from the SBA under certain circumstances, such as if the EIDL is made before the PPP loans are available and for a purpose other than covering payroll costs. #### **Changes to the SBA’s Economic Injury Disaster Loans (EIDLs).** Another important aspect of the CARES Act for small businesses is that it expands eligibility for the SBA’s **[Economic Injury Disaster Loans (EIDLs)](https://www.sba.gov/funding-programs/disaster-assistance).** In early March, the SBA’s disaster loan program was extended to all small businesses affected by COVID-19, but the CARES Act opens this program up further and makes it easier to apply. **These changes include:** - - EIDLs are now also available to Tribal businesses, cooperatives, and ESOPs with fewer than 500 employees. They are also available to all non-profit organizations, including 501(c)(6)s, and to individuals operating as sole proprietors or independent contractors. - EIDLs can be approved by the SBA based solely on an applicant’s credit score. - EIDLs that are smaller than $200,000 can be approved without a personal guarantee. - Borrowers can receive a $10,000 emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses. #### **Can a nonprofit get an EIDL and a Paycheck Protection Program loan?** Yes, nonprofits can get both an EIDL and a Paycheck Protection Program loan as long as they don’t pay for the same expenses. However, be sure to check with your financial advisor or lender before taking both types of loans if you are not sure of the specifics. #### **Self-Funded Nonprofits and Unemployment.** Only reimburses self-funded nonprofits for half of the costs of benefits provided to their laid-off employees. Some charitable nonprofits **pay state unemployment taxes (SUTA)** like other businesses. These organizations pay quarterly taxes based on their “experience rating,” a formula based on the recent history of unemployment claims by their former employees. Charitable nonprofits have the option of **electing of self-insuring** rather than paying SUTA. Nonprofits that elect to take this option are required to reimburse their state unemployment insurance trust funds for the amount of benefits their terminated or laid off employees claim. **Section 2103.** #### **Charitable Giving Incentive** Creates a new above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300. The incentive applies to cash contributions made in 2020 and can be claimed on tax forms next year. **Section 2204**. The law also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent. For corporations, the law raises the annual limit from 10 percent to 25 percent. Food donations from corporations would be available to 25 percent, up from the current 15 percent cap. **Section 2205**. #### **Employee Retention Payroll Tax Credit** Creates a refundable payroll tax credit of up to $5,000 for each employee on the payroll when certain conditions are met. The entity had to be an ongoing concern at the beginning of 2020, experienced a whole or partial shutdown, and had seen a drop in revenue of at least 50 percent in the first quarter compared to the first quarter of 2019. The availability of the credit would continue each quarter until the organization’s revenue exceeds 80 percent of the same quarter in 2019. For tax-exempt organizations, the entity’s whole operations must be taken into account when determining eligibility. Notably, employers receiving Paycheck Protection Program loans would not be eligible for these credits. **Section 2301**. #### **Delayed Payment of Payroll Taxes** Allows employers to delay payment of the employer portion payroll taxes in 2020; payable in equal halves at the end of 2021 and 2022. **Section 2301**. #### **Loan Support for Larger Entities** CARES also calls for the creation of a loan and loan guarantee program via a new Industry Stabilization Fund specifically targeting “mid-size” organizations, defined as having between 500 and 10,000 employees. This provision, unlike the emergency SBA loan program, does not provide loan forgiveness, but does mandate an interest rate of no higher than two percent and would not accrue interest or require repayments for the first six months. Nonprofits accepting the mid-size business loans must retain or rehire at least 90 percent of their staff at full compensation. **Section 4003**. [**VISIT HERE**](https://www.congress.gov/116/bills/hr748/BILLS-116hr748eas.pdf) to download entire Act, H.R. 758, from Congress.gov (854 pages) ## **Changes to Paid Sick Leave and Paid FMLA Leave from the Families First Coronavirus Response Act** The CARES Act makes small changes to the [**Families First Coronavirus Response Act (FFCRA**)](https://waradydavis.com/covid-19-financial-relief/) in regards to **paid sick leave, paid FMLA** and more. These changes include: 1. Paid family and medical leave (FMLA) under the FFCRA is capped at $200 per day and $10,000 total per employee. 2. Paid sick leave under the FFCRA is capped at $511 per day and $5,110 total per employee. This amount drops to $200 per day and $2000 total for sick leave taken by an employee in order to care for a family member in quarantine or care for a child whose school has closed. 3. Workers that were laid off after March 1, 2020, but then rehired, are eligible for paid FMLA leave provisions described in the FFCRA immediately instead of needing to be an employee for 30 days. 4. Businesses and nonprofits can keep money that they would have deposited for payroll taxes in anticipation of refunds from the Treasury Department for paid sick leave and paid FMLA leave outlined by the FFCRA, including amounts that would have been refunded later. ## **Additional Provisions** The Act also calls for large infusions of cash to the following sectors: 1. 1. 1. **$150 Action for a state, tribal, and local Coronavirus Relief fund** 2. **$130 Action for hospitals** 3. **$30 Action for education** 4. **$25 Action for transit systems** ## **We Are Here to Help** We will continue to issue information on the CARES Act and other available relief for nonprofits. Also, look for upcoming COVID-19 related webinars. Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, chicago accounting nonprofit, chicago audit nonprofit, chicago cpa nonprofit, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, nonprofit cares, Northshore CPA, not-for-profit cares, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Demystifying Plan Audits - IRS Releases Updated Guidance](https://waradydavis.com/demystifying-plan-audits-irs-releases-updated-guidance/) **Published:** April 1, 2015 **Author:** WaradyDavis **Excerpt:** To clarify its plan audit process, the IRS recently updated the guidance it offers to plan sponsors. Even though the guidance is fairly general, it’s helpful for all plan administrators and sponsors to review. Let’s take a look at some common questions regarding plan audits. **Content:** To clarify its plan audit process, the IRS recently updated the guidance it offers to plan sponsors. Even though the guidance is fairly general, it’s helpful for all plan administrators and sponsors to review. Let’s take a look at some common questions regarding plan audits. ## Who gets audited? The IRS chooses plans for audit in one of four ways: 1. As part of a special IRS initiative focusing on a specific issue, 2. On a tip-off, 3. After discovering questionable or unusual items on a plan’s return, or 4. By random selection. The IRS says audits aren’t merely a game of “gotcha.” The purpose is to develop corrective strategies and help plan sponsors execute these strategies. ## How can you prepare? If you’re notified that the IRS wants to audit your plan, the examiner generally will give you a list of documents to review before the site visit. Similarly, after the on-site examination, the IRS may ask you to produce additional documents. **Remember:** You don’t have to go it alone. As with a tax audit, it’s in your best interest to be represented by a plan expert. Make sure that you authorize this person to act on your behalf in writing, using the required IRS form (Form 2848, “Power of Attorney and Declaration of Representative”), and that he or she is licensed to practice before the IRS. ## What does the IRS look for? The IRS will likely examine one of 10 plan operational areas. Questions to ask about your plan include: 1. Are all eligible employees properly participating? 2. Is the plan properly crediting service and vesting in the plan? 3. Do plan contributions, benefits, rights or features improperly favor highly compensated employees and thus discriminate against non-highly compensated employees? 4. Have minimum contributions and benefits and accelerated vesting been provided to meet top-heavy requirements? 5. Are all contributions and benefits within applicable limits? 6. Are contributions correct and made timely, and are deductions within applicable limits? 7. Has the plan correctly calculated, properly made, and timely and accurately reported distributions? 8. Is the trust operating for the exclusive benefit of participants and according to fiduciary standards? 9. Do the plan document and trust meet current tax law? 10. Did the plan timely and accurately file federal returns and reports? The IRS plan audit can cover any of these topics. Now is the time to review your plan to make sure it complies with the questions above. If you receive a notice of an IRS plan audit, have the requested documents available on the examiner’s arrival. If you need additional time to gather the requested data, contact the IRS as soon as possible to request an extension of time. At the conclusion of a plan examination, the examiner can instruct you to make operational changes to the plan, dictate a remedy to an alleged problem, or, in the worst-case scenario, disqualify your plan. Remember that you can appeal any IRS findings. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Perspectives on Employee Benefits --- ### [Shirtsleeves to Shirtsleeves in Three Generations](https://waradydavis.com/shirtsleeves-shirtsleeves-three-generations/) **Published:** November 27, 2020 **Author:** Leslie Flinn **Excerpt:** Learn more about the importance of estate planning and strategies for a successful transfer of wealth – Fort Worth Estate Planning **Content:** The Scottish proverb “shirtsleeves to shirtsleeves in three generations” describes the cycle of families starting with little means who build their wealth through hard work, but by the time great-grandchildren are in charge, the family is back to where they started, with nothing. Many wealthy families are concerned about their heirs’ capability to manage the money and business assets they will inherit. This is especially true among first-generation wealth builders. Their concerns are backed up with research that finds 70% of family wealth is lost by the second generation, and 90% of family wealth is lost by the third generation. US Trust surveyed high net-worth individuals with at least $3 million in investable assets to see how they prepare the next generation for managing significant wealth. “Looking at the numbers, 78% feel the next generation is not financially responsible enough to handle inheritance,” says Chris Heilmann, U.S. Trust’s Chief Fiduciary Executive. Sixty-four percent of survey participants say they have shared little or nothing about their financial matters with their children. The survey highlights a variety of reasons for the lack of communication: talking about money is taboo, they do not want their children to become lazy and unmotivated, and they fear the information will be shared beyond the family. The surveys and statistics are discouraging, but your family can beat the odds. ## Some strategies to avoid the three-generation cycle are below. ### Communicate with your Heirs You may think you are protecting your kids by not sharing financial information with them, but the result is ignorant children who grow up to become ignorant adults. Give your kids the advantage of financial literacy so they can make smart decisions. Many financial institutions and educators, such as Dave Ramsey, offer specialized courses and programs designed to help heirs understand the opportunity and responsibility of inheritance. Don’t leave out the grandkids, you can never be too young to learn about the importance of smart financial decisions. ### Discuss the Estate Plan The mystery surrounding an estate plan can cause quite a stir among the family. If you and your heirs are committed to full transparency and comprehensive planning, then you should discuss the 500-pound gorilla: the will. Parents and grandparents who communicate the what and why of their will in a group setting allow for open dialogue to occur before the silence of death makes clarifications or adjustments impossible. It is better to overcome the hesitation of discussing these issues than to have a legal war that drains the assets and destroys relationships when the patriarch or matriarch is no longer around. ### Share Your Vision A successful transfer of wealth requires a shared vision between generations. Your heirs need to learn about how you built the wealth, the values you hold close, and what you expect of them. The stories of family history, opportunities for growth, and acceptance of responsibilities which accompanies the wealth will set your family on the path to success beyond the three-generation curse. **Categories:** Estate Planning, Financial Planning, Wealth **Tags:** estate planning, financial planning, high-net worth families, inheriting assets, strategies, wealth, will --- ### [Don’t Overlook New-for-2016 Enhancements to Certain Tax Incentives](https://waradydavis.com/new-for-2016-tax-incentives/) **Published:** May 1, 2016 **Author:** WaradyDavis **Excerpt:** Passage of the “Tax Extenders” undeniably provided one of the major headlines – and tax benefits – to come out of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), signed into law on December 18, 2015. Although these tax extenders (over 50 of them in all) were largely made retroactive to January 1, 2015, valuable enhancements to some of these tax benefits were not made retroactive. Rather, these enhancements were made effective only starting January 1, 2016. As a result, individuals and businesses alike should treat these enhancements as brand-new tax breaks, taking a close look at whether one or several of them may apply. Following are items to consider as 2016 tax planning gets underway now that tax filing-season has ended. **Content:** Passage of the “Tax Extenders” undeniably provided one of the major headlines – and tax benefits – to come out of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), signed into law on December 18, 2015. Although these tax extenders (over 50 of them in all) were largely made retroactive to January 1, 2015, valuable enhancements to some of these tax benefits were not made retroactive. Rather, these enhancements were made effective only starting January 1, 2016. As a result, individuals and businesses alike should treat these enhancements as brand-new tax breaks, taking a close look at whether one or several of them may apply. Here’s a list to consider as 2016 tax planning gets underway now that tax filing-season has ended: **Section 179 expensing.** The PATH Act permanently extended the Code Section 179 dollar of investment limitations at the higher $500,000 and $2 million, levels, which are adjusted for inflation for tax years beginning after 2015 (it is $500,000 and $2,010,000 for 2016). In addition, starting only in 2016, the $250,000 limitation on the amount of section 179 property that can be attributable to qualified real property has been eliminated. Further, for tax years beginning after 2015, the Code Section 179 expense deduction is now allowed for air conditioning and heating units. **Bonus depreciation.** In addition to the big news that the PATH Act extended Code Section 168(k) bonus depreciation to apply to most qualifying property placed in service before January 1, 2020, it made a number of modifications, including: - replacement of the bonus allowance for qualified leasehold improvement property with a bonus allowance for additions and improvements to the interior of any nonresidential real property, effective for property placed in service after 2015; and - allowance to farmers of a 50 percent deduction in place of bonus depreciation on certain trees, vines, and plants in the year of planting or grafting rather than the placed-in-service year, effective for planting and grafting after 2015. **Section 181 expensing.** Special Section 181 expensing for qualified film and television productions is extended for two years to apply to qualified film and television productions commencing before January 1, 2017. However, the expensing rule is also expanded to apply to qualified live theatrical productions commencing after December 31, 2015. **WOTC.** The Work Opportunity Tax Credit (WOTC) has been extended five years through December 31, 2019. In addition, the credit has been expanded and made available to employers who hire individuals who are qualified long-term unemployment recipients who begin work for the employer after December 31, 2015. **Research credit.** The PATH Act permanently extended the research credit that applies to amounts paid or incurred after December 31, 2014. However, a new allowance of the research credit against alternative minimum tax liability applies to credits determined for tax years beginning after December 31, 2015. In addition, a new payroll tax credit associated with the research credit applies only to tax years beginning after December 31, 2015 (Act Sec. 121(d) (3) of the PATH Act). **Military differential pay.** The PATH Act extended the employer tax credit for differential wage payments made to qualified employees on active military duty has been made permanent and applies to payments made after December 31, 2014. Effective only for tax years beginning after December 31, 2015, however, the credit may be claimed by all employers regardless of the average number of individuals employed during the tax year. The credit is also no longer limited to eligible small business employers with less than 50 employees. **Teachers’ classroom expense deduction.** The PATH Act permanently extended the above-the-line deduction for elementary and secondary school teachers’ classroom expenses. Additionally, for tax years after 2015, the Act includes “professional development expenses” within the scope of the deduction. These expenses include courses related to the curriculum in which the educator provides instruction. **Nonbusiness energy property credit.** The PATH Act extended the nonrefundable nonbusiness energy property credit allowed to individuals under Code Sec. 25C for two years, making it available for qualified energy improvements and property placed in service before January 1, 2017. For property placed in service after December 31, 2015, the standards for energy efficient building envelope components are modified to meet new conservation criteria. *If you have any questions about these new “extenders,” please contact Warady & Davis LLP at (847) 267-9600.* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [Did you make a financial resolution in 2017? Here are some tips to keep you on track](https://waradydavis.com/did-you-make-a-financial-resolution-in-2017-here-are-some-tips-to-keep-you-on-track/) **Published:** February 20, 2017 **Author:** WaradyDavis **Excerpt:** When it comes to your financial resolutions this year (and beyond), use these tips to actually keep and reach your goals. **Content:** Submitted By: [Ronald S. Zweig](https://waradydavis.com/staff/ronald-s-zweig-cpa-partner/), Registered Investment Advisor, CPA, Partner, Warady & Davis LLP. SJ Financial Advisors. When it comes to your financial resolutions this year (and beyond), use these tips to actually keep and reach your goals. ## Turn Dream into Goals Dreams are something the heart wants, and the mind can envision. Whether that’s opening your own business, retiring early, taking a trip around the world, or even just being able to pay for part of your kids’ college tuition. The hard part is taking those big ideas and transforming them into actionable goals. Financial goals operate like any other goal in the way that they benefit greatly from being written and planned at SMART: specific, measurable, attainable or agreed-upon, realistic, and time-based. Taking a big dream and breaking it down into something that features clear-cut amounts and is tied to a certain time can be difficult, but that’s the purpose of SMART goals—to make you think with intention about your goals before agreeing to them. Take a blank piece of paper and write out a few versions of the same goal, and then talk it over with trusted confidants or other stakeholders (such as a spouse or business partner) before solidifying the goal(s) you’re going to stick to. ### Google It Want to make a financial goal but aren’t quite sure where even to start? Surf the internet to get some crowd-sourced ideas and then adapt them to your personal situation. Google “financial resolutions” or “ideas for financial goals” to get your brainstorm going. You can also look at your social media network, asking your digital community for examples of their personal finance intentions. ### Baby Steps If you’re saving for something big, like a down payment on a house or want to completely pay off a maxed-out credit card, those are huge numbers at face value. But, if you set a miniature step, such as saving $125 a week that you will then put toward the payment or bill, it becomes more manageable. After even six months, the weekly savings will have added up to a significant number that will cut away at the greater goal. Set a plan for how you can save that $125 a week by reasonably cutting down on extraneous expenses (coffee shop lattes, shoe shopping, sports tickets) more often than you have in the past. ### Get a Personal Trainer for your Money When we make exercise and weight loss goals, one of the first things we should do is invest in a personal trainer—someone to hold us accountable for our goals. Consider a financial advisor your guru to get your portfolio in shape. If you already have such an advisor, get back in regular contact with them. Set up an appointment to clue your advisor in on your annual resolutions and set a plan to reach your goals together. If you don’t already have a financial advisor in your contact list – that’s your first step. Not sure where to even find a financial advisor? Ask your advisors, close friends, family, and colleagues whom they trust with their money. ### Regular Review Don’t wait until December 2017 to refocus and reevaluate. Set a calendar reminder to regularly review your financial goals in increments that make sense for your monetary goals (whether that’s once a week, month, or quarter). During these review sessions (that should sometimes include your financial advisor), be thorough and honest with your progress and setbacks. ### Slip-Ups Will Happen You’re not a perfect person, and it’s wrong to assume that just because you’ve set a financial goal, the journey to that goal will be without a few pitfalls. If saving, investing, and reaching financial goals were easy, you likely would have already done so. And failure is likely to happen. Say your goal is to pay off all credit card debt over the next 10 months, but you end up spending extra cash flow on a spontaneous trip. It’s okay, but don’t beat yourself after the fact or think that because of one diversion, your whole goal is kaput. Derek Tharp, a financial planner at Conscious Capital Inc., told Forbes in an interview that “temptation bundling” can be a good way to incentivize yourself to keep your difficult monetary resolutions. For instance, say you want to pay off your student loans at a better rate than in years past. Set up your automatic payments to meet your goal rate and tell yourself that you will visit your favorite, pricey restaurant for a nice dinner only after you reduce your base loan amount by a 40%. ### Embrace Technology Your smartphone and laptop are always nearby, so use them! There’s a wealth of financial apps out there to help you set and track your financial progress toward goals. For a low monthly fee or even for free, you can have a personal budget tracker and analyst in your pocket that can assist in budgeting and investing daily. Turn the notifications on, and you’ll quickly notice that financial budgeting and savings apps are a solid way to keep your goals top of mind well after the new year has passed. ### Resources 1. [How to Set, And Keep, Your Personal-Finance Resolutions](https://www.wsj.com/articles/how-to-set-and-keep-your-personal-finance-resolutions-1483185601) 2. [How to Create a Financial Plan Like a Pro](https://money.usnews.com/money/personal-finance/family-finance/articles/how-to-create-a-financial-plan-like-a-pro) 3. [Smart Goals](https://www.projectsmart.co.uk/smart-goals.php) 4. [Top 7 Apps for Putting Short-Term Financial Goals in Motion](https://www.americanbanker.com/news/bank-technology/top-7-apps-for-putting-short-term-financial-goals-in-motion-1076624-1.html) 5. [5 Ways to Meet Your Financial Goals in 2014](https://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2014/01/09/5-ways-to-meet-your-financial-goals-in-2014) 6. [9 smart things to do with your annual bonus](https://www.bankrate.com/finance/savings/refocusing-on-financial-goals.aspx) ##### **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal, or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business, or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [Treasury to review/re-evaluate tax regulations](https://waradydavis.com/treasury-to-reviewre-evaluate-tax-regulations/) **Published:** May 1, 2017 **Author:** WaradyDavis **Excerpt:** The Treasury Department is to undertake a review and re-evaluation of tax regulations issued by the IRS since January 1, 2016. President Trump signed an Executive Order 13789 (“Identifying and Reducing Tax Regulatory Burdens”) ordering this action in later April, 2017. Following its review and re-evaluation, the Treasury Department will make recommendations. **Content:** The Treasury Department is to undertake a review and re-evaluation of tax regulations issued by the IRS since January 1, 2016. President Trump signed an Executive Order 13789 (“Identifying and Reducing Tax Regulatory Burdens”) ordering this action in later April, 2017. Following its review and re-evaluation, the Treasury Department will make recommendations. ## **Tax regulations** The IRS typically issues many regulations every year. Some regulations are permanent, others are temporary, and others are proposed. IRS regulations touch every taxpayer, including individuals, businesses, and tax-exempt organizations. When the IRS proposes a regulation, it invites public comments. The federal government maintains a website where individuals can review proposed regulations and make comments. Frequently, the IRS will hold a hearing at which stakeholders and taxpayers can share their concerns about proposed regulations. All regulatory documents are published in the Federal Register. ## **President’s instructions** Under President Trump’s April Executive Order, the Treasury Department is to identity tax regulations that: - Impose an undue financial burden on taxpayers; - Add undue complexity to federal tax laws; or - Exceed the statutory authority of the IRS. The Treasury Department is to make an initial report within 60 days. After that, Treasury will recommend what actions to take, which may include delaying, suspending or modifying regulations. The second report is due within 150 days. We will keep you posted of developments. ## **IRS guidance plan** At the same time the President announced his Executive Order, the IRS requested public input on its new **Priority Guidance Plan**. The Priority Guidance Plan identifies guidance projects that are high on the agency’s agenda. Generally, these projects cover a wide range of taxpayers and tax administration. In its announcement, the IRS noted that “input is of particular importance because of Executive Order 13771.” Executive Order 13771 was signed by President Trump in January. The Executive Order generally instructs federal agencies to remove two existing regulations for every new regulation proposed. Since January, the pace of IRS guidance has slowed. Indeed, the IRS has not issued any regulations since January 20, 2017. The IRS has posted new frequently asked questions (FAQs) and has updated some existing FAQs on its website. The agency also has released several revenue procedures. These are official statements of a particular procedure. Additionally, the IRS has continued to issue private letter rulings. IRS Chief Counsel has posted advice memoranda. IRS officials also continue to testify at Congressional hearings and speak at trade and industry events. IRS Commissioner John Koskinen has characterized these items as “sub-regulatory” guidance. They appear to be outside the scope of Executive Order 13771. Additionally, a federal agency may determine that a regulation is outside the scope of the Executive Order. The U.S. Department of Health and Human Services (HHS) made this determination for regulations under the Affordable Care Act released in April. ### ***If you have any questions about the President’s executive orders, please contact your Warady & Davis LLP advisor at (847) 267-9600.*** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [New ACA Forms Debut for 2016 Tax Filing Season](https://waradydavis.com/sample-publication-5/) **Published:** March 1, 2016 **Author:** WaradyDavis **Excerpt:** In 2016, many individuals will be receiving new information returns from their employers and/or health insurance providers. The information returns reflect new reporting requirements put in place by the Affordable Care Act. **Content:** As the 2016 filing season gets underway, many individuals will be receiving new information returns from their employers and/or health insurance providers. The information returns reflect new reporting requirements put in place by the Affordable Care Act. Some taxpayers will need to wait to file their returns until they receive their information returns, but most taxpayers will not. **Background** The ACA generally requires certain employers, insurance providers and the Health Insurance Marketplaces to provide statements to covered individuals about their health insurance coverage. Under the ACA, all individuals must carry minimum essential health insurance coverage or make a shared responsibility payment, unless exempt. Individuals who obtain coverage through the Health Insurance Marketplace may qualify for a special tax credit, the Code Sec. 36B credit, to help offset the cost of coverage **Forms** The IRS has developed new forms for ACA reporting - Form 1095-A, Health Insurance Marketplace Statement, the Health Insurance Marketplaces provide Form 1095-A to individuals enrolled in coverage, with information about the coverage, who was covered, and when. - Form 1095-B, Health Coverage, health insurance providers (for example, health insurance companies) send this form to individuals they cover, with information about who was covered and when. - Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, Certain employers send this form to certain employees, with information about what coverage the employer offered. Generally these are “applicable large employers.” This is the second year that the Health Insurance Marketplaces have provided Forms 1095-A to enrollees. However, this is the first year that health insurance providers and certain employers have furnished Forms 1095-B and 1095-C to covered individuals. **Deadlines** Health Insurance Marketplaces must provide enrollees with Form 1095-A by February 1, 2016. This year, the IRS has given health insurance providers and certain employers more time to furnish Forms 1095-B and 1095-C to covered individuals. The deadline to provide Forms 1095-B and 1095-C is March 31, 2016. Forms 1095-A, 1095-B and 1095-C will be mailed to recipients or provided electronically if the recipient has agreed to electronic delivery. Health insurance providers and certain employers also must file information returns with the IRS (Forms 1094-B and 1094-C) but those forms have different deadlines. **Returns** The IRS has instructed taxpayers who have coverage through the Health Insurance Marketplaces to wait to file their 2015 tax return until they receive Form 1095-A. Many enrollees in Marketplace coverage have received advance payments of the Code Sec. 36B credit and will need to reconcile the advance payments when they file their 2015 tax returns. These individuals will use the information on Form 1095-A to complete a separate form (Form 8962, Premium Tax Credit). Form 1095-A is not attached to a taxpayer’s return but retained for his or her records. As always, our office is here to provide assistance. Individuals with employer-provided health insurance and other qualifying minimum essential health care coverage do not need to wait to file their 2015 tax return until they receive Forms 1095-B or 1095-C, the IRS has instructed. While the information on Forms 1095-B and 1095-C may assist in preparation of a tax return, they are not required, the IRS explained. Individuals may use other forms of documentation, in lieu of the information on Forms 1095-B and 1095-C, to show insurance coverage, such as insurance cards or payroll statements reflecting health insurance deductions, the IRS further explained. Like Form 1095-A, Forms 1095-B and 1095-C are not attached to the taxpayer’s return but are retained for his or her records. If you have any questions about Forms 1095-A, 1095-B or 1095-C and the information they report, please contact us at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [Virtual currency lands in the IRS’s crosshairs](https://waradydavis.com/virtual-currency-lands-in-the-irss-crosshairs/) **Published:** June 27, 2023 **Author:** Leslie Flinn **Excerpt:** If you do business with virtual currency, it’s time to bone up on related tax requirements. The IRS is paying closer attention. **Content:** While the value of virtual currency continues to fluctuate, the IRS’s interest in it has only increased. In 2021, for example, the agency launched Operation Hidden Treasure to root out taxpayers who don’t report income from cryptocurrency transactions on their federal income tax returns. Moreover, the [Inflation Reduction Act](https://waradydavis.com/inflation-reduction-act/), enacted in 2022, allocated $80 billion to the IRS, with much of it designated for enforcement activities. However, the [Fiscal Responsibility Act](https://waradydavis.com/whats-in-the-fiscal-responsibility-act/), enacted in May 2023, will claw back $21.39 billion of that amount by the end of 2025. The IRS’s strategic operating plan for 2023 through 2031 lays out the agency’s intention to ramp up enforcement [related to digital assets](https://waradydavis.com/creating-a-digital-estate-plan/). If you buy, sell or otherwise engage in transactions involving virtual currency, you need to stay up to date with the latest tax developments. ## Terminology The IRS defines a “virtual asset” as any virtual representation of value that’s recorded on a cryptographically secured distributed ledger or similar technology. The term includes: • Convertible virtual currency (meaning it has an equivalent value in real currency or acts as a substitute for real currency) such as Bitcoin, • Stablecoins (a type of currency whose value is tied to the value of another asset, such as the U.S. dollar), and • Non-fungible tokens (NFTs). According to the IRS, cryptocurrency is an example of a convertible virtual currency that can be used as a payment for goods and services, digitally traded between users, and exchanged for or into real currencies or digital assets. Cryptocurrency uses cryptography to secure transactions that are digitally recorded on a distributed ledger (for example, blockchain). ## Taxation of transactions For federal tax purposes, digital assets are treated as property. Thus, transactions involving virtual currency are subject to the same general tax rules that apply to property transactions, such as purchases and sales of stock or real estate. **Several types of virtual currency transactions can trigger reporting obligations, including:** **Sales.** If you sell virtual currency, you must recognize any capital gain or loss on the sale, subject to any limitations on the deductibility of capital losses. The gain or loss equals the difference between your adjusted tax basis in the currency and the amount you receive for it. You should report the amount you receive on your federal income tax return in U.S. dollars (see below for more information on reporting obligations). Your basis is the amount you spent to acquire the virtual currency, including fees, commissions and other costs. Your adjusted basis is your basis increased by certain expenditures and reduced by certain deductions or credits. **Property exchanges.** If you exchange virtual currency that you hold as a capital asset for other property (including goods or other digital assets), you must recognize a capital gain or loss. The gain or loss is the difference between the fair market value (FMV) of the property you receive and your adjusted tax basis in the virtual currency. If, as part of an arm’s length transaction, you transfer a digital asset and receive other property in exchange, your tax basis in the property you receive is its FMV at the time of the exchange. **Payment for services.** If you receive virtual currency for performing services — regardless of whether you perform the services as an employee or an independent contractor — you recognize the FMV of the currency when received as ordinary income. The FMV will also be your tax basis in that asset. On the flip side, if you pay for a service using virtual currency that you hold as a capital asset, you’ve exchanged a capital asset for the service and will have a capital gain or loss. In addition, the FMV of virtual currency that’s paid as wages, at the date of receipt, is subject to federal income tax withholding, Federal Insurance Contributions Act (FICA) tax and Federal Unemployment Tax Act (FUTA) tax. It also must be reported on Form W-2, “Wage and Tax Statement.” ## Reporting obligations You may have noticed a new line on your individual federal income tax return in recent years. The 2022 version asks: “At any time during 2022, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, gift or otherwise dispose of a digital asset (or a financial interest in a digital asset)?” If you answer “yes,” you must report all related income, whether as income, a capital gain or loss, or otherwise (for example, as a gift). The[ Infrastructure Investment and Jobs Act (IIJA)](https://apps.npr.org/documents/document.html?id=21031305-infrastructure-bill), enacted in late 2021, created additional new reporting requirements for digital asset transactions. These provisions were enacted with an eye toward generating additional tax revenues to help fund infrastructure projects. The requirements provide the IRS with more information to work from and establish more potential compliance tripwires for taxpayers who engage in virtual currency transactions. The IIJA expanded the definition of brokers that are required to report their customers’ gains and losses on the sale of securities during the tax year to the IRS on Form 1099-B, “Proceeds from Broker and Barter Exchange Transactions.” The form generally requires a description of each sale, the cost basis, the acquisition date and price, the sale date and price, and the resulting short- or long-term gain or loss. Under the IIJA, operators of trading platforms for digital assets, such as cryptocurrency exchanges, are subject to the same reporting requirements as traditional securities brokers. The effective date remains to be seen, though, as the IRS hasn’t yet issued final regulations with instructions. After the new rules take effect, cryptocurrency platforms will need to collect Form W-9, “Request for Taxpayer Identification Number and Certification,” from their customers. The IIJA also amended existing anti-money laundering laws to treat digital assets as cash for purposes of those laws. As a result, beginning in 2023, businesses must report to the IRS when they receive more than $10,000 in digital assets in one transaction or multiple related transactions. Such transactions should be reported on IRS Form 8300, “Report of Cash Payments Over $10,000 Received in a Trade or Business.” To complete the form, a business will need to gather the name, address and taxpayer identification number, among other information, from the payer. Failure to comply may lead to significant civil and criminal penalties. ## Enforcement tool One way the IRS may uncover digital assets is through the use of a “John Doe summons.” The U.S. Department of Justice notes that “because transactions in cryptocurrencies can be difficult to trace and have an inherently pseudo-anonymous aspect, taxpayers may be using them to hide taxable income from the IRS.” By asking a court to serve a John Doe summons on a crypto dealer or exchange, the IRS can find out information about a person’s account. In one recent case, an individual challenged the IRS’s use of a summons to obtain his account information from a virtual currency exchange. He argued it was unconstitutional. A U.S. District Court disagreed and ruled that the IRS’s actions “fall squarely” within its powers to pursue unpaid taxes. (Harper, DC NH, 5/26/23) ## An evolving area With its new infusion of enforcement funding, the IRS’s focus on virtual currency transactions is likely to intensify. We’ll help you stay in compliance with the applicable rules and requirements. *© 2023* **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [BOI reporting deadline delayed - for now](https://waradydavis.com/boi-reporting-deadline-delayed-for-now/) **Published:** December 1, 2024 **Author:** Leslie Flinn **Excerpt:** FinCEN confirmed that due to a recent nationwide Federal court order, the deadline for reporting companies to file beneficial ownership information is temporarily delayed and reporting companies are not subject to liability if they fail to file by 1/1/2025. **Content:** > **IMPORTANT UPDATE – February, 2025**On February 18, 2025, following a decision by the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Department of Treasury, et al., 6:24-cv-00336 (E.D. Tex.), **beneficial ownership information [(BOI) reporting requirements](https://waradydavis.com/act-now-on-boi-reporting-deadlines/) under the Corporate Transparency Act (“CTA”) are once again back in effect with a new deadline of March 21, 2025**. ## BOI Reporting Delayed – For Now On Tuesday, December 3, 2024, in the case of [Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.)](https://polsinelli.gjassets.com/content/uploads/2024/12/cta-v-garland-district-court-opinion-preliminary-injunction.pdf), a federal district court in the Eastern District of Texas, Sherman Division, issued an order granting a ***nationwide preliminary injunction*** that: 1. enjoins the CTA (“Corporate Transparency Act”), including enforcement of that statute and regulations implementing its beneficial ownership information reporting requirements, and, specifically, 2. stays all deadlines to comply with the CTA’s reporting requirements. As a result, under the injunction, the CTA and the BOI reporting rule cannot be enforced, and reporting companies need not comply with the CTA’s **Jan. 1, 2025**, BOI reporting deadline pending a further order of the court. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024. The preliminary injunction, however, likely will remain in effect through the appeal process or until the court issues another order. ### **Should You Still File Your Business(es)’ BOI Report?** While this litigation is ongoing, FinCEN confirmed it will comply with the order for as long as it remains in effect. However, there is a chance that the injunction could be overturned and/or a new court order issued at any time. Since the BOI reporting deadline is January 1, 2025, we recommend that affected Warady & Davis clients proceed with BOI Reporting to avoid any last- minute scramble to comply. Texas Top Cop Shop is only one of several cases in which plaintiffs have challenged the CTA that are pending before courts around the country. Several district courts have denied requests to enjoin the CTA, ruling in favor of the Department of the Treasury. The government continues to believe—consistent with the conclusions of the U.S. District Courts for the Eastern District of Virginia and the District of Oregon—that the CTA is constitutional. In addition, the CTA was a bi-partisan effort and is unlikely to go away completely. ### **Background** Under the CTA, P.L. 116-283, which Congress passed in 2021 as an anti-money-laundering initiative, reporting companies must disclose the identity and information about beneficial owners of the entities. For new entities incorporated after Jan. 1, 2024, reporting companies must also disclose the identity of “applicants” — defined as any individual who files an application to form a corporation, limited liability company, or other similar entity. Willful violations are punishable by a fine of $591 a day, up to $10,000, and two years in prison with similarly serious penalties for unauthorized disclosure. ### More Information For more information regarding the BOI reporting requirements including FAQs and a helpful short instructional video visit **[https://www.fincen.gov/boi. ](https://www.fincen.gov/boi)**The AICPA has also created a [**BOI reporting resource center**](https://www.aicpa-cima.com/resources/landing/beneficial-ownership-information-boi-reporting). You may also contact your Warady & Davis LLP business advisor with any additional questions or concerns – (847) 267-9600 or**[ info@waradydavis.com. ](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2024 All Rights Reserved **Categories:** Business, Business Management, E-Alerts, General **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [It’s not too late to reduce your 2024 taxes](https://waradydavis.com/its-not-too-late-to-reduce-your-2024-taxes/) **Published:** December 16, 2024 **Author:** Leslie Flinn **Content:** ## Year-End Tax Planning for Individuals As the end of the year draws near, savvy taxpayers always look for ways to reduce their tax bills. This year, the sense of urgency is higher for many due to a variety of factors including the sunsetting of favorable provisions of the [Tax Cuts and Jobs Act (TCJA).](https://waradydavis.com/congress-passes-biggest-tax-bill-since-1986-the-tax-cuts-and-jobs-act-tcja/) Indeed, many of the Tax Cuts and Jobs Act provisions are set to expire at the end of 2025, absent congressional action. However, with President-Elect Donald Trump set to take power in 2025 and a unified GOP Congress, the chances have greatly improved that many provisions will be extended or made permanent. In addition, new tax legislation is a priority of incoming leadership. With these factors in mind, it’s not too late to reduce your 2024 taxes. Here are some tax-related strategies to consider before year-end. ### **Bunching itemized deductions** For 2024, the standard deduction is $29,200 for married couples filing jointly, $14,600 for single filers, and $21,900 for heads of households. “Bunching” various itemized deductions into the same tax year can offer a pathway to generating itemized deductions that exceed the standard deduction. For example, you can claim an itemized deduction for medical and dental expenses that are greater than 7.5% of your adjusted gross income (AGI). Suppose you’re planning to have a procedure in January that will come with significant costs not covered by insurance. In that case, you may want to schedule it before year end if it’ll push you over the standard deduction when combined with other itemized deductions. ### **Making charitable contributions** Charitable contributions can be a useful vehicle for bunching. Donating appreciated assets can be especially lucrative. You avoid capital gains tax on the appreciation and, if applicable, the net investment income tax (NIIT). Another attractive option for taxpayers age 70½ or older is making a qualified charitable distribution (QCD) from a retirement account that has[ required minimum distributions (RMDs).](https://waradydavis.com/10-year-rmd-rule-finalized-by-the-irs/) For 2024, eligible taxpayers can contribute as much as $105,000 (adjusted annually for inflation) to qualified charities. This removes the distribution from taxable income and counts as an RMD. It doesn’t, however, qualify for the charitable deduction. You can also make a one-time QCD of $53,000 in 2024 (adjusted annually for inflation) through a charitable remainder trust or a charitable gift annuity. ### **Leveraging maximum contribution limits** Maximizing contributions to your retirement and healthcare-related accounts can reduce your taxable income now and grow funds you can tap later. The 2024 maximum contributions are: - $23,000 ($30,500 if age 50 or older) for 401(k) plans. - $7,000 ($8,000 if age 50 or older) for traditional IRAs. - $4,150 for individual coverage and $8,300 for family coverage, plus an extra $1,000 catch-up contribution for those age 55 or older for Health Savings Accounts. Also keep in mind that, beginning in 2024, contributing to 529 plans is more appealing because you can transfer unused amounts to a beneficiary’s Roth IRA (subject to certain limits and requirements). ### **Harvesting losses** Although the stock market has clocked record highs this year, you might find some losers in your portfolio. These are investments now valued below your cost basis. By selling them before year end, you can offset capital gains. Losses that are greater than your gains for the year can offset up to $3,000 of ordinary income, with any balance carried forward. Just remember the “wash rule.” It prohibits deducting a loss if you buy a “substantially similar” investment within 30 days — before or after — the sale date. ### **Converting an IRA to a Roth IRA** Roth IRA conversions are always worth considering. The usual downside is that you must pay income tax on the amount you transfer from a traditional IRA to a Roth. If you expect your income tax rate to increase in 2026, the tax hit could be less now than down the road. Regardless, the converted funds will grow tax-free in the Roth, and you can take qualified distributions without incurring tax after you’ve had the account for five years. Moreover, unlike other retirement accounts, Roth IRAs carry no RMD obligations. In addition, Roth accounts allow tax- and penalty-free withdrawals at any time for certain milestone expenses. For example, you can take a distribution for a first-time home purchase (up to $10,000), qualified birth or adoption expenses (up to $5,000 per child) or qualified higher education expenses (no limit). ### **Timing your income and expenses** The general timing strategy is to defer income into 2025 and accelerate deductible expenses into 2024, assuming you won’t be in a higher tax bracket next year. This strategy can reduce your taxable income and possibly help boost tax benefits that can be reduced based on your income, such as IRA contributions and student loan deductions. If you’ll likely land in a higher tax bracket in the near future, you may want to flip the general strategy. You can accelerate income into 2024 by, for example, realizing deferred compensation and capital gains, executing a Roth conversion, or exercising stock options. ### **Questions?** With the potential for major tax changes on the horizon, now is the time to take measures to protect your bottom line. We can help you make the right moves for 2024 and beyond. Contact your Warady & Davis LLP advisor at (847) 267-9600 or info@waradydavis.com. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2024 All Rights Reserved **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Five steps to better manage receivables](https://waradydavis.com/five-steps-to-better-manage-receivables/) **Published:** August 27, 2019 **Author:** webmaster **Content:** Failure to collect accounts receivable (AR) in a timely manner can lead to myriad financial problems for your company, including poor cash flow and the inability to pay its own bills. **Here are five effective ideas to facilitate more timely collections:** ## **1. Create an AR aging report**. This report lets you see at a glance the current payment status of all your customers and how much money they owe. Aging reports typically track the payment status of customers by time periods, such as 0–30 days, 31–60 days, 61–90 days and 91+ days past due. Armed with this information, you’ll have a better idea of where to focus your efforts. For example, you can concentrate on collecting the largest receivables that are the furthest past due. Or you can zero in on collecting receivables that are between 31 and 60 days outstanding before they become any further behind. ## **2. Assign collection responsibility to a sole accounting employee.** Giving one employee the responsibility for AR collections ensures that the “collection buck” stops with someone. Otherwise, the task of collections could fall by the wayside as accounting employees pick up on other tasks that might seem more urgent. ## **3. Re-examine your invoices.** Your customers prefer bills that are clear, accurate and easy to understand. Sending out invoices that are sloppy, vague or inaccurate will slow down the payment process as customers try to contact you for clarification. Essentially you’re inviting your customers to not pay your invoices promptly. ## **4. Offer customers multiple ways to pay.** The more payment options customers have, the easier it is for them to pay your invoices promptly. These include payment by check, Automated Clearing House, credit or debit card, PayPal or even text message. ## **5. Be proactive in your billing and collection efforts.** Many of your customers may have specific procedures that must be followed by vendors for invoice formatting and submission. Learn these procedures and follow them carefully to avoid payment delays. Also, consider contacting customers a couple of days before payment is due (especially for large payments) to make sure everything is on track. Lax working capital practices can be a costly mistake. Contact **Warady & Davis LLP at 847-267-9600** to help implement these and other strategies to improve collections and boost your revenue and cash flow. We can also help you with strategies for dealing with situations where it’s become clear that a past-due customer won’t (or can’t) pay an invoice. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Audit & Accounting, Business, Business Management **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [5 strategies to cut your company’s 2023 tax bill](https://waradydavis.com/5-strategies-to-cut-your-companys-2023-tax-bill/) **Published:** December 5, 2023 **Author:** Leslie Flinn **Excerpt:** As 2023 winds down, making time for year-end tax planning time now may prove beneficial to your business come tax-filing time next year. **Content:** As another year ends with interest rates and markets in flux, one thing remains certain: Reducing your company’s tax bill can improve your cash flow and your bottom line. Below are five strategies — including some tried-and-true and others particularly timely — that you can execute before the turn of the new year to minimize your company’s tax liability. ## 1. Take advantage of the pass-through entity (PTE) tax deduction, if available The [Tax Cuts and Jobs Act (TCJA)](https://waradydavis.com/congress-passes-biggest-tax-bill-since-1986-the-tax-cuts-and-jobs-act-tcja/) imposed a $10,000 limit on the federal income tax deduction for state and local taxes (SALT). In response, more than 30 states have enacted some type of “workaround” to provide relief to PTE owners who pay individual income tax on their share of their business’ income. While PTE tax deductions vary by state, they generally allow partnerships, limited liability companies and S corporations to pay a mandatory or elective entity-level state tax on business income with an offsetting owner-level benefit. The benefit typically is a full or partial tax credit, deduction or exclusion that owners can apply to their individual state income tax. The business can claim an IRC Section 164 business expense deduction for the full amount of its payment of the tax, as the SALT limit doesn’t apply to businesses. ## 2. Establish a cash balance retirement plan Cash balance retirement plans are regaining popularity for businesses with high earners who regularly max out their 401(k) plans. The plans combine the higher contribution limits of defined contribution plans with the higher maximum benefits and deduction limits of defined benefit plans. A business can claim much larger deductions for cash balance contributions than 401(k) contributions. In 2023, for example, the maximum employer/employee 401(k) contribution for a 55-year-old is $73,500 (including a catch-up contribution of $7,500). Meanwhile, a business can contribute up to $265,000 to a cash balance plan (depending on the participant’s age), in addition to the 401(k) plan contribution. Contribution limits increase with age, creating a valuable opportunity for those nearing retirement to add to their retirement savings as well as a substantial deduction for the business. Under the original [SECURE Act](https://www.congress.gov/116/plaws/publ94/PLAW-116publ94.pdf#page=605), businesses have until their federal filing deadline (including extensions) to launch a cash balance plan. But it can take some time to prepare the necessary documents, calculate the contributions and handle other administrative tasks, so you’d be wise to get the ball rolling sooner rather than later. ## 3. Take action on asset purchases Timing your asset purchases so you can place the items “in service” before year-end has long been a viable method of reducing your taxes. However, now there’s a ticking clock to consider. That’s because the TCJA reduces 100% first-year bonus depreciation by 20% each tax year, until it vanishes in 2027 (absent congressional action). The deduction has already dropped to 80% for 2023. First-year bonus depreciation is available for computer systems, software, vehicles, machinery, equipment, office furniture and qualified improvement property (generally, certain improvements to nonresidential property, including roofs, HVAC, fire protection and alarm systems, and security systems). Usually, though, it’s advisable to first apply the IRC Section 179 expensing election to asset purchases. Sec. 179 allows you to deduct 100% of the purchase price of new and used eligible assets. Eligible assets include machinery, office and computer equipment, software, certain business vehicles, and qualified improvement property. The maximum Sec. 179 “deduction” for 2023 is $1.16 million. It begins phasing out on a dollar-for-dollar basis when a business’s qualifying property purchases exceed $2.89 million. The maximum deduction is limited to the amount of your income from business activity, but you can carry forward unused amounts indefinitely or claim the excess amounts as bonus depreciation, which is subject to no limits or phaseouts. (Note: If financing asset purchases, consider the impact of high interest rates in addition to the potential tax savings.) ## 4. Maximize the qualified business income (QBI) deduction One caveat regarding depreciation deductions is that they can reduce the QBI deduction for PTE owners. (Note that the QBI deduction is scheduled to expire after 2025 absent congressional action.) If the QBI deduction is allowed to expire, PTE income could be subject to rates as high as 39.6% if current rates also expire. For now, though, PTE owners can deduct up to 20% of their QBI, subject to certain limitations based on W-2 wages paid, the unadjusted basis of qualified property and taxable income. Accelerated depreciation reduces your QBI (in addition to certain other tax breaks that depend on taxable income) and thus your deduction. On the other hand, you can increase the deduction by increasing W-2 wages or purchasing qualified property. In addition, you can bypass income limits on the QBI deduction by timing your income and deductions (see below). ## 5. Timing income and expenses With the election looming next November, it’s unlikely that 2024 will see significant changes to the tax laws. As a result, the perennial tactic of timing income and expenses is worth pursuing if you use cash-basis accounting. For example, if you don’t expect to land in a higher tax bracket next year, you can push income into 2024 and accelerate expenses into 2023. As discussed above, though, you could end up with a smaller QBI deduction. ### A tangled web Seemingly small tax decisions may have costly unintended consequences under different tax provisions. We can help your business make the right year-end tax planning moves. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [5 ways nonprofits can prepare for an audit](https://waradydavis.com/5-ways-nonprofits-can-prepare-for-an-audit/) **Published:** September 22, 2021 **Author:** Leslie Flinn **Content:** No not-for-profit looks forward to annual audits. But regular maintenance and preparation specific to an impending audit can make the process less disruptive. **We recommend taking the following steps:** ### 1. Reconcile routinely You shouldn’t wait until audit time to reconcile accounts — for example, cash, receivables, pledges, payables, accruals and revenues. Reconcile general ledger account balances to supporting schedules (bank reconciliation, receivables and payable aging) monthly or at least quarterly. And don’t forget to reconcile database information provided and maintained by non accounting departments, such as contributions, events revenue, registration revenue and sponsorships. ### 2. Prepare supporting documentation Collect all supporting documentation before your audit and if anything is missing, alert auditors immediately. It might be necessary to request duplicate invoices from vendors or ask donors for copies of letters describing restrictions on contributions. ### 3. Assemble the ‘Client Request Letter’ list items As part of our planning process, W&D typically compiles a detailed client request letter which includes a list of materials they expect you to produce. The list includes a timeline indicating when the each type of materialis needed. It is important too submit everything on the list according to the timeline. If you don’t, you could push back the audit itself and miss your board deadline for completion. Also, to ensure accuracy, perform a self-review of all information before you sen. ### 4. Be ready to explain variances Before your auditors arrive, identify major fluctuations in your account balances compared to the previous year. Your audit team will inquire into significant variances in revenues and expenses. Make sure you’re ready to explain them — as well as budget variances — promptly and clearly. ### 5. Review earlier audits Audits from previous years provide useful guidance. Check prior years’ audit entries and confirm that you didn’t make the same errors this year. Also confirm that you posted all of the audit entries from the last audit. If you didn’t, your financial statements might be distorted. ## Year-long relationship Don’t think of audits as a once-a-year obligation. Keep in touch with your W&D team throughout the year. For example, if you land a new grant or contract and aren’t certain how to properly record it, don’t hesitate to reach out to your Warady & Davis LLP advisor. *© 2021* **Categories:** Not-for-Profit --- ### [White House, Capitol Hill focus on tax reform in 2017](https://waradydavis.com/white-house-capitol-hill-focus-on-tax-reform-in-2017/) **Published:** February 20, 2017 **Author:** WaradyDavis **Excerpt:** Following President Trump's promise to move quickly on tax code changes, the three major indexes booked fresh records. The White House and lawmakers from both parties have discussed tax cuts, infrastructure spending, and more to encourage economic growth. However, the details of their plans have yet to be revealed. Tax reform legislation may be unveiled as early as late February. **Content:** Following President Trump’s promise to move quickly on tax code changes, the three major indexes booked fresh records. The White House and lawmakers from both parties have discussed tax cuts, infrastructure spending, and more to encourage economic growth. However, the details of their plans have yet to be revealed. Tax reform legislation may be unveiled as early as late February. **Tax reform** President Trump campaigned on tax reform and Republican lawmakers in the GOP-controlled Congress, especially in the House, have endorsed many of his proposals. House Republicans also have their own “blueprint” for tax reform. At the time this article was prepared, neither the White House nor House Republicans had released specific bill language. However, based on statements from the president and House Republicans, tax reform legislation in the House is expected to include: - Consolidated and lower individual income tax rates - Reduced corporate tax rate - Elimination of the alternative minimum tax (AMT) - Some new tax incentives for childcare and eldercare - Elimination of some unspecified individual and business tax incentives - Repeal of the federal estate tax In late January, House Speaker Paul Ryan, R-Wisconsin, predicted that the House will approve a tax reform package within the first 200 days of 2017. At the same time, Ryan acknowledged that the Senate operates under different rules and legislation in the Senate often moves at a slower pace. In past years, the House and Senate have played ping pong with tax bills, with the House passing a bill, the Senate amending it and returning it to the House, and so on. That process could repeat itself this year. Our office will keep you posted of developments. **Affordable Care Act** President Trump also campaigned on repeal and replacement of the Affordable Care Act (ACA). The ACA was not only a health care bill; it was also a tax bill. The ACA created many new taxes, including the net investment income (NII) tax, the additional Medicare Tax, the excise tax on medical devices, and the excise tax on high-dollar health plans. These taxes, especially the NII tax, have generated significant revenues for the federal government. At the time this article was prepared, the president said that repeal and replacement of the ACA would be “simultaneous” but gave few details about what a new health care bill would look like. The president has mentioned, briefly, expanding health savings accounts (HSAs). House Republicans also have discussed HSAs. In the Senate, one GOP proposal would allow states to keep the ACA. House Minority Leader Nancy Pelosi, D-California, has said that any ACA replacement must meet the fundamental principles of the ACA to win support from Democrats. **Infrastructure** Democrats and Republicans, along with the White House, have discussed increased spending on infrastructure in 2017. Infrastructure could include some unspecified tax incentives. In late January, South Dakota Senator John Thune said that infrastructure spending could be part of a larger tax bill, but he gave no specifics. **IRS** Shortly after taking office, President Trump ordered a hiring freeze for federal employees. Traditionally, the IRS hires many temporary workers during the filing season to answer calls from taxpayers and help to process returns. It is unclear how the president’s order will impact the IRS’s hiring plans, if at all. Since 2010, the IRS has limited full-time hiring in response to budget pressures. *If you have any questions about tax reform and other legislation, please contact our office.* ##### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Uncategorized --- ### [How to Comply with the New Corporate Transparency Act](https://waradydavis.com/corporate-transparency-act-beneficial-ownership-information-reporting-requirement/) **Published:** January 4, 2024 **Author:** Leslie Flinn **Excerpt:** The Corporate Transparency Act (CTA) goes into effect on January 1, 2024, impacting a significant number of small businesses across the U.S. **Content:** ***Updated 2/24/2024*** ## How to Comply with the Corporate Transparency Act Starting January 1, 2024, a significant number of businesses will be required to comply with the [Corporate Transparency Act](https://home.treasury.gov/news/press-releases/jy1974) (CTA). The CTA was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of the [beneficial ownership information](https://www.fincen.gov/sites/default/files/shared/BOI_FAQs_Q%26A_12.1.23.pdf) (otherwise known as “BOI”) of certain entities from people who own or control a company. It is anticipated that 32.6 million businesses will be required to comply with this reporting requirement. The BOI reporting requirement intends to help US law enforcement combat money laundering, the financing of terrorism, and other illicit activity. The CTA is not a part of the tax code. Instead, it is a part of the Bank Secrecy Act, a set of federal laws that require record-keeping and report filing on certain types of financial transactions. Under the CTA, BOI reports will not be filed with the IRS, but with the [Financial Crimes Enforcement Network](https://www.fincen.gov/boi) (FinCEN), another agency of the Department of the Treasury. Below is some information for you to consider for complying with this new reporting requirement. **This information is meant to be general only and should not be applied to your specific facts and circumstances without consultation with competent legal counsel**. ## Who Needs to Report? Reporting companies include corporations, LLCs, limited liability partnerships, limited partnerships, and business trusts, and comprise not only companies formed in the United States but also foreign entities that register or qualify to do business in any state. Domestic entities that are not created by the filing of a document with a secretary of state or similar office are not required to report under the CTA. Foreign companies required to report under the CTA include corporations, LLCs, or any similar entity that is formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office. ## Are there any exemptions from the filing requirements? There are 23 categories of exemptions. Included in the exemptions list are publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting firms, tax-exempt entities, and certain inactive entities, among others. Please note these are not blanket exemptions, and many of these entities are already heavily regulated by the government and thus already disclose their BOI to a government authority. In addition, certain “large operating entities” are exempt from filing. To qualify for this exemption, the company must: a) Employ more than 20 people in the U.S.; b) Have reported gross revenue (or sales) of over $5M on the prior year’s tax return; and c) Be physically present in the U.S. **I**nformation and guidance on exemptions, FAQs, and how to file can be found on FinCEN’s website at [FinCEN – Beneficial Ownership Information Reporting](https://www.fincen.gov/boi)**.** ## When must companies file? Different filing timeframes depend on when an entity is registered/formed or if there is a change to the beneficial owner’s information. - New entities (created/registered in 2024) — must file within 90 days - New entities (created/registered after 12/31/2024) — must file within 30 days - Existing entities (created/registered before 1/1/24) — must file by 1/1/25 - Updates- within 30 days of any change, including a new address. All reporting companies have the responsibility to update and correct their reports as needed. ## What sort of information is required to be reported? Companies must report the following information: full name of the reporting company, any trade name or doing business as (DBA) name, business address, state or Tribal jurisdiction of formation, and an IRS taxpayer identification number (TIN). Additionally, information on the beneficial owners of the entity and, for newly created entities, the company applicants of the entity is required. This information includes — name, birthdate, address, and unique identifying number and issuing jurisdiction from an acceptable identification document (e.g., a driver’s license or passport) and an image of such document. ## Who is a beneficial owner? Any individual who, directly or indirectly, either: - Exercises “substantial control” over a reporting company, or - Owns or controls at least 25 percent of the ownership interests of a reporting company An individual has substantial control of a reporting company if they direct, determine or exercise substantial influence over important decisions of the reporting company. This includes any senior officers of the reporting company, regardless of formal title, or if they have no ownership interest in the reporting company ### How to Comply Reporting Companies can make the free, federally required one-time filing and any future updates directly by going online and registering at [BOI](https://www.fincen.gov/boi). This site also includes useful information on reporting requirements and a [small business guide](https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf). FinCEN will confirm receipt once a report is successfully filed. ### Beware of Scams ***Remember that this is a free, one-time, federally required filing*** The Better Business Bureau issued a warning that scammers are exploiting the new law to convince business owners to give up their personal information. FinCEN does not send unsolicited requests, and filings are completed online. If you receive any emails, letters, or phone calls asking you to share your information to comply with the new regulations, they are most likely fraudulent. You should not click any links or scan any QR codes. ### Risk of non-compliance Penalties for willfully not complying with the BOI reporting requirement can result in criminal and civil penalties of $500 per day and up to $10,000, with up to two years of jail time. For more information about the CTA, [visit www.aicpa-cima.com/boi](https://www.aicpa-cima.com/resources/landing/beneficial-ownership-information-boi-reporting). You will see the following paragraph in our engagement letters, alerting you about the CTA and a link to the FinCEN to seek out more information and reporting requirements. > ***Corporate Transparency Act/Beneficial Ownership Reporting*** > > *Assisting you with your compliance with the Corporate Transparency Act (“CTA”), including beneficial ownership information (“BOI”) reporting, is not within the scope of this engagement. You have sole responsibility for your compliance with the CTA, including its BOI reporting requirements and the collection of relevant ownership information. We shall have no liability resulting from your failure to comply with CTA. Information regarding the BOI reporting requirements can be found at [Beneficial Ownership Information](https://www.fincen.gov/boi).* > > *Consider consulting with legal counsel if you have questions regarding the applicability of the CTA’s reporting requirements and issues surrounding the collection of relevant ownership information.* In addition to the above-mentioned website, additional information can be found at: [FinCEN – Small Business Resources](https://www.fincen.gov/boi/small-business-resources) ### How Can I Get Help? Once again, information and guidance on exemptions, FAQs, and how to file can be found on FinCEN’s website at [FinCEN – Beneficial Ownership Information Reporting](https://www.fincen.gov/boi). You can also contact the Illinois Secretary of State’s Department of Business Services at (800) 252-8980. While we recognize that this new reporting requirement will raise questions, and you may reach out to Warady & Davis for guidance, it is a FinCEN and not IRS matter. As such, we recommend that if you have questions or need assistance, you should contact your attorney. **Questions?** ***Please contact your attorney or Warady & Davis LLP advisor(s) with your questions at [847-267-9600](tel:847-267-9600);* .** ###### **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal, or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business, or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2024 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Treasury, IRS Get Moving on ABLE Account Rules](https://waradydavis.com/treasury-irs-get-moving-on-able-account-rules/) **Published:** June 30, 2015 **Author:** WaradyDavis **Content:** Late in 2014, Congress passed and President Obama signed into the law the Achieving a Better Life Experience (ABLE) Act. The new law, which enjoyed strong bipartisan support, authorizes the creation of tax-favored accounts for qualified individuals challenged by disabilities. Congress instructed Treasury and the IRS to quickly issue guidance and the agency did so in June. The new guidance covers how to establish ABLE accounts, funding for these accounts, qualified distributions, and various reporting requirements. **ABLE accounts** ABLE accounts are intended to encourage individuals and families to establish a tax-favored savings account to assist and support individuals with disabilities. Contributions to an ABLE account are not deductible, but qualified distributions for certain expenses are excluded from taxation. **Creation** ABLE accounts must be created under a state program. Currently, many states are in the process of setting up an ABLE program. If a state does not establish and maintain an ABLE program, the law allows it to contract with another state to provide an ABLE program for its residents. **Eligibility** Generally, an individual is an eligible individual for a tax year if, during that year, either the individual is entitled to benefits based on blindness or disability under Title II or XVI of the Social Security Act and the blindness or disability occurred before the date on which the individual attained age 26, or a disability certification meeting specified requirements is filed with the IRS. In some cases, the IRS explained that individuals may be unable to establish an account themselves. If the eligible individual cannot establish the account, the eligible individual’s agent under a power of attorney or, if none, his or her parent or legal guardian may establish the ABLE account for that eligible individual. **Contributions and distributions** Total contributions to an ABLE account per calendar year cannot exceed the annual gift tax exclusion (which is $14,000 for 2015). Additionally, state must provide adequate safeguards to ensure that total contributions to an ABLE account do not exceed the state’s limit for aggregate contributions under its qualified tuition program. The ABLE Act allows for direct and indirect investment of contributions to the program or earnings no more than two times in any calendar year. If distributions from an ABLE account do not exceed the designated beneficiary’s qualified disability expenses, no amount is included in the designated beneficiary’s gross income. Otherwise, the distribution may be subject to income tax and an additional tax. **Qualified expenses** For ABLE accounts, qualified expenses are expenses that relate to the designated beneficiary’s blindness or disability, and are for the benefit of that designated beneficiary in maintaining or improving his or her health, independence, or quality of life. These include expenses for education, housing, transportation, employment training, and personal support services. The IRS requested comments from interested parties about what types of expenses should be considered qualified disability expenses and under what circumstances. For example, a smartphone could be considered a qualified disability expense if it is an effective and safe communication or navigation aid for an individual with autism. **Reporting and means-testing** The guidance includes various reporting rules. For example, information regarding distributions will be reported on new Form 1099-QA: Distributions from ABLE Accounts. Generally an ABLE account is not to be counted in determining the designated beneficiary’s eligibility for many federal means-testing programs. Special rules may apply to some federal programs. The new guidance covers many aspects and requirements of ABLE accounts, beyond this high-level review. If you have any questions about ABLE accounts and the IRS’s new guidance, please contact us at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [COVID-19 Employee Lay-Off Questions & Answers](https://waradydavis.com/covid-19-employee-lay-off-questions-answers/) **Published:** March 24, 2020 **Author:** Leslie Flinn **Content:** Due to fall-out from the coronavirus pandemic, many of our clients are grappling with tough business questions including temporary lay-offs and how they can retain valuable employees long-term. Temporary lay-offs are further complicated by two provisions of the **Families First Coronavirus Response Act (FFCRA); The Emergency Paid Sick Leave Act and the Emergency Family Medical Leave Act.** **[UPDATE: 3.26.2020 – DOL Issues Emergency Paid Sick Leave Act (EPSLA) and Emergency Family Medical Leave Act (EFMLA) Guidance.](https://www.dol.gov/agencies/whd/pandemic/ffcra-questions)** DOL guidance provides good news for employers struggling with state ordered closures. It appears based on guidance points below that employers **do NOT have to pay two weeks EPSLA due to lay-offs or state ordered closures either before or after FFCRA effective date (April 1, 2020)**. Instead, employees may be eligible for expanded unemployment benefits **The Emergency Paid Sick Leave Act,** effective April 2, 2020, requires employers with *fewer than 500* employees and public employers with at least one employee to provide employees with **up to two weeks of paid sick leave**. Employers of health care providers or emergency responders may elect not to provide this leave to those specific employees. In addition, the Secretary of Labor may exempt small businesses (defined as fewer than 50 employees) if the required leave would jeopardize the viability of their business. Covered employers are required to provide emergency paid leave to an employee who is unable to work or work remotely because: 1. the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19; The DOL clarified in its recent FFCRA guidance that ***State ordered closures and lay-offs DO NOT qualify employees for EPSLA. Instead, they may be entitled to unemployment. See [DOL Guidance](https://www.dol.gov/agencies/whd/pandemic/ffcra-questions).*** 2. the employee has been advised by a health care provider to self-quarantine because of COVID-19; 3. the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; 4. the employee is caring for an individual subject (or advised) to quarantine or isolation; 5. the employee is caring for a son or daughter whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 precautions; or 6. the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and **NOTE:** Caring for another who is subject to an isolation order or advised to self-quarantine as described above is not limited to family members. Employees may also be eligible to receive protected leave and pay benefits under the Emergency Family Medical Leave Act. This applies to any full-time or part-time employee that has been on the employer’s payroll for 30 days prior to taking the leave. Employees will be entitled to take up to 12 weeks of job-protected leave if an employee is unable to work (or remote work) due to caring for the employee’s son or daughter (who is under 18) because the child’s school or place of care has been closed or his or her childcare provider is unavailable due to the public health emergency. There are a variety of restrictions and requirements. Click HERE for more information. ## Here are the most common questions we are hearing from our clients: **Q****. U****nfortunately, I can’t afford to pay my employees. What options do I have and how does FFCRA apply?** **A**. **Lay-off.** If you lay-off employees on or after April 2, 2020, then **[The Emergency Paid Sic](https://waradydavis.com/covid-19-financial-relief/)**[**k Leave Act**](https://waradydavis.com/covid-19-financial-relief/) and Emergency Family Medical Leave Act may apply. You can temporarily lay-off your employees. Employees can return to work when conditions improve. **Employers can ask employees to voluntarily take unpaid time-off and/or use remaining sick and vacation benefits first then switch to unpaid. NOTE:** Employees will still qualify for unemployment under this scenario as the employer requested they voluntarily switch to unpaid status due to lack of work. If employees are still employed by you after the effective date of FFCRA (April 2, 2020), then they may be eligible for Emergency Paid Sick Leave and Emergency Family Medical Leave. **Q: Are employers eligible for reimbursement for providing these additional paid benefits to employees?** **A:** To ease some of the financial burden this will place on employers, a limited refundable tax credit will be allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes), equal to payments made to the employee. For example, under the Emergency Paid Sick provision, employers can claim up to $511 or $200 for any day of absence for the reasons outlined above, to a maximum of ten days per employee for the year. Please consult your tax attorney or accountant for specific guidance on caps and credits. **Q. What happens to employee health insurance benefits during a lay-off?** **A.** The question of how to handle health insurance benefits during a layoff varies from employer to employer depending on the agreement they have in place with their insurance provider. The MRA, a national HR Association, recommends that employers reach out to their insurance broker/provider and review the contract they have in place to understand how an employee should be treated in a lay-off situation and if their insurance provider is making any exceptions due to COVID-19 pandemic. **NOTE:** If you are able to keep the employee on the group health plan, that is recommended, if at all possible. **Q. Who pays the employees’ health insurance premium share during the lay-off?** **A.** Regarding an employee’s premium share, employers have two options: 1. Pay the employee share on their behalf and have them catch up when they return to work; 2. Have employees pay you their premium amount up front. Set expectations so that the employee knows how to get you the payment so they can keep their health benefits intact. **Q. What unemployment benefits are available to my employees?** **A.** The Act provides $1 billion in aid to state unemployment compensation programs so long as a state: 1. Waives any waiting period; 2. Waives the work search requirements for employees directly impacted by COVID-19 on account of an illness in the workplace or direction from a public health official to isolate or self-quarantine; and 3. Does not charge employer accounts for these COVID-19 related benefits. The State of Illinois has issued [NEW](https://www2.illinois.gov/ides/Pages/COVID-19-and-Unemployment-Benefits.aspx)[: Illinois Emergency Unemployment Benefits for workers whose unemployment is attributable to COVID-19 – IDES](https://www2.illinois.gov/ides/Pages/COVID-19-and-Unemployment-Benefits.aspx)** [**To view a FULL list of client Questions & Answers related the new FFCRA leave benefits, CLICK HERE.** ](https://waradydavis.com/important-business-owner-qa-new-covid-19-employer-requirements/) ## We are Here For You The COVID-19 situation is fluid and rapidly evolving. We know that many of you have questions and concerns during this unprecedented time. Please be sure to consult your attorney and do not hesitate to reach out to your Warady & Davis business advisor for help and guidance. Call 847-267-9600 or email info@waradydavis.com. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Shuttered Venue Operator Grant Program Set to Reopen](https://waradydavis.com/svog-opens-april8/) **Published:** April 23, 2021 **Author:** Leslie Flinn **Content:** ###### *Updated 4.23.2021* **Updated launch date**: The SBA announced that is has completed rigorous testing and the Shuttered Venue Operators Grant application portal and it will reopen on **Monday, April 26 at 12pm ET**. **[Applicants may continue to register for an application portal account](https://www.svograntportal.sba.gov/s/).** On April 8, 2021, the U.S. Small Business Administration was scheduled to start accepting applications to the [**Shuttered Venue Operators Grant (SVOG) program**](https://www.sba.gov/sites/default/files/2021-04/4-8-21%20SVOG%20FAQ%20FINAL.pdf) but had to shut-down due to systems issues. **For more information on how to apply, visit the [SBA’s portal](https://www.svograntportal.sba.gov/s/).** ## What is the Shuttered Venue Operator Grant Program? The SVOG program is targeted to operators of live venues, live performing arts organizations, museums and movie theatres, as well as live venue promoters, theatrical producers and talent representatives. Eligible businesses may apply for critical economic relief, as they are some of the first that had to shutter their doors a year ago in response to the COVID-19 pandemic. The SVOG program was created when the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260, was signed into law in late December. The Economic Aid Act appropriated $15 billion to the program, which is designed to provide eligible applicants with grants equal to 45% of their gross earned revenue, up to a maximum of $10 million. The American Rescue Plan Act, P.L. 117-2, which became law March 11, appropriated an additional $1.25 billion to the SVOG, bringing the program’s funding to a total of $16.25 billion. More than $16 billion of the funding is set aside for grants. The American Rescue Plan Act also amended the SVOG program so entities that apply for a Paycheck Protection Program (PPP) loan after Dec. 27, 2020, can also apply for an SVOG, with the eligible entity’s SVOG to be reduced by the PPP loan amount. **Here’s what live venue operators should know now if they are interested in these new grants.** ## Grant amount Grant amounts will reflect either of the following instances: - For an eligible entity in operation on January 1, 2019, grants will be for an amount equal to 45% of their 2019 gross earned revenue OR $10 million, whichever is less. - For an eligible entity that began operation after January 1, 2019, grants will be for the average monthly gross earned revenue for each full month you were in operation during 2019 multiplied by six (6) OR $10 million, whichever is less. .What businesses are eligible to apply for these grants The SVO grant program will offer up funds to a specific set of businesses that operate live venues or serve a role in the performance arts industry. These companies must have been operating as of February 29, 2020. ***Businesses that generally qualify include:*** - Live venue operators or promoters. - Theatrical producers. - Live performing arts organization operators. - Museum operators, zoos and aquariums that meet specific criteria. - Motion picture theater operators. - Talent representatives. Any business that wants one of these grants must have an active government System of Award Management (SAM) account, so it’s crucial to sign up quickly at SAM.gov. ## Eligible businesses should sign up for a SAM account immediately Any business that wants one of these grants must have an active government System of Award Management (SAM) account, so it’s crucial to sign up quickly at SAM.gov. To sign up, you must first **[create a login.gov user account](https://login.gov/)** and then use that same login information to sign up for SAM. When you are registering for SAM, you will also need to **[provide the following data](https://smallgovcon.com/five-things/five-things-you-should-know-registering-in-sam-gov/)** that should be tied to your business: - **Dun & Bradstreet DUNS number**: Acquiring a DUNS number is free and typically takes one to two business days to process. You can [get the DUNS number free here](https://fedgov.dnb.com/webform/index.jsp). - **Tax Id Number (TIN) and Taxpayer Name:** A TIN will typically be either your Employer ID Number (EIN) or Social Security Number (SSN), depending on what type of business you own. It’s possible your Taxpayer Name is not the same as your legal business name, so be sure to double-check this. - **A CAGE or NCAGE number:** If you already have a **[CAGE/NCAGE number](https://eportal.nspa.nato.int/AC135Public/CageTool/home),** you are all set. If you don’t have one, you’ll automatically be assigned your SAM.gov registration is finished. - **A NAICS code:** This code identifies what industry your business serves. You can look up **[NAICS codes here](https://www.naics.com/search/).** - **Electronic Funds Transfer (EFT) Information:** You’ll need to provide your bank routing and account numbers to receive funds. ##### It’s strongly advised to get a SAM account functional swiftly to speed up the SVO grant application process. ## Grant priorities The SVO grant funds will be disbursed to applicants in the order of those who have been hit hardest first and those that were hurt the least later. For example, the first 14 days of distribution will be prioritized for “entities that suffered a 90% or greater revenue loss between April 2020 through December 2020 due to the COVID-19 pandemic.” The second 14 days will be focused on entities that suffered a 70% or greater revenue loss during that same time period. And so on. ## Businesses can take both PPP loans and venue grants The SVO grant program initially barred prospective applicants from receiving both PPP loans and SVO grants. However, the American Rescue Plan Act (ARPA) amended this provision and now businesses can apply for first- and second-draw PPP loans ***prior*** to applying for SVO grants. However, any venues that receive a SVO grant will be ineligible to receive a new PPP loan after the grant is issued. If a company seeking an SVO grant receives a PPP loan on or after December 27, 2020, then they will have the PPP loan deducted from the SVO grant total. For example, if a performing arts theater received a $20,000 PPP loan in January 2021 and is approved for an SVO grant of $100,000 in April 2021, the grant will only be worth $80,000. If a company was able to get a PPP loan before December 27, 2020, their grant will not be reduced by that amount. Allowable use of funds #### **Funds may be used for specific expenses, which include:** - Payroll costs - Rent payments - Utility payments - Scheduled mortgage payments (*not including prepayment of principal*) - Scheduled debt payments (*not including prepayment of principal on any indebtedness incurred in the ordinary course of business prior to February 15, 2020)* - Worker protection expenditures - Payments to independent contractors (*not to exceed $100,000 in annual compensation per contractor*) - Other ordinary and necessary business expenses, including maintenance costs - Administrative costs (*including fees and licensing*) - State and local taxes and fees - Operating leases in effect as of February 15, 2020 - Insurance payments - Advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production. (*May not be primary use of funds)* #### **Grantees may not use award funds to:** - Buy real estate - Make payments on loans originated after February 15, 2020 - Make investments or loans - Make contributions or other payments to, or on behalf of, political parties, political committees, or candidates for election - Any other use prohibited by the Administrator ## **Grantee recordkeeping** Grantees will be required to maintain documentation demonstrating their compliance with the eligibility and other requirements of the SVOG program. They must retain employment records for four years following their receipt of a grant and retain all other records for three years. ## Questions ***Please contact your Warady & Davis LLP advisor with your questions at 847-267-9600;* . For more information about SVO grants, the SBA has [created a helpful FAQ sheet](https://www.sba.gov/document/support-shuttered-venue-operators-grants-faq) that outlines program information in detail.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. SOURCE: SBA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, PPP Application Deadline, PPP Deadline, PPP extended, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [COVID-19 Business Loans and Disaster Relief](https://waradydavis.com/business-loans-and-disaster-relief/) **Published:** March 26, 2020 **Author:** Leslie Flinn **Content:** Businesses have been hit hard by mandatory closures and safety measures required to slow the spread of the coronavirus (COVID-19). Many of our clients are asking for guidance on loan assistance and disaster relief. But businesses have a growing number of resources and relief programs to turn to, including emergency funding from the government, protection from eviction and business loan deferment. The FDIC is encouraging banks to work with customers to provide coronavirus-related assistance, related to both personal and business finances. On March 27th, a $2 trillion fiscal stimulus measure, the **Coronavirus Aid, Relief, and Economic Security Act (CARES Act)** was signed into law. Among other items, the measure provides $350 billion in federally guaranteed loans to small businesses and establishes a $500 billion government lending program for distressed companies. See details below with more information coming soon. Below is a list of current federal, state and lender-specific support available to business owners now, which will be updated to include programs as they’re released and refined. ***Return to this page regularly*.** ## Federal Coronavirus Small Business Assistance If you need cash to offset lost revenue and help keep your business afloat, the programs below can help. The U.S. Small Business Administration (SBA) **[coronavirus resource page](https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources "https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources")** provides a list of relief programs, and it offers guidance to small business owners during this crisis. ### Federal Reserve Main Street Lending Program - **[The Fed releases preliminary information. READ MORE.](https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm)** ### **CARES Act – Paycheck Protection Program** **The Coronavirus Aid, Relief and Economic Security Act (CARES)** includes $350 billion in emergency loans for small businesses **(The Paycheck Protection Program)** to help them keep workers employed. In fact, if small businesses maintains or later restore their payrolls a portion of the loan may be forgiven. **The US Department of The Treasury issued late March 31st a first round of guidance for the Paycheck Protection Program. You can begin to apply as early as April 3rd. For detailed information on Paycheck Protection Program details and how to apply [CLICK HERE.](https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses)** **\*\*IMPORTANT NOTE\*\*** Please be cautious of potential scammers who may be reaching out to offer you assistance in applying for loans. - [**NEW: PPP Program Opens to Self-Employed and Independent Contractors**](https://waradydavis.com/ppp-opens-to-self-employed-and-icseasury-provides-ppp-clarity-2/) ***4.10.2020*** - **[NEW: SBA Issues PPP Frequently Asked Questions; Gives Favorable Answers.](https://waradydavis.com/us-treasury-provides-ppp-clarity/) *4.7.2020*** - [SBA & US Treasury Frequently Asked Questions.](https://home.treasury.gov/policy-issues/small-business-programs/small-business-lending-fund/frequently-asked-questions) ***Released late evening 4.6.2020*** - [SBA Answers More Key PPP Questions **UPDATED; 4.4.2020 with Additional SBA Guidance**](https://waradydavis.com/sba-issues-ppp-guidance/) - [Answers to More CARES Act Emergency Loan Questions 4.2.2020](https://waradydavis.com/answerstoquestions-emergency-loans/) - [Q&A for CARES Act Emergency Loans – Round 1 ](https://waradydavis.com/qa-cares-act-emergency-loans-2/) ### SBA Economic Injury Disaster Loan Program As part of its disaster assistance program, the SBA is providing low-interest working capital loans of up to $2 million to small businesses and nonprofits affected by the coronavirus. These loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits. Loan repayment terms vary by applicant, up to a maximum of 30 years. ***Who’s Eligible*** - As of March 23, businesses in every state plus American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands can apply. - You can use the loan to cover accounts payable, debts, payroll and other bills the coronavirus has affected your ability to pay. ***How to Apply*** - **[Apply online](https://disasterloan.sba.gov/ela/Account/Login "https://disasterloan.sba.gov/ela/Account/Login")** and select “Economic Injury” as the reason you’re seeking assistance. - You’ll need to supply required supporting documentation that could include the business’s most recent tax returns, a personal financial statement and a schedule of liabilities that lists all your current debts. - Call the SBA Disaster Assistance Customer Service Center at 1-800-659-2955 for help with your application. ## State and Local Coronavirus Small Business Assistance States and municipalities are adding programs by the day. Check your governor’s website for up-to-date information about relief available in your area. The National Governors Association offers a list of **[governors’ websites](https://www.nga.org/governors/addresses/ "https://www.nga.org/governors/addresses/").** If you have questions related to available assistance in states other than Illinois, please contact your Warady & Davis LLP advisor at 847-267-9600; info@waradydavis.com. ### Illinois ### Emergency Small Business Grants and Loans Assistance Under the leadership of Governor JB Pritzker, DCEO is working with partners to launch more than $90 million in emergency assistance programs for Illinois small businesses. [**SEE DETAILS HERE.**](https://www2.illinois.gov/dceo/SmallBizAssistance/Pages/EmergencySBAIntiatives.aspx) These initiatives include: **Hospitality Emergency Grant Program** To help hospitality businesses make ends meet in the midst of the COVID-19 pandemic, DCEO is launching the Hospitality Emergency Grant Program with $14 million drawn from funds originally budgeted for job training, tourism promotion, and other purposes. ***Who is eligible?*** Bars and restaurants with a valid license to serve food or liquor and who generated revenues of less than $1 million in 2019. Hotels with a valid license (hotels, motels other lodging establishments) and who generated revenues of less than $8 million in 2019. ***How do businesses apply?*** Businesses can submit an application online here: **[Landing Page](https://us.accion.org/news/covid-19-hospitality-business-grant-program), [English Application](https://www.surveymonkey.com/r/ilgrant), [Spanish Application](https://www.surveymonkey.com/r/IlgrantS)**. Applications for awards will be accepted until 5:00pm on April 1st, and winners will be chosen via a lottery, therefore, there is no benefit to submitting an application first as long as a valid, complete application is received by the deadline. **Illinois Small Business Emergency Loan Fund** DCEO and the Illinois Department of Financial and Professional Regulation (IDFPR) are establishing the Illinois Small Business Emergency Loan Fund to offer small businesses low interest loans of up to $50,000. ***Who is eligible?*** Small businesses located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019 can apply. Small businesses within the City of Chicago can apply to a similar loan program**.** ***How do businesses apply?*** Businesses will be able to complete an interest form on [**State of Illinois DCEO web page**](https://www2.illinois.gov/dceo/SmallBizAssistance/Pages/EmergencySBAIntiatives.aspx) on Friday, March 27, 2020. **Downstate Small Business Stabilization Program** To support small businesses in downstate and rural counties across Illinois, DCEO is repurposing $20 million in CDBG funds to bolster the Downstate Small Business Stabilization Program. This Fund will offer small businesses of up to 50 employees the opportunity to partner with their local governments to obtain grants of up to $25,000 in working capital. These grants will be offered on a rolling basis. ***Who is eligible?*** Local governments can apply on behalf of businesses with 50 employees or less. Only units of local government recognized by the Illinois Constitution and able to support economic development activities on a sufficient scale are eligible to apply for Economic Development grant funding. This includes cities, villages, and counties. A map of eligible areas of the state can be accessed **[here](https://www2.illinois.gov/dceo/CommunityServices/CommunityInfrastructure/Pages/default.aspx),** see “Staff Contact Information.” **Chicago Small Business Resiliency Fund** Starting March 31, small businesses in Chicago can apply for low-interest loans of up to $50,000 with repayment terms of up to five years. The amount of the loan you’ll qualify for depends on your revenues before business was affected by the coronavirus. ***Who’s eligible:*** You must demonstrate a 25% drop in revenue, have less than $3 million in revenue and fewer than 50 employees, and have no current tax liens or legal judgments. ***How to apply:*** **Apply online** and include your most recent tax return, bank statements going back to October 2019 and photo ID. ## Lender and Corporate Small Business Assistance Programs Many banks have offered deferment and forbearance to business loan customers having trouble making payments. Check Forbes’ [list of banks](https://www.forbes.com/sites/advisor/2020/03/12/list-of-banks-offering-relief-to-customers-affected-by-coronavirus/#637b92973ee3 "https://www.forbes.com/sites/advisor/2020/03/12/list-of-banks-offering-relief-to-customers-affected-by-coronavirus/#637b92973ee3") offering relief. You can also search for your bank on the American Bankers Association’s ongoing **A-Z list of coronavirus response programs.** ### Facebook Small Business Grants Program Facebook has committed to offering up to 30,000 small businesses $100 million in cash grants and Facebook advertising credits. The grants will be provided to businesses in more than 30 countries. Information is limited, but sign up to get more details from the company when they’re available. ## We are here to help. Please visit the **[Warady & Davis LLP COVID-19 Resource Cente](https://waradydavis.com/resource-center/covid-19-resources/)r** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Adjusting your financial statements for COVID-19 tax relief measures](https://waradydavis.com/adjusting-your-financial-statements-for-covid-19-tax-relief-measures/) **Published:** June 1, 2020 **Author:** Leslie Flinn **Content:** The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, contains several tax-related provisions for businesses hit by the novel coronavirus (COVID-19) crisis. Those provisions will also have an impact on financial reporting. Companies that issue financial statements under U.S. Generally Accepted Accounting Principles (GAAP) are required to follow Accounting Standards Codification (ASC) Topic 740, *Income Taxes*. This complicated guidance requires companies to report the effects of new tax laws in the period they’re *enacted*. As a result, companies — especially those that issue quarterly financial statements or that have fiscal year ends in the coming months — are scrambling to interpret the business tax relief measures under the new law. ## **Overview of business tax law changes** The CARES Act suspends several revenue-generating provisions of the Tax Cuts and Jobs Act (TCJA). These changes aim to help improve operating cash flow for businesses during the COVID-19 crisis. Specifically, the new law temporarily scales back TCJA deduction limitations on: - Net operating losses (NOL), - Business tax losses sustained by individuals, - Business interest expense, and - Charitable contributions for corporations. The CARES Act also accelerates the recovery of credits for prior-year corporate alternative minimum tax (AMT) liability. And it fixes a TCJA drafting error for real estate qualified improvement property (QIP). The fix retroactively allows a 15-year depreciation period for QIP, making it eligible for first-year bonus depreciation in tax years after the TCJA took effect. The correction allows businesses to choose between first-year bonus depreciation for QIP expenditures and 15-year depreciation. These changes are subject to numerous rules and restrictions. So, it’s not always clear whether a business will benefit from a particular change. In some cases, businesses may need to file amended federal income tax returns to take advantage of retroactive changes in the law. In addition, a company’s tax obligations may be impacted by relief measures provided in the states and countries where it operates. ## **Impact on financial reporting** Under ASC 740, companies must adjust deferred tax assets and liabilities for the effect of a change in tax laws or tax rates. On the income statement side, the adjustment is included in income from continuing operations. If your business follows U.S. GAAP, you’ll need to account for the effect of the CARES Act on deferred tax assets and liabilities for interim and annual reporting periods that include March 27, 2020 (the date the law was signed by President Trump). Also, certain provisions, such as the modified NOL and business interest deduction rules, may impact a company’s current taxes payable. Unfortunately, some companies may have difficulty accurately forecasting income or loss in the current period due to the economic disruptions caused by COVID-19. ### **Stay tuned** In the coming months, the Financial Accounting Standards Board (FASB) plans to focus on supporting businesses as they navigate the impact of the COVID-19 crisis and providing guidance to clarify financial reporting issues as they arise. ## W&D is here to help. Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Audit & Accounting **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, ppp loan forgiveness, ppp loan forgiveness application, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The Tax Cut and Jobs Act (TCJA) Summaries](https://waradydavis.com/the-tax-cut-and-jobs-act-tcja-summaries/) **Published:** January 5, 2018 **Author:** WaradyDavis **Excerpt:** This article provides you with quick access to special studies written around the Tax Cuts and Jobs Act changes. **Content:** ## Tax Cuts and Jobs Act Summaries On December 22, 2017 President Trump signed into law H.R. 1, the ***“Tax Cuts and Jobs Act,” (TCJA)*** a sweeping [tax reform law](https://waradydavis.com/white-house-capitol-hill-focus-on-tax-reform-in-2017/) that promises to entirely change the tax landscape. This article provides you with quick access to special studies written around the TCJA changes, broken into six categories listed below: - This [**special study**](https://tax.thomsonreuters.com/media-resources/news-media-resources/checkpoint-news/daily-newsstand/checkpoint-special-study-on-pension-and-benefit-changes-in-the-tax-cuts-and-jobs-act/) describes the Act’s **pension and benefit changes**, including the repeal of the rule allowing characterization of IRA contributions, extended rollover period for rollover of plan loan offset amounts, relief from early withdrawal tax for “qualified 2016 disaster distributions”, and more. - This **[special study](https://tax.thomsonreuters.com/media-resources/news-media-resources/checkpoint-news/daily-newsstand/checkpoint-special-study-on-estate-and-gift-tax-changes-in-the-tax-cuts-and-jobs-act/)** describes the Act’s **estate and gift tax changes**, including the increased exemption amount for the estate and gift tax, the new rates and brackets, and modification of the kiddie tax. - This **[special study](https://tax.thomsonreuters.com/media-resources/news-media-resources/checkpoint-news/daily-newsstand/2017-tax-reform-checkpoint-special-study-on-individual-tax-changes-in-the-tax-cuts-and-jobs-act/)** describes the Act’s **changes that would affect individuals**, including the new rates and brackets, the increased standard deduction and elimination of personal exemptions, the repeal of the individual mandate under the Affordable Care Act, and a new deduction for pass-through income. You can also read a PDF version of this report [here](https://tax.thomsonreuters.com/checkpoint/individual-tax-changes-tax-reform-2017/). - This **[special study](https://tax.thomsonreuters.com/media-resources/news-media-resources/checkpoint-news/daily-newsstand/2017-tax-reform-checkpoint-special-study-on-business-tax-changes-in-the-tax-cuts-and-jobs-act/)** describes **key business tax changes** that are made under the Act, including a reduction in the corporate tax rate to a flat 21% rate; an increase in expensing to $1 million; a temporary 100% first year qualifying business asset deduction; a 5-year write-off period for R&D expenses; a limitation on the deduction for business interest, and elimination of the domestic production activities deduction. - This **[special study](https://tax.thomsonreuters.com/media-resources/news-media-resources/checkpoint-news/daily-newsstand/2017-tax-reform-checkpoint-special-study-on-s-corp-partnership-other-changes-in-the-tax-cuts-and-jobs-act/)** describes a number of the Act’s changes that would affect **S corporations, partnerships, tax-exempt organizations, electing small business trusts, and retirement plans.** - This **[special study](https://tax.thomsonreuters.com/media-resources/news-media-resources/checkpoint-news/daily-newsstand/2017-tax-reform-checkpoint-special-study-on-foreign-income-foreign-persons-tax-changes-in-the-tax-cuts-and-jobs-act/)** describes key tax changes affecting **foreign income and foreign persons,** including the exemption from U.S. tax for certain foreign income and the deemed repatriation of off-shore income. ###### Source: Thomson Reuters ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2018 All Rights Reserved. **Categories:** Business, Estate Planning, Not-for-Profit, Tax Legislation, Tax Planning --- ### [Treasury and the IRS issue Able Act guidance](https://waradydavis.com/treasury-and-the-irs-to-quickly-issue-able-act-guidance/) **Published:** June 1, 2015 **Author:** WaradyDavis **Content:** Late in 2014, Congress passed and President Obama signed into the law the Achieving a Better Life Experience (ABLE) Act. The new law, which enjoyed strong bipartisan support, authorizes the creation of tax-favored accounts for qualified individuals challenged by disabilities. Congress instructed Treasury and the IRS to quickly issue guidance and the agency did so in June. The new guidance covers how to establish ABLE accounts, funding for these accounts, qualified distributions, and various reporting requirements. **ABLE accounts** ABLE accounts are intended to encourage individuals and families to establish a tax-favored savings account to assist and support individuals with disabilities. Contributions to an ABLE account are not deductible, but qualified distributions for certain expenses are excluded from taxation. **Creation** ABLE accounts must be created under a state program. Currently, many states are in the process of setting up an ABLE program. If a state does not establish and maintain an ABLE program, the law allows it to contract with another state to provide an ABLE program for its residents. **Eligibility** Generally, an individual is an eligible individual for a tax year if, during that year, either the individual is entitled to benefits based on blindness or disability under Title II or XVI of the Social Security Act and the blindness or disability occurred before the date on which the individual attained age 26, or a disability certification meeting specified requirements is filed with the IRS. In some cases, the IRS explained that individuals may be unable to establish an account themselves. If the eligible individual cannot establish the account, the eligible individual’s agent under a power of attorney or, if none, his or her parent or legal guardian may establish the ABLE account for that eligible individual. **Contributions and distributions** Total contributions to an ABLE account per calendar year cannot exceed the annual gift tax exclusion (which is $14,000 for 2015). Additionally, state must provide adequate safeguards to ensure that total contributions to an ABLE account do not exceed the state’s limit for aggregate contributions under its qualified tuition program. The ABLE Act allows for direct and indirect investment of contributions to the program or earnings no more than two times in any calendar year. If distributions from an ABLE account do not exceed the designated beneficiary’s qualified disability expenses, no amount is included in the designated beneficiary’s gross income. Otherwise, the distribution may be subject to income tax and an additional tax. **Qualified expenses** For ABLE accounts, qualified expenses are expenses that relate to the designated beneficiary’s blindness or disability, and are for the benefit of that designated beneficiary in maintaining or improving his or her health, independence, or quality of life. These include expenses for education, housing, transportation, employment training, and personal support services. The IRS requested comments from interested parties about what types of expenses should be considered qualified disability expenses and under what circumstances. For example, a smartphone could be considered a qualified disability expense if it is an effective and safe communication or navigation aid for an individual with autism. **Reporting and means-testing** The guidance includes various reporting rules. For example, information regarding distributions will be reported on new Form 1099-QA: Distributions from ABLE Accounts. Generally an ABLE account is not to be counted in determining the designated beneficiary’s eligibility for many federal means-testing programs. Special rules may apply to some federal programs. The new guidance covers many aspects and requirements of ABLE accounts, beyond this high-level review. If you have any questions about [ABLE accounts and the IRS’s new guidance](https://waradydavis.com/treasury-irs-get-moving-on-able-account-rules/), please contact us at (847) 267-9600. **Categories:** Tax Legislation --- ### [Year-End Tax Legislation Renews Extenders, Cuts IRS Funding](https://waradydavis.com/year-end-tax-legislation-renews-extenders-cuts-irs-funding/) **Published:** June 8, 2016 **Author:** WaradyDavis **Content:** Eleventh-hour votes in Congress in December renewed a package of tax extenders for 2014, created new savings accounts for individuals with disabilities, cut the IRS’ budget, and more. At the same time, the votes helped to set the stage for the 114th Congress that convenes this month. Republicans have majorities in the House and Senate and have indicated that taxes are one of the top items on their agenda for 2015. ## Extenders The Tax Increase Prevention Act of 2014, signed into law by President Obama in December extends more than 50 individual, business and energy tax incentives retroactively to January 1, 2014. As a result, taxpayers can claim these incentives on their 2014 returns filed in 2015. The Act includes all of the popular incentives for individuals, such as the state and local sales tax deduction and higher education tuition deduction, as well as many business incentives, including the research tax credit, bonus depreciation and enhanced Code Sec. 179 expensing. A handful of extenders were not renewed, mostly targeted to energy efficiency. If you have any questions about the renewal of the extenders for 2014, please contact us at (847) 267-9600. ## ABLE Act As part of the extenders package, Congress approved the Achieving a Better Life Experience (ABLE) Act of 2014. The Act establishes ABLE accounts for individuals with disabilities. Funds in ABLE accounts may be used for qualified expenses of persons with disabilities. **To fund these accounts, the Act:** - Adjusts for inflation some civil tax penalties - Authorizes the IRS to certify qualifying professional employer organizations - Excludes dividends from controlled foreign corporations from the definition of personal holding company income - Increases the IRS’ levy authority on payments to Medicare providers - Raises the Inland Waterways Trust Fund financing rate ## IRS budget The IRS goes into the 2015 filing season with a reduced budget. The omnibus spending agreement, signed into law by President Obama on December 16, cuts the IRS’ fiscal year (FY) 2015 budget by some $345 million. The omnibus spending agreement also instructs the IRS to improve its response times in helping victims of identity theft and reduce refund fraud. In response to the budget cuts, IRS Commissioner John Koskinen said the agency will freeze hiring and take other steps to reduce expenses. Koskinen also cautioned that revenue collection and tax enforcement could be impaired by the budget cuts as the agency will have to make do with less. Taxpayer audits were singled out by Koskinen as one area where cutbacks could have a negative effect. ## Affordable Care Act Congress also clarified the status of so-called expatriate health plans under the Affordable Care Act. These plans cover very specific groups of people, including participants in a group health plan who are aliens residing outside the United States and U.S. nationals about whom there is a good faith expectation of being abroad, in connection with his or her employment, for at least 180 days in a 12-month period. The omnibus spending agreement exempts expatriate health plans, employer sponsors of these plans, and insurance issuers providing coverage under these plans from the health care coverage requirements of the Affordable Care Act. Additionally, the omnibus spending agreement treats these plans as providing minimum essential coverage for purposes of the Affordable Care Act’s individual mandate. ## Multi-employer pension plans The extenders package and the omnibus spending agreement amend the rules governing multi-employer pension plans. The provisions, supporters argued, are intended to shore-up many struggling plans. Opponents countered that the changes weaken protections for beneficiaries. The amendments to the multi-employer pension rules are very technical. Please contact our office for more details ## 114th Congress The Tax Increase Prevention Act did not extend the extenders beyond 2014. As of January 1, 2015, they all expired again. During 2014, proposals to extend the incentives for two years or make them permanent were floated in Congress. The GOP-controlled House voted to make permanent bonus depreciation, enhanced Code Sec. 179 expensing and some charitable giving breaks, but these bills were not taken up by the Democratic-controlled Senate. This could change in the 114th Congress. The new leaders of the tax-writing committees, Rep. Paul Ryan, R-Wisc., chair of the House Ways and Means Committee, and Sen. Orrin Hatch, R-Utah, chair of the Senate Finance Committee, have both indicated their interest in addressing the extenders as part of comprehensive tax reform. Any movement toward comprehensive tax reform will require cooperation between the White House and the Republican-controlled Congress. In December, President Obama said that he would be willing to work with Republicans on corporate tax reform but any decrease in the corporate tax rate would need to be paid for by revenue raisers elsewhere. The President also said that he wants to preserve and make permanent some temporary enhancements to individual tax breaks, such as the earned income credit. New Senate Majority Leader Mitch McConnell, R-Ky., also said in December that he could work with the White House. Please contact us at [(847) 267-9600]() if you have any questions about the 2014 year-end legislation or the new Congress. Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2014 **Categories:** Tax Legislation --- ### [Competing Proposals Fuel Tax Reform Debate](https://waradydavis.com/competing-proposals-fuel-tax-reform-debate/) **Published:** May 9, 2016 **Author:** WaradyDavis **Content:** April, 2014. Tax reform, frequently discussed in Washington, got a boost from two recent proposals, one from the chair of the House tax writing committee and another from the White House. Rep. Dave Camp, R-Mich., chair of the House Ways and Means Committee, released a massive tax reform bill in late February. In early March, President Obama released his fiscal year (FY) 2015 budget proposals, detailing over 160 tax proposals. Both proposals share some similarities but also key differences. **Camp’s plan** Camp unveiled a sweeping tax reform plan (the Tax Reform Act of 2014) that would leave almost no part of the Tax Code unchanged. Everyone-individuals, businesses, exempt-organizations, governmental entities-would be impacted in one way or another. Some of Camp’s far-reaching proposals are: - Consolidation of individual tax brackets - Higher standard deduction - Increased child tax credit - Revised treatment of capital gains and dividends with a 40 percent exemption - Repeal of alternative minimum tax (AMT) - Consolidated education tax incentives - Simplified tax return for seniors - Reform of charitable contribution deduction - Modified home mortgage interest deduction - Top corporate tax rate of 25 percent - Reform of rules for depreciation - Permanent research tax credit - Reform of the casualty loss rules To pay for lower tax rates, Camp’s proposal would repeal many popular current tax incentives for individuals. They include the state and local sales tax deduction, higher education tuition deduction, student loan interest deduction, residential energy efficiency credits, adoption credit, and the itemized medical expense deduction. Many tax-advantage benefits of retirement plans would be curtailed or eliminated. Businesses also would lose many tax incentives, such as the Code Sec. 199 domestic production activities deduction, credits for production of fossil and alternative fuels, and the Work Opportunity Tax Credit. Camp’s plan would also repeal the like-kind exchange rules, the last-in, first-out (LIFO) method of accounting, and reform the rules for the treatment of travel and entertainment expenses. The foreign tax system would also be overhauled. Camp did not propose to repeal the Patient Protection and Affordable Care Act. Camp did, however, propose to repeal the Affordable Care Act’s medical excise tax and prohibition of using health FSA dollars for over-the-counter medications. Camp has supported separate bills to delay the Affordable Care Act’s individual mandate but did not address this in his tax reform plan. ## Obama’s proposals President Obama’s FY 2015 budget renews a number of past proposals and makes some new proposals. [New proposals include significant enhancements](https://waradydavis.com/some-fye-2017-budget-proposals-could-gain-traction-in-2016/) to the child tax credit and the earned income credit. President Obama did not go so far as Camp to propose reducing the number of individual tax brackets but he did call for reducing the value of certain exclusions and deductions for higher income individuals and imposing a minimum tax rate of 30 percent on individuals with adjusted gross incomes above $1 million. For homeowners, the President proposed to extend the now-expired exclusion for cancellation of certain home mortgage debt. In the education area, the President called on Congress to make permanent the AOTC. As in his past budget proposals, President Obama also signaled his willingness to reduce the corporate tax rate but businesses would need to give up some tax incentives in exchange. These could include many of the so-called business tax extenders, such as special expensing rules for television productions, environmental remediation and similar ones. The President did propose to permanently increase Code Sec. 179 small business expensing to $500,000 with a $2 million investment limit. However, bonus depreciation would not be extended. ## Outlook Several of the President’s proposals are similar to ones from Camp. The President called for repealing the last-in, first-out (LIFO) method of accounting and many fossil fuel preferences. A new proposal would limit the amount of capital gain deferred under Code Sec. 1031 from a like-kind exchange of real property to $1 million per taxpayer per year, effective for exchanges completed after December 31, 2014. Both the President and Camp proposed to make permanent the research tax credit. They differed significantly on which other temporary incentives to continue or eliminate. The GOP-controlled House is not expected to take up many of President Obama’s proposals, with the possible exception of some tax administration changes. The President’s budget received a more enthusiastic response from Senate Democrats, but passage in the Senate requires a supermajority of 60 votes, which Democrats lack. The outlook for Camp’s proposals is equally murky. As chair of the Ways and Means Committee, Camp may schedule hearings on his plan but the House GOP leadership ultimately must bring the bill to the full House for a vote, and it is unlikely to do so this year. *If you have any questions about the President’s proposals or Camp’s bill, please contact our office at (847) 267-9600.* If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. © 2012 Thomson Reuters/RIA. All rights reserved. **Categories:** Tax Legislation --- ### [10-Year RMD Rule Finalized By the IRS](https://waradydavis.com/10-year-rmd-rule-finalized-by-the-irs/) **Published:** August 6, 2024 **Author:** Leslie Flinn **Excerpt:** The 10-Year RMD rule finalized by the IRS confirms inherited retirement assets will receive different treatment depending on the recipient, starting in 2025. **Content:** ## Based on the 10-Year RMD rule finalized by the IRS in late July, inherited retirement assets will be subject to different treatment depending on the recipient, starting in 2025. On July 19, 2024, the IRS and Treasury Department released long-awaited **Final Regulations for Inherited Retirement Account Required Minimum Distributions** or “RMDs” ([**T.D. 10001**](https://public-inspection.federalregister.gov/2024-14542.pdf)). RMDs are mandated yearly withdrawals from IRAs, 401(k)s and other tax deferred retirement plans. The final regulations clarify changes brought about by the [SECURE Act](https://waradydavis.com/the-secure-act-likely-to-affect-your-retirement-and-estate-plans/), which took effect in 2020, and the [SECURE 2.0 Act](https://waradydavis.com/secure-2-0-a-game-changer-for-retirement-planning/), which was signed into law at the end of 2022. The new rules start taking effect on **January 1, 2025** and apply to retirement plan participants, IRA owners, and their beneficiaries. ### Background The genesis of the new regulations dates back to the 2019 enactment of the Setting Every Community Up for Retirement Enhancement (SECURE) Act. One of the many changes in that tax law was the elimination of so-called “stretch IRAs.” Previously, all beneficiaries of inherited IRAs could stretch RMDs over their entire life expectancies. Younger heirs in particular benefited by taking smaller distributions for decades, deferring taxes while the accounts grew. These heirs also could pass on the IRAs to later generations, deferring the taxes even longer. The SECURE Act created limitations on which heirs can stretch IRAs. These limits are intended to force beneficiaries to take distributions and expedite the collection of taxes. Specifically, for IRA owners or defined contribution plan participants who died in 2020 or later, only **“eligible designated beneficiaries” (EDB)** are permitted to stretch out payments over their life expectancies. - **Eligible designated beneficiaries** **(EDB) –** as defined by the IRS include the following: Surviving spouses, Children younger than “the age of majority,” Individuals with disabilities, Chronically ill individuals, and Individuals who are no more than 10 years younger than the account owner. ***The bottom-line is that eligible designated beneficiaries have other options for dealing with an inherited retirement account and may not be limited to the 10-year rule****.* (Note that self-certification of disability or chronic illness is not sufficient under the final regulations, which require documentation.) - **Designated beneficiaries (DB)**—are all other heirs who are not an EDB (commonly, the adult children or grandchildren of a plan participant. ) Designated beneficiaries are required to take the entire balance of the account within 10 years of the death, regardless of whether the deceased died before, on or after the **required beginning date (RBD)** of his or her RMDs. ***This is known as the “10-year rule.”*** ### Proposed regulations muddied the waters In February 2022, the IRS issued proposed regulations addressing the 10-year rule — and they brought some bad news for many affected heirs. The proposed regulations provided that, if the deceased dies on or after the RBD, designated beneficiaries must take their taxable RMDs in years one through nine after death (based on their life expectancies), receiving the balance in the tenth year. A lump-sum distribution at the end of 10 years wouldn’t be allowed. The IRS soon heard from confused taxpayers who had recently inherited IRAs or defined contribution plans and didn’t know when they were required to start taking RMDs. Designated beneficiaries could have been hit with a penalty based on the amounts that should have been distributed but weren’t. This penalty was 50% before 2023 but was lowered to 25% starting in 2023 (or 10% if a corrective distribution was made in a timely manner). The plans themselves could have been disqualified for failing to make RMDs. As a result, the IRS issued a series of waivers on enforcement of the 10-year rule. ### Final regulations settle the matter With the release of the final regulations, the waivers will come to an end after 2024. The Final regulations distinguish between: 1. a) instances in which the original participant began taking RMDs before they died and 2. b) instances when they died before they started taking RMDs. The final regulations also follow proposed regulations and continue to differentiate between eligible designated beneficiaries and designated beneficiaries. **Timing of RMDs:** You may hear reference to the “at least as rapidly” rule a great deal while talking about inherited IRAs. The rule emphasizes the frequency of withdrawal, and not the amount of the withdrawal. In simple terms, that means if the person who died was themselves taking RMDs due to their age at time death, designated beneficiaries must make annual withdrawals during the 10-year period. Under the life expectancy rules, what’s left in the account has to be distributed to the beneficiaries at the same rate or faster—you can’t take fewer distributions. Conversely, the final regulations stipulate that, upon the original account owner’s death, and assuming said owner died before they reach their required beginning date to commence RMDs, designated beneficiaries and their advisors do have flexibility in how to withdraw funds. While the account still has to be fully liquidated under the same timeline, no annual distributions are required. That gives designated beneficiaries more opportunity for tax planning. But, as already noted, if RMDs had already started, for designated beneficiaries they must continue based on the new 10-year time horizon. Regardless of the specifics, all the money must be out of the account within a decade. The rules are still complicated for a several reasons. One is that the age at which someone must take required minimum distributions has changed twice since the first Secure Act was signed into law in 2019 and the Secure 2.0 Act that followed in 2022 — from 70.5 years old to 72 and now 73 (it will be 75 in 2033). ### What About Roth IRAs? **Roth accounts:** Owners of Roth accounts are not subject to RMDs. That has always been the case for Roth IRAs. Until Secure 2.0, however, RMDs from designated Roth accounts including Roth 401(k), Roth 403(B) or Roth 457(b) were required, even though those withdrawals were not subject to income taxes. Starting in 2024, RMDs from these Roth designated accounts are no longer mandated. As a result, the rules that apply to beneficiaries of Roth IRAs and DRAs for 2024 and after are the same as those that apply to beneficiaries who inherit traditional accounts from someone who died before they were supposed to start taking RMDs. Whether the account was split between Roth and traditional investments, however, will also affect how distributions must be treated. These rules will be covered separately in a future communication. ### Other Points to Note The IRS has allowed all designated beneficiaries to skip RMDs from inherited IRAs for 2020, 2021, 2022, 2023 and 2024 without facing any penalties. The final regulations state that no RMDS will be required for this 4-year period. The 10-year window, however, ***will not be extended for designated-beneficiaries***. Instead, designated beneficiaries will have to abide by the 10-year period beginning at the time of inheritance. Once again, however, designated beneficiaries **will not have to take RMDs retroactively.** ### Additional Proposed Regulations The IRS released another set of proposed regulations regarding other RMD-related changes made by SECURE 2.0, including the age when individuals born in 1959 must begin taking RMDs. Under the proposed regulations, the “applicable age” for them would be 73 years. They also include rules addressing: The purchase of an annuity with part of an employee’s defined contribution plan account, Distributions from designated Roth accounts, Corrective distributions, Spousal elections after a participant’s death, Divorce after the purchase of a qualifying longevity annuity contract, and Outright distributions to a trust beneficiary. The proposed regulations would take effect in 2025. Stay tuned. ### **Questions?** The final regulations are [162 pages](https://public-inspection.federalregister.gov/2024-14542.pdf) long and cover other pertinent information about RMD rules for account owners and beneficiaries. This article only scratches the surface. As with most regulations, the IRS is anticipated to provide further clarifications when necessary. **IMPORTANT:** The rules related to RMDs are complicated, especially due to changes to the SECURE Act and the SECURE 2.0 Act. If you’ve inherited an IRA or a defined contribution plan and are unsure of whether you should be taking RMDs, contact your Warady & Davis LLP advisor at (847) 267-9600 or . We are happy to help you determine the best course of action for your tax situation. Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2024 All Rights Reserved **Categories:** Hot Topics, Tax, Uncategorized **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [IRS provides transitional relief for RMDs and inherited IRAs](https://waradydavis.com/irs-provides-transitional-relief-for-rmds-and-inherited-iras/) **Published:** September 8, 2023 **Author:** Leslie Flinn **Excerpt:** Due to legislation affecting the age taxpayers must start taking required minimum distributions (RMDs) from retirement funds, the IRS has offered transitional relief. **Content:** The IRS has issued new guidance providing transitional relief related to recent legislative changes to the age at which taxpayers must begin taking required minimum distributions (RMDs) from retirement accounts. The guidance in [IRS Notice 2023-54](https://www.irs.gov/pub/irs-drop/n-23-54.pdf) also extends relief already granted to taxpayers covered by the so-called “10-year rule” for inherited IRAs and other defined contribution plans. ## The need for RMD relief In late 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act brought numerous changes to the retirement and estate planning landscape. Among other things, it generally raised the age at which retirement account holders must begin to take their RMDs. The required beginning date (RBD) for traditional IRAs and other qualified plans was raised from age 70½ to 72 Three years later, in December 2022, the [SECURE 2.0 Act](https://waradydavis.com/secure-2-0-a-game-changer-for-retirement-planning/) increased the RBD age for RMDs further. This year the age increased to 73, and it’s scheduled to climb to 75 in 2033. The RBD is defined as April 1 of the calendar year *following* the year in which an individual reaches the applicable age. Therefore, an IRA owner who was born in 1951 will have an RBD of April 1, 2025, rather than April 1, 2024. The first distribution made to the IRA owner that will be treated as a taxable RMD will be a distribution made for 2024. While the delayed onset of RMDs is largely welcome news from an income tax perspective, it has caused some confusion among retirees and necessitated updates to plan administrators’ automatic payment systems. For example, retirees who were born in 1951 and turn 72 this year may have initiated distributions this year because they were under the impression that they needed to start taking RMDs by April 1, 2024. Administrators and other payors also voiced concerns that the updates could take some time to implement. As a result, they said, plan participants and IRA owners who would’ve been required to start receiving RMDs for calendar year 2023 before SECURE 2.0 (that is, those who reach age 72 in 2023) and who receive distributions in 2023 might have had those distributions mischaracterized as RMDs. This is significant because RMDs aren’t eligible for a tax-free rollover to an eligible retirement plan, so the distributions would be includible in gross income for tax purposes. ## The IRS response To address these concerns, the IRS is extending the 60-day deadline for rollovers of distributions that were mischaracterized as RMDs due to the change in the RBD from age 72 to age 73. The deadline for rolling over such distributions made between January 1, 2023, and July 31, 2023, is now September 30, 2023. For example, if a plan participant born in 1951 received a single-sum distribution in January 2023, and part of it was treated as ineligible for a rollover because it was mischaracterized as an RMD, the plan participant will have until the end of September to roll over that portion of the distribution. If the deadline passes without the distribution being rolled over, the distribution will then be considered taxable income. The rollover also applies to mischaracterized IRA distributions made to an IRA owner (or surviving spouse). It applies even if the owner or surviving spouse rolled over a distribution within the previous 12 months, although the subsequent rollover will preclude the owner or spouse from doing another rollover in the next 12 months. (The individual could still make a direct trustee-to-trustee transfer.) Plan administrators and payors receive some relief, too. They won’t be penalized for failing to treat any distribution made between January 1, 2023, and July 31, 2023, to a participant born in 1951 (or that participant’s surviving spouse) as an eligible rollover distribution if the distribution would’ve been an RMD before SECURE 2.0’s change to the RBD. ## The 10-year rule conundrum Prior to the enactment of the original SECURE Act, beneficiaries of inherited IRAs could “stretch” the RMDs on the accounts over their entire life expectancies. The stretch period could run for decades for younger heirs, allowing them to take smaller distributions and defer taxes while the accounts grew. These heirs then had the option to pass their IRAs to later generations, potentially deferring tax payments even longer. To accelerate tax collection, the SECURE Act eliminated the rules permitting stretch RMDs for many heirs (referred to as designated beneficiaries, as opposed to eligible designated beneficiaries, or EDBs). For IRA owners or defined contribution plan participants who died in 2020 or later, the law generally requires that the entire balance of the account be distributed within 10 years of death. The rule applies regardless of whether the deceased dies before, on or after the RBD for RMDs from the plan. (EDBs may continue to stretch payments over their life expectancies or, if the deceased died before the RBD, may elect the 10-year rule treatment.) According to proposed IRS regulations released in February 2022, designated beneficiaries who inherit an IRA or defined contribution plan before the deceased’s RBD can satisfy the 10-year rule by taking the entire sum before the end of the calendar year that includes the 10-year anniversary of the death. Notably, though, if the deceased dies on or after the RBD, designated beneficiaries would be required to take taxable annual RMDs (based on their life expectancies) in years one through nine, receiving the remaining balance in year 10. They can’t wait until the end of 10 years and take the entire account as a lump-sum distribution. The annual RMD rule would provide designated beneficiaries less tax-planning flexibility and could push them into higher tax brackets during those years, especially if they’re working. The 10-year rule and the proposed regs left many designated beneficiaries who recently inherited IRAs or defined contribution plans bewildered as to when they needed to begin taking RMDs. For example, the IRS heard from heirs of deceased family members who died in 2020. These heirs hadn’t taken RMDs in 2021 and were unsure whether they were required to take them in 2022. In recognition of the lingering questions, the IRS previously waived enforcement against taxpayers subject to the 10-year rule who missed 2021 and 2022 RMDs if the plan participant died in 2020 on or after the RBD. It also excused missed 2022 RMDs if the participant died in 2021 on or after the RBD. The latest guidance extends that relief by excusing 2023 missed RMDs if the participant died in 2020, 2021 or 2022 on or after the RBD. The relief means covered individuals needn’t worry about being hit with excise tax equal to 25% of the amounts that should’ve been distributed but weren’t (or 10% if the failure to take the RMD is corrected in a timely manner). And plans won’t be penalized for failing to make an RMD in 2023 that would be required under the proposed regs. ### Final regs are pending The IRS also announced in the guidance that final regs related to RMDs will apply for calendar years no sooner than 2024. Previously, the agency had said final regs would apply no earlier than 2023. We’ll let you know when the IRS publishes the final regs and how they may affect you. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Tax Extenders Bill Passed by Congress; Provides 2014 Tax Relief](https://waradydavis.com/tax-extenders-bill-passed-by-congress-provides-2014-tax-relief-2/) **Published:** June 2, 2016 **Author:** WaradyDavis **Content:** Congress’s long-awaited passage of tax extenders legislation provides a short-term extension through only the end of this year of dozens of familiar tax breaks for businesses and individuals, along with a new savings program for the disabled. On Dec. 16, the Senate passed the Tax Increase Prevention Act of 2014 (TIPA), which the House had passed on Dec. 3. The act extends through Dec. 31, 2014, certain tax relief provisions that expired at the end of 2013. Several of these provisions can produce significant savings for taxpayers on their 2014 income tax returns, but quick action (before Jan. 1, 2015) may be needed to take advantage of some of them. To read more, please visit our website – https://waradydavis.com/news/legislation/tax-extenders-2014.php or call 847-267-9600. **Categories:** Tax Legislation --- ### [Q&A For CARES Act Emergency Loans - Apply Now](https://waradydavis.com/qa-cares-act-emergency-loans-2/) **Published:** March 31, 2020 **Author:** Leslie Flinn **Content:** **The US Department of The Treasury issued late today a first round of guidance for the Paycheck Protection Program. You can begin to apply as early as April 3rd.** **[ See information HERE. ](https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses)\*\*IMPORTANT NOTE:** ***Please be cautious of potential scammers who may be reaching out to offer you assistance in applying for loans.*** ### **Following is helpful information we have compiled to-date on CARES Act Emergency Loans** ## Paycheck Protection Program (PPP) ***Please keep in mind that these are general guidelines and subject to final rule-making and eligibility requirements from the SBA.*** The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone. **The Paycheck Protection Program (PPP) will be administered through banks. Contact your bank now as they are giving first priority to existing customers.** ### When Can I Apply? - Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders. - Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders. - Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program. ### Where Can I apply? You can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. Visit **[www.sba.gov](https://www.sba.gov/)** for a list of SBA lenders. ### **Who is Eligible?** - Business Concern - 501(c) (3) Non-Profit Organization - 501 (c) (19) Veterans Organization - Tribal Business Concern - To qualify, companies and nonprofits must have fewer than 500 total employees, including all affiliates, subsidiaries and companies under common ownership. Certain exceptions apply for small businesses in the food service sector, franchises and SBIC-financed businesses. ### What do I need to apply? You will need to complete the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020. Click **[HERE](https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf)** for the application. Lender documentation requirements may vary. ***See suggested list below.*** ### What other documents will I need to include in my application? You will need to provide your lender with payroll documentation. ### Do I need to first look for other funds before applying to this program? No. The US Department of The Treasury is waiving the usual SBA requirement that you try to obtain some or all of the loan funds from other sources (i.e., we are waiving the Credit Elsewhere requirement). ### How long will this program last? Although the program is open until June 30, 2020, you are encouraged to apply as quickly as you can because there is a funding cap and lenders need time to process your loan. ### How many loans can I take out under this program? Only one. ### What can I use these loans for? - Payroll costs, including benefits; - Interest on mortgage obligations, incurred before February 15, 2020; - Rent, under lease agreements in force before February 15, 2020; and - Utilities, for which service began before February 15, 2020. ### How much of my loan will be forgiven? - You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. **Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.** - You will also owe money if you do not maintain your staff and payroll. - **Number of Staff:** Your loan forgiveness will be reduced if you decrease your full-time employee headcount. - **Level of Payroll:** Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019. - **Re-Hiring:** You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020. ### **Important Items to Note** - You can apply for both an Economic Injury Disaster Loan (through the SBA) and a Payroll Protection Program Loan, ***but there may be no duplication in the use of funds.*** - The maximum loan amount is 2.5 times your monthly payroll, up to $10 million, with an interest rate of 1% and a 2 year term. See details at the **[SBA website](https://www.sba.gov/document/policy-guidance--business-loan-program-temporary-changes-paycheck-protection-program)**. - These will be unsecured loans that do not require personal guarantees. - Loan payments can be deferred for 6 months, but interest will continue to accrue during this period. - No prepayment penalty. - No collateral required. ### **What You Can Do Now** - **CONTACT YOUR BANK FOR GUIDANCE.** - View the **[Paycheck Protection Program Application Form. Click HERE.](https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf)** - Identify and compile records for those expenses that can be covered by the program. - If you’ve already had to reduce your workforce due to COVID-19, determine if you would like to rehire them. They will be covered. - Collect the documentation you typically need for a loan application: ***Financial statements*** – Interim 2020 income statement and balance sheet and full year 2019 income statement and balance sheet. **Your bank will communicate with you the documents they require.** - ***Tax Returns*** – last three (3) years of federal returns for business - ***2019 payroll information*** - ***Current organizational documents*** – Bylaws, articles and operating agreements - ***General liability insurance information*** - Current ***building lease & any amendments*** ### HOW THE PAYCHECK PROTECTION PROGRAM WORKS For a clear, easy to understand overview of how the Paycheck Protection Program works, see the US Chamber of Commerce’s informative Q&A guide. **[VIEW HERE](https://waradydavis.com/wp-content/uploads/2020/03/COVID-19-Small-Business-ELA-Loan-Guide.pdf).** **Watch for updates from your banker.** ## **THE SBA Economic Injury Disaster Loan (EIDL)** ### **How to Apply:** The SBA Economic Injury Disaster Loans will be administered through the SBA. *Do not contact your bank regarding these loans*. You may apply **EIDL Online Application Website https://disasterloan.sba.gov/ela** ### **Who Is Eligible:** CARES Act expands EIDL eligibility to small businesses, cooperatives, ESOPs with fewer than 500 employees, passive properties, tribal businesses, all non-profit organizations, including 501(c)(6)s, and to individuals operating as sole proprietors or independent contractors. ### **Highlights:** - **Every State Should Now Be On The Approved EIDL List** - **EIDL Loans May Not Be Forgiven** - **Borrowers can receive a $10,000 emergency grant cash advance that can be forgiven** if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses. - **Can a business get an EIDL and a Paycheck Protection Program loan?** Yes, small businesses can get both an EIDL and a Paycheck Protection Program loan as long as they don’t pay for the same expenses. - **EIDL Applicants Must:** - Apply directly with the SBA and not a bank to get these loans - Have a FICO score greater than 570 to qualify - Have been in business for more than one year. - Keep supporting documents detailing how all the loan proceeds were used for three years. - All available collateral, both business and personal, will have to be pledged until a 1:1 collateral coverage is obtained. The loan will still be made if a 1:1 collateral coverage is not achieved. - All owners with a 20% or greater ownership interest in the entity will be required to guarantee the loan ### **Loan Terms:** - Applicants can either get an EIDL or a new enhanced SBA 7a loan with the proposed program changes, but the SBA might not let them get both. - 30 year terms and amortization is being advised - The loan amount guidance is equal to 6 months of GPM - Loans in this program do not count towards a borrower’s available SBA guaranteed dollar limits - 3.75% interest rate on For Profit business loans and 2.75% interest rates on Non-For Profit loans - Monthly payments will begin 12 months after the loan is funded, interest will accrue ### **Estimated Timeline:** - Historically EIDL loans took 21 days for credit decisions to be made by the SBA. The SBA then mails the loan docs to the applicant after approval. - Applicants have up to 60 days to return signed loan docs to the SBA. The SBA will process and disburse funds into the applicants’ operating account in 3 to 5 days. - **These are historical timelines when this program was used for much smaller areas of the country and not the country as a whole. Anticipate the timeline will be longer.** - Loans up to $500,000 might not require much financial documentation - Loan amounts greater than $500,000 will most likely be slower and require more documentation - Tax Transcripts will be ordered, but the SBA will not wait to get them back before funding ## **We Are Here to Help** We will be issuing more detailed information on the CARES Act soon including small business assistance and available business loans and disaster relief. Also, look for upcoming COVID-19 related webinars. Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID, PPP **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Chicago emergency business loan assistance, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, state of illinois emergency business loan assistance, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Protect your business from COVID-19](https://waradydavis.com/protect-your-business-from-covid-19/) **Published:** March 18, 2020 **Author:** Leslie Flinn **Content:** Yesterday, the government announced plans to mitigate the virus’ impact on America. Action items include suspending all in bound travel from Europe for the next 30 days, a possible payroll tax cut and extension of tax filing deadlines, small business aid and more. As a precaution, business owners and management should take preventive steps to address potential disruption to their operations. Here are some recommended steps to take now. ## **Steps to take now** - **Practice good hygiene.** Encourage hand washing, cough etiquette and social distancing techniques. Disinfect surfaces thoroughly, share CDC prevention information with employees, and provide hand sanitizer and other supplies. (For more details visit the **[Centers for Disease Control and Prevention website](https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html).** - **Tell sick employees to stay home.** Businesses that do not offer paid sick leave may want to consider temporarily offering sick leave. - **Limit non-essential travel.** Avoid high risk areas. - **Identify critical employee groups**. This could be a shipping department, payment processing team, or any functions your company absolutely must have operating every day and develop absenteeism back-up plans. Cross train employees, look for others who could learn the task, recent retirees, or consider an outsourcing plan. - **Have a communication plan.** Be prepared to communicate with customers, suppliers and employees regarding any possible changes in operations. - **Proactively plan for the possibility of office closure(s**). A sizable percentage of your workforce may need to perform tasks from a virtual environment at home or another remote location. - **Ensure that work-at-home systems are running well**, which includes computer security. Perform a test. - **Talk to critical suppliers** of both goods and services about their ability to deliver reliably. Consider setting up alternative suppliers. - **Evaluate and understand possible revenue impact**. Consider ways to mitigate possible negative effects and control expenses. - **Review your insurance coverage.** Make sure your property insurance program includes both business interruption and contingent business interruption coverage protecting income losses generated by inactive suppliers. If nothing else, COVID-19 provides a good lesson that business contingency planning is a worthwhile exercise. **As always, we are here to help. Please contact your Warady & Davis LLP advisor at 847-267-9600.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business Management **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Personal exemptions and standard deductions and tax credits, oh my!](https://waradydavis.com/personal-exemptions-and-standard-deductions-and-tax-credits-oh-my/) **Published:** January 16, 2018 **Author:** WaradyDavis **Content:** Under the **Tax Cuts and Jobs Act (TCJA)**, individual income tax rates generally go down for 2018 through 2025. But that doesn’t necessarily mean your income tax liability will go down. The TCJA also makes a lot of changes to tax breaks for individuals, reducing or eliminating some while expanding others. The total impact of all of these changes is what will ultimately determine whether you see reduced taxes. One interrelated group of changes affecting many taxpayers are those to personal exemptions, standard deductions and the child credit. ## **Personal exemptions** For 2017, taxpayers can claim a personal exemption of $4,050 each for themselves, their spouses and any dependents. For families with children and/or other dependents, such as elderly parents, these exemptions can really add up. For 2018 through 2025, the TCJA suspends personal exemptions. This will substantially increase taxable income for large families. However, enhancements to the standard deduction and child credit, combined with lower tax rates, might mitigate this increase. ## **Standard deduction** Taxpayers can choose to itemize certain deductions on Schedule A or take the standard deduction based on their filing status instead. Itemizing deductions when the total will be larger than the standard deduction saves tax, but it makes filing more complicated. For 2017, the standard deductions are $6,350 for singles and separate filers, $9,350 for head of household filers, and $12,700 for married couples filing jointly. The TCJA nearly doubles the standard deductions for 2018 to $12,000 for singles and separate filers, $18,000 for heads of households, and $24,000 for joint filers. (These amounts will be adjusted for inflation for 2019 through 2025.) For some taxpayers, the increased standard deduction could compensate for the elimination of the exemptions, and perhaps even provide some additional tax savings. But for those with many dependents or who itemize deductions, these changes might result in a higher tax bill — depending in part on the extent to which they can benefit from enhancements to the child credit. ## **Child credit** Credits can be more powerful than exemptions and deductions because they reduce taxes dollar-for-dollar, rather than just reducing the amount of income subject to tax. For 2018 through 2025, the TCJA doubles the child credit to $2,000 per child under age 17. The new law also makes the child credit available to more families than in the past. For 2018 through 2025, the credit doesn’t begin to phase out until adjusted gross income exceeds $400,000 for joint filers or $200,000 for all other filers, compared with the 2017 phaseout thresholds of $110,000 and $75,000, respectively. The TCJA also includes, for 2018 through 2025, a $500 credit for qualifying dependents other than qualifying children. ## **Tip of the iceberg** Many factors will influence the impact of the TCJA on your tax liability for 2018 and beyond. And what’s discussed here is just the tip of the iceberg. For example, the TCJA also makes many changes to itemized deductions. For help assessing the impact on your tax situation, please contact us at (847) 267-9600 for more information. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2018 All Rights Reserved. **Categories:** Tax Legislation --- ### [Spending bill extends tax breaks, adds retirement provisions](https://waradydavis.com/spending-bill-extends-tax-breaks-adds-retirement-provisions/) **Published:** January 16, 2020 **Author:** Leslie Flinn **Content:** Before its winter break, Congress engaged in a flurry of activity. Most notably, it reached agreement on a massive government wide spending package titled the **Further Consolidated Appropriations Act, 2020.** The legislation extends certain income tax provisions that had expired, as well as some that were due to expire at the end of 2019. Congress traditionally passes so-called “extenders” annually, but it neglected to do so for 2018. As a result, several popular breaks for both individuals and businesses expired at the end of 2017. To the surprise of some, the agreement also includes the **Setting Every Community Up for Retirement Enhancement (SECURE) Act.** The law, which had been mired in the Senate since the House of Representatives passed it by a 417-3 vote in May 2019, is the first significant retirement-related legislation since the Pension Protection Act of 2006. Together, the two laws could have substantial repercussions for tax, retirement and even estate planning. ## Extended tax breaks Among others, the new legislation extends the following tax provisions, some of which were established on a temporary basis by the Tax Cuts and Jobs Act (TCJA), through 2020: - **Exclusion of discharge of mortgage debt.** Homeowners who’ve undergone foreclosure, a short sale, or a loan modification, or otherwise had mortgage debt forgiven, can exclude up to $2 million of the debt from their gross income ($1 million for married individuals filing separately). The debt generally must have resulted from the acquisition, construction or substantial improvement of their principal residence. The law also modifies the exclusion to make it apply to debt discharged under a binding written agreement entered into before January 1, 2021. Before this change, the exclusion applied only to debt forgiven in calendar years through 2017 and debt discharged in 2018 under a written agreement entered into in 2017. Deduction for mortgage insurance premiums. Homeowners now can continue to treat their qualified mortgage insurance premiums as deductible mortgage interest — assuming they itemize their deductions. The deduction begins to phase out when adjusted gross income (AGI) exceeds $100,000 ($50,000 if married filing separately). This deduction had expired at the end of 2017. - **Deduction for unreimbursed medical expenses.** The TCJA reduced the threshold for deducting unreimbursed medical expenses from 10% to 7.5% of AGI for 2017 and 2018. The lower threshold now has been extended through 2020. Qualified medical expenses in excess of the threshold can be claimed as an itemized deduction. Qualified medical expenses include payments to physicians, dentists and other medical practitioners, as well as for certain equipment (including glasses, contacts and hearing aids), supplies, diagnostic devices, and prescription drugs. Travel expenses related to medical care are deductible, too. If you’re expecting to incur medical expenses early in 2020, you may now find it worthwhile to expedite, if possible, those costs into 2019 to qualify for the deduction on your 2019 income tax return or increase your 2019 deduction. - **Deduction for qualified tuition and related expenses.** The above-the-line deduction for higher education expenses reduces a taxpayer’s AGI and is available regardless of whether the taxpayer itemizes (though it generally can’t be taken if certain tax credits for education expenses are claimed). The deduction is limited to $4,000 for individual taxpayers whose AGI doesn’t exceed $65,000 ($130,000 for joint filers) or $2,000 for individuals whose AGI doesn’t exceed $80,000 ($160,000 for joint filers). This deduction had expired at the end of 2017. - **Incentives for empowerment zones.** The law extends the incentives — including tax-exempt bonds, employment credits, increased expensing on qualifying equipment, and capital gains deferral on the sale of qualified assets sold and replaced — for eligible businesses and employers to operate in the 41 specifically designated economically distressed areas - **New Markets Tax Credit (NMTC).** Businesses can earn NMTCs for investments in real estate projects, community facilities and operating businesses in low-income communities. The credit generally equals 39% of the original investment amount, claimed over a period of seven years beginning on the date of the investment.The new law provides a $5 billion allocation for the credit for 2020 and extends for one year, through 2025, the carryover period for unused credits (that is, carrying over from years in which the credit amount exceeds the taxpayer’s tax liability). In certain circumstances, the NMTC can enhance the tax benefits of investing in empowerment zones. - **Employer tax credit for paid family and medical leave.** The TCJA created a new tax credit for certain employers that provide paid family and medical leave but made it available only for 2018 and 2019. Eligible employers can now claim the credit through 2020 if they have a written policy providing at least two weeks of such leave annually to all qualifying employees, both full- and part-time (the requisite leave for part-timers is determined on a prorated basis), and meet certain other requirements.The amount of the credit begins at 12.5% of wages paid if the leave payment rate is at least 50% of the normal wage rate. The percentage rises incrementally by 0.25 percentage points as the rate of leave payment exceeds 50%, with a maximum credit of 25% when full wages are paid for the leave. The maximum amount of family and medical leave that may be taken into account with respect to any qualifying employee is 12 weeks per tax year. - **Work Opportunity Tax Credit (WOTC).** The WOTC was due to expire at the end of 2019. It’s available to employers that hire individuals who are members of 10 targeted groups, including certain qualified veterans, ex-felons and certain individuals receiving state benefits. Employers that hire such employees can claim the tax credit as a general business credit against their income tax. ## Changes to retirement plans **The SECURE Act** is packed with more than two dozen provisions primarily intended to encourage saving for retirement. Most of the provisions take effect January 1, 2020. They include measures affecting both individuals and businesses. For example, under current law, individuals are prohibited from contributing to traditional IRAs after they reach age 70½, regardless of whether they’re still working. The SECURE Act eliminates that restriction so that anyone can contribute as long as they’re working, matching the existing rules for 401(k) plans and Roth IRAs. The SECURE Act raises the age at which taxpayers generally must begin to take their required minimum distributions (RMDs) from 70½ to 72. The new rule applies only to those individuals who haven’t reached the age of 70½ by the end of 2019. The law also includes a new exemption from the 10% tax penalty on early withdrawals from retirement accounts. Taxpayers can withdraw an aggregate of $5,000 from a plan without penalty within one year of the birth of a child or an adoption becoming final. Less favorably for individual taxpayers, the SECURE Act eliminates the “stretch” RMD provisions that have permitted beneficiaries of inherited retirement accounts to spread the distributions over their life expectancies. This allowed younger beneficiaries to take smaller distributions while growing the accounts and deferring taxes. Now, most nonspouse beneficiaries must take their distributions over a 10-year period beginning on the deceased’s death. That could increase the tax burden by pushing the distributions into years when the beneficiary is working and in higher tax brackets. The change, therefore, could require some modifications to estate plans, particularly if the plans include trustee-managed inherited IRAs with guardrails to prevent young beneficiaries from quickly draining the accounts. On the business side, the SECURE Act expands access to open multiple employer plans (MEPs). MEPs give smaller, unrelated businesses the opportunity to team up to provide defined contribution plans at a lower cost, due to economies of scale, with looser fiduciary duties. It also provides tax credits to employers for starting retirement plans and automatically enrolling employees. In addition, the new law paves the way for employers to include annuities in their retirement plans by eliminating their potential liability when it comes to selecting the appropriate annuity plans. And the SECURE Act requires employers to allow participation in their retirement plans by part-time employees who’ve worked at least 1,000 hours in one year (about 20 hours per week) or three consecutive years of at least 500 hours. ## Action required The extension of tax breaks that were thought to have expired at the end of 2017 when filing federal income tax returns for the 2018 tax year means that some taxpayers should consider filing amended returns for the year. Changes to the laws for retirement savings may require a rethinking of both retirement and estate planning. We can help you chart the best course to reduce your taxes and maximize your and your heirs’ financial cushions under current law. Please call us at 847-267-9600 if you have any questions. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [The pass-through provisions of the TCJA: The devil is in the details](https://waradydavis.com/the-pass-through-provisions-of-the-tcja-the-devil-is-in-the-details/) **Published:** March 20, 2018 **Author:** WaradyDavis **Content:** The **Tax Cuts and Jobs Act (TCJA)** has been touted for cutting the corporate tax rate, but the law also contains some valuable goodies for smaller businesses that operate as pass-through entities, including partnerships, limited liability companies, S corporations and sole proprietorships. These businesses stand to see their tax liabilities fall significantly, but determining just how much they will benefit can be complicated. ## **Pass-through tax cuts** The owners and shareholders of pass-through entities pay taxes on their net income at individual ordinary income tax rates, which had reached as high as 39.6% under prior law. The TCJA reduced individual tax rates, though, with the highest rate now at 37%. It also raised the thresholds for individual tax brackets, and the top rate doesn’t take effect until taxable income exceeds $500,000 for single filers and $600,000 for married couples filing jointly. Moreover, the TCJA added a generous new business deduction for pass-through businesses that will slash taxable income. The qualified business income (QBI) deduction generally allows taxpayers to deduct 20% of QBI received. QBI is the net amount of income, gains, deductions and losses, exclusive of reasonable compensation, certain investment items and payments to partners for services rendered. The calculation is performed for each qualified business and aggregated. (If the net amount is below zero, it’s treated as a loss for the following year, thereby reducing that year’s QBI deduction.) Once taxable income — not QBI — exceeds $157,500 for single filers or $315,000 for married couples filing jointly, a wage limit begins to phase in, under which taxpayers can deduct only the lesser of 20% of QBI or 50% of their allocable share of W-2 wages paid by the business. The wage limit is intended to deter high-income taxpayers from converting wages or other compensation for personal services to QBI that qualifies for the deduction. Alternatively, taxpayers can deduct the lesser of 20% of QBI or 25% of wages plus 2.5% of their allocable share of the unadjusted basis of qualified business property (QBP) — essentially, the purchase price of tangible depreciable property held at the end of the tax year. This option makes it easier for capital-intensive firms with relatively low wages (for example, real estate, construction or manufacturing businesses) to take advantage of the deduction. The wage limit phases in completely when taxable income exceeds $207,500 for single filers and $415,000 for joint filers. When it applies but isn’t yet fully phased in, the gross (without any wage limit) deduction is reduced by the same ratio of the difference between the amount of the gross deduction and the fully wage-limited deduction as the ratio of 1) the amount by which the taxable income exceeds the threshold to 2) $50,000 for single filers or $100,000 for married couples filing jointly. The amount of the deduction may not exceed 20% of the taxable income less any net capital gains. So, for example, if the QBI for a married couple is $400,000 and their taxable income is $300,000, the deduction is limited to 20% of $300,000, or $60,000. The QBI deduction is further limited for specified service trades or businesses (SSTBs). SSTBs include businesses involving law, financial, health care, brokerage and consulting services firms, as well as any business where the principal asset is the reputation or skill of one or more of its employees. The QBI deduction for SSTBs begins to phase out at $157,500 in taxable income for single filers and $315,000 for joint filers, phasing out completely at $207,500 and $415,000, respectively (the same thresholds by which the wage limit phases in). The QBI deduction applies to taxable income and doesn’t come into play when computing adjusted gross income (AGI). It’s available to both itemizing and nonitemizing taxpayers. ## **Examples for non-SSTBs** The amount of the deduction for “qualified trades or businesses” depends largely on taxpayers’ taxable income — that is, their AGI less itemized deductions (excluding the QBI deduction). It’s most easily calculated when taxable income is under $157,500 for single filers and $315,000 for married joint filers so the wage limit doesn’t apply. For example, joint filers Bob and Mary have taxable income of $150,000, including $75,000 in QBI. They can deduct 20% of $75,000, or $15,000, from their taxable income. Computing the deduction also is fairly straightforward when taxable income exceeds $207,500 for single filers or $415,000 for married joint filers. Let’s assume Bob and Mary have taxable income of $575,000, including $75,000 of Mary’s QBI. She pays $20,000 in wages and has $90,000 of QBP. The first option for the wage limit calculation in this situation is $10,000 (50% of $20,000), and the second option is $7,250 (25% of $20,000 + 2.5% of $90,000) — making the wage limit, and the deduction, $10,000. What if Bob and Mary’s taxable income falls into the range between $315,000 and $415,000, where the wage limit is phasing in, with everything else remaining the same? If their taxable income is, say, $400,000, their deduction is partially capped by the wage limit. As in the immediately preceding example, the full wage limit is $10,000, but, with taxable income of $400,000, only 85% of the full limit applies: ($400,000 taxable income – $315,000 threshold)/$100,000 = 85% To calculate the amount of their deduction, the couple must deduct 85% of the difference between the gross deduction of $15,000 and the $10,000 deduction if the full wage limit applied: ($15,000 – $10,000) × 85% = $4,250 That amount is deducted from the gross deduction for a final deduction of $10,750 ($15,000 – $4,250). ## **Example for SSTBs** When taxable income doesn’t exceed $157,500 for single filers or $315,000 for married couples filing jointly, SSTBs are treated in the same manner as qualified businesses (see first example above) when it comes to the QBI deduction. And, if the taxable income equals or exceeds $207,500 for single filers or $415,000 for married joint filers, SSTB owners receive no QBI deduction. It’s when taxable income falls between those thresholds that things get trickier because the QBI, W-2 wages and QBP all gradually phase out on a prorated basis over this income range. The percentage that a taxpayer can take into account is 100% less the percentage equal to the ratio of 1) the amount by which taxable income exceeds the threshold amount to 2) $50,000 for single filers or $100,000 for joint filers: 1- (taxable income – applicable threshold)/$50,000 or $100,000 = applicable percentage For example, let’s say Bob and Mary have joint taxable income of $400,000, and Mary has an SSTB with $75,000 in QBI. She pays $20,000 in wages and owns $90,000 in QBP. Only 15% of the QBI, or $11,250, qualifies for the deduction: 1- ($400,000 – $315,000)/$100,000 = 15% × $75,000 = $11,250 The gross deduction is 20% of $11,250, or $2,250. But, because only 15% of the QBI qualifies for the deduction, the couple can take account of only 15% of wages ($3,000) and QBP ($13,500) when calculating the wage limit. Fifty percent of wages for purposes of the limit, therefore, is $1,500, and 25% of wages plus 2.5% of QBP is $1,087.50 — setting the full wage limit at the greater amount of $1,500. As for a non-SSTB, though, the wage limit phases in gradually over this income range. In this case, 85% of the limit applies: ($400,000 – $315,000)/$100,000 = 85% The couple must reduce their QBI deduction by 85% of the difference between the gross deduction amount and the deduction amount if the full wage limit applied: ($2,250 – $1,500) × 85% = $637.50 As a result, their allowable deduction is $1,612.50 ($2,250 – $637.50). ## **What’s next?** It’s still early in the life cycle of the TCJA, and extensive regulations are expected in the near future. Among other things, the Treasury Department must draft regulations addressing the allocation of items and wages, along with reporting requirements, and the application of the QBI deduction to tiered entities. We’ll keep you abreast of important developments. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2018 All Rights Reserved. **Categories:** Tax Legislation --- ### [TCJA glitches and the extenders](https://waradydavis.com/tcja-glitches-and-the-extenders-uncertainty-looms-over-some-federal-income-tax-provisions/) **Published:** April 22, 2019 **Author:** Leslie Flinn **Content:** Congress has yet to tackle several outstanding uncertainties frustrating both businesses and individual taxpayers. The Tax Cuts and Jobs Act (TCJA), for example, contains several “glitches” requiring legislative fixes. Congress also has neglected to pass the traditional “extenders” legislation that retroactively extend certain tax relief provisions that expired at the end of an earlier year, in this case 2017. **TCJA glitches** The sprawling TCJA signed into law in late 2017 contains some inadvertent glitches that range from a lack of clarity to significant drafting errors. In some cases the glitches may produce unintended and costly consequences. Here are examples of two glitches that still need to be addressed and one that has been addressed recently: **The “retail” glitch.** This prevents retailers, restaurants and other businesses from enjoying 100% bonus depreciation on certain assets. Before the TCJA’s enactment, qualified retail improvement property, qualified restaurant property and qualified leasehold improvement property were depreciated over 15 years under the modified accelerated cost recovery system (MACRS) and over 39 years under the alternative depreciation system (ADS). The TCJA classifies all of these property types as qualified improvement property (QIP). QIP generally is defined as any improvement to the interior of a nonresidential real property that’s placed in service after the building was placed in service. Congress intended QIP that is placed in service after 2017 to have a 15-year MACRS recovery period and a 20-year recovery under the ADS. Because 15-year property is eligible for bonus depreciation, Congress also intended QIP to be eligible for that break. Yet, the 15-year recovery period for QIP doesn’t appear in the statutory language of the TCJA, even though it’s found in the Joint Explanatory Statement of Congressional Intent. Until technical corrections are made, therefore, QIP has a 39-year MACRS recovery period, making it ineligible for bonus depreciation. In late March 2019, a bipartisan bill that would fix the error was introduced in the U.S. House of Representatives. The Restoring Investment in Improvements Act mirrors bipartisan legislation introduced in the Senate in mid-March. But many Democrats in Congress haven’t supported this and other TCJA fixes, due to their complaints about how the law was enacted. Some lawmakers advocate tying such fixes to other tax code changes that might otherwise come up short on the votes necessary for passage. In the meantime, taxpayers who have invested in QIP might consider cost segregation studies. By separating out QIP from other types of property, they could still qualify for some bonus depreciation. **Effective date glitch for the NOL deduction**. The TCJA implemented several changes to deductions for net operating losses (NOLs). Specifically, it limits the deduction to 80% of taxable income, eliminates most NOL carrybacks and allows unlimited carryforwards (vs. 20 years under prior law). The statutory text states that changes to carrybacks and carryforwards apply to NOLs arising in taxable years *ending* after December 31, 2017 — but the Conference Report says they apply to NOLs arising in taxable years *beginning* after December 31, 2017. The statute and the report agree that the 80% limitation applies to losses arising in taxable years beginning after December 31, 2017. Because statutory language controls, a mismatch now exists between the effective dates for the 80% limitation and the changes to NOL carrybacks and carryforwards. Congress’s Joint Committee on Taxation has confirmed that all of the changes should apply to NOLs in tax years beginning after 2017. It notes, though, that technical corrections may be necessary. As of this writing, no correcting legislation has been introduced in Congress. **Proposed tax extenders** Many of the income tax provisions that Congress enacts are temporary. As a result, Congress routinely temporarily reauthorizes some of these more popular provisions before or after they expire. In late February 2019, Sens. Chuck Grassley (R-IA) and Ron Wyden (D-OR) introduced the Tax Extender and Disaster Relief Act of 2019. Among other things, the legislation would extend through 2019 more than two dozen tax breaks that expired at the end of 2017, including the: - New Energy-Efficient Home Credit ($1,000 or $2,000 per home for eligible manufacturers of qualified energy-efficient residential homes), - Exclusion from gross income of discharge of qualified principal residence debt (up to $2 million for married couples filing jointly and $1 million for other taxpayers), - Mortgage insurance premiums deduction (phasing out for taxpayers with adjusted gross income over $100,000 or, if married filing separately, $50,000), - Deduction for qualified tuition and related expenses (up to $4,000 per year subject to income limitations), and - Empowerment zone tax incentives, including tax-exempt bond financing, a wage credit, accelerated depreciation on qualifying equipment and capital gains tax deferral in designated geographic areas. As of this writing, corresponding legislation hasn’t been introduced in the U.S. House of Representatives. **A waiting game** In light of the current political climate in Washington, D.C., it remains to be seen whether any of the outstanding issues will be resolved in the near future. We’ll keep you apprised of any updates. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax Legislation --- ### [BOI Reporting Paused ... Again](https://waradydavis.com/boi-reporting-paused-again/) **Published:** December 27, 2024 **Author:** Leslie Flinn **Excerpt:** IMPORTANT UPDATE: The January deadline for businesses to register their beneficial ownership information is once again on hold following a Dec. 26 order from the Fifth Circuit Court of Appeals.  **Content:** > **IMPORTANT UPDATE – February, 2025**On February 18, 2025, following a decision by the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Department of Treasury, et al., 6:24-cv-00336 (E.D. Tex.), **beneficial ownership information [(BOI) reporting requirements](https://waradydavis.com/act-now-on-boi-reporting-deadlines/) under the Corporate Transparency Act (“CTA”) are once again back in effect with a new deadline of March 21, 2025**. ## BOI Reporting Paused … Again On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (*Texas Top Cop Shop, Inc. v. McHenry*—formerly, *Texas Top Cop Shop v. Garland*). **As a separate nationwide order issued by a different federal judge in Texas (*Smith v. U.S. Department of the Treasury*) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in *Texas Top Cop Shop*.** Reporting companies also are not subject to liability if they fail to file this information while the *Smith* order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.Despite the Supreme Court’s granting the government’s motion to stay a nationwide injunction, as a **separate nationwide order issued by a different federal judge in Texas (*Smith v. U.S. Department of the Treasury*) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN.** This means that the government cannot enforce the CTA and BOI reporting requirements and small businesses are under no obligation to file these reports while the court decides the case. **NOTE**: Warady & Davis LLP and the AICPA, however, continue to recommend that small business owners should remain ready to file BOI reports, as this week’s legal rollercoaster demonstrates that the injunction can be reversed at anytime. The latest injunction will remain in place while the lawsuit proceeds or until the court says otherwise. ### **Background** On Dec. 23, the Fifth Circuit lifted a **[nationwide injunction](https://waradydavis.com/boi-reporting-back-on-with-new-deadline/)** issued by the district court judge earlier this month in a Texas lawsuit challenging the Corporate Transparency Act, which requires covered businesses to report their beneficial ownership information to the Financial Crimes Enforcement Network. Three days later, “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments,” the panel of Fifth Circuit judges that will consider the merits of the government’s appeal of the preliminary injunction vacated that decision and once again enjoined enforcement of the reporting rule and CTA. The lawsuit in Texas was filed by the National Federation of Independent Business and several of its members. The plaintiffs argued that the CTA exceeded Congress’ authority to regulate interstate commerce, that it violates the First Amendment by compelling speech and infringing freedom of association and that it violates the Fourth Amendment by forcing the disclosure of private information. Businesses should monitor **[FinCEN’s BOI page](https://fincen.gov/boi)** for updates, revised deadlines and reporting instructions. ### **More Information** For more information regarding the BOI reporting requirements including FAQs and a helpful short instructional video visit **[https://www.fincen.gov/boi. ](https://www.fincen.gov/boi)**The AICPA has also created a [**BOI reporting resource center**](https://www.aicpa-cima.com/resources/landing/beneficial-ownership-information-boi-reporting). Warady & Davis LLP will continue to keep you informed regarding BOI Reporting requirements as new developments unfold. You may also contact your Warady & Davis LLP business advisor with any additional questions or concerns – (847) 267-9600 or**[ info@waradydavis.com.](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2024 All Rights Reserved **Categories:** Business, Business Management, E-Alerts, General **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Using audit techniques can help shape your nonprofit's future](https://waradydavis.com/using-audit-techniques-can-help-you-shape-your-nonprofits-future/) **Published:** July 18, 2021 **Author:** WaradyDavis **Excerpt:** Whether or not a nonprofit uses an independent auditor once a year, it can employ moves from an auditor’s playbook to get a better view of the organization’s revenue picture. This article discusses techniques such as pinpointing year-to-year trends and benchmarking to other nonprofits, which can be useful in planning a nonprofit’s short and long-term future. **Content:** Whether or not your nonprofit uses an independent auditor, you can employ moves from an auditor’s playbook to get a better view of your organization’s revenue picture. Techniques such as pinpointing year-to-year trends and benchmarking to other nonprofits can be useful in planning your short- and long-term future. ### Look at donor trends To some degree, most nonprofits rely on contributions from supporters to balance their budgets. Compare the dollars raised to past years and see if you can pinpoint any trends. For example, have individual contributions reached a plateau in recent years? What fundraising campaigns have you launched during that period? Go beyond the totals and determine, for instance, if the number of major donors — say, those who give $1,000 or more a year — has been rising. You get more bang for your fundraising buck when you’re able to add major donors to your roster of supporters. Also estimate what portion of contributions is restricted by donors as to how or when the money can be used. If your organization has a large percentage of donations tied up in restricted funds, you might want to re-evaluate your gift acceptance policy. In fact, make sure you have a gift acceptance policy especially for non-standard gifts. You also might want to review your fundraising materials to make sure you’re pursuing contributions that give your organization the most flexibility. ### Size up grant funding Grants include funding from corporate, foundation and government sources. They can vary dramatically in size and purpose, from grants that cover operational costs, to monies for launching a program, to payment for providing services to clients. For example, a state agency may pay you $500 for each low-income, unemployed individual who receives your job training. Pay attention to trends here, too. For instance, did a particular funder supply 50% of total revenue in 2014, 75% in 2015, and 80% last year? A growing reliance on a single funding source — an example of a “concentration” that will increase your risk — is a red flag to auditors and it should be to you, too. In this case, if funding stopped, your organization might be forced to find a new funding source, curtail a program or even close its doors. ### ****Consider service fees, membership dues**** Fees from clients or other third parties can be similar to fees for-profit organizations earn. Fees are generally viewed as exchange transactions, because the client receives something of value in exchange for its payment. Some not-for-profits charge fees on a sliding scale based on income or ability to pay. In other cases, fees (such as rent paid by low-income individuals) are subject to legal limitations set by government funding agencies. On an ongoing basis, your nonprofit will need to assess if providing certain services pays for itself. For instance, fees set four years ago for a medical procedure may no longer be sufficient to cover costs. A decision to raise fees or discontinue the services will probably need to be made. If your nonprofit is a membership organization, you likely charge membership dues. Has membership grown or declined in recent years, and how do your dues compare with similar groups? Make informed predictions about the future of membership dues, especially if you rely on them substantially for revenue. If you suspect that dues income will continue to decline, your organization might consider dropping dues altogether and restructuring. If so, examine other income sources for growth potential. ### Apply the knowledge Once you’ve gained a deeper understanding of your revenue picture, apply that knowledge to various aspects of managing your organization. This will likely involve educating your management team and setting or revising goals. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2021 **Categories:** Not-for-Profit --- ### [Highway Bill Revises Return Due Dates, Makes Other Changes](https://waradydavis.com/highway-bill-revises-return-due-dates-makes-other-changes/) **Published:** September 1, 2015 **Author:** WaradyDavis **Excerpt:** This article discusses the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. The Act revises some important return due dates, overrules a Supreme Court tax decision, revises the employer shared responsibility requirements in the Affordable Care Act (ACA), and includes other tax compliance measures. **Content:** President Obama signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 on July 31. The Act revises some important return due dates, overrules a Supreme Court tax decision, revises the employer shared responsibility requirements in the Affordable Care Act (ACA), and includes other tax compliance measures. Although the highway and transportation funding portion of the Act is temporary (Congress must come up with another funding bill by late October), the tax compliance measures are permanent. **Return due dates** The Act changes the filing deadlines for a number of major tax forms. For the most part, however, these changes first apply to 2016 tax year returns that are due in 2017. Nothing will change for the return filing season coming up in early 2016. The Act provides that the due date for partnerships to file Form 1065, U.S. Return of Partnership Income and Schedule K-1s, Partner’s Share of Income, will move from April 15 to March 15 (or to the 2 ½ months after the close of its tax year for fiscal-year taxpayers). Under the Act, the filing deadline for regular C corporations moves from March 15 (or the 15th day of the 3rd month after the end of its tax year) to April 15 (or the 15th day of the 4th month after the end of its tax year). For C corporations with tax years ending on June 30, the filing deadline will remain at September 15 until tax years beginning after December 31, 2025, when it will become October 15. An automatic six-month extension will be available for C corporations, except for calendar-year C corporations through 2025, during which an automatic five-month extension until September 15 will generally apply. A number of other filing extension deadlines will also change, starting in 2017. FBAR. The Act shifts the due date for the FBAR (Report of Foreign Bank and Financial Accounts, FinCEN Form 114) from June 30 to April 15 with a maximum extension of a six-month period ending October 15. **Overstatement of Basis** In the Home Concrete case, the Supreme Court ruled that an overstatement of basis does not result in an omission of income for statute of limitations purposes. Under the Act, the six-year limitations period applies where any overstatement of basis results in a substantial omission (25 percent or more) of income. The Act is effective for all returns for which the normal assessment period remained open as of the date of enactment and for returns filed after that date. **Affordable Care Act** The new Act revises the ACA’s employer shared responsibility requirements (“employer mandate”). Under the Act, an individual is not taken into account for purposes of the ACA’s employer shared responsibility requirements for applicable large employers (ALEs) if the individual has coverage under TRICARE or a VA health care program. This Act provides that this treatment may be applied retroactively, to months beginning after December 31, 2013. **Mortgage Reporting** Mortgage servicers file Form 1098, Mortgage Interest Statement, to report certain information to the IRS. Included in the Act are additional reporting requirements for mortgage servicers, including the amount of the outstanding mortgage principal, the address (or description of property without an address) of the property, and loan origination date. The additional reporting requirements apply to returns and statements the due date for which (determined without regard to extensions) is after December 31, 2016. **Stepped-up Basis** The Act requires consistency between estate tax value and the “stepped-up basis” of assets acquired from a decedent. Executors of large estates will be required to disclose to the IRS information identifying the value of each interest received. **Additional Provisions** - Pension funds. The Act extends through 2025 the ability of qualified employers to transfer excess pension assets to fund retiree health benefits and retiree life insurance. - Military veterans. Under the Act, a veteran’s eligibility to contribute to a health savings account (HSA) is not affected by receipt of medical care for a service-connected disability. - Fuel taxes. The Act uniformly imposes taxes on liquefied natural gas (LNG), liquefied petroleum gas (LPG), and compressed natural gas (CNG) on an energy-equivalent basis. - Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 If you have any questions about the Supreme Court’s decision in Obergefell and its impact on taxes, please contact us at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [The Restaurant Revitalization Fund](https://waradydavis.com/restaurant-revitalization-fund/) **Published:** April 6, 2021 **Author:** Leslie Flinn **Content:** ***Updated 4-6-2021*** The American Rescue Plan Act of 2021 (the “Act”), signed by President Biden on March 11, 2021, includes within [Section 5003](https://www.congress.gov/bill/117th-congress/house-bill/1319/text#toc-H820E94F05FC0418598F55F90A7979952) a $28.6 billion appropriation to establish a Restaurant Revitalization Fund (the “RRF”) to provide tax-free federal grants to food and beverage businesses hard hit by the pandemic. These grants may be applied to eligible expenses already incurred and for additional expenses over the remainder of the year (or longer if the covered period is extended by the Small Business Administration (the “SBA”)), and are available to entities ranging from food carts to full-service restaurants and tasting rooms. UPDATE: The SBA announced that applicants for RRF grants will no longer will be required to register with the government on the System of Award Management. The process to get a SAM account can be cumbersome. The SBA also said that it expects to begin accepting applications for the program, which will be first-come, first-served, later this month. ## Summary of the RRF and Eligibility A total of $5 billion of the RRF is set aside for businesses with less than $500,000 in 2019 annual gross receipts, with the remainder to be available for grants in an *“equitable manner to eligible entities of different sizes,”* with authority granted to the Administrator of the SBA to make adjustments to the distribution of funds based on demand and local market conditions affecting eligible entities. An eligible grant recipient may be a “restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink.” Entities that are not eligible for RRF grants include entities that (i) are operated by state or local government, (ii) as of March 13, 2020, owned or operated, together with any affiliated business, more than 20 locations (regardless of whether the entities share a common name), (iii) have a pending application for or have received a Shuttered Venue Operators Grant, or (iv) are a “publicly-traded company” (here meaning any entity that is majority owned or controlled by an entity that is an issuer, the securities of which are listed on a national securities exchange under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. § 78f)). The term “affiliated business” means a business in which an eligible entity has an equity or right to profit distributions of not less than 50 percent, or in which an eligible entity has the contractual authority to control the direction of the business, provided that such affiliation shall be determined as of any arrangements or agreements in existence as of March 13, 2020. ## Size of Grants Grants are available to eligible entities in the amount of their “pandemic-related revenue loss,” which is based on the difference between 2020 gross receipts against 2019 gross receipts (with alternative calculations available for entities that were not in operation for the entirety of 2019), and reduced dollar for dollar by any amounts received from Paycheck Protection Program (the “PPP”) Loans (aggregated between First and Second Draws thereunder). The aggregate maximum grant to any entity and its affiliated businesses is $10 million, with a cap of $5 million per physical location. ## Priority in Awarding Grants During the first 21 days during which RRF grants are awarded, applications from eligible entities that are small business concerns owned and controlled by women, small business concerns owned and controlled by veterans, or socially and economically disadvantaged small business concerns will receive priority. Applicants will be required to submit a self-certification of eligibility for priority with any grant application. ## Use of RRF Funds Grants may be used for a wide variety of expenses “incurred as a direct result of, or during, the COVID-19 pandemic,” including payroll, scheduled mortgage payments (principal and interest), scheduled rent, utilities, outdoor seating construction, supplies (including PPE and cleaning materials), food and beverage expenses (within the scope of pre-pandemic business practice), paid sick leave, operational expenses, and other items in the Administrator’s determination that are necessary to maintain the eligible entity. The covered period for use of funds means the period from February 15, 2020 through either December 31, 2021 or a later date determined by the SBA no later than two years out from the date of enactment of the Act. ### Questions *Please contact your Warady & Davis LLP advisor with your questions at [847-267-9600](tel:847-267-9600);* . You can also visit the [Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/) for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. **SOURCE:** SBA **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, PPP Application Deadline, PPP Deadline, PPP extended, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [SBA's RRF Program to Accept Applications May 3rd at 12 PM ET](https://waradydavis.com/restaurant-revitalization-fund-ready/) **Published:** April 24, 2021 **Author:** Leslie Flinn **Content:** Registration for the SBA’s **[Restaurant Revitalization Fund (RRF)](https://waradydavis.com/restaurant-revitalization-fund/)** relief program application portal will begin on **Friday, April 30, 2021, at 9 am ET. Applications will open on Monday, May 3, 2021, at noon ET,** the U.S. Small Business Administration (SBA) announced as it revealed[ **key details of the program**.](https://www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fund) All eligible applicants will be able to submit applications as soon as the program opens, but for the first 21 days the SBA will prioritize reviewing applications from small businesses owned by women, veterans, and socially and economically disadvantaged individuals. The $28.6 billion program was established by the American Rescue Plan Act, P.L. 117-2, that became law in March. The RRF awards grants of up to $5 million per physical location and is capped at $10 million per entity and affiliates. ## Who is Eligible? Eligible entities that have experienced pandemic-related revenue loss include: - Restaurants; - Food stands, food trucks, and food carts; - Caterers; - Bars, saloons, lounges, and taverns; - Snack and nonalcoholic beverage bars; - Bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries at which on-site sales to the public comprise at least 33% of the gross receipts; - Inns at which on-site sales of food and beverages to the public comprise at least 33% of gross receipts; and - Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products. ## **How to apply** Eligible businesses can apply through SBA-recognized third-party point-of-sale vendors or directly through the SBA using the online application portal. Registration with SAM.gov is not required, and DUNS or CAGE identifiers are not necessary to apply for funding. A sample application form is [**available for download**](https://www.sba.gov/document/sba-form-3172-restaurant-revitalization-funding-application-sample) for businesses that would like to prepare their applications. The form will be completed online, but the SBA requests that businesses not submit forms at this time. To verify tax information, businesses will be required to submit IRS Form 4506-T, *Request for Transcript of Tax Return*, completed and signed by the applicant. This requirement can be satisfied by completing this form on the SBA platform. For gross receipts and eligible expenses documentation, any of the following documents may be submitted: - Business tax returns (IRS Form 1120, *U.S. Corporation Income Tax Return*, or IRS Form 1120-S, *U.S. Income Tax Return for an S Corporation*); - IRS Forms 1040, *U.S. Individual Income Tax Return*, Schedule C, *Profit or Loss From Business*; IRS Forms 1040, Schedule F, *Profit or Loss From Farming*; - For a partnership, the partnership’s IRS Form 1065, *U.S. Return of Partnership Income* (including Forms K-1, *Partner’s Share of Income, Deductions, Credits, etc.*); - Bank statements; - Externally or internally prepared financial statements such as income statements or profit-and-loss statements; and - Point-of-sale reports, including IRS Form 1099-K, *Payment Card and Third Party Network Transactions*. ## Additional Requirements for Some Applicants **Eligible brewpubs, tasting rooms, taprooms, breweries, wineries, distilleries, and bakeries** will need to submit documents showing evidence that on-site sales to the public comprised at least 33% of gross receipts for 2019. This may include Tax and Trade Bureau Forms 5130.9 or TTB. For businesses that opened in 2020, the applicant’s original business model should have contemplated at least 33% of gross receipts in on-site sales to the public. **Eligible inns** will need to provide documents showing that on-site sales of food and beverage to the public comprised at least 33% of gross receipts for 2019. For businesses that opened in 2020, the applicant’s original business model should have contemplated at least 33% of gross receipts in on-site sales to the public. ## **Funding details and calculations** The program includes $5 billion set aside for applicants with 2019 gross receipts of $500,000 or less; an additional $4 billion set aside for applicants with 2019 gross receipts from $500,000 to $1.5 million; and an additional $500 million set aside for applicants with 2019 gross receipts of $50,000 or less. The SBA may provide funding of up to $5 million per location, not to exceed $10 million for the applicant and any affiliated businesses. The minimum award is $1,000. Calculations for payment are: - **Calculation 1.** For applicants in operation before or on Jan. 1, 2019: 2019 gross receipts minus 2020 gross receipts minus Paycheck Protection Program (PPP) loan amounts. - **Calculation 2.** For applicants that began operations partially through 2019: (Average 2019 monthly gross receipts times 12) minus 2020 gross receipts minus PPP loan amounts. - **Calculation 3.** For applicants that began operations on or between Jan. 1, 2020, and March 10, 2021, that have not yet opened but have incurred eligible expenses: Amount spent on eligible expenses between Feb. 15, 2020, and March 11, 2021, minus 2020 gross receipts minus PPP loan amounts. ***Entities that began operations partially through 2019 may elect to use either Calculation 2 or Calculation 3.*** ## Use of Funds Funds may be used for specific expenses, including: - Business payroll costs, including sick leave; - Payments on any business mortgage obligation; - Business rent payments, not including prepayment of rent; - Business debt service, both principal and interest, not including any prepayment of principal or interest; - Business utility payments; - Business maintenance expenses; - Construction of outdoor seating; - Business supplies, including protective equipment and cleaning materials; - Business food and beverage expenses, including raw materials; - Covered supplier costs; and - Business operating expenses. For purposes of this program, gross receipts do not include: - Amounts received from first or second-draw PPP loans; - Amounts received from Economic Injury Disaster Loans (EIDL); - Advances on EIDL (EIDL Advance and Targeted EIDL Advance); - State and local grants; or - SBA Section 1112 payments. ## **Steps to Take Now** The SBA and its point of sale partners are not accepting applications yet, but will be soon. To prepare, download and complete the **[sample application](https://www.sba.gov/document/sba-form-3172-restaurant-revitalization-funding-application-sample)**. In addition, you may sign-up to receive program updates from the SBA **HERE.** ## Questions ***Please contact your Warady & Davis LLP advisor with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. SOURCE: The SBA **Categories:** COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, Grants for Restaurants, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Restaurant Revitalization Fund, RRF, Second PPP Loans, Stimulus Assistance for Restaurants, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [COVID-19 EIDL Loans](https://waradydavis.com/covid-19-eidl-application-deadline-nears/) **Published:** December 1, 2021 **Author:** Leslie Flinn **Content:** The U.S. Small Business Administration (SBA) expanded eligibility for COVID-19 Economic Injury Disaster Loan (EIDL) funding.in September, 2021. While you may not have qualified or considered **[EIDL funding](https://covid19relief.sba.gov/#/)** necessary previously, you might want to reconsider. But you’ll have to do so quickly, as the application deadline is December 31, 2021. ### **Shaky economic ground ahead?** Sen. Joe Manchin (D-WV) released a statement on December 19 announcing that he “cannot vote to move forward” on the **[BBBA](https://waradydavis.com/u-s-house-passes-the-build-back-better-act/)**. The $2.1 billion bill that passed in the U.S. House of Representatives includes numerous provisions related to healthcare, energy initiatives, immigration, education, social programs and taxes. Manchin’s vote is needed to pass the proposed legislation in the Senate. Yet Senate Majority Leader Chuck Schumer (D-NY) indicated on December 20 that he nonetheless intends to hold a vote on the bill in early 2022. Schumer’s announcement came hours after Goldman Sachs reduced its predictions for U.S. economic growth in 2022 based on Manchin’s statement. ### **Types of EIDL relief available** The COVID-19 EIDL program was created to make low-interest, fixed-rate long-term loans to provide small businesses (including sole proprietorships and independent contractors) the working capital they need to withstand the effects of the pandemic. Three types of funding are available: 1. ***Loans.*** This funding type features a 30-year term and fixed interest rate of 3.75%. The proceeds can be used for any normal operating expense, including payroll, rent or mortgage, utilities, and other ordinary businesses expenses. Since the recent program expansion (see below), funds also can be used to pay or pre-pay business debt incurred at any time, including after submitting the application, and regularly scheduled payments of federal debt. 2. ***Targeted advances.*** Businesses located in low-income communities, have no more than 300 employees and have suffered more than a 30% reduction in revenue may qualify for a targeted advance up to $10,000. These advances don’t have to be repaid. 3. ***Supplemental targeted advances*.** Businesses in low-income communities that have no more than 10 employees and saw revenue declines of more than 50% may be eligible for an additional $5,000. Supplemental advances also don’t require repayment. ### **The recent expansion** The SBA has implemented several changes to make it easier for small businesses to access the COVID-19 EIDL loans. Among other things, the SBA: - Expanded eligibility from organizations with no more than 500 employees (including affiliates) to encompass businesses in the hardest hit industries with no more than 500 employees *per physical location,* as long as the business (with affiliates) has no more than 20 locations, - Increased the maximum loan amount from $500,000 to $2 million, - Extended the payment deferment period to two years after the loan origination date for all loans (interest will accrue during that period, and principal and interest payments must be made over the remaining 28 years of the loan term), and - Simplified the affiliation requirements. The SBA has also limited entities that are part of a single corporate group to a combined total of no more than $10 million in COVID-19 EIDL loans. ### **Additional eligibility requirements** - Applicants must be physically located in the United States or a designated territory and have suffered working capital losses due to the COVID-19 pandemic. In addition, the businesses must have been in operation on or before January 31, 2020. - Businesses (other than sole proprietorships) must have a valid tax identification number. Each owner, member, partner or shareholder of 20% or more must be a U.S. citizen, non-citizen national or qualified alien with a valid Social Security number. - For loans of $500,000 or less, you must have a credit score of at least 570. For larger loans, the credit score must be at least 625. Personal guaranty and collateral requirements may apply, too, depending on the amount of the loan. ### **The deadline** The SBA will accept applications for loans and targeted advances until December 31, 2021. It will continue to process applications after that date, until the funds are exhausted. While the SBA earlier advised businesses seeking supplemental targeted advances to submit applications by December 10, 2021, it later announced it will accept applications until year end. **Note that borrowers can request increases, up to their maximum loan eligibility amount, for up to two years after loan origination or until the program funds are exhausted.** In addition, the SBA will accept reconsideration and appeal requests received before December 31, 2021, if received on a timely basis. For reconsiderations, that means within six months from the date the application was declined. Appeals must be received within 30 days from the date the reconsideration was declined. You can apply online for **[COVID-19 EIDL relief HERE,](https://covid19relief.sba.gov/#/)** but act quickly as the clock is ticking. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, Tax Legislation --- ### [Illinois Small Business COVID-19 Relief Program Receives More Funding](https://waradydavis.com/il-covid19-smallbus-relief/) **Published:** May 1, 2020 **Author:** Leslie Flinn **Content:** The Business Invest – Illinois Small Business COVID-19 Relief Program (“Program”) is an impact investment loan program under which the State Treasurer Michael Frerichs has now made available up to $500 million in deposits to banks and credit unions throughout the state, at near-zero rates, to assist Illinois small business and non-profits negatively affected by the COVID-19 pandemic. The purpose of this funding is to provide vital economic support to small businesses and non-profits throughout Illinois to help overcome the loss of revenue they are experiencing. He said the installment was designed to complement the federal government’s assistance, but Frerichs also noted that the state “can move faster than the federal government because we already have the authority to facilitate the loans.” Through this program, the Illinois Treasurer’s Office partners with approved financial institutions to provide loans — either lower rate loans, or loans to a business or non-profit that would not otherwise qualify — to Illinois small businesses impacted by the COVID-19 pandemic. Eligible businesses and non-profits must have either been shut down due to the stay-at-home order or have had “limited” operations. They also must have less than $1 million in liquid assets or $8 million average annual receipts. Individual lenders are allowed up to $25 million in initial funding from the program. Local banks and credit unions can obtain the money through the treasurer’s office, who will then loan it out to their partnered small businesses. The community lenders also determine the eligibility and length of loans. Frerichs said his office typically can get the money to banks within one or two days. As for how quickly the money actually shows up in the small business owner’s account depends on how quickly the bank is able to process the loan. **[Click here for the application](https://illinoistreasurergovprod.blob.core.usgovcloudapi.net/twocms/media/doc/business%20invest%20-%20small%20business%20covid-19%20loan%20program%2020200422.pdf)** or visit illinoistreasurer.gov for more information. To find an active list of financial institutions participating in the Illinois Small – Business COVID-19 Relief Program, **click here.** ## **We Are Here to Help** The Warady & Davis LLP team will continue to provide relevant updates and guidance on this topic and others. Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. Please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or info@waradydavis.com. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management, COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Illinois coronavirus small business impact loans, Illinois COVID-19 small business relief loans, Illinois impact loans, Illinois small business relief, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [PPP first-draw forgiveness & repayment](https://waradydavis.com/ppp-forgiveness-and-repayment/) **Published:** August 3, 2021 **Author:** Leslie Flinn **Content:** #### The end of the principal and interest payment deferral period is rapidly approaching for many businesses that received first-draw loans under the Paycheck Protection Program (PPP1). **To avoid having to make payments, if you have not filed for your PPP1 forgiveness, you should do so now.** #### The good news is that the SBA announced a streamlined process where borrowers with loans under $150,000 can apply for forgiveness directly with the SBA. This new change will help some 6.5 million small businesses with loans under $150,000. At the beginning of the year, the SBA released a streamlined application for borrowers, [Form 3508S](https://www.sba.gov/document/sba-form-3508s-ppp-3508s-loan-forgiveness-application-instructions), for the smaller loans that make up the majority of PPP financing. #### In addition, if you do have to start making principal and interest payments due to timing, you still have up to the maturity date of your loan to apply for forgiveness. If the loan is forgiven, then any principal or interest payments made will be refunded. ## **PPP basics** PPP loans generally are 100% forgivable if the borrower allocates the funds on a 60/40 basis between payroll and eligible non-payroll costs. Non-payroll costs initially included only mortgage interest, rent, utilities and interest on any other existing debt, but the Consolidated Appropriations Act (CAA), enacted in late 2020, significantly expanded eligible non-payroll costs. For example, the funds can be applied to certain operating expenses and worker protection expenses. The CAA also withdrew the original requirement that borrowers deduct the amount of any Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) advance from their PPP forgiveness amount. And it provides that a borrower doesn’t need to include any forgiven amounts in its gross income and can deduct otherwise deductible expenses paid for with forgiven PPP proceeds. ## **Forgiveness filings** PPP borrowers can apply for forgiveness at any time before their loans’ maturity date (loans made before June 5, 2020, generally have a two-year maturity, while loans made on or after that date have a five-year maturity). But, if a borrower doesn’t apply for forgiveness within 10 months after the last day of the “covered period” — the eight-to-24 weeks following disbursement during which the funds must be used — PPP loan payments will no longer be deferred and principal and interest payments will begin That 10-month period is coming to an end for many “first-draw” borrowers. For example, a business that applied early in the program might have a covered period that ended on October 30, 2020. It would need to apply for forgiveness by August 30, 2021, to avoid loan repayment responsibilities. ## New SBA streamlined forgiveness for loans under $150,000 The SBA announced a streamlined application portal to allow borrowers with [Paycheck Protection Program (PPP)](https://www.sba.gov/ppp) loans of $150,000 or less through participating lenders to apply for forgiveness directly through the SBA. This new change will help some 6.5 million small businesses with loans under $150,000. At the beginning of the year, the SBA released a streamlined application for borrowers,[ Form 3508S](https://www.sba.gov/document/sba-form-3508s-ppp-3508s-loan-forgiveness-application-instructions), for the smaller loans that make up the majority of PPP financing. The new forgiveness platform will begin accepting applications from borrowers on August 4, 2021. Lenders are required to opt-in to this program through[ https://directforgiveness.sba.gov](https://directforgiveness.sba.gov/). According to the SBA, over 600 banks have opted into direct forgiveness, enabling over 2.17mm borrowers to apply through the portal. These banks represent 30% of loans $150,000 or less that have not yet been submitted for forgiveness. In addition to the technology platform, the SBA established a PPP customer service team to answer questions and assist borrowers with their forgiveness applications. Borrowers that need assistance or have questions should call (877) 552-2692, Monday – Friday, 8 a.m. – 8 p.m. EST. ***Borrowers whose lenders choose not to participate or those with loans greater than $150,000 will still need to apply for forgiveness by filing forms with their lenders, who’ll then submit the forms to the SBA.*** If the SBA doesn’t forgive a loan or forgives only part of it, the lender will notify the borrower when the first payment is due. Interest accrues during the time from disbursement of the loan proceeds to SBA remittance to the lender of the forgiven amount, and the borrower must pay the accrued interest on any amount not forgiven. ## **Audit action** Borrowers also should be aware of the possibility that they may be audited by the SBA’s Office of Inspector General, with support from the IRS and other federal agencies. The SBA will automatically audit every loan that’s more than $2 million after the borrower applies for forgiveness, but smaller loans may be subject to scrutiny, too. Although the SBA has established an audit safe harbor for loans of $2 million or less, that carve-out applies only to the examination of the borrower’s good faith certification on the loan application that the “current economic uncertainty makes the loan request necessary to support the ongoing operations” of the business. The SBA also recently notified lenders that it’s eliminating the loan necessity requirement for loans of more than $2 million. ***Those borrowers will no longer need to complete a burdensome Loan Necessity Questionnaire.*** **All borrowers, however, still might be audited on matters such as eligibility (for example, the number of employees), calculation of the loan amount, how the funds were used and entitlement to forgiveness.** Borrowers that receive adverse audit findings may be required to repay their loans and, depending on the missteps uncovered, could face civil penalties and prosecution under the federal False Claims Act. ## **Act now** Business owners always have a lot on their plates, so it’s understandable that some may not have focused on the various dates relevant to their PPP loans. Now is the time to ensure that you file your PPP1 forgiveness application in a timely manner. ***The W&D team is here to help. Please contact us with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ##### **SOURCE: IRS** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** PPP **Tags:** 000, Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Is your business eligible for the employee retention tax credit?](https://waradydavis.com/is-your-business-eligible-employee-retention-tax-credit/) **Published:** March 11, 2021 **Author:** Leslie Flinn **Content:** ***UPDATED March 15, 2021 to reflect additional guidance and the ARPA Act of 2021*** Under the Consolidated Appropriations Act, 2021, the employee retention credit, a provision of the CARES Act, is available through December 31, 2021 to eligible employers who retained employees during the COVID-19 pandemic. It is meant to help businesses offset the financial disruption caused by the pandemic. The enactment of the American Rescue Plan Act 2021 (ARPA) and the Consolidated Appropriations Act 2021 (CAA), changed some of the provisions under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, including the employee retention tax credit that has been expanded and extended under the new law. Due to the ongoing impact of the COVID-19 pandemic, eligible employers now have until December 31, 2021 to claim the tax credit on wages paid to employees they retained through the crisis. Another change under the law is the tax credit is now available to businesses that took a loan under the Paycheck Protection Program (PPP), including borrowers from the initial round of PPP who originally were ineligible to claim the tax credit. Keep in mind, the credit can only be taken on wages that are not forgiven or expected to be forgiven under PPP. ## What is the Employee Retention Credit? Employers who qualify, including borrowers who took a loan under the initial PPP, the credit can be claimed against 50 percent of qualified wages paid, up to $10,000 per employee annually for wages paid between March 13 and Dec. 31, 2020. For employers who qualify in 2021, including PPP recipients, the new law expands the credit and allows them to claim a credit against 70% of qualified wages paid. Additionally, the amount of wages that qualifies for the credit is now $10,000 per employee per quarter for all of 2021. So, an employer could claim up to $7,000 per quarter per employee or $14,000 for 2021. ## What Employers Qualify for the Employee Retention Credit? Most employers, including tax exempt organizations, can qualify for the credit. Qualification is determined by one of two factors for eligible employers — and one of these factors must apply in the calendar quarter the employer wishes to utilize the credit: - A trade or business that was fully or partially suspended or had to reduce business hours due to a government order. ***The credit applies only for the portion of the quarter the business is suspended, not the entire quarter.*** ##### Some businesses, based on IRS guidance, generally do not meet this factor test and would not qualify. - Those considered essential, unless they have supply of critical material/goods disrupted in manner that affects their ability to continue to operate. - Businesses shuttered but able to continue their operations largely intact through telework. - However, any of these businesses still may qualify for the credit with the second factor test. ## An employer that has a significant decline in gross receipts. Under the original CARES Act, generally, if gross receipts in a calendar quarter are below 50% of gross receipts when compared to the same calendar quarter in 2019, an employer would qualify. They are no longer eligible in the calendar quarter immediately following the quarter when gross receipts exceed 80% compared to the same calendar quarter in 2019. Under the new law, beginning in 2021, businesses must be impacted by forced closures or quarantines and have seen more than 20% drop in gross receipts in the quarter compared to the same quarter in 2019. An employer can amend their Form 941 if they determine later that they qualified for the credit. If you are a new business, the IRS allows the use of gross receipts for the quarter in which you started business as a reference for any quarter which they do not have 2019 figures because you were not yet in business. **Note:** A member of controlled or affiliated service groups are considered a single employer, so they must aggregate their gross receipts to determine when and if they qualify. ## What wages qualify when calculating the retention credit? Wages/compensation, in general, that are subject to FICA taxes, as well as qualified health expenses qualify when calculating the employee retention credit. These must have been paid after March 12, 2020 and qualify for the credit if paid through December 31, 2021. Keep in mind, the thresholds on these wages and the percentage of credit increases on 2021, including allowing the inclusion of Medicare. When determining the [qualified health expenses](https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-amount-of-allocable-qualified-health-plan-expenses-faqs), the IRS has multiple ways of calculating depending on circumstances. Generally, they include the employer and employee pretax portion and not any after-tax amounts. When determining the qualified wages that can be included, an employer must first determine the number of full-time employees they had in 2019. Employers with more than 100 full-time employees (based on the employer shared responsibility provision in the Affordable Care Act) use different qualified wages than those with 100 or fewer full-time employees. Under the new law, the employee limit for determining which wages are applicable to the credit increases to 500 in 2021. ## What Qualifies as a Full-Time Employee For the purposes of the employee retention credit, a full-time employee is defined as one that in any calendar month in 2019 worked at least 30 hours per week or 130 hours in a month (this is the monthly equivalent of 30 hours per week) and the definition based on the employer shared responsibility provision in the ACA. - Employers who were in business the entire calendar year in 2019 would take the sum of the number of full-time employees in each calendar month and divide by 12. - An employer who started a business during 2019 determines the number of full-time employees by taking the sum of the number of full-time employees in each full calendar month in 2019 in which the business operated and divide by that number of months. - An employer who started a business in 2020 determines the number of full-time employees by taking the sum of the number of full-time employees in each full calendar month in 2020 that the business operated and divides by that number of months. Once full-time employees are determined, employers will know which qualified wages to use. ## Large Employers Those who have more than 100 full-time employees (this threshold increases to 500 beginning in 2021) can only use the qualified wages of employees ***not providing* services** because of suspension or decline in business. Furthermore, any wages paid for vacation, sick or other days off based on the employer’s current policy cannot be included in qualified wages for the larger employers. Basically, employers can only use this credit on employees who are not working. ## All Other Employers Employers with 100 or fewer full-time employees (this threshold increases to 500 beginning in 2021) can use all employee wages — those working, as well as any time paid not being at work with the exception of paid leave provided under the Families First Coronavirus Response Act. The IRS does have guardrails in place to prevent wage increases that would count toward the credit once the employer is eligible for the employee retention credit. - There is no double-dipping for credits. Employers who take the employee retention credit cannot take credit on those same qualified wages for paid family medical leave. - If an employee is included for the Work Opportunity Tax Credit, they may not be included for the employee retention credit. So, employer’s considering which credits to take should evaluate which one is better financially to their business. ## How do the credits work? The employee retention credit is allowed against the employer’s share of Social Security and Medicare taxes. However, the credit is fully refundable. So, if the credit exceeds the employer’s total liability of the portion of Social Security in any calendar quarter, the excess is refunded to the employer. At the end of the quarter, the amounts of these credits will be reconciled on the employer’s [Form 941](https://www.irs.gov/forms-pubs/about-form-941). ## How does a PEO client employer reconcile? Employers utilizing a Professional Employer Organization (PEO) or Certified Professional Employer Organization (CPEO) do not have an individual 941 filed on their behalf, so it’s important for them to understand how they would reconcile this information and receive the credit. The IRS posted guidance to clarify how it would work. If an eligible employer uses a PEO or CPEO, the retention credit is reported on the PEO/CPEO aggregate Form 941 and Schedule R. ## PPP Loan Forgiveness and ERC The IRS released notice 2021-20 which outlines the interplay of PPP loan forgiveness and the Employee Retention Credit (ERC). In brief, wages are disallowed for ERC based on how you reported wages on the PPP loan forgiveness application. If only reported wages were provided to get forgiveness, then you cannot utilize the wages ***(up to the loan amount)*** for ERC. If other qualifying costs plus the wages were reported, then more wages will be allowed for ERC. **Three examples will show you how this will likely work in most situations.** In each example the PPP loan amount is $200,000. Payroll costs are only wages and health insurance costs since those qualify for both the PPP and ERC. Other qualifying costs may be different amounts. NOTE: W&D encouraged clients to report all forgivable payroll and nonpayroll expenses when filing for forgiveness. **If payroll costs reported are greater than the amount needed to meet maximum loan forgiveness and/or the minimum 60% eligible payroll cost requirement, the balance may be used for the ERC (if client meets requirements.)** ***Example # 1*** – You report $200,000 of qualifying payroll costs and no other qualifying costs (even though you had $70,000 of other costs). $200,000 of payroll costs are not allowed for the ERC. You could have reported the $70,000 of other costs but chose not to bother with listing them on the forgiveness application. This prevents $70,000 of payroll costs qualifying for the ERC. ***Example #2*** – Same facts as Example #1, but you report the full $200,000 of payroll costs plus the $70,000 of other costs. Instead of $200,000 of payroll costs not being allowed for ERC, it drops to $130,000, the minimum amount of payroll costs needed to get full forgiveness in combination with other costs. ***Example # 3*** – Same as Example #2, however other costs are now $90,000 which was reported on the application. In this case, the minimum payroll needed to get full forgiveness is $120,000 (60% of $200,000), therefore $80,000 of payroll costs will be allowed for the ERC. ### Questions? Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. **Source: IRS, US Treasury, Paychex** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, employee retention tax credit, employee retention tax credit 2021, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP Loans, PPP2, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Economic Injury Disaster Loans Update](https://waradydavis.com/ppp-application-deadline-extended-of-2021-business-nonprofit-benefits-copy-copy/) **Published:** March 25, 2021 **Author:** Leslie Flinn **Content:** The U.S. Small Business Administration is more than tripling the maximum amount that small businesses and nonprofits can borrow under the COVID-19 Economic Injury Disaster Loans (EIDL) program. Starting the week of April 6, the loan limit for COVID-19 EIDL loans will jump from six months of economic injury with a maximum loan amount of $150,000 to up to 24 months of economic injury with a maximum loan amount of $500,000. The SBA’s Economic Injury Disaster Loans provide low-interest emergency working capital to small businesses. Any COVID-19 EIDL loans in process when the new loan limits go into effect will automatically be considered for the new maximum limits, the SBA said. Existing COVID-19 EIDL borrowers will be able to request an increase beginning April 6. The SBA will provide updated instructions on how to request a loan increase on [SBA.gov](https://sba.gov) and also will reach out directly via email to existing COVID-19 borrowers with loans approved prior to the increased loan limit taking effect. The SBA has approved more than $200 billion in COVID-19 EIDL loans. The loans have a 30-year maturity with interest rates of 3.75% for small businesses, including sole proprietors and independent contractors, and 2.75% for not-for-profits. ## Deferred EIDL Payments The SBA also announced March 12 that it was extending deferment periods for all its disaster loans, including the COVID-19 EIDL loans. COVID-19 EIDL recipients will not need to start making payments on their loans until 2022, though borrowers may voluntarily continue to make payments during the deferment as interest will continue to accrue on the outstanding loan balance. ## Targeted EIDL Advance Grants The American Rescue Plan Act of 2021 provided an **Additional $15B in funding for Targeted EIDL Advance Grants.** **Eligibility:** - Businesses located in low-income communities - No more than 300 employees - Suffered an economic loss of more than 30%, as determined by the amount that the entity’s gross receipts declined during an eight-week period between March 2, 2020, and Dec. 31, 2021, relative to a comparable eight-week period immediately preceding March 2, 2020. Eligible businesses and nonprofit organizations that received a previous EIDL Advance in an amount less than $10,000 will have first priority to apply for the Targeted EIDL Advance and will be the first group to receive SBA email invitations to the application portal. ***To apply, you must receive an SBA e-mail invitation.*** The second priority group are eligible businesses and nonprofit organizations that applied for EIDL assistance before December 27, 2020 but did not receive an EIDL Advance because available funding was exhausted in mid-July 2020. \[**Note:** Businesses and nonprofit organizations with COVID-19-related losses can still apply for an Economic Injury Disaster Loan (EIDL), if they have not done so already. More information about the loan program can be found at**[ www.sba.gov/coronavirusrelief.](https://www.sba.gov/coronavirusrelief)**\] ## Questions ***Please contact your Warady & Davis LLP advisor with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ##### SOURCE: SBA and AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, Economic Injury Disaster Loan, EIDL, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Targeted EIDL Advance, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Senate Reveals Healthcare Bill](https://waradydavis.com/senate-reveals-healthcare-bill/) **Published:** September 18, 2016 **Author:** WaradyDavis **Content:** The future of the Affordable Care Act and its associated taxes has moved to the Senate following passage of the American Health Care Act (AHCA) in the House in April. Traditionally, legislation moves more slowly in the Senate than in the House, which means that any ACA repeal and replacement bill may be weeks if not months away. **Note.** At the time this article was prepared, few details have emerged about discussions in the Senate on the ACA’s taxes. Some senators have predicted that the Senate will write its own ACA repeal and replacement bill. A Congressional Budget Office (CBO) report, issued in late May, scored the House-passed AHCA as eventually causing 23 million fewer individuals to be covered, a number that may prompt the Senate to move further away from the House bill. It is also unclear if a Senate bill would repeal all or some of the ACA’s taxes. A Senate bill could also make other changes to the ACA, such as changes to the individual and employer shared responsibility requirements and the Code Sec. 36B premium assistance tax credit. **Health care taxes** As approved by the House, the AHCA repeals nearly all of the ACA’s taxes and delays the ones it does not repeal immediately. The House-passed version of the AHCA repeals the net investment income (NII) tax, the excise tax on medical devices, and the health insurance provider fee, among others, retroactively to the start of 2017. Further, the House-passed version of the AHCA delays the ACA’s excise tax on high-dollar health plans. Whether the Senate will go along with repealing all or some of the ACA’s taxes is unclear. Some GOP members of the Senate Finance Committee had previously called for immediate repeal of the additional Medicare tax. Other Republican senators called for immediate repeal of the medical device excise tax. Our office will keep you posted of developments. **Code Sec. 36B credit** Individuals who obtain health insurance through the ACA Marketplace may qualify for a tax credit to help offset the cost of coverage. The House-passed version of the AHCA also revises the Code Sec. 36B premium assistance tax credit. The amount of the credit would vary depending on the taxpayer’s age, among other modifications. Again, it is unclear if the Senate will adopt these changes to the credit or make its own revisions. **Other provisions** An ACA repeal and replacement bill in the Senate also is expected to address, among other things, - Individual and employer shared responsibility requirements - Health savings accounts - Code Sec. 45R small employer health insurance credit - Branded prescription drug fee - Medical expense deduction - Minimum essential health benefits **Other health care bills** Just before Congress’ Memorial Day recess, the House Ways and Means Committee approved several bills related to the House version of the AHCA. One bill would allow individuals who have certain types of COBRA coverage to claim the revised Code Sec. 36B credit. Another bill would disallow advance payments of the credit unless the recipient is a citizen or national of the U.S. or an alien lawfully present in the U.S. **Administrative actions** The U.S. Department of Health and Human Services (HHS), the Department of Labor (DOL) and the IRS administer different parts of the ACA. In May, HHS announced that changes to the direct enrollment process for the ACA Marketplace. HHS also announced that online enrollment for the Small Business Health Options Program (SHOP) would be through an agent or broker. Please contact our office if you have any questions about health care and taxes. **Categories:** Tax Legislation --- ### [Chicago Adopts Highest Sales Tax Among Major Cities](https://waradydavis.com/chicago-adopts-highest-sales-tax-among-major-cities-2/) **Published:** July 20, 2015 **Author:** WaradyDavis **Content:** When Cook County, Illinois [adopted](https://www.chicagotribune.com/2015/07/15/cook-county-board-votes-to-raise-sales-tax/) a one percentage point county sales tax increase, its county seat — Chicago — vaulted to the top of a dubious list: major cities with the highest sales tax. Including state, county, city, and public transit sales tax impositions, Chicago’s combined sales tax will return to its former high of 10.25 percent as of January 1. Does Chicago’s pending rate represent the highest combined state and local sales tax in the nation. It doesn’t. That distinction goes to a handful of towns in Tennessee and one in Arkansas (with 12 percent combined rates), all with populations of a few thousand people or less. A smattering of small municipalities in Arizona, Louisiana, and Oklahoma also feature higher combined rates. Tennessee, however, foregoes an individual income tax (except for on interest and dividend income), and thus leans heavily on the sales tax as a source of state revenue. While Arizona, Arkansas, Louisiana, and Oklahoma impose all of the major tax categories, they also lean disproportionately on the sales tax, with sales tax collections as a percentage of total state and local revenue ranging from 32.4 percent in Oklahoma to 39.3 percent in Louisiana, perhaps in response to low property tax collections. The national average is 22.7 percent reliance on the sales tax for state and local revenue. Chicago stands out because it’s a high sales tax amidst a sea of high taxes, even with the partial sunsets of the 2011 Illinois tax hikes. [Its rate as of January 1, 2016](https://waradydavis.com/new-illinois-sales-tax-rate-increases-effective-7-1-2016/) will also stand out as the highest rate in a major city. You can quibble with definitions of what constitutes a major city, but by any possible measure, Chicago will impose the highest city rate as of 2016. If you have any questions please contact a Warady & Davis advisor at 847-267-9600. Source: Jared Walczak – www.taxfoundation.org **Categories:** Tax Legislation --- ### [Congress acts to reform the IRS, enhance taxpayer protections](https://waradydavis.com/congress-acts-to-reform-the-irs-enhance-taxpayer-protections/) **Published:** July 2, 2019 **Author:** Leslie Flinn **Content:** President Trump has signed into law a broad package of reforms aimed at the IRS. Among other things, the Taxpayer First Act contains several new protections for taxpayers, along with provisions intended to improve the IRS’s customer service. ## Stronger safeguards against identity theft Several of the Act’s provisions address tax-related identity theft. For example, the Act generally requires the IRS to notify a taxpayer as soon as practicable when it suspects or confirms an unauthorized use of the individual’s identity. The IRS also must: - Provide the taxpayer instructions on how to file a report with law enforcement on the unauthorized use, - Identify any steps the individual should take to permit law enforcement to access his or her personal information during the investigation, - Provide information regarding the actions the taxpayer can take to protect him or herself from harm, and - Offer identity protection measures, such as the use of an “identity protection personal identification number” (IP PIN). The Act also requires the IRS to establish a program within five years that allows all taxpayers to request IP PINs to better secure their identity when filing their tax returns. This protection is currently available only to victims of tax-related identity theft. The IRS must provide a suspected victim with additional notifications regarding whether it has initiated an investigation into the unauthorized use and whether the investigation has substantiated such unauthorized use. It also must notify the individual of whether any action has been taken against someone relating to the unauthorized use or whether any referral for criminal prosecution has been made. And the IRS must ensure that victims of tax-related identity theft have a single point of contact at the agency throughout the processing of their cases. That contact must track the taxpayer’s case to completion and coordinate with other IRS employees to resolve the taxpayer’s issues as quickly as possible. ## Greater appeals rights The Taxpayer First Act codifies into law the IRS’s already-existing, independent Office of Appeals. It also expands taxpayers’ rights of appeal regarding tax matters. For example, under the law, the IRS must provide certain taxpayers who request a conference with the Office of Appeals with access to the nonprivileged portions of the case file on the disputed issues no later than 10 days before the scheduled conference date. Currently, taxpayers must file a Freedom of Information Act request to gain access to their case files. The resolution process available through the appeals office is generally available to all taxpayers. If a taxpayer’s request to appeal an IRS notice of deficiency is denied, the IRS must give the taxpayer a written notice with a detailed description of the facts involved, the basis for the denial, and a detailed explanation of how the basis applies to the facts. The notice also must describe the procedures for protesting the denial. ## **Customer service improvements** The Act gives the IRS one year to develop and submit to Congress a comprehensive customer service strategy. The strategy must include a plan to extend assistance to taxpayers that’s secure and designed to meet reasonable taxpayer expectations. The plan must adopt appropriate customer service best practices from the private sector, including online services, telephone callback services, and training of customer service employees. Separately, the Act requires the IRS to supply helpful information to taxpayers who are on hold during a telephone call to any IRS help line. That information includes common tax scams, where and how to report tax scams, and additional advice on how taxpayers can protect themselves from identity theft and tax crimes. ## Additional provisions The Taxpayer First Act tackles many other areas, including: ***Structuring:*** The Act establishes new protections from IRS enforcement abuses of so-called “structuring laws.” Those laws let the agency seize taxpayer assets when a taxpayer appeared to make bank deposits in amounts just under the $10,000 trigger for bank reporting requirements. ***Whistleblower reforms:*** The Act permits the IRS to disclose to a whistleblower tax return information related to the investigation of any taxpayer about whom the whistleblower has provided information (to the extent necessary to obtain information that isn’t otherwise reasonably available). It also mandates certain updates to whistleblowers on investigations and adds antiretaliation provisions. ***Electronic filing:*** The IRS generally must eventually require individuals filing 10 or more returns — down significantly from the current 250-return threshold — to file electronically. The lower threshold will be phased in, falling to 100 returns for 2021 and 10 returns in 2022. Special rules apply to partnerships. ## And that’s not all The far-reaching bill will affect a variety of other areas, such as cybersecurity, innocent spouse relief, private debt collection, and misdirected tax refund deposits. We’ll keep you abreast of these and other relevant tax developments. [Please contact your Warady & Davis LLP team](https://waradydavis.com/resource-center/contact-us/) with any questions or concerns at [847-267-9600](tel:847-267-9600). ###### **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal, or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business, or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Tax Legislation and Reform Cautiously Move Forward in New Congress](https://waradydavis.com/1140-2/) **Published:** February 15, 2015 **Author:** WaradyDavis **Excerpt:** The White House and the new Congress continue to look for common ground on tax legislation and tax reform in 2015. Both sides say tax reform is possible in 2015 and behind the usual rhetoric there seems to be a real drive to move tax reform in the 114th Congress. Reform could be similar to the comprehensive package moved nearly 30 years ago in the Tax Reform Act of 1986, or, as many observers predict, will take a new track to reflect a vastly different economy and Tax Code compared to 1986. **Content:** The White House and the new Congress continue to look for common ground on tax legislation and tax reform in 2015. Both sides say tax reform is possible in 2015 and behind the usual rhetoric there seems to be a real drive to move tax reform in the 114th Congress. Reform could be similar to the comprehensive package moved nearly 30 years ago in the Tax Reform Act of 1986, or, as many observers predict, will take a new track to reflect a vastly different economy and Tax Code compared to 1986. ## **Tax bills** The two tax writing committees-House Ways and Means and Senate Finance-have so far approved a number of tax bills impacting individuals and businesses. Among the bills that House Ways and Means has marked up is legislation to: - Make permanent Code Sec. 179 small business expensing ($500,000 dollar limit/$2 million investment limit, indexed for inflation) - Enhance Code Sec. 529 college savings plans - Extend and expand the charitable deduction for contributions of food inventory - Enhance and make permanent the research tax credit - Make permanent the reduced recognition period for built-in gains of S corporations - Extend permanently the special rules for tax-free distributions from IRAs for charitable purposes by qualified individuals The Senate Finance Committee (SFC) also has been busy with tax legislation. The SFC has approved, among other bills, legislation to: - Modify the alternative minimum tax for small insurance companies - Provide special rules for charitable contributions to agricultural organizations - Create a Waste-Heat-to-Power investment tax credit - Exclude from income certain compensation received by public safety officers and their dependents - Require the IRS to notify exempt organizations before revoking exempt status for failing to file returns - Exclude from Gross Income Certain Clean Coal Power Grants - Create a Military Spouse Job Continuity Credit House Speaker John Boehner, R-Ohio, has signaled his support for some of the bills. Boehner controls the House’s schedule and his support is necessary to bring bills before the full House for a vote. In the Senate, the new Majority Leader, Mitch McConnell of Kentucky, has said he wants to move tax legislation this year but has not provided any timetable for legislation. Because of Senate rules, bills generally come more slowly to the floor for a vote and often are subject to a lengthy amendment process. The Senate also generally requires a supermajority of 60 votes to approve tax legislation. Our office will keep you posted of developments as tax legislation moves forward. ## **Tax reform** All of the key players have voiced support for tax reform-President Obama, Speaker Boehner, Majority Leader McConnell-along with the chairs of the House and Senate tax writing committees. They differ on the scope of tax reform, how to pay for tax reform, and more details. President Obama’s fiscal year 2016 budget recommendations, released in early February, could be a catalyst for tax reform, especially the President’s proposals for small businesses. Many of the small business proposals, such as enhanced Code Sec. 179 expensing, enjoy bipartisan support. [As in past years, the hurdle of how to pay](https://waradydavis.com/2015-tax-tips-for-you-and-your-business/) for these and other tax reforms is problematic. President Obama has proposed to eliminate fossil fuel tax breaks, repeal LIFO, and other revenue raisers, to pay for business tax reform, including a reduction in the corporate tax rate. ## **Affordable Care Act** The Affordable Care Act (ACA) is another potential hurdle to tax reform this year. The House has approved legislation to repeal the ACA and Senate Republicans have offered replacement bills. The real test of how the ACA could impact tax reform will come after June, when the U.S. Supreme Court will decide the fate of the Code Sec. 36B premium assistance tax credit. If the Supreme Court strikes down IRS regulations extending the credit to individuals in both federally-facilitated Marketplaces and state-run Marketplaces, President Obama is expected to call on Congress to come up with a legislative solution. If the White House and Congress can reach an agreement, it would be a good harbinger for tax reform. *If you have any questions about pending tax legislation or tax reform, as always, please contact your Warady & Davis LLP advisor at (847) 267-9600.* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Supreme Court Defense of Marriage Act Decision](https://waradydavis.com/supreme-court-defense-of-marriage-act-decision/) **Published:** June 8, 2016 **Author:** WaradyDavis **Content:** The Defense of Marriage Act (DOMA), enacted in 1996, is an all-encompassing statute that applies to more than 1,100 federal laws and regulations administered by various federal departments and agencies, including the Internal Revenue Service (IRS) and the Department of Labor (DOL). The recent decision by the Supreme Court striking down certain sections of DOMA has already begun affecting benefit plans, including 401(k) qualified retirement plans. The case of *United States v. Windsor\** originated when a legally married same-sex spouse was denied the federal estate-tax marital exemption after her partner died. She had to pay more than $360,000 in estate taxes on inherited assets and sued the IRS in an attempt to receive a refund. However, the spousal exemption on federal estate tax was not granted because DOMA did not permit the couple’s same-sex marriage to be recognized under federal income-tax laws. DOMA Section 3 defines the term “marriage” to be between one man and one woman and the term “spouse” to be a person of the opposite sex who is a husband or wife, which precludes same-sex couples from being married under federal law. ## Qualified plan spousal rights Under DOMA, spousal rights were not available to same-sex partners, and the following retirement plan provisions *did not* apply: - Spousal consent was not needed to name someone other than the spouse as beneficiary. - Qualified joint and survivor annuity (QJSA) requirements or protections were not provided. - Spousal consent was not required for distributions, loans, or hardship withdrawals. - Hardship distributions made on behalf of the spouse’s hardship were not available. - Required minimum distribution joint life tables where the spouse is more than ten years younger could not be used. - A deceased participant’s plan assets could not be rolled over by a same-sex spouse into his or her own IRA. - Qualified domestic relations orders (QDROs) were not applicable. - Rollover privileges available only for a spouse (such as rolling over an IRA to the surviving spouse’s own IRA) were not available. - Family attribution rules used in determining highly compensated employees, key employees, and controlled groups did not reflect the spousal relationship in same-sex marriages. ## Supreme Court decision On June 25, 2013, in a five to four decision in *United States v. Windsor*, the U.S. Supreme Court ruled that Section 3 of DOMA was an illegal denial of equal protection rights guaranteed by the Constitution. This landmark decision has a major impact on retirement plan spousal benefit rules. In states that allow same-sex marriage, same-sex partners will now have the same rights that have always been available to opposite-sex married partners. **Section 3 of DOMA:** *“In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or wife.”* However, the ruling did not invalidate Section 2 of DOMA, which permits states that do not allow same-sex marriages to refuse to recognize such marriages. As a result, the changes made to Section 3 of DOMA appear to be much clearer at this time in instances when same-sex partners reside in states where same-sex marriages are recognized. **Section 2 of DOMA:** *“No State, territory, or possession of the United States, or Indian tribe, shall be required to give effect to any public act, record, or judicial proceeding of any other State, territory, possession, or tribe respecting a relationship between persons of the same sex that is treated as a marriage under the laws of such other State, territory, possession, or tribe, or a right or claim arising from such relationship.”* ## Same-sex marriage states\*\* We are in uncharted territory. At the time DOMA was enacted, there were no states that recognized same-sex marriage. Massachusetts became the first state to permit same-sex marriage in 2004. Currently, same-sex marriages are authorized in California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Rhode Island, Vermont, Washington, and Washington, D.C. States that recognize domestic partnerships or civil unions are not directly affected by the *Windsor* decision. The purpose of civil unions and domestic partnerships is to afford individuals some of the benefits of marriage (such as medical power of attorney) without actually recognizing the relationship as a marriage. States with civil unions include Colorado, Hawaii, Illinois, and New Jersey. Those with domestic partnerships are Nevada and Oregon. Since domestic partnerships and civil unions are not marriages, recognition of a same-sex spouse is not required but may be permitted. ## More questions than answers The DOMA decision creates many more questions than it answers, and plan sponsors and administrators have no precedent to follow. Current state laws determine who is a spouse for purposes of determining if two individuals are legally married. However, retirement plans are governed by federal law. [Right after the Supreme Court decision](https://waradydavis.com/supreme-courts-same-sex-marriage-decision-affects-taxation/), there was confusion as to how to administer retirement plans when different states did not recognize a same-sex marriage validly celebrated in another state. Recent IRS guidance has clarified that the place of the marriage’s celebration determines the law for the marriage that will be recognized for federal income-tax purposes, including qualified plans — regardless of whether a state recognizes same-sex marriages. There may be many additional issues requiring statutory or regulatory fixes that will take time to settle as they work their way through the state and federal legal systems. ## Treasury, IRS, and DOL guidance The Treasury Department and the IRS have issued guidance (Revenue Ruling 2013-17 and FAQs) regarding how the DOMA decision applies to the filing of federal income-tax returns and qualified plans. The ruling covers same-sex marriages entered into in one of the 50 states, Washington D.C., a U.S. territory, or a foreign country. It does not cover domestic partnerships, civil unions, and similar arrangements. The Treasury/IRS ruling generally requires same-sex couples to file their federal tax returns as married (either married filing jointly or married filing separately) as of the 2013 tax year. If the couple was married in a state that recognizes same-sex marriage and now resides in a state that does not, the couple must still file as married. In addition, an amended federal tax return may be filed for all open years (2010, 2011, and 2012). In the revenue ruling’s accompanying FAQs, the IRS stated, *“A qualified retirement plan must treat a same-sex spouse as a spouse for purposes of satisfying the federal tax laws relating to qualified retirement plans.” “. . . a qualified plan must recognize a same-sex marriage that was validly entered into in a jurisdiction whose laws authorize the marriage, even if the married couple lives in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages.”* For ERISA purposes, the DOL guidance (Technical Release No. 2013-04) agrees. Future IRS guidance will address how the IRS will apply the Supreme Court’s decision retroactively to employee benefit plans, specifically to plan sponsors, the plan or arrangement, employers, affected employees, and beneficiaries. This is particularly critical for defined benefit plans and plans subject to spousal consent where distributions have already occurred. ## Going forward More guidance clarifying the impact of the DOMA ruling on retirement plan administration will be forthcoming. This newsletter will address changes as they occur. In the meantime, plan sponsors (especially those in states that recognize same-sex marriage) can consider some best practice action steps, including: - Reminding all plan participants to review their current beneficiary designations to ensure they are accurate and up to date. - Recording same-sex marriage as a status code for your human resource records. \* *United States v. Windsor*, 570 U.S. \_\_ (2013) \*\* As of April 1, 2014 *If you have any questions about the tax provisions in the health care reform laws, please contact us at 847-267-9600. We will be following developments as they ensue after the Supreme Court issues its decision.* If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. © 2012 Thomson Reuters/RIA. All rights reserved. **Categories:** Tax Legislation --- ### [IRS warns businesses about ERC scams](https://waradydavis.com/irs-warns-businesses-about-erc-scams/) **Published:** September 8, 2023 **Author:** Leslie Flinn **Excerpt:** IRS continues to warn businesses to beware of ERC scams, despite the claims you may hear on the tv, in the mail, phone or email. **Content:** The airwaves and internet are inundated these days with advertisements claiming that businesses are missing out on the lucrative [Employee Retention Tax Credit (ERC)](https://waradydavis.com/erc-update-2023-theres-still-time-to-apply-for-erc/). While some employers do indeed remain eligible if they meet certain criteria, the IRS continues to caution businesses about third-party scams related to the credit. While there’s nothing wrong with claiming credits you’re entitled to, those that claim the ERC improperly could find themselves in hot water with the IRS and face cash-flow problems as a result. Here’s what you need to know to reduce your risks. ## ERC in a nutshell The ERC is a refundable payroll tax credit intended for businesses that 1) continued paying employees while they were shut down due to the pandemic in 2020 and 2021, or 2) suffered significant declines in gross receipts from March 13, 2020, to December 31, 2021. Eligible employers could receive credits worth up to $26,000 per retained employee contingent on payroll amounts available during the quarter ERC is being claimed and other factors. The credit may still be available on an amended 941-X tax return. The requirements are strict, though. Specifically, you must have: - Sustained a full or partial suspension of operations due to orders from a governmental authority that limited commerce, travel or group meetings due to COVID-19 during 2020 or the first three quarters of 2021, - Experienced a significant decline in gross receipts during 2020 or in the first three quarters of 2021 compared to 2019, or - Qualified as a recovery startup business — which can claim the credit for up to $50,000 total per quarter without showing suspended operations or reduced receipts — for the third or fourth quarters of 2021. (Qualified recovery startups are those that began operating after February 15, 2020, and have annual gross receipts of less than or equal to $1 million for the three tax years preceding the quarter for which they are claiming the ERC.) In addition, a business can’t claim the ERC on wages that it reported as payroll costs when it applied for [Paycheck Protection Program (PPP)](https://www.govinfo.gov/content/pkg/BILLS-116hr748enr/pdf/BILLS-116hr748enr.pdf) loan forgiveness or it used to claim certain other tax credits. Also, a business must reduce the wage deductions claimed on its federal income tax return by the amount of credits. ## Prevalence of scams The potentially high value of the ERC, combined with the fact that employers can file claims for it on amended returns until April 15, 2024 for 2020 or April 15, 2025 for 2021, has led to a cottage industry of fraudulent promoters offering to help businesses claim the credit. These fraudsters wield inaccurate information and inflated promises to generate business from innocent clients. In return, they reap excessive upfront fees or commissions. The IRS has called the amount of misleading marketing around the credit “staggering.” For example, in recent guidance, the tax agency explained that, contrary to advice given by some promoters, **supply chain disruptions generally *don’t* qualify** an employer for the credit unless the disruptions were due to a specific government order. It’s not enough that an employer suspended operations because of disruptions — the credit applies only if the employer had to suspend operations because a government order caused **the supplier to suspend *its* operations.** In addition, the employer must demonstrate that it was not able to obtain supplies elsewhere regardless of cost and meet other requirements. ERC fraud has grown so serious that the IRS has included it in its annual “Dirty Dozen” list of the [worst tax scams](https://waradydavis.com/irs-warns-about-2019-tax-scams/) in the country. In Utah, for example, the U.S. Department of Justice has charged two promoters, who did business as “1099 Tax Pros,” with participating in a fraudulent tax scheme by preparing and submitting more than 1,000 forms to the IRS. They claimed more than $11 million in false ERCs and COVID-related sick and family leave wage credits for their clients. Fraudsters have been able to monopolize on the general confusion and uncertainty around the ERC. A recent congressional hearing found that some of the problems can be traced back to the entirely paper application process created for the credit. This has contributed to a backlog of nearly 500,000 unprocessed claims, out of more than 2.5 million claims that have been submitted. Although it’s unclear how much progress the IRS has made on the backlog, the agency has announced that it has entered a new phase of intensified scrutiny of ERC claims. It’s stepping up its compliance work and establishing additional procedures to deal with fraud in the program. The IRS already has increased its audit and criminal investigation work on ERC claims, focusing on both the promoters *and* the businesses filing dubious claims. If you fell into the trap and are among those businesses, you could end up on the hook for repayment of the credit, along with penalties and interest, on top of the fees you paid the promoter. That could make a substantial dent in your cash flow. Even if you’re eligible for the credit, you could run into trouble if you failed to reduce your wage deductions accordingly or claimed it on wages that you also used to claim other credits. As the IRS has noted, promoters may leave out key details, unleashing a “domino effect of tax problems” for unsuspecting businesses. Moreover, providing your business and tax documents to an unscrupulous promoter could put you and your employees at risk of identity theft. ### Red flags to watch for The IRS has identified several warning signs of illegitimate promoters, including: - Unsolicited phone calls, text messages, direct mail or ads highlighting an “easy application process” or a short eligibility checklist (the rules for eligibility and computation of credit amounts are quite complicated), - Statements that the promoter can determine your ERC eligibility within minutes, - Hefty upfront fees, - Fees based on a percentage of the refund amount claimed, - Preparers who refuse to sign the amended tax return filed to claim a refund of the credit, - Aggressive claims from the promoter that you qualify before you’ve discussed your individual tax situation ***(the credit isn’t available to all employers***), or - Refusal to provide detailed documentation of how your credit was calculated. The IRS also warns that some ERC “mills” are sending out fake letters from nonexistent government entities such as the “Department of Employee Retention Credit.” The letters are designed to look like official IRS or government correspondence and typically include urgent language pushing immediate action. ### Protect yourself Taking several simple steps can help you cut your risk of being victimized by scammers. First, if you think you may qualify for the credit, work with a trusted professional such as your CPA firm or legal advisor. Those who are aggressively marketing the credit (and in some cases, only the credit) are more interested in making money themselves and are unlikely to prioritize or protect your best interests. You also should request a detailed worksheet that explains how you’re eligible for the credit. The worksheet should “show the math” for the credit amount as well. If you’re claiming you suspended business due to a government order, ensure that you have legitimate documentation of the order. Don’t accept a generic document about a government order from a third party. Rather, you should acquire a copy of the actual government order and review it to confirm that it applies to your business. ### Proceed with caution No taxpayer ever wants to leave money on the IRS’s table, but skepticism is warranted whenever something seems too good to be true. If you believe your business might be eligible for the ERC, Warady & Davis LLP can help you verify eligibility, compute your credit and file your refund claim. We can also help you determine how to proceed if you claimed the ERC improperly. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Nine Employee Benefit Plan Audit Tips](https://waradydavis.com/nine-employee-benefit-plan-audit-tips/) **Published:** May 1, 2021 **Author:** WaradyDavis **Excerpt:** Well it’s that time of year again…time to dust off those participant files and prepare for the employee benefit plan audit season. As a firm who takes pride in our efficiency with employee benefit plan audits, here are some tips that we hope will help ensure your retirement plan audit goes smoothly and meets your goals now and in the future: **Content:** Well it’s that time of year again…time to dust off those participant files and prepare for the [employee benefit plan audit](https://waradydavis.com/service/employee-benefit-plan-audit/) season. As a firm who takes pride in our efficiencies with employee benefit plan audits, here are some tips that we hope will help ensure your retirement plan audit goes smoothly and meets your goals now and in the future: ## **Nine employee benefit plan audit tips** 1. Meet with your accounting/finance group early in the year and discuss how the audits will be staffed and supported. 2. Prepare throughout the year the schedules and information you know will be requested for the year-end audit including: #### **Employee files:** - Do they contain proper documentation for verification of benefit eligibility/ineligibility? - Are signed participant forms (i.e. enrollment, [beneficiary designation](https://waradydavis.com/court-finds-that-plan-document-trumps-beneficiary-designation-forms/), investment allocation, etc.) contained within? - Plan documents. Some documents that might be required include: - Signed adoption agreements - Signed amendments - Signed service provider agreements - Summary plan description - Current surety/fidelity bond #### **Revisit the plan document to ensure the plan is operating in accordance with the provisions contained therein**. - If your plan is an ESOP, consider reviewing the allocation calculation spreadsheet for clarity. - Gather participant and plan-wide information (plan investment balances and activity) for prior plan years. 1. Have a kick-off meeting with the auditors and your accounting/finance group well before the audit begins to set expectations, goals and timelines. 2. Manage what will be audited. Some things are standard and some may not be identified, but represent an area that needs review in your opinion. Remember the audit should make the plan processes even better and afford more protections for the participants and the company. 3. Hold frequent status meetings to ensure the audit is on track. 4. Keep your senior management informed of the status as well as any potential areas of concern. 5. Stuff happens, so allow extra time in your timeline for unexpected setbacks. 6. Learn from the findings and use this knowledge to improve your internal controls and to better manage your vendors. 7. Hold a debriefing meeting as soon as possible after the reports are issued. Taking some time to organize and prepare for the audit now will be well worth the effort when audit time comes. ### Questions? If you have any questions or concerns about preparing for an employee benefit plan audit, please feel free to contact [Jea Song, CPA, Partner](https://waradydavis.com/staff/jea-song-cpa-partner/) at 847-267-9600, . ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2021 **Categories:** Employee Benefit Plans --- ### [Year-end Spending Package Tackles Retirement Planning and More](https://waradydavis.com/year-end-spending-package-tackles-retirement-planning-and-more/) **Published:** December 29, 2022 **Author:** Leslie Flinn **Excerpt:** Included in Consolidated Appropriations Act of 2023 is a package of enhanced retirement benefits, otherwise known as the SECURE 2.0 Act. **Content:** On December 23, 2022, Congress passed the **[Consolidated Appropriations Act of 2023](https://www.appropriations.senate.gov/imo/media/doc/JRQ121922.PDF).** The sprawling year-end spending “omnibus” package includes two important new laws that could affect your financial planning: the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act **[(also known as SECURE 2.0)](https://waradydavis.com/secure-2-0/)** and the Conservation Easement Program Integrity Act. ## Bolstering Retirement Savings The original SECURE Act, enacted in 2019, was a significant bipartisan law related to retirement savings. In the spring of 2022, with an eye toward building on the reforms in that law, the U.S. House of Representatives passed the Securing a Strong Retirement Act. Despite strong bipartisan support, the bill stalled. Then, the U.S. Senate introduced its own retirement legislation, dubbed the Enhancing American Retirement Now Act. **SECURE 2.0 incorporates provisions from both bills and addresses a wide array of areas that make major changes to retirement planning, including:** **Required minimum distributions (RMDs).** The first SECURE Act generally raised the age at which you must begin to take RMDs — and pay taxes on them — from traditional IRAs and other qualified plans, from 70½ to 72. The new law increases the age to 73, starting January 1, 2023, and boosts it to 75 on January 1, 2033. This change allows people to delay taking RMDs and paying tax on them. The law also relaxes the penalties for failing to take full RMDs, reducing the 50% excise (or penalty) tax to 25%. If the failure is corrected in a “timely” manner, the penalty would drop to 10%. **Catch-up contributions.** Beginning January 1, 2025, individuals who are ages 60 to 63 can make catch-up contributions to 401(k) plans and SIMPLE plans up to the greater of $10,000 or 50% more than the regular catch-up amount. The increased amounts are indexed for inflation after 2025. (The annual dollar limit on catch-up contributions is $7,500 for 2023, up from $6,500 for 2022.) The law also changes the taxation of catch-up contributions, though, which could reduce the upfront tax savings for those who max out their annual contributions. Catch-up contributions will be treated as post-tax Roth contributions. Previously, you could choose whether to make catch-up contributions on a pre- or post-tax basis. An exception is provided for employees whose compensation is $145,000 or less (indexed for inflation). **Qualified charitable distributions (QCDs).** QCDs have gained in popularity as a way to satisfy RMD requirements while also fulfilling philanthropic goals. With a QCD, you can distribute up to $100,000 per year directly to a 501(c)(3) charity after age 70½. You can’t claim a charitable deduction, but the distribution is removed from taxable income. Under the new law, you also can make a one-time QCD transfer of up to $50,000 through a charitable gift annuity or charitable remainder trust (as opposed to directly to the charity). The law also indexes for inflation the annual IRA charitable distribution limit of $100,000. **Automatic enrollment.** Beginning in 2025, new 401(k) plans must automatically enroll participants when they become eligible. However, the employees may opt out. The initial contribution amount is at least 3% but no more than 10%. Then, the amount is automatically increased every year until it reaches at least 10% but no more than 15%. Existing plans are exempt, and the law provides exceptions for small and new businesses. **Annuities.** Annuities can help reduce retirees’ risk of depleting their savings before they die. But RMD regulations have interfered with the availability of annuities in qualified plans and IRAs. For example, the regulations prohibit annuities with guaranteed annual increases of only 1% to 2%, return of premium death benefits and period-certain guarantees. SECURE 2.0 removes these RMD barriers to annuities. The law also makes qualified longevity annuity contracts (QLACs) — inexpensive deferred annuities that don’t begin payment until the end of the individual’s life expectancy — more appealing. Among other things, it repeals the 25% cap on the maximum annuity purchase and allows up to $200,000 (indexed for inflation) from an account balance to be used to purchase a QLAC. **Matching contributions on student loan payments.** The law also aims to help employees who miss out on their employers’ matching retirement contributions because their student loan obligations prevent them from making retirement contributions. It allows them to receive matching contributions to retirement plans based on their qualified student loan repayments. Employers can make matching contributions to 401(k) plans or SIMPLE IRAs. These provisions are effective for contributions made for plan years beginning January 1, 2024. **Part-time employee eligibility.** SECURE 2.0 lowers the hurdles for long-term, part-time employees to participate in 401(k) plans. They’ll still need to work at least 500 hours before becoming eligible but they’ll have to work for only two consecutive years, rather than the three years required by the first SECURE Act. The provision takes effect for plan years beginning January 1, 2025. **Small business tax credits.** To incentivize small businesses to establish retirement plans, SECURE 2.0 creates or enhances some tax credits. For example, it increases the startup credit from 50% to 100% of administrative costs for employers with up to 50 employees. An additional credit is available for some non-defined benefit plans, based on a percentage of the amount the employer contributes, up to $1,000 per employee. **Tax-free rollovers from 529 plans to Roth IRAs.** The new law permits a beneficiary of a 529 college savings account to make direct rollovers from a 529 account in his or her name to a Roth IRA without tax or penalty. This provides an option for 529 accounts that have a balance remaining after the beneficiary’s education is complete. The 529 account must have been open for more than 15 years and other rules apply. The provision is effective for distributions beginning in 2024. ## Cracking Down on Certain Tax Shelters The retirement provisions in the omnibus law are partially offset by the law addressing conservation easements. Current law generally allows taxpayers to claim a charitable deduction for qualified donations of real property to charity. According to the IRS, though, promoters have twisted the relevant tax provision to develop abusive “syndicated” conservation easements that use inflated appraisals and partnership arrangements to reap “grossly inflated” deductions. Going forward, the Conservation Easement Program Integrity Act disallows charitable deductions for qualified conservation contributions if the claimed deduction exceeds 2.5 times the sum of each partner’s relevant basis in the partnership making the contribution. An exception is granted if the contribution meets a three-year holding period test, substantially all of the partnership is owned by family members or the contribution relates to the preservation of a certified historic structure. ### More to Come These are only some of the provisions in the new law. The entire omnibus law is sure to generate additional questions and guidance. We’ll keep you apprised of the developments that could affect your financial health. **Questions?** *Please contact your Warady & Davis LLP advisor(s) with your questions at [847-267-9600](tel:847-267-9600);* . Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2022 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Who's subject to PPP Owner-Employee Forgiveness Limits?](https://waradydavis.com/who-is-subject-to-ppp-owner-employee-compensation-forgiveness-limits/) **Published:** August 25, 2020 **Author:** Leslie Flinn **Content:** The U.S. Small Business Administration (SBA) and Treasury issued an interim final rule Monday addressing Paycheck Protection Program (PPP) forgiveness issues related to owner-employee compensation and the eligibility of nonpayroll costs. Specifically, the **[interim final rule](https://www.sba.gov/sites/default/files/2020-08/PPP%20IFR%20-%20Ownership.pdf)** establishes that **owner-employees with less than a 5% stake in a C or S corporation are exempted from the PPP owner-employee compensation rule** for determining the amount of their compensation for loan forgiveness. The exemption’s intent is to cover owner-employees who have no meaningful ability to influence decisions over how loan proceeds are allocated, according to the interim final rule. Self-employed Schedule C (and Schedule F) filers, general partners, and other PPP borrowers that utilized 2019 IRS Form 1040 Schedule C line 31 net profit amount in calculating the amount of their PPP loan are clearly also subject to these limitations. ## The current Paycheck Protection Program Forgiveness Application asks all borrowers to certify as follows: - if a 24-week Covered Period applies, the forgiveness amount requested does not exceed 2.5 months’ worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $20,833 per individual; and - if the Borrower has elected an 8-week Covered Period, the forgiveness amount requested does not exceed 8 weeks’ worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $15,385 per individual. While the concept of owner-employee compensation was initially used by the SBA to calculate the amount that a small business with no employees was eligible for, with the expansion of the eligible covered period, the Treasury and SBA have also added restrictions on the use of compensation to owner-employees in calculation of the amount of payroll costs eligible for forgiveness. See, for example, the “[**Interim Final Rule** **on Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule**](https://www.sba.gov/sites/default/files/2020-06/PPP--IFR--Revisions-to-Loan-Forgiveness-Interim-Final-Rule-and-SBA-Loan-Review-Procedures-Interim-Final-Rule-508.pdf)” and the **[Frequently Asked Questions about Loan Forgiveness](https://www.sba.gov/sites/default/files/2020-08/PPP%20--%20Loan%20Forgiveness%20FAQs%20%28August%2011%2C%202020%29-508.pdf).** ## New Non-payroll Costs Rules The guidance also details a couple of decisions that the SBA and Treasury said are designed to maintain equitable treatment between a business owner that holds property in a separate entity and one that holds the property in the same entity as its business operations. In the first decision, the SBA and Treasury declare that the amount of loan forgiveness requested for nonpayroll costs may not include any amount attributable to the business operation of a tenant or subtenant of the PPP borrower. The guidance illustrates this with four examples. **Example 1:** A borrower rents an office building for $10,000 per month and subleases out a portion of the space to other businesses for $2,500 per month. Only $7,500 per month is eligible for loan forgiveness. **Example 2**: A borrower has a mortgage on an office building it operates out of, and it leases out a portion of the space to other businesses. The portion of mortgage interest that is eligible for loan forgiveness is limited to the percent share of the fair market value (FMV) of the space that is not leased out to other businesses. As an illustration, if the leased space represents 25% of the FMV of the office building, then the borrower may only claim forgiveness on 75% of the mortgage interest. **Example 3:** A borrower shares a rented space with another business. When determining the amount that is eligible for loan forgiveness, the borrower must prorate rent and utility payments in the same manner as on the borrower’s 2019 tax filings, or if a new business, the borrower’s expected 2020 tax filings. **Example 4:** A borrower works out of his or her home. When determining the amount of nonpayroll costs that are eligible for loan forgiveness, the borrower may include only the share of covered expenses that were deductible on the borrower’s 2019 tax filings, or if a new business, the borrower’s expected 2020 tax filings. ## Rent, Lease and Mortgage Interest Payments to Related Parties In the second decision regarding certain nonpayroll costs, SBA and Treasury rule that rent or lease payments to a related party are eligible for loan forgiveness provided that (1) the amount of loan forgiveness requested for those payments is no more than the amount of mortgage interest owed on the property during the covered period that is attributable to the space being rented by the business, and (2) the lease and the mortgage were entered into prior to Feb. 15, 2020. However, ***mortgage interest payments to a related party are not eligible for forgiveness.*** Per the ruling, PPP loans are intended to help businesses cover nonpayroll costs owed to third parties, not payments to a business’s owner that occur because of how the business is structured. Stay tuned as we will update you both by e-alerts and webinars as information on the next round of Stimulus and PPP changes become available. In the meantime, please contact us with your questions and concerns at 847-267-9600 or **[info@waradydavis.com.](mailto:info@waradydavis.com)** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us; we are here to help**[.](mailto:info@waradydavis.com)** **SOURCE:** [SBA.gov and the Journal of Accountancy](https://www.sba.gov) **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Don't Forget About Corporate Transparency Act Deadlines](https://waradydavis.com/dont-forget-about-corporate-transparency-act-reporting-deadlines/) **Published:** August 6, 2024 **Author:** Leslie Flinn **Excerpt:** Corporate Transparency Act (CTA) causes significant changes in federal law that impacts most privately held corporations, partnerships & more **Content:** > **IMPORTANT UPDATE – February, 2025**On February 18, 2025, following a decision by the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Department of Treasury, et al., 6:24-cv-00336 (E.D. Tex.), **beneficial ownership information [(BOI) reporting requirements](https://waradydavis.com/act-now-on-boi-reporting-deadlines/) under the Corporate Transparency Act (“CTA”) are once again back in effect with a new deadline of March 21, 2025**. This Client E-Alert is provided to remind you of a significant change in federal law effective January 1, 2024 that impacts most privately held corporations, partnerships, limited liability companies – including single member LLCs, and other entities. It is important that you take steps now to determine if the Corporate Transparency Act deadlines apply to your business. [**The Corporate Transparency Act (“CTA”)**](https://waradydavis.com/corporate-transparency-act-beneficial-ownership-information-reporting-requirement/), which took effect on January 1, 2024, seeks to assist law enforcement in combatting money laundering, tax fraud, financing of terrorism, and other illicit activity through anonymous shell and front companies. To accomplish this task, the CTA requires a wide variety of business organizations (referred to as “Reporting Companies”) to file an initial report with the [Financial Crimes Enforcement Network](https://www.fincen.gov/boi) (FinCEN) disclosing, among other things, information regarding the entity and its beneficial owners, and imposes a continuing obligation to report any changes to previously reported information. ## What is the Deadline for BOI Reporting? There are different filing timeframes depending on when an entity is registered/formed or if there is a change to the beneficial owner’s information. - Existing entities (created/registered before 1/1/24) — **must file by 1/1/25** - New entities (created/registered in 2024) — **must file within 90 days** - New entities (created/registered after 12/31/2024) — **must file within 30 days** - Reporting companies that have changes to previously reported information – including minor changes such as a new address — **must file within 30 days** *Penalties for willfully not complying with the BOI reporting requirement can be significant.* ## Am I Exempt? The complete list of entities that are exempt from the reporting rules is too lengthy to include here — ranging from government units to not-for-profit organizations to insurance companies and more. Notably, an exemption was created for a “large operating company” that employs more than 20 employees on a full-time basis, has more than $5 million in gross receipts or sales (not including receipts and sales from foreign sources), and physically operates in the United States. However, many of these companies already must meet other reporting requirements providing comparable information. ***In all, there are 23 exemptions, so please contact your Warady & Davis LLP advisor at 847-267-9600 or info@waradydavis.com or your legal counsel to understand if you qualify as exempt.*** ## How Does My Business File a BOI Report? As of Jan. 1, 2024, the electronic filing system is available and the [form to report BOI](https://boiefiling.fincen.gov/) can be accessed. Reporting Companies can make these filings directly by going online and registering at [Fincen-BOI](https://www.fincen.gov/boi) ## What Information Is Required on a BOI Report? There are two types of reporting companies; a Domestic reporting company (DRC) and a Foreign reporting company (FRC). Both involve corporations and limited liability companies. Both must file a document with a secretary of state or similar office. The difference is a DRC is created through the filing of its documents, while an FRC is formed under the law of a foreign company and has to file documents to register to conduct business in the U.S. ### A reporting company must report: - Legal name - Any trade names, DBAs, or trading as names - Current street address of its principal place of business - Its jurisdiction of formation or registration - Taxpayer ID# ### Beneficial owners must report: - Individual’s name - Date of birth - Residential address - An ID# from an acceptable ID document – passport, U.S. driver’s license, and name of issuing state or jurisdiction of the ID document - Must supply an image of the ID document and it cannot be expired ### Who Qualifies as a Beneficial Owner? There are a few factors used in determining a beneficial owner, including an individual who, indirectly or directly: - Exercises substantial control over a reporting company - Owns or controls 25% or more of a reporting company’s ownership interests ## Looking Ahead This BOI reporting requirement is expected to impact tens of millions of businesses in America and certainly a portion of our W&D clients. We recommend taking steps now to determine whether you qualify for an exemption and, depending on the outcome, collect your information to be prepared to file by your required deadline (see above). For more information regarding the CTA reporting requirements and how to file visit [BOI E-FILING](https://boiefiling.fincen.gov/). You may also visit [(BOI) Reporting – AICPA & CIMAi](https://www.aicpa-cima.com/resources/landing/beneficial-ownership-information-boi-reporting). **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions or if you need assistance with your BOI reporting at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2024 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Act Now On BOI Reporting Deadlines](https://waradydavis.com/act-now-on-boi-reporting-deadlines/) **Published:** October 31, 2024 **Author:** Leslie Flinn **Excerpt:** Corporate Transparency Act (CTA) causes significant changes in federal law that impacts most privately held corporations, partnerships & more **Content:** > **IMPORTANT UPDATE – February, 2025**On February 18, 2025, following a decision by the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Department of Treasury, et al., 6:24-cv-00336 (E.D. Tex.), **beneficial ownership information [(BOI) reporting requirements](https://waradydavis.com/act-now-on-boi-reporting-deadlines/) under the Corporate Transparency Act (“CTA”) are once again back in effect with a new deadline of March 21, 2025**. ## Act Now on BOI Reporting We want to make sure your business remains compliant with Federal regulations. All businesses, unless exempt, are once again required to file the “**Beneficial Ownership Information” (BOI)** report. **[Click HERE ](https://waradydavis.com/boi-reporting-back-on-with-new-deadline/) for new filing deadlines.** BOI reporting involves providing detailed information about the individuals who own or control your company to enhance transparency and prevent illicit activities. This requirement is a result of [**The Corporate Transparency Act (“CTA”)**](https://waradydavis.com/dont-forget-about-corporate-transparency-act-reporting-deadlines/), which took effect on January 1, 2024. The CTA seeks to assist law enforcement in combatting money laundering, tax fraud, financing of terrorism, and other illicit activity through anonymous shell and front companies. To accomplish this task, the CTA requires a wide variety of business organizations (referred to as “Reporting Companies”) to file an initial ***Business Owners Information (BOI)*** report with the **[Financial Crimes Enforcement Network](https://www.fincen.gov/boi) (FinCEN)** disclosing, among other things, information regarding the entity and its beneficial owners, and imposes a continuing obligation to report any changes to previously reported information. ### How to Complete BOI Report **For those who need to complete the BOI Reporting please click the link below.** **[](https://www.fincen.gov/boi)[Beneficial Ownership Information](https://www.fincen.gov/boi)** ### Who needs to complete the BOI Report? - Corporations - Partnerships - Limited Liability Companies - ***Any entities that have filed articles of incorporation/organization with the Secretary of State*** ### Who is Exempt? There are 23 exemptions for entities who do NOT need to file, for example: - Non-Profit Entities - Large operating companies with 20 or more full-time employees, a physical US-Based office and that have $5 million or more in gross revenue reported on their most recent tax filing ### Tips for Completing Your BOI Report - Have your most recent tax return in front of you. - Have all owners’ information including birthdates and photocopies of their IDs ready for upload If you have any questions or need guidance while completing the BOI report, please don’t hesitate to reach out to your W&D advisor at 8***47-267-9600;* .** **Thanks for your attention to this important matter.** For more information regarding the BOI reporting requirements including FAQs and a helpful short instructional video visit [Beneficial Ownership Information Reporting](https://www.fincen.gov/boi). ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2024 All Rights Reserved **Categories:** Business, Business Management, E-Alerts, General **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [New tax law provides more generous depreciation-related tax breaks](https://waradydavis.com/new-tax-law-provides-more-generous-depreciation-related-tax-breaks/) **Published:** February 1, 2018 **Author:** WaradyDavis **Excerpt:** If your business is buying new assets in 2018, you’ll be able to benefit in several ways under the new tax reform law, commonly referred to as the “Tax Cuts and Jobs Act” (TCJA), which was signed into law by President Trump on December 22. You even may be able to take advantage of some of the enhancements on your 2017 tax return! **Content:** If your business is buying new assets in 2018, you’ll be able to benefit in several ways under the new tax reform law, commonly referred to as the “Tax Cuts and Jobs Act” (TCJA), which was signed into law by President Trump on December 22. You even may be able to take advantage of some of the enhancements on your *2017* tax return! ## Much better bonus depreciation Under pre-TCJA law, for qualified *new* assets that your business places in service in 2017, you can claim a 50% first-year bonus depreciation deduction. Used assets don’t qualify. This tax break is available for the cost of new computer systems, purchased software, vehicles, machinery, equipment, office furniture and so forth. In addition, 50% bonus depreciation can be claimed for qualified improvement property, which means any qualified improvement to the interior portion of a nonresidential building if the improvement is placed in service after the date the building is placed in service. But qualified improvement costs don’t include expenditures for the enlargement of a building, an elevator or escalator, or the internal structural framework of a building. Bonus depreciation improves significantly under the TCJA: For qualified property placed in service between September 28, 2017, and December 31, 2022 (or by December 31, 2023, for certain property with longer production periods), the first-year bonus depreciation percentage is increased to 100%. In addition, the 100% deduction is allowed for both new and used qualifying property. The new law also allows 100% bonus depreciation for qualified film, television and live theatrical productions placed in service on or after September 28, 2017. Productions are considered placed in service at the time of the initial release, broadcast or live commercial performance. In later years, bonus depreciation is scheduled to be reduced as follows: - 80% for property placed in service in 2023. - 60% for property placed in service in 2024. - 40% for property placed in service in 2025. - 20% for property placed in service in 2026. **Important:** For certain property with longer production periods, the preceding reductions are delayed by one year. For example, 80% bonus depreciation will apply to long-production-period property placed in service in 2024. ## Section 179 deduction enhanced permanently When 100% first-year bonus depreciation isn’t available, the Sec. 179 tax break can provide similar benefits. Sec. 179 allows eligible taxpayers to deduct the entire cost of qualifying new or used depreciable property and most software in Year 1, subject to various limitations. Under pre-TCJA law, for tax years that began in 2017, the maximum Sec. 179 depreciation deduction is $510,000. The maximum deduction is phased out dollar for dollar to the extent the cost of eligible property placed in service during the tax year exceeds the phaseout threshold of $2.03 million. Qualified real property improvement costs are also eligible for the Sec. 179 deduction. This real estate break applies to: - Certain improvements to interiors of leased nonresidential buildings, - Certain restaurant buildings or improvements to such buildings, and - Certain improvements to the interiors of retail buildings. Deductions claimed for qualified real property costs count against the overall maximum for Sec. 179 deductions ($510,000 for tax years that began in 2017). The TCJA permanently enhances the Sec. 179 deduction. Under the new law, for qualifying property placed in service in tax years beginning in 2018, the maximum Sec. 179 deduction is increased to $1 million, and the phaseout threshold amount is increased to $2.5 million. For later tax years, these amounts will be indexed for inflation. For purposes of determining eligibility for these higher limits, property is treated as acquired on the date on which a written binding contract for the acquisition is signed. The new law also expands the definition of eligible property to include certain depreciable tangible personal property used predominantly to furnish lodging. The definition of qualified real property eligible for the Sec. 179 deduction is also expanded to include the following improvements to nonresidential real property: roofs, HVAC equipment, fire protection and alarm systems, and security systems. ## Enhanced deductions for business passenger vehicles For *new or used* passenger vehicles that are placed in service in 2018 and used over 50% for business, the maximum annual depreciation deductions under the TCJA are as follows: - $10,000 for Year 1. - $16,000 for Year 2. - $9,600 for Year 3. - $5,760 for Year 4 and thereafter until the vehicle is fully depreciated. For years after 2018, these amounts will be increased for inflation. While the Year 1 amount is a little lower than the Year 1 amount under pre-TCJA law, the TCJA allows much faster depreciation overall. For example, the 2017 limits for passenger cars are $11,160 for Year 1 for a new car ($3,160 for a used car). For subsequent years for new and used cars, the limits are $5,100 for Year 2, $3,050 for Year 3, and $1,875 for Year 4 and thereafter. Slightly higher limits apply to light trucks and light vans. For passenger vehicles purchased and placed in service during 2018, the first year depreciation allows up to $18,000 ($10,000 first year depreciation and $8,000 bonus.) ### Contact us for help The tax laws related to business depreciation will be changing significantly in 2018, and there are even additional tax-savings opportunities when you file your 2017 return. Contact us to discuss your 2017 asset purchases and your future purchasing plans so you can reap the maximum benefits from the new law. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2018 All Rights Reserved. **Categories:** Tax Legislation --- ### [IRS delays new reporting rule for online payment processors](https://waradydavis.com/irs-delays-new-reporting-rule-for-online-payment-processors/) **Published:** December 5, 2023 **Author:** Leslie Flinn **Excerpt:** The IRS is delaying the $600 Form 1099-K reporting threshold for third-party settlement organizations for the 2023 tax year. **Content:** For the second consecutive year, the IRS has postponed implementation of a new rule that would have led to an estimated 44 million taxpayers receiving tax forms from payment apps and online marketplaces such as Venmo and eBay. While the delay should spare such taxpayers some confusion, it won’t affect their tax liability or income reporting responsibilities. And the IRS indicated that it intends to begin phasing in the rule in 2024. ## The new reporting rule The rule concerns IRS Form 1099-K, *Payment Card and Third Party Network Transactions*, an information return first introduced in 2012. The form is issued to report payments from: - Credit, debit and stored-value cards such as gift cards, and - Payment apps or online marketplaces (also known as third-party settlement organizations). If you receive direct payments via credit, debit or gift card, you should receive the form from your payment processors or payment settlement entity. But for years, payment apps and online marketplaces have been required to send Form 1099-K only if the payments you receive for goods and services total more than $20,000 from more than 200 transactions (although they can choose to send you the form with lower amounts). The form reports the gross amount of all reportable transactions for the year and by the month. The IRS also receives a copy. The [American Rescue Plan Act (ARPA)](https://waradydavis.com/whats-in-the-arpa-for-individuals/), enacted in March 2021, significantly expanded the reach of Form 1099-K. The changes were designed to improve voluntary tax compliance for these types of payments. According to the IRS, tax compliance is higher when amounts are subject to information reporting. Under ARPA, payment apps and online marketplaces must report payments of more than $600 for the sale of goods and services; the number of transactions is irrelevant. As a result, the form would be sent to many more taxpayers who use payment apps or online marketplaces to accept payments. The rule change could ensnare not only small businesses and individuals with side hustles but also “casual sellers” of used personal items like clothing, furniture and other household items. The change originally was scheduled to take effect for the 2022 tax year, with the forms going out in January 2023. However, in December 2022, the IRS announced its first implementation delay and released guidance stating that 2022 would be a transition period for the change. The agency also acknowledged that the change must be managed carefully to help ensure that 1) the forms are issued only to taxpayers who should receive them, and 2) taxpayers understand what to do as a result of this reporting. ## The updated implementation plan In a November 2023 report, the[ U.S. Government Accountability Office (GAO)](https://www.gao.gov/products/gao-24-107095#:~:text=IRS%20expects%20to%20receive%20about,inform%20enforcement%20and%20outreach%20priorities.) stated that the IRS expects to receive about 44 million Form 1099-Ks in 2024 — an increase of around 30 million. The GAO found, however, that the “IRS does not have a plan to analyze these data to inform enforcement and outreach priorities.” Less than a week later, the IRS announced a second delay in the rule change, explaining that the previous thresholds ($20,000 / more than 200 transactions) remain in place for 2023. The agency cited feedback from taxpayers, tax professionals and payment processors, as well as the possibility of taxpayer confusion. It seemed likely confusion would ensue when the forms started hitting mailboxes in January 2024. For example, with forms sent by payment apps or online marketplaces, it’s not clear how taxpayers should transfer the reported amounts to their individual tax returns. The income shown on the form might be properly reported on the recipient’s: - Schedule C, *Profit or Loss from Business (Sole Proprietorship)*, - Schedule E, *Supplemental Income and Loss (From rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs, etc.)*, or - Appropriate return for a partnership or corporation. In addition, the gross amount of a reported payment doesn’t include any adjustments for credits, cash equivalents, discounts, fees, refunds or other amounts — so the full amount reported might not be the taxable amount. Moreover, not every reportable transaction is taxable. If you sell a personal item on eBay at a loss, for example, you aren’t required to pay tax on the sale. If you met the $600 threshold, though, that sale would appear on your Form 1099-K. Be aware that the IRS isn’t abandoning the lower threshold. In its latest announcement, the agency indicated that a transitional threshold of $5,000 will apply for tax year 2024. This phased-in approach, the IRS says, will allow it to review its operational processes to better address taxpayer and stakeholder concerns. ## Advice for Form 1099-K recipients If you receive a Form 1099-K under the existing thresholds, the IRS advises you to review the form carefully to determine whether the amounts are correct. You also should identify any related deductible expenses you may be able to claim on your return. If the form includes personal items that you sold at a loss, the IRS says you should “zero out” the payment on your return by reporting both the payment and an offsetting adjustment on Form 1040, Schedule 1. If you sold such items at a gain, you must report the gain as taxable income. ### Taxes remain the same It’s worth repeating that the delay in the implementation of the new Form 1099-K threshold doesn’t affect taxpayers’ obligations to report income on their tax returns. All income is taxable unless excluded by law, regardless of whether a taxpayer receives a Form 1099-K. If you have questions regarding Form 1099-K reporting, please contact us. © 2023 **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Tibble Case Puts Focus on Fiduciaries’ Ongoing Duties](https://waradydavis.com/1377-2/) **Published:** December 1, 2015 **Author:** WaradyDavis **Excerpt:** Earlier in 2015, the U.S. Supreme Court clarified the ongoing duty of retirement plan fiduciaries to monitor plan investments. Tibble v. Edison International has been percolating through the federal court system since 2007. The case focuses on the timing of lawsuits against plan fiduciaries for breaches of their fiduciary duty. **Content:** Earlier in 2015, the U.S. Supreme Court clarified the ongoing duty of retirement plan fiduciaries to monitor plan investments. Tibble v. Edison International has been percolating through the federal court system since 2007. The case focuses on the timing of lawsuits against plan fiduciaries for breaches of their fiduciary duty. ## Case background In 1999, Edison’s 401(k) plan added three retail-priced mutual funds and in 2002 added three more. In 2007, plan participants sued plan fiduciaries “to recover damages for alleged losses suffered by the plan from alleged breaches of \[the fiduciaries’\] fiduciary duties.” ERISA sets a six-year time limit on filing a fiduciary breach complaint. Under the law, the clock starts “the date of the last action which constitutes part of the breach or violation, or, in the case of an omission, the latest date on which the fiduciary could have cured the breach or violation.” Both the district court in California and the U.S. Court of Appeals for the Ninth Circuit found that the plan’s initial investments in 1999 — eight years before the initiation of the lawsuit — constituted the “last action.” They reasoned that the addition of the three funds in 2002 didn’t amount to a change in the program, so there was no call to reset the six-year limitation to that date. ## U.S. Supreme Court ruling A unanimous U.S. Supreme Court held that the Ninth Circuit had erred because it failed to consider “the contours of the alleged breach of fiduciary duty.” The nature of the fiduciary duty in this circumstance, the court held, is “derived from the common law of trusts,” which means that “a trustee has a continuing duty — separate and apart from the duty to exercise prudence in selecting investments at the outset — to monitor, and remove imprudent, trust investments.” Thus, because the trustees’ duty was ongoing, no deadline was reached for the plaintiffs to file their lawsuit. As long as the alleged breach of the continuing duty of prudence occurs within six years of the suit, the claim falls within the statute of limitations. The Supreme Court’s ruling didn’t address whether plan fiduciaries at Edison had failed to act as prudent fiduciaries, merely that they were still on the hook despite the interval between the time certain plan investments were made and the date that a class action suit was launched. The Court sent the case back to the Ninth Circuit to determine whether Edison’s fiduciaries shouldn’t have allowed the 401(k) plan to use mutual funds, whose fee structure was the same as that offered to “retail” (individual) investors, instead of cheaper institutionally priced funds. ## Basic issue remains unresolved The appeals court will have to consider the underlying question: Did the fiduciaries violate their duties in allowing the 401(k) plan to invest in retail-priced funds? Although the Tibble case is about plan fees, that’s only one of the many things plan fiduciaries need to consider, of course. Other critical areas of ongoing focus include: Investment performance. Certain types of investments are volatile and positive results can never be guaranteed. But ongoing monitoring requires comparing their performance to other funds with similar investment strategies that might be doing better, even if they’re losing money. Having an independent investment expert provide regular performance monitoring and benchmarking will be important in supporting investment decisions. According to the U.S. Department of Labor, the duty to act prudently is one of a fiduciary’s central responsibilities under ERISA. It requires expertise in a variety of areas, such as investments. A fiduciary lacking investment expertise should hire someone with that professional knowledge to carry out investment functions. Going it alone without such expertise can lead to poor investment decisions. ERISA Section 404(c). This provision requires plans to provide a “broad range” of investments. The range of investments must, among other things, offer at least three investment choices that are diversified and have different risk and return characteristics. Qualified default investment alternatives (QDIAs). The QDIA rules are specific about acceptable default investments. Fiduciaries need to make sure their QDIAs maintain those characteristics over time. Potentially bad investment choices. While meeting Section 404(c) requirements is an explicit fiduciary responsibility that plan sponsors must monitor, a conservative approach alone isn’t enough. Keep an eye on any particular fund that, if participants unwisely invested too heavily in, could get them in financial trouble. Investment manager competence. Fiduciaries must monitor who’s managing each of the fund’s investments. Funds may periodically switch managers. When this occurs, conduct due diligence on any replacement manager. Being a prudent fiduciary by keeping track of plan investments and operations on an ongoing basis doesn’t guarantee everything will always go according to plan. Congress understood that when it enacted ERISA, and courts will take this into consideration when considering possible violations. ### Timing matters At a minimum, fiduciaries must demonstrate through their actions — and, equally important, the documentation of their actions — that they gave careful thought to the plan participants’ best interest. And as the U.S. Supreme Court made clear in Tibble, fiduciaries’ duty to do so can never be put on hold. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Employee Benefit Plans, Perspectives on Employee Benefits --- ### [Want Happy Donors? Be Careful with Acknowledgement Letters](https://waradydavis.com/want-happy-donors-be-careful-with-acknowledgement-letters/) **Published:** January 1, 2015 **Author:** WaradyDavis **Excerpt:** Many of your donors are now in the process of preparing their 2014 tax returns. You may also have just completed or are still preparing acknowledgement letters thanking them for their 2014 contributions. We know you are aware of the need for such letters. You may not, however, be aware of the dire consequences that may be in store for your donors if the letters aren’t received timely or are not written in accordance with stringent IRS guidelines **Content:** Many of your donors are now in the process of preparing their 2014 tax returns. You may also have just completed or are still preparing acknowledgement letters thanking them for their 2014 contributions. We know you are aware of the need for such letters. You may not, however, be aware of the dire consequences that may be in store for your donors if the letters aren’t received timely or are not written in accordance with stringent IRS guidelines. A recent tax court case highlighted the need for timely and properly worded acknowledgements. In this case, the IRS disallowed a donor’s deduction because the charity’s acknowledgment letter did not contain the necessary wording. The donor then obtained a properly worded letter from the charity, however the IRS disallowed the deduction because it was received after the donor filed his return and the court upheld this decision. In the spirit of keeping your donors happy, let’s review the rules. The tax laws provide that “No deduction shall be allowed for any contribution of $250 or more unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment of the contribution by the donee organization.” The rules explain that an acknowledgment shall be considered contemporaneous if the donor obtains the acknowledgment on or before the earlier of (1) the filing date of the donor’s tax return, or (2) the due date (including extensions) of filing the return. The rules further explain that the acknowledgment letter must contain the following information: 1. The amount of cash and a description (but not value) of any non-cash property contributed; 2. Whether the donee organization provided any goods or services in consideration for the donation; 3. A description and good faith estimate of the value of any goods or services that the organization provided, or if such goods or services consist solely of intangible religious benefits, if that was the case. In the tax court case mentioned above the charity failed to include the simple phrase **“No goods or services were provided in exchange for your contribution.”** This case emphasizes the importance that your acknowledgments include the necessary information and are timely sent to donors. It is not sufficient to simply say **“Please consult your tax advisor to determine the deductibility of your donation.”** Remember, a happy donor is more likely to be a generous donor. If you have any questions about your acknowledgment letters please contact Warady & Davis LLP at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Using your financial statements during an economic crisis](https://waradydavis.com/using-your-financial-statements-during-an-economic-crisis/) **Published:** April 14, 2020 **Author:** Leslie Flinn **Content:** The economic fallout from the coronavirus (COVID-19) pandemic has forced business owners to reevaluate their operations and make difficult decisions. One place to look for the information you need to make rational, reasonable moves is your financial statements. Under U.S. Generally Accepted Accounting Principles, these typically comprise a statement of cash flows, a balance sheet and an income statement. ### **Cash flow** A statement of cash flows should be organized into three sections: cash flows from operating, financing and investing activities. Ideally, a company generates enough cash from operations to cover its expenses. For many businesses, the COVID-19 pandemic has caused revenue to drop precipitously without a proportionate decrease in certain (fixed) operating expenses. Keep a close eye on whether you’re reaching a danger point. To generate additional cash flow, you may need to borrow money — consider a Small Business Administration loan, if you’re eligible. ### **Assets and liabilities** Your balance sheet tallies your company’s assets, liabilities and net worth — creating a snapshot of its financial health on the statement date. Assets are typically listed in order of liquidity. Current assets (such as accounts receivable) are expected to be converted into cash within a year, while long-term assets (such as your plant and equipment) will be used to generate revenue beyond the next 12 months. Similarly, liabilities are listed in order of maturity. Current liabilities (such as accounts payable) come due within a year, while long-term liabilities are payment obligations that extend beyond the current year. As its name indicates, the balance sheet must *balance* — that is, assets must equal liabilities plus net worth. Net worth is the extent to which the book value of assets exceeds liabilities. In times of distress, certain assets (such as receivables, financial assets, pension funds and inventory) may need to be written off, and intangibles (such as brands and goodwill) may become impaired. These changes may cause the book value of a company’s net worth to be negative, suggesting that the business is insolvent. Other red flags include current assets growing faster than sales, and a deteriorating ratio of current assets to current liabilities. ### **Income and overhead** An income statement shows revenue and expenses over the accounting period. Revenue has fallen for many businesses as the result of social distancing during the COVID-19 outbreak. Fortunately, certain variable expenses — such as materials and direct labor costs — have also fallen. Unfortunately, most fixed expenses — such as rent, equipment leasing fees, advertising, insurance premiums and manager salaries — are ongoing. Review costs that are categorized on the income statements as overhead and sales, general and administrative expenses. Consider whether you can scale back these items, renegotiate them or convert them into variable costs over the long run. For example, you might return a leased copier that isn’t being used, decrease your insurance coverage or rely more on independent contractors, rather than employees, for certain tasks. ### **Sudden changes** Your existing financial statements may not account for the sudden changes inflicted upon businesses worldwide by COVID-19. Warady & Davis LLP can assist you in evaluating them, gleaning insightful data using updated numbers, and generating new ones going forward. ## **We Are Here to Help** Please visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Audit & Accounting, Business, Business Management, COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, Federal Reserve Coronavirus Loans, Federal Reserve Covid-19 Loans, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Main Street Lending Program, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [U.S. Volunteering Trends](https://waradydavis.com/u-s-volunteering-trends/) **Published:** February 1, 2015 **Author:** WaradyDavis **Excerpt:** In February, the U.S. Bureau of Labor Statistics published data on volunteering in America.* According to the report, approximately one in four Americans (25.3%) volunteered between September 2013 and September 2014 **Content:** In February, the U.S. Bureau of Labor Statistics published data on volunteering in America.\* According to the report, approximately one in four Americans (25.3%) volunteered between September 2013 and September 2014. The volunteer rate for women was higher than for men (28.3% compared with 22.0%), and married people volunteered at a higher rate than those who never married (30.0% compared with 20.2%). The age group with the highest volunteer rate for the period was the cohort of 35- to 44-year-olds (29.8%). It’s interesting to note that the age group with the highest volunteer rate is most likely the busiest in terms of juggling work and family responsibilities. But the data are consistent with the results of a recent study\*\* that found that working people who volunteer are healthier and more satisfied with their work-life balance, even though they have more on their plates than those who don’t volunteer. ###### \* Volunteering in the United States, 2014 ###### \*\* Funded by the Swiss National Science Foundation If you have any questions about your nonprofit organization, please contact Warady & Davis LLP at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [The Protecting Americans from Tax Hikes Act of 2015, or “PATH”](https://waradydavis.com/the-protecting-americans-from-tax-hikes-act-of-2015-or-path/) **Published:** May 9, 2016 **Author:** WaradyDavis **Excerpt:** President Obama on December 18th signed The Protecting Americans from Tax Hikes Act of 2015, or “PATH” - a package of tax extenders costing $622 billion over the next decade. This tax bill contains some nice presents: permanent extensions of tax benefits for businesses and individuals that have long been temporary. **Content:** President Obama on December 18th signed **The Protecting Americans from Tax Hikes Act of 2015**, or ***“PATH”*** – a package of tax extenders costing $622 billion over the next decade. This tax bill contains some nice presents: permanent extensions of tax benefits for businesses and individuals that have long been temporary. ***PATH*** will end a frustrating cycle for millions of taxpayers. In the past, lawmakers have enacted popular temporary provisions and then left taxpayers hanging until the last minute as to whether the provisions would be renewed. For example, the provision allowing IRA charitable transfers—a highly popular measure that helps charities and lowers taxes for many older Americans—has been renewed five times since 2006, with four of them coming after Thanksgiving. The nadir was 2012, when the break wasn’t re-enacted until early in 2013, and many donors were confused by rules for making retroactive 2012 gifts. This year, 52 tax provisions that have expired have either been temporarily extended or made permanent. Almost two dozen are made permanent, including six for families and individuals. The R&D Tax Credit and Section 179 Expensing for Capital Investment, important for business, are extended indefinitely. The bill doesn’t permanently extend all popular breaks. Tax relief for mortgage-debt forgiveness, “bonus” depreciation, and a credit for alternative-fuel vehicles expire in 2016. Following is a list of notable benefits which are now permanent under the new law or have been temporarily extended. #### Individual and family provisions: **PERMANENTLY EXTENDED:** - Tax-free distributions from individual retirement plans for charitable purposes - Deduction of state and local general sales taxes - Enhanced child tax credit - Enhanced American opportunity tax credit - Enhanced earned income tax credit - Deduction for certain expenses of elementary and secondary school teachers - Parity for exclusion from income for employer-provided mass transit and parking benefits - Charitable deduction for contributions of food inventory - Tax treatment of certain payments to controlling exempt organizations - Basis adjustment to stock of S corporations making charitable contributions of propert **EXTENDED THROUGH 2016:** - Exclusion from gross income of discharge of qualified principal residence indebtedness - Treatment of mortgage insurance premiums as qualified residence interest - Above-the-line deduction for qualified tuition and related expenses **PERMANENTLY EXTENDED** - **Increased Section 179 deduction.** The provision permanently extends the small business expensing limitation and phase-out amounts in effect from 2010 to 2014 ($500,000 and $2 million, respectively). The special rules that allow expensing for computer software and qualified real property (qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property) also are permanently extended. Both the $500,000 and $2 million figures are indexed for inflation beginning in 2016. The provision further modifies the expensing limitation with respect to qualified real property by eliminating the $250,000 cap beginning in 2016.Fifteen-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements. Exclusion of 100 percent of gain on certain small business stock.Subpart F exception for active financing income. Military housing allowance exclusion for determining whether a tenant in certain counties is low-income. **EXTENDED THROUGH 2019:** **Bonus depreciation.** Bonus depreciation percentage is 50 percent for property placed in service during 2015, 2016, and 2017 and phases down with 40 percent in 2018 and 30 percent in 2019. The provision continues to allow taxpayers to elect to accelerate the use of AMT credits in lieu of bonus depreciation under special rules for property placed in service during 2015. The provision modifies the AMT rules beginning in 2016 by increasing the amount of unused AMT credits that may be claimed in lieu of bonus depreciation. The provision also modifies bonus depreciation to include qualified improvement property and to permit certain trees, vines, and plants bearing fruit or nuts to be eligible for bonus depreciation when planted or grafted, rather than when placed in service. Look-through treatment of payments between related controlled foreign corporations under foreign personal holding company rules. New markets tax credit. Work opportunity tax credit. **EXTENDED THROUGH 2016:** - Indian employment tax credit - Railroad track maintenance credit - Mine rescue team training credit - Qualified zone academy bonds - Classification of certain race horses as three-year property - Seven-year recovery period for motor sports entertainment complexes - Accelerated depreciation for business property on an Indian reservation - Election to expense mine safety equipment - Special expensing rules for certain film and television productions - Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico - Empowerment zone tax incentives - Temporary increase in limit on cover-over of rum excise taxes to Puerto Rico and the Virgin Islands - American Samoa economic development credit - Moratorium on medical device excise tax - Credit for nonbusiness energy property - Credit for alternative fuel vehicle refueling property - Credit for two-wheeled plug-in electric vehicles - Second-generation biofuel producer credit - Biodiesel and renewable diesel incentives - Production credit for Indian coal facilities - Credits with respect to facilities producing energy from certain renewable resources - Credit for energy-efficient new homes - Special allowance for second-generation biofuel plant property - Energy-efficient commercial buildings deduction - Special rule for sales or dispositions to implement FERC or state electric restructuring policy for qualified electric utilities - Excise tax credits relating to alternative fuels - Credit for new qualified fuel cell motor vehicles - News stories and congressional tax writing committee chairmen heralded the tax extenders legislation as a step forward for tax reform. This alert merely lists the bill’s major tax provisions. You can expect to receive more commentary from W&D on important provisions. In the meantime, if you have any questions, please contact usat (847) 267-9600. Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Tax Legislation --- ### [Should You Opt Out of Advance Child Tax Credit Payments?](https://waradydavis.com/should-you-opt-out-of-advanced-child-tax-credit-payments/) **Published:** July 8, 2021 **Author:** Leslie Flinn **Content:** ## What is the Child Tax Credit? Child tax credit payments, which were set up and expanded under the American Rescue Plan passed earlier this year, amount to $3,000 annually per child ages 6 to 17 and $3,600 annually for children under 6. ## When will you receive the credit? Eligible families will receive half of their credit in the form of monthly payments of up to $250 per school-age child and up to $300 per child under 6 from July through December 2021. The other half will be paid out when they file their 2021 taxes. The credit is income-based and starts to phase out for individuals earning more than $75,000 a year or $150,000 for those married filing jointly. **Most eligible families won’t need to do anything to receive the payments, but you should understand the implications and why advance payments might not make sense for your household even if you qualify.** ## Should you opt out of Advance Child Tax Credit Payments? Because the IRS will base the payments on your 2020 tax return (or, if not yet available, your 2019 return), it’s possible that you could receive excess payments over the amount you actually qualify for in 2021. **In that case — unlike excess stimulus payments — you’ll be required to repay the excess.** The IRS will either deduct the amount from your 2021 refund or add it to the amount you owe. **The bottom-line is that If you don’t usually receive a refund, then the advance payments could actually cause you to *owe more* when you file your 2021 taxes.** You might consider opting out if, for example, you were near the income limits in 2019 or 2020 or expect to earn more in 2021. Be aware that couples filing jointly must both opt out, otherwise the spouse who doesn’t will receive half of the joint payment. It’s not only a change in expected income that could lead to excess payments; it’s also a change in the number of dependents. For example, divorced couples who share joint custody may alternate the years in which they claim their children as dependents for CTC purposes. If 2021 is your former spouse’s year, consider opting out. Parents of children who will turn age 18 in 2021 also should consider opting out. Other examples of why you may want to consider opting out include if you switched to a higher-paying job, or your spouse went back to work after being unemployed for most or all of 2020. Both of these scenarios could cause you to be in a higher tax bracket next year. Also, if you sold property for a gain and therefore earned more income in 2021, you could possibly have to pay the credit back when you file your 2021 tax return. **Once again, if you fall into any of the above categories or you can afford not to use the credit payments immediately, you may want to opt out. That way, you’ll receive the payments as the full child tax credit when filing your 2021 taxes.** ## How to Opt Out [**The IRS released a new online tool**](https://www.irs.gov/credits-deductions/child-tax-credit-update-portal) that allows families to check their eligibility, view the upcoming payments and unenroll from getting advanced payments. To use the portal, parents will need to have an existing IRS username or ID.me account, or enroll for one using a photo ID. To opt out of the advanced payments, families must unenroll using the online portal three days before the first Thursday of the next month, **[according to the IRS](https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-topic-j-unenrolling-from-advance-payments)**. The **[agency also said ](https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-topic-j-unenrolling-from-advance-payments)**that for parents who are married and filing jointly, **both spouses must unenroll.** **The deadline to opt out of the first payment was June 28, 2021, but you can still opt out for future payments. Parents have until 11:59 p.m. ET on August 2nd to unenroll for the next payment.** Following is a table showing all the unenrollment deadlines: ## **Deadlines to *unenroll* in the advanced child tax credit payments** **Payment Month****Unenrollment Deadline** **Payment Date***July 2021**June 28, 2021* *July 15, 2021*Aug. 2021August 2, 2021August 13, 2021Sept. 2021August 30, 2021September 15, 2021Oct. 2021October 4, 2021October 15, 2021Nov. 2021November 1, 2021November 15, 2021Dec. 2021November 29, 2021December 15, 2021## Questions ***Please contact your Warady & Davis LLP advisor with your questions at 847-267-9600;* .** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ##### **SOURCE: IRS** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [President Biden’s proposed budget includes notable tax provisions](https://waradydavis.com/president-bidens-proposed-budget-includes-notable-tax-provisions/) **Published:** March 24, 2023 **Author:** Leslie Flinn **Excerpt:** Here’s a rundown of the business and individual tax provisions included in President Biden’s recently released budget proposal. **Content:** ## President Biden’s proposed budget includes notable tax provisions President Biden has released his [proposed budget](https://www.whitehouse.gov/omb/budget/) for the federal government for the 2024 fiscal year. The budget, which aims to cut the deficit by nearly $3 trillion over 10 years, includes numerous provisions that would affect the tax bills of both individuals and businesses. While most of these proposals are unlikely to be enacted with a Republican majority in the U.S. House of Representatives, they shed light on the Democrats’ priorities as they prepare for the 2024 election season. ### Individual tax provisions The proposed budget includes tax provisions that would affect taxpayers of various income levels. In particular, it would make the following changes: **Tax rates.** The proposal would reinstate the top individual tax rate of 39.6% for single filers earning more than $400,000 ($450,000 for married couples). **Net investment income tax (NIIT).** The NIIT on income over $400,000 would include all pass-through business income not otherwise covered by the NIIT or self-employment taxes. The budget also would increase both the additional Medicare tax rate and the NIIT rate by 1.2 percentage points. Thus, the Medicare tax rate would be 5% for earnings above $400,000, and the NIIT rate would be 5% for investment income above $400,000. **Capital gains tax.** The highest capital gains rate now is 20% (or 23.8% if the NIIT applies). For individuals with taxable income of more than $1 million, the budget proposes that capital gains be taxed at ordinary rates, with 37% (or 40.8% with the NIIT) generally being the highest rate — or 39.6% (or 43.4% with the NIIT) if the top tax rate is raised. **Child tax credit (CTC).** This proposal would expand the CTC and make it fully refundable and payable in advance on a monthly basis. For eligible parents, the credit would increase from $2,000 to $3,000 for children age six and older and $3,600 for children under age six. The proposal also would establish a “presumptive eligibility” for determining when a taxpayer is eligible to claim a monthly specified child allowance or receive a monthly advance child payment. After a taxpayer establishes presumptive eligibility for a child, that child would be treated as a specified child of the taxpayer for each month during the period of the taxpayer’s presumptive eligibility. **Premium tax credits (PTCs).** The American Rescue Plan Act expanded eligibility for healthcare insurance subsidies to taxpayers with household incomes above 400% of the federal poverty line for 2021 and 2022. It also reduced the applicable contribution percentage (the percentage of household income a taxpayer must contribute toward a healthcare insurance premium). The [Inflation Reduction Act (IRA)](https://waradydavis.com/inflation-reduction-act/) extended the expansion through 2025. The proposed budget would make this expansion permanent. **Cryptocurrency taxation.** The proposal would amend the “wash-sale” rule to cover digital assets. The rule prohibits the deduction of a loss when the taxpayer acquires “substantially identical” investments within 30 days before or after the sale date. **Minimum wealth tax.** The proposal would impose a minimum 25% tax on total income, generally inclusive of unrealized capital gains, for all taxpayers whose assets exceed liabilities by more than $100 million. According to the White House, the tax would apply to only the top 0.01% of taxpayers. **Gift and estate taxes.** The proposal would close loopholes related to certain trust arrangements. Specifically, the changes would affect grantor-retained annuity trusts and charitable lead annuity trusts ### Business tax provisions The proposed budget’s tax provisions target numerous issues of interest to businesses, including: **Corporate tax rates.** The proposal would trim back the large cut made to the corporate tax rate in the [Tax Cuts and Jobs Act (TCJA)](https://waradydavis.com/congress-passes-biggest-tax-bill-since-1986-the-tax-cuts-and-jobs-act-tcja/). It would hike the tax rate for C corporations from 21% to 28% — still significantly less than the pre-TCJA rate of 35%. In addition, the effective global intangible low-taxed income (GILTI) rate would increase to 14%. Overall, with other proposed changes, the effective GILTI rate would rise to 21%. **Global minimum tax.** The proposal would repeal[ Base Erosion and Anti-Abuse Tax (BEAT)](https://www.irs.gov/pub/irs-utl/irc59a-beat-overview.pdf) liability, replacing it with an “undertaxed profits rule.” In conjunction with the GILTI regime, the rule would ensure that income earned by a multinational company, whether parented in the United States or elsewhere, is subject to a minimum rate of taxation regardless of where the income is earned. **Stock buyback excise tax.** The IRA created a 1% excise tax on the fair market value when corporations buy back their stock, with the goal of reducing the difference in the tax treatment of buybacks and dividends. The proposal would quadruple the tax to 4%. **Carried interest loophole.** A “carried interest” is a hedge fund manager’s contractual right to a share of a partnership’s profits. Currently, it’s taxable at the capital gains rate if certain conditions are satisfied. The budget proposes to close this loophole. **Like-kind exchanges.** Owners of certain appreciated real property can defer the taxable gain on the exchange of the property for real property of a “like-kind.” The proposal would allow the deferral of gain up to an aggregate amount of $500,000 for each taxpayer ($1 million for married couples filing a joint return) each year for like-kind exchanges. Under this proposal, any like-kind gains in excess of $500,000 (or $1 million for married couples) in a year would be recognized in the year the taxpayer transfers the real property. **Low-income housing tax credit.** The budget proposes to expand and enhance the largest federal incentive for affordable housing construction and rehabilitation. ### The elephant in the room **The elephant in the room** The budget proposal doesn’t address many of the temporary tax provisions of the TCJA that have expired or are set to expire in the next few years. The increased standard deduction, reduced individual tax rates, qualified business income deduction for pass-through businesses, and limit on the state and local tax deduction are among the numerous provisions scheduled to expire at the end of 2025 — potentially affecting the tax liability of a wide swath of taxpayers. We’ll keep you informed if there’s significant movement on this front. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [PBGC Updates Premium Rates and Payment Deadlines](https://waradydavis.com/pbgc-updates-premium-rates-and-payment-deadlines/) **Published:** June 1, 2015 **Author:** WaradyDavis **Excerpt:** Earlier this year, the Pension Benefit Guaranty Corporation (PBGC) announced several changes affecting defined-benefit pension sponsors in 2015, including changes to annual premium rates and scheduling. Sponsors of qualified defined-benefit plans subject to ERISA’s plan termination insurance rules must file with and pay to the PBGC annual plan termination insurance premiums. **Content:** Earlier this year, the Pension Benefit Guaranty Corporation (PBGC) announced several changes affecting defined-benefit pension sponsors in 2015, including changes to annual premium rates and scheduling. Sponsors of qualified defined-benefit plans subject to ERISA’s plan termination insurance rules must file with and pay to the PBGC annual plan termination insurance premiums. ### For single-employer defined-benefit plans, the PBGC charges two types of premiums: 1. Flat-rate premium. This is a fixed amount per participant. For single-employer plans, the PBGC raised the rate in 2015 by 16% to $57, up from $49. 2. Variable-rate premium. This is based on how well the plan is funded. In 2015, the rate jumped to $24 per $1,000 of unfunded vested benefits, up from $14, and the cap was bumped up to $418 times the number of participants. The PBGC also announced that the premium payment schedule transition rule for small pensions (generally with 100 or fewer participants) is now fully phased in. The premium due date now coincides with Form 5500 due dates. Thus, generally for calendar year plans, the due date is October 15. ### In addition to the premium rate and payment changes, the PBGC made the following announcements: - Risk-transfer activity reporting. Pension plans must now report information about the number of former employees involved in certain recent risk-transfer activities — such as annuity purchases and lump-sum windows. Because the reporting requirement for 2015 applies to a longer period than for subsequent years, plans may report reasonable estimates instead of exact counts. - Look-back rule approval. PBGC approval is required to start using the look-back rule in 2015 if the plan opted out in 2014. Approval is also required, with limited exceptions, to opt out of the look-back rule starting this year. The PBGC has expanded its look-back rule instructions to clarify the exceptions and to provide information on how to request approval. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Perspectives on Employee Benefits --- ### [Measuring Performance - Look to Your Mission](https://waradydavis.com/measuring-performance-look-to-your-mission/) **Published:** February 1, 2016 **Author:** WaradyDavis **Excerpt:** A recent study by the Stanford Graduate School of Business in collaboration with BoardSource and GuideStar found that although many nonprofit organizations devote significant efforts to measuring performance, nonprofit directors say the efforts are falling short. **Content:** A recent study by the Stanford Graduate School of Business in collaboration with BoardSource and GuideStar found that although many nonprofit organizations devote significant efforts to measuring performance, nonprofit directors say the efforts are falling short. Performance measurement needs to assess both financial efficiency and how well the nonprofit is meeting organizational goals and achieving its mission. However, while 92% of the nonprofit directors surveyed said their boards review data and information to evaluate organizational performance, 46% said they have little to no confidence that the data they review fully and accurately measures their organizations’ success in achieving their missions.\* ## **Study Recommendations** With this information in mind, the authors of the study made these recommendations: - Make sure your board and other key stakeholders understand and embrace your mission - Establish specific goals and strategies tied directly to achieving your mission - Develop rigorous performance metrics that reflect those goals and strategies ### **Developing Performance Metrics** To develop effective performance metrics, start by grouping your activities. **Inputs**. These are key tangibles and intangibles that drive your organization, such as your mission or vision statement, financial resources, personnel, and information systems and infrastructure. Possible metrics to measure inputs include: - Percentage of strategic priorities aligned with the mission statement - Operating revenue as a percentage of costs - Percentage of activities documented and measured **Activities**. Include all of your specific programs and services and related tasks, such as disseminating information, education, research, advocacy, and networking. You might measure these by: - The money you spend providing aid and support to the community - Employee productivity - The increase/decrease in the number of community members participating in your programs and services **Outcomes/Impacts.** You need to know, and donors want to know, how your programs and services have changed your clients’ lives and benefited society as a whole. Use metrics specific to your programs and services. Examples include: - Percentage of clients placed in jobs or jobs created in a year - Percentage of area low-income children placed in early education programs - Number of college scholarships provided - Number of disaster-damaged homes repaired - Lives saved by medical services - The percentage of beneficiaries reporting major improvements in the quality of their lives Combining easier-to-measure financial performance with measures of mission success can give you a better picture of your organization’s success and how it impacts the communities you serve. If you have any questions about your nonprofit organization’s performance and mesauring success, please contact Warady & Davis LLP at (847) 267-9600. ###### \* 2015 Survey on Board of Directors of Nonprofit Organizations, Stanford Graduate School of Business and the Rock Center for Corporate Governance ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [IRS releases $80 Billion spending plan—And what it means for taxpayers](https://waradydavis.com/irs-releases-80-billion-spending-plan-and-what-it-means-for-taxpayers/) **Published:** May 9, 2023 **Author:** Leslie Flinn **Excerpt:** The IRS unveils its strategic operating plan detailing how the agency will spend the $80 billion in agency funding it was allocated over 10 years. **Content:** The IRS unveiled its[ strategic operating plan](https://www.irs.gov/pub/irs-pdf/p3744.pdf) to spend the $80 billion in agency funding it was allocated over 10 years in the [Inflation Reduction Act of 2022](https://waradydavis.com/inflation-reduction-act/). The 146-page plan provides estimates of how the funds will be allocated, in addition to timetables for initiatives to boost customer service, technology, hiring and enforcement. The agency indicated its plans to increase audits of high net-worth individuals, businesses, and complex cases and not to increase audit rates on those making under $400,000 annually or small businesses. These individuals and businesses should not be worried about increased IRS audits. The $8.7 billion IRS spending plan for fiscal years 2022, 2023, and 2024 includes nearly $3.5 billion (40%) for operations support; $1.78 billion for enforcement (20%); and almost $1.7 billion each (19%) for taxpayer services and technology modernization. The three-year budget takes into account that circumstances and needs will change as improved technology changes the focus. For example, fewer workers will be needed to key in paper returns, or people answering phones could be reallocated to taxpayer assistance centers as more processes are automated. The long-term reduction in staffing and resources at the IRS impacted enforcement, where the agency has 2,600 agents who work directly on cases involving certain individuals, large partnerships, and large corporations. That compares with nearly 5,000 of these agents in 2010. Simultaneously, the number of individuals making over $10 million increased to 30,600 from 13,300 a decade ago. The number of large partnerships and S corporation filings jumped to 300,000 from about 175,000, so the IRS needs to concentrate on those both to catch up and to help close the tax gap. In addition, the agency still needs to focus also on its short-term need to reduce its backlog of amended tax returns and correspondence. ### IRS $80 billion spending plan Key takeaways from the plan include: **Customer callback coverage.** The IRS says it now provides a customer callback option for 75% of calls to IRS live assistance toll-free telephone lines and plans to expand coverage to 95% of taxpayers calling for toll-free live assistance by the end of July 2023. **Online accounts**. Taxpayers will have access to secure online accounts where they can view account and profile information, make changes, interact with the IRS, and manage preferences for payments, refunds, and communications. **Additional staff.** The IRS will expand capacity in the Office of Chief Counsel and within the Department of the Treasury Office of Tax Policy to address more taxpayer questions proactively, using both formal and informal legal guidance and rulings. **Tax professionals and clients.** The IRS will allow tax professionals to view status information for their clients. It will also give taxpayers the ability to authorize tax professionals to track status information for them through the online Tax Pro Account platform. **Taxpayer notifications.** The IRS will send taxpayers notifications about potential issues as they file returns to help them correct errors and claim credits and deductions for which they are eligible. **Online Notices.** It will add digital copies of all notices to online accounts and create digital copies of all notices so that taxpayers and authorized third parties can access them online. Transformation and Strategy Office. Implementation will be coordinated by a newly formed Transformation and Strategy Office that will support IRS leadership. ![IRS B Spending Plan](https://waradydavis.com/wp-content/uploads/2023/04/IRS-80-Billion-Strategic-Operating-Plan-.png "IRS Billion Strategic Operating Plan | Warady & Davis LLP") **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2023 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Inflation Reduction Act Includes Wide-ranging Tax Provisions](https://waradydavis.com/inflation-reduction-act/) **Published:** August 15, 2022 **Author:** Leslie Flinn **Excerpt:** The Inflation Reduction Act is About to Become Law, Learn How its Tax Provisions Might Affect You **Content:** ## The Inflation Reduction Act includes Wide-ranging Tax Provisions The **[U.S. Senate](https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/07/statement-by-president-biden-on-senate-passage-of-the-inflation-reduction-act/)** and House of Representatives passed the **[Inflation Reduction Act (IRA). ](https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf)**President Biden is expected to sign the bill into law on August 16th. The IRA includes significant provisions related to climate change, health care, and, of course, taxes. The IRA also addresses the federal budget deficit. According to the Congressional Budget Office (CBO), the IRA is projected to reduce the deficit by around $90 billion over the next 10 years. Although the IRA falls far short of Biden’s originally proposed $2 trillion **[Build Back Better Act](https://waradydavis.com/u-s-house-passes-the-build-back-better-act/)**, the $430 billion package nonetheless is a sprawling piece of legislation bound to affect most Americans over time. Here’s an overview of some of what the bill includes. ### Significant Tax Provisions For starters, how is the federal government going to pay for all of it? Not surprisingly, new taxes are part of the equation (along with savings from, for example, lower drug prices). But the bill is designed to not raise taxes on small businesses or taxpayers earning less than $400,000 per year. Instead, tax increase focus on larger corporations and wealthier individuals. ### U.S. corporations (other than S corporations) that have more than $1 billion in annual earnings over the previous three years. While the current corporate tax rate is 21%, it’s been well documented that many such companies pay little to no federal income tax, due in part to deductions and credits. The IRA imposes a corporate alternative minimum tax of 15% of financial statement income (also known as book income, as opposed to tax income) reduced by, among other things, depreciation and net operating losses. The new minimum tax is effective for tax years beginning after December 31, 2022. As a result of last-minute negotiations, private equity firms and hedge funds are exempt from the minimum tax. They could have been covered by a provision that generally includes subsidiaries when determining annual earnings. The tradeoff is that the IRA now will extend the excess business loss limitation for certain businesses for two years. Although the initial bill language also closed the so-called “carried interest” loophole that permits these interests to be taxed as long-term capital gains rather than ordinary income, the loophole ultimately survived. Instead, the IRA will now impose a 1% excise tax on the fair market value when corporations buy back their stock. ### Additional IRS Funding The IRA also provides about $80 billion over 10 years to fund the IRS and improve its “tax enforcement activities” and technology. Notably, the IRS budget has been dramatically slashed in recent years, dropping by 20% in 2020, compared to 2010. The CBO estimates that the infusion of funds will allow the IRS to collect $203 billion over the next decade from corporations and wealthy individuals. ### Climate and Energy Provisions The IRA dedicates about $370 billion to combating climate change and boosting domestic energy production. It aims to reduce the country’s carbon emissions by 40% by 2030. The legislation includes new, extended and increased tax credits intended to incentivize both businesses and individuals to boost their use of renewable energy. For example, the bill provides tax credits to private companies and public utilities to produce renewable energy or manufacture parts used in renewable projects, such as wind turbines and solar panels. Clean energy producers that pay a prevailing wage also may qualify for tax credits. ### Clean Vehicle Credit The current tax credit for qualified plug-in electric vehicles has been significantly revised in the IRA. Currently, a taxpayer can claim a credit for each new qualified plug-in electric drive motor vehicle placed in service during the tax year. The maximum credit amount is $7,500. Certain vehicle requirements must be met. The credit phases out beginning in the second calendar quarter after a manufacturer sells more than 200,000 plug-in electric drive motor vehicles for use in the U.S. after 2009. Under the IRA, the plug-in vehicle credit has been renamed the *“clean vehicle credit”* and the manufacturer limitation on the number of vehicles eligible for the credit has been eliminated after December 31, 2022. The bill changes how the clean vehicle credit is calculated. Specifically, a vehicle must meet critical mineral and battery component requirements. There are also price and income limitations. The clean vehicle credit isn’t allowed for a vehicle with a manufacturer’s suggested retail price above $80,000 for vans, sport utility vehicles and pickups, and above $55,000 for other vehicles. The clean vehicle credit isn’t allowed if a taxpayer’s modified adjusted gross income (MAGI) for the current or preceding tax year exceeds $150,000 for single filers, $300,000 for married couples filing jointly and $225,000 for heads of household. The IRA also contains a tax credit for a used plug-in electric drive vehicle purchased after 2022. The tax credit is $4,000 or 30% of the vehicle’s sale price, whichever is less. There are also price and income limitations. ### Home Energy Improvements Individual taxpayers can also receive tax breaks for home energy efficiency improvements, such as installing solar panels, energy-efficient water heaters, heat pumps and HVAC systems. And a “Clean Energy and Sustainability Accelerator” will use public and private funds to invest in clean energy technologies and infrastructure. ### Health Care Provisions The IRA allows Medicare to negotiate the price of prescription drugs and prohibits future administrations from refusing to negotiate. It also caps Medicare enrollees’ annual out-of-pocket drug costs at $2,000 and monthly insulin costs at $35 and provides them free vaccines. Additional provisions to rein in drug costs include a requirement that pharmaceutical companies that raise the prices on drugs purchased by Medicare faster than the rate of inflation rebate the difference back to the program. The IRA also should reduce health care costs for Americans of all ages who obtain health insurance coverage from the federal Health Insurance Marketplace. It extends the expansion of subsidies — in the form of refundable premium tax credits — under the America Rescue Plan Act through 2025. These subsidies had been scheduled to expire at the end of 2022. ### Much More to Come The IRA is a sweeping piece of legislation that affects many sectors of U.S. business, as well as most citizens. Additional information, guidance and regulations related to its numerous, far-reaching provisions are inevitable. We’ll keep you up to date on the developments that could affect your finances and federal tax liability. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2022 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [White House & Congress Take Action to Increase Participation in Retirement Plans](https://waradydavis.com/increasing-participation-in-retirement-plans/) **Published:** April 1, 2016 **Author:** WaradyDavis **Excerpt:** Both Congress and the White House want to increase access, coverage and participation in retirement savings plans. A recent study indicates that a majority of American households may not be able to maintain their standard of living after retirement and that the current private pension system is not working well enough to avoid the problem. **Content:** Both Congress and the White House want to increase access, coverage and participation in retirement savings plans. A recent study indicates that a majority of American households may not be able to maintain their standard of living after retirement and that the current private pension system is not working well enough to avoid the problem. A Joint Committee on Taxation study identified several major impediments to retirement savings: lack of access to workplace plans; high costs of starting and maintaining plans, especially for small employers; low employee coverage and participation rates; the lack of lifetime income options; and the use of savings before retirement (known as leakage). Key policy goals to remedy these shortfalls include increased access, participation and contribution levels; reduced leakage of account balances; and the promotion of a greater number of lifetime income options. The Obama Administration’s Fiscal Year 2017 budget includes a number of proposals to address these concerns. The Senate Finance Committee has held hearings on the problem and on potential solutions. The hearing highlighted the work of the Committee’s 2015 Working Group on Savings and Investment, which made a number of proposals regarding retirement savings. Both Republicans and Democrats have expressed a desire to address the problem on a bipartisan basis. **Multi-employer plans** The White House and Congress both support the use of open multiple-employer plans (open MEPs) to increase access to retirement plans. Unlike current law, open MEPs would be available to unrelated employers, without requiring the employers to have a “common bond.” These pooled retirement plans can offer retirement benefits with lower costs and fewer burdens than if employers had to offer separate plans. Another proposal is to open retirement plan access to long-time part-time workers. The White House also proposed to offer tax cuts to employers that offer more generous plans or that provide automatic enrollment for their employees. In addition, the White House would like to increase the portability of retirement benefits so that employees can more easily move plan accounts and benefit as they shift jobs, and can consolidate workplace benefits with private IRA accounts. Open MEPs would be particularly useful for smaller employers. These plans could offer automatic enrollment of employees with employee contributions, ease of movement between employers without having to move funds out of the MEP, and distribution options that include lifetime annuities. Participation could be limited to small employers (100-500 employees), who have the greatest coverage gap. **Greater participation** The White House has indicated that half of workers at firms with fewer than 50 people, and more than ¾ of part-time workers, have no access to retirement plans, compared to 89 percent of workers at larger firms that do provide retirement plans. The administration estimates that its proposals would provide an additional 30 million people with access to workplace plans. Several states, as well as the federal government, have established or are considering automatic enrollment in IRAs. Oregon, for example, has initiated this benefit for people without employer-based accounts. Practitioners say it would make more sense for the federal government to provide a national plan, rather than to have 50 different plans operating at the state level. Some practitioners recommended that 401(k) accounts be made fully automatic for all workers instead of just new hires, and that auto-enrollment include a meaningful employee contribution rate. *If you have any questions about retirement plan options for yourself or your employees, please contact us at (847) 267-9600.* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [Highlights of the Proposed Families First Coronavirus Response Act](https://waradydavis.com/highlights-of-the-proposed-the-families-first-coronavirus-response-act/) **Published:** March 18, 2020 **Author:** Leslie Flinn **Content:** ## House passes bill to provide coronavirus relief; Senate expected to act soon Several arms of the federal government have taken, or are weighing, significant steps to help the country deal with the spread of the coronavirus (COVID-19) and the implications for individuals and businesses. On March 14, the U.S. House of Representatives overwhelmingly passed a bipartisan 110-page bill and, as of this writing, is currently in the Senate. ***The Families First Coronavirus Response Act*** includes a wide range of provisions, including some addressing insurance coverage and reimbursement of diagnostic testing costs and others expanding safeguards for economically disadvantaged individuals. It also includes two significant groups of measures that will affect certain employers and workers through December 31, 2020. **Expanded family and medical leave** The act amends the Family and Medical Leave Act (FMLA) for employees who 1) work for employers with fewer than 500 employees, and 2) have been on the job at least 30 days. Under the bill, these employees (including those who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan) will have the right to take up to 12 weeks of job-protected leave to: - Comply with a requirement or recommendation to quarantine due to exposure or symptoms of COVID-19, - Care for an at-risk family member who’s quarantined due to exposure or symptoms of COVID-19, and - Care for their children if the children’s school or place of care has been closed, or the childcare provider is unavailable, because of COVID-19. Although the FMLA generally requires only job-protected leave — not paid leave — the bill mandates paid leave after 14 days at two-thirds of the employee’s usual rate. (The first 14 days are covered under the paid sick leave provisions discussed below). Note, though, that the bill gives the U.S. Secretary of Labor the power to issue regulations that exempt small businesses with fewer than 50 employees from this expansion if it would jeopardize the viability of the business. Because of this potential exemption and the fact that these provisions don’t apply to employers with 500 or more employees, many American workers won’t be protected by them. The act will help employers subject to the provisions by allowing them to take a tax credit against their share of Social Security taxes for 100% of the qualified family leave wages they pay each quarter. The amount of wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. Any excess credit over its Social Security tax liability is refundable to the employer. No deduction is allowed for the amount of the credit, and no credit is allowed for wages that are subject to the existing Section 45S business tax credit for paid family and medical leave. Employers can elect to not have the credit apply. The 100% refundable family leave credit also is available for certain self-employed individuals, applicable against income taxes. Self-employed people who would be entitled to paid leave under the expanded FMLA if they were employees of a business are eligible. The qualified leave amount is capped at the lesser of $200 per day or the average daily self-employment income for the taxable year per day. These individuals can count only those days they’re unable to work for reasons covered by the expanded FMLA. The Treasury Department will establish documentation requirements. **Paid sick leave** The act requires employers with fewer than 500 employees to provide two weeks of paid sick leave, at the employee’s regular rate, to quarantine or seek a diagnosis or preventive care for COVID-19. If the employee must take leave to care for a family member for such purposes, or to care for a child whose school has closed or childcare provider isn’t available, these employees must provide leave paid at two-thirds of the employee’s regular rate. Full-time employees are entitled to 80 hours of paid sick leave, and part-time employees are entitled to the typical number of hours that they work in a typical two-week period. As with expanded family leave, covered employers can claim an elective refundable 100% tax credit for qualified paid sick leave wages, also against Social Security taxes. But the bill makes a distinction between those wages paid for employee who must self-isolate or obtain a diagnosis and those paid for to employees caring for a family member or child. For the former, the amount of wages taken into account per employee is capped at $511 per day; for the latter, it’s capped at $200 per day. The total number of days taken into account per employee can’t exceed the excess of 10 over the total number of days taken into account for all preceding calendar quarters. Again, any excess credit over their Social Security tax liability is refundable, no deduction is allowed for the amount of the credit and no credit is allowed for wages that are subject to the Section 45S business tax credit. The self-employed are similarly eligible for the refundable credit at differing amounts — 100% for their personal needs and 67% to care for a family member or child. The amount of wages is capped at $511 per day or the average daily self-employment income for the taxable year per day. **HDHP coverage** The IRS has published new guidance making clear that high-deductible health plans (HDHPs) can pay for COVID-19-related testing and treatment without putting their status at risk. That means individuals with HDHPs that provide such coverage can continue to contribute to their health savings accounts (HSAs) and deduct the contributions on their 2020 tax returns (or make pre-tax contributions their employer-sponsored HSAs). Health insurance plans generally must satisfy several requirements to qualify as an HDHP. For example, providing nonpreventive health care coverage without a deductible, or with a deductible below the requisite minimum, would forfeit HDHP status. (Vaccinations are considered preventive care.) The IRS is temporarily suspending this rule to avoid administrative delays or other financial disincentives that could impede testing and treating for COVID-19. **Tax relief** As of the time of this writing, the deadline to **file** your return has not been officially extended. News sources are reporting that taxpayers will have an additional 90 days to **pay** any monies owed if less than a certain amount with no penalties or interest, but **returns should still be filed by April 15th.** We are awaiting official notice from the IRS and will communicate with you as soon as we hear. Some states have announced tax relief related to COVID-19. Check with your Warady & Davis LLP advisor for more information. **Stay tuned** Congress and the Trump administration are weighing other actions to increase access to health care, as well as stabilize and stimulate the economy. We’ll keep you updated as new relief becomes available. Contact us for help to determine how best to minimize the financial impact. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Highlights of The American Taxpayer Relief Act](https://waradydavis.com/highlights-of-the-american-taxpayer-relief-act/) **Published:** May 9, 2016 **Author:** WaradyDavis **Content:** The American Taxpayer Relief Act of 2012 (ATRA) averted the United States’ descent over the “fiscal cliff” — a combination of higher taxes and forced spending cuts scheduled to go into effect in 2013. The act prevented income tax rate increases for about 98% of taxpayers and made other changes affecting individuals and businesses. Here’s a brief summary of the most important provisions. **Individual tax provisions** - Made permanent 2012 ordinary-income tax rates, ranging from 10% to 35% - Increased the top marginal tax rate to 39.6% on taxable income in excess of certain thresholds - Allowed the scheduled 2013 return of the limits on certain itemized deductions and personal exemptions - Made permanent 2012 long-term capital gains rates of 0% and 15% - Increased long-term capital gains rate to 20% for taxpayers with taxable income exceeding certain thresholds - Made permanent long-term capital gains treatment for qualified dividends - Made permanent alternative minimum tax (AMT) relief - Extended the deduction for state and local *sales* tax in lieu of state and local income tax through Dec. 31, 2013 - Extended various child- and education-related credits and deductions - Extended the ability of taxpayers age 70½ or older to make a direct tax-free rollover from an IRA to charity through Dec. 31, 2013 - Extended certain home and energy-related breaks - Increased the top estate tax rate to 40% - Maintained the estate tax exemption amount at $5 million, inflation-adjusted annually **Business tax provisions** ATRA extended through Dec. 31, 2013, several valuable tax breaks, such as: - Bonus depreciation - Enhanced Section 179 expensing - Accelerated depreciation for qualified leasehold, retail and restaurant improvements - The Work Opportunity credit - The research and development credit - Certain energy-related breaks **The impact on you** We’ve touched on only some of ATRA’s numerous provisions here. In addition, many breaks are subject to a variety of rules and limitations. So be sure to discuss them with your tax advisor to determine exactly how they’ll affect you. CCH’s full [Tax Briefing: American Taxpayer Relief Act](https://tax.cchgroup.com/downloads/files/pdfs/legislation/ATPR.pdf) is available by clicking [here](https://tax.cchgroup.com/downloads/files/pdfs/legislation/ATPR.pdf). Please call us at 847-267-9600 if you have any questions about the new law or how it impacts you directly. We’d be happy to help. If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. **Categories:** Tax Legislation --- ### [Get Ready for 2016](https://waradydavis.com/get-ready-for-2016/) **Published:** May 1, 2015 **Author:** WaradyDavis **Content:** It is never too early to begin planning for the 2016 filing season. Although the current filing season has just ended, there are steps that taxpayers can take now to avoid a tax bill when April 2016 rolls around. For example, taxpayers can adjust their withholding, take stock of any changes in income or family circumstances, maintain accurate tax records, and more, in order to reduce the probability of a surprise tax bill when the next filing season arrives. ## **Recommended Action Steps** Specifically, the IRS advises taxpayers to take the following steps now to jump start a successful 2016 filing season for their 2015 tax year returns: - Consider filing a new Form W-4, Employee’s Withholding Allowance Certificate, with an employer if certain life circumstances have changed (such as a change in marital status or the birth of a child). A new child could mean an additional exemption and/or tax credits that might lower your tax liability. Therefore you might benefit from claiming an extra withholding allowance. Conversely, getting married (or divorced) could change your income, making it advantageous to readjust your withholding accordingly. - Report any changes or projected changes in income to the Health Insurance Marketplace (if taxpayer obtained insurance through a marketplace). Income affects the calculation of subsidy payments. Recipients of the advance premium tax credit may owe tax for 2015 if their subsidy payments are too high. - Maintain accurate and organized tax records, such as home loan documents or financial aid documents. Many deductions must be substantiated with evidence, and staying organized now could facilitate the tax return filing process in the future. - Plan to increase itemized deductions. If a taxpayer plans to purchase a house, contribute to charity, or incur medical expenses that may not be reimbursed during 2015, it may be beneficial to consider whether itemizing deductions would be more beneficial than claiming the standard deduction for 2015. - Stay informed of the latest tax law changes. Keeping on top of developments can reduce confusion in the long run.*If you have any questions regarding your tax planning situation, as always, please contact your Warady & Davis LLP advisor at (847) 267-9600.* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** The Bottom Line --- ### [Documenting Hardship Withdrawals and Loans](https://waradydavis.com/documenting-hardship-withdrawals-and-loans/) **Published:** October 1, 2021 **Author:** WaradyDavis **Excerpt:** The IRS clarified its rules for documentation of hardship withdrawals and participant loans on its website in 2015. This article discusses what must be retained. **Content:** The IRS clarified its rules for documentation of hardship withdrawals and participant loans on its website in 2015. With respect to hardship withdrawals, sponsors must retain: - Documentation of the hardship request, review and approval, - Financial information and documentation that substantiates the employee’s immediate and heavy financial need, - Documentation to support that the hardship distribution was properly made according to applicable plan provisions and the Internal Revenue Code, and - Proof of the actual distribution made and related Form 1099-R. According to the IRS, it’s not sufficient for plan participants to keep their own records of hardship distributions. And electronic self-certification isn’t sufficient documentation of the nature of a participant’s hardship. ### With respect to plan loans, sponsors must retain: - Evidence of the loan application, review and approval process, - An executed plan loan note, - If applicable, documentation verifying that the loan proceeds were used to purchase or construct a primary residence, - Evidence of loan repayments, and - Evidence of collection activities associated with loans in default and the related ### Forms 1099-R, if applicable. Plan administrators cannot allow participants to self-certify their eligibility for these loans. Some in the employee benefits industry have asserted that these clarified instructions are inconsistent with existing regulations, and that the instructions lack the authority of a true regulation. Until the IRS determines the legitimacy of these concerns, sponsors should adhere to the guidance, unless advised otherwise by counsel. Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Employee Benefit Plans --- ### [Determination Letter Limbo](https://waradydavis.com/determination-letter-limbo/) **Published:** December 1, 2015 **Author:** WaradyDavis **Excerpt:** Sponsors of individually designed qualified retirement plans will need to adjust to the idea of operating without the IRS’s official blessings when changing the plan document to comply with new laws and regulations. The changes won’t affect plan sponsors who have adopted standardized preapproved plans, as many small plan sponsors do. Earlier this year, the IRS laid out its plans to scale back its plan determination letter program. **Content:** ## IRS makes changes to determination letter program Sponsors of individually designed qualified retirement plans will need to adjust to the idea of operating without the IRS’s official blessings when changing the plan document to comply with new laws and regulations. The changes won’t affect plan sponsors who have adopted standardized preapproved plans, as many small plan sponsors do. Earlier this year, the IRS laid out its plans to scale back its plan determination letter program. ### Here’s what you need to know. **“Off-cycle” submissions** The IRS established a system of rolling five-year reporting periods. Each sponsor of a non-preapproved standard plan was assigned to one of the periods based on the plan sponsor’s employer identification number. Sponsors could seek a determination letter for remedial plan amendments (such as an amendment remedying a plan provision that might have been noncompliant) only once during its assigned five-year period. Now, as of July 21, 2015, the IRS will no longer accept determination letter applications that are submitted “off-cycle.” An off-cycle application is one that is filed “other than during the last 12-month period of a plan’s remedial amendment cycle, that is, the 12-month period ending on January 31 of the last year of the cycle.” The timing question will become moot beginning in 2017, however, when the five-year remedial amendment cycle program will disappear entirely. At that time, the IRS will no longer issue determination letters for remedial amendments to sponsors of nonstandard plans. Plans covered by the “A” five-year cycle, however, get a small break: These plans will be able to submit determination letters between February 1, 2016, and January 31, 2017. **Surviving determination letter categories** Determination letters will still be issued to all nonstandard plans, however, when a new plan is formed (the “initial determination letter”) or is terminated. The IRS times these determination letter requests to the underlying events, not to a five-year cycle.The IRS gave itself the freedom to make exceptions under “certain other limited circumstances that will be determined by the Treasury and the IRS.” The agencies also can seek public suggestions on appropriate circumstances to grant an exception. **Avoiding penalties** Why the changes to the determination letter program? The IRS is trying to more efficiently direct its limited resources because of budget cuts while at the same time Congress has enacted new laws that have stretched the agency’s legal staff thin. Although the IRS is scaling back its determination letter program, it’s not cutting back on its regulatory compliance enforcement efforts, including plan audits. In the absence of remedial determination letters, audited plans determined to have compliance deficiencies could be subject to greater penalties than might otherwise have been the case. As a result, third parties that audit qualified plans might begin seeking formal assurances from the plan sponsor that its plan is compliant. **Keeping up to date** Plan sponsors should keep a close watch for additional IRS guidance on the issues left unresolved by the IRS determination letter announcement. Moving ahead without formal approval from the IRS for remedial amendments may be tricky. ## Master and prototype, volume submitter plan document guidance updated The IRS has updated some guidance on requesting preapprovals for master and prototype and volume submitter plan documents. The new guidance modifies and updates previous positions. Most notably, under the new guidance, the IRS will now issue preapproval letters for many kinds of Employee Stock Ownership Plans (ESOPs) and defined benefit plans containing cash balance features. Among other requirements for preapproval letters, cash balance plans must provide that, at all times, prior accrued benefits (and other enumerated benefits) are protected. If the cash balance plan was the subject of a conversion amendment, the plan must comply with the IRS minimum vesting standards and regulations for plan conversion amendments. And if it contains any structure of principal credits that increase with age, service or other measure during a participant’s employment, those plan provisions must be definitely determinable, operationally nondiscriminatory, and at all times in compliance with the “133 1/3 percent rule” and enabling regulations. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Employee Benefit Plans, Perspectives on Employee Benefits --- ### [Court Finds That Plan Document Trumps Beneficiary Designation Forms](https://waradydavis.com/court-finds-that-plan-document-trumps-beneficiary-designation-forms/) **Published:** August 1, 2015 **Author:** WaradyDavis **Excerpt:** Plan documents generally control all aspects of a qualified retirement plan. Whether th plan document invalidates the language in other forms, such as a written beneficiary designation form, can lead to disagreement. Recently, the U.S. Court of Appeals for the Ninth Circuit had to resolve just such a case. **Content:** Plan documents generally control all aspects of a qualified retirement plan. Whether the plan document invalidates the language in other forms, such as a written beneficiary designation form, can lead to disagreement. Recently, the U.S. Court of Appeals for the Ninth Circuit had to resolve just such a case. In Becker v. Mays-Williams, the plan participant designated his wife as his retirement plan beneficiary, but the couple later divorced. He then contacted the plan’s benefits call center and telephonically undesignated his former spouse as the beneficiary and designated his son as the new beneficiary. However, he never filled out a written change of beneficiary form before he died. Both the participant’s former wife and son claimed to be the beneficiary. The plan administrator filed the suit in the federal court to determine the proper beneficiary, and the court ruled in the ex-wife’s favor on the basis of the deceased plan participant’s failure to complete a new written beneficiary form designating his son as the new beneficiary. The son appealed. The case turned on whether the beneficiary designation forms had the same legal authority as the retirement plan document. The plan document stated that unmarried plan participants could change the beneficiary designation from time to time, and the summary plan description stated that this could be done by visiting the plan’s website or calling the plan’s benefits center. It also stated that, on the death of an unmarried participant, a valid beneficiary designation had to be on file with the benefits center prior to death, or the plan would disburse benefits to the participant’s estate. The court concluded that the beneficiary designation forms weren’t themselves plan documents and that a written change of beneficiary form for unmarried participants wasn’t required. Thus, the phone call designating the son as the beneficiary was proper, and the lower court’s ruling was overturned. The lesson here: Make sure your plan document and any corresponding forms have matching language. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Perspectives on Employee Benefits --- ### [Charitable Tax Incentives Restored](https://waradydavis.com/charitable-tax-incentives-restored-2/) **Published:** April 1, 2016 **Author:** WaradyDavis **Excerpt:** The Protecting Americans from Tax Hikes (PATH) Act of 2015, signed into law late last year, restored and made permanent several federal income-tax provisions designed to encourage charitable giving. **Content:** The Protecting Americans from Tax Hikes (PATH) Act of 2015, signed into law late last year, restored and made permanent several federal income-tax provisions designed to encourage charitable giving. **Contributions from IRAs** Charitably minded individuals age 70½ and older continue to have the ability to have up to $100,000 a year directly transferred from their individual retirement accounts (IRAs) to qualifying charitable organizations. Qualified charitable distributions are excluded from taxable income. A qualified charitable distribution offers the donor the potential for greater tax savings than a taxable IRA withdrawal followed by a cash contribution, for several reasons. First, the donor’s adjusted gross income is not increased by the amount of the distribution, which could be helpful in qualifying the donor for various other tax breaks. Second, in the latter scenario, the donor might not receive a first-year deduction equal to the full contribution due to the tax law’s percentage-of-income limits on charitable deductions. And third, even though IRA charitable distributions are nontaxable, they count toward satisfying the IRA owner’s minimum distribution requirement for the year. **Qualified Conservation Contributions** The PATH Act makes permanent the more generous income-based ceilings applicable to individual donors’ tax deductions for charitable contributions of qualified real property interests exclusively for conservation purposes. Instead of the deduction ceiling that normally applies — generally, 30% of the taxpayer’s “contribution base” — deductions for qualified conservation contributions are subject to a 50% ceiling (100% if made by a qualifying farmer or rancher). Amounts that are not deductible because of the applicable percentage limitation may be carried over for up to 15 years. The law also makes permanent the higher deduction limit (100% of adjusted taxable income) and the 15-year deduction carryover period for qualified conservation contributions by corporate farmers and ranchers. **Donations of Food Inventory** Businesses continue to receive an enhanced deduction for charitable contributions of food inventory. The food must be “apparently wholesome” — that is, be intended for human consumption and meet all quality and labeling standards imposed by government laws and regulations, even though the food may not be readily marketable because of age, appearance, freshness, size, surplus, grade, or other conditions. The PATH Act also makes certain other taxpayer-friendly changes with respect to donations of food inventory. **News from the IRS** The following are some additional PATH Act and other tax-related developments of interest to nonprofit organizations. **Donee reporting regulations.** The IRS has withdrawn proposed regulations regarding the contemporaneous written acknowledgments taxpayers must have on hand to substantiate their charitable contributions of $250 or more. The regulations would have given organizations the option of reporting the information their donors require for substantiation purposes on a new IRS information return to be sent to the IRS and the donor. Although the proposed donee reporting method was to be optional, organizations and charity regulators expressed concerns about it. A key concern was the potential for taxpayer identity theft, since organizations electing to use the new method would have been required to obtain, store, and send to the IRS their donors’ personal information (names, addresses, and Social Security or other taxpayer identification numbers). **Social welfare organizations.** The IRS has announced its intention to issue temporary regulations implementing a new tax law provision added by the Protecting Americans from Tax Hikes (PATH) Act of 2015 that requires a Code Section 501(c)(4) social welfare organization formed after December 18, 2015, to provide the IRS with notification that it is operating as a Code Section 501(c)(4) organization. Certain existing social welfare organizations also must provide the notification. Affected organizations will have at least 60 days from the date the regulations are issued to submit the notification. **Transportation fringe benefits.** For 2016, employers may provide up to $255 a month in transit passes or transportation in a commuter highway vehicle as a nontaxable fringe benefit. This figure reflects the PATH Act provision creating parity between the exclusion for transportation fringe benefits and the exclusion for qualified parking benefits. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Changes to Nonprofit Accounting Standards: An Update](https://waradydavis.com/changes-to-nonprofit-accounting-standards-an-update/) **Published:** April 1, 2016 **Author:** WaradyDavis **Excerpt:** The Financial Accounting Standards Board (FASB) is working on a proposal that would make substantive changes to not-for-profit financial statement reporting.* The FASB’s objective is to improve net asset classification requirements and the information provided in the financial statements and notes about liquidity, financial performance, and cash flows. This initiative represents the first effort to update the fundamental reporting model for nonprofit entities in more than 20 years. **Content:** The Financial Accounting Standards Board (FASB) is working on a proposal that would make substantive changes to not-for-profit financial statement reporting.\* The FASB’s objective is to improve net asset classification requirements and the information provided in the financial statements and notes about liquidity, financial performance, and cash flows. This initiative represents the first effort to update the fundamental reporting model for nonprofit entities in more than 20 years. In its initial redeliberations of the proposal in December 2015 following a comment period on the exposure draft, the Board decided not to require organizations to use the direct method of presenting operating cash flows. Use of either the direct or the indirect method would continue to be allowed. Additionally, nonprofits choosing to use the direct method would no longer have to provide the indirect reconciliation. The Board affirmed its original proposals that would require nonprofits to: - Present only two net asset classifications: net assets with donor-imposed restrictions and net assets without donor restrictions - Disclose the amounts and purposes of board-designated net assets on the face of the financial statements or in the notes - Classify the entire amount by which endowment funds are “underwater” within net assets with donor restrictions rather than within the unrestricted category - Disclose certain information with respect to underwater endowment funds, including the organization’s policy to either reduce expenditures or not spend from underwater endowment funds, the aggregate fair value of underwater funds, the aggregate original endowment gift amount or level required to be maintained (by donor stipulations or by law), and the aggregate amount of the deficiencies ###### \* *Presentation of Financial Statements of Not-for-Profit Entities* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [2020 Q4 tax calendar: Key deadlines for businesses and other employers](https://waradydavis.com/2020-q4-tax-calendar-key-deadlines-for-businesses-and-other-employers/) **Published:** September 7, 2020 **Author:** Leslie Flinn **Content:** Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2020. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. [**Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.**](mailto:info@waradydavis.com) **Thursday, October 15** - If a calendar-year C corporation that filed an automatic six-month extension: - File a 2019 income tax return (Form 1120) and pay any tax, interest and penalties due. - Make contributions for 2019 to certain employer-sponsored retirement plans. **Monday, November 2** - Report income tax withholding and FICA taxes for third quarter 2020 (Form 941) and pay any tax due. (See exception below under “November 10.”) **Tuesday, November 10** - Report income tax withholding and FICA taxes for third quarter 2020 (Form 941), if you deposited on time (and in full) all of the associated taxes due. **Tuesday, December 15** - If a calendar-year C corporation, pay the fourth installment of 2020 estimated income taxes. **Thursday, December 31** - Establish a retirement plan for 2020 (generally other than a SIMPLE, a Safe-Harbor 401(k) or a SEP). **You can also visit the [Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/) for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us; we are here to help.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Business, Business Management **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [PPP Round 2](https://waradydavis.com/ppp-reopens/) **Published:** January 19, 2021 **Author:** Leslie Flinn **Content:** ## Reopening of PPP Loan Program The SBA and Treasury announced that the new PPP will re-open the week of Jan. 11 with community financial institutions exclusively allowed to make first-draw PPP loans on starting Jan. 11 and second-draw PPP loans starting Jan. 13. The PPP will open to all participating lenders at an unspecified date shortly thereafter and remain open through March 31 or until funds are exhausted, whichever occurs first. Congress revived the PPP loan program as part of the $900 billion [COVID-19 relief bill](https://docs.house.gov/billsthisweek/20201221/BILLS-116HR133SA-RCP-116-68.pdf) or the ***Economic Aid Act*** that was signed into law on Dec. 27. The original PPP provided [$525 billion in forgivable loans](https://www.sba.gov/sites/default/files/2020-08/PPP_Report%20-%202020-08-10-508.pdf) over five months before it stopped accepting applications in August. The new PPP has $284.5 billion available for forgivabe loans, including $35 billion for first-time loans. The new round of PPP will be smaller than the original and focuses on smaller businesses that can demonstrate need. **Here’s what you need to know:** ## New PPP and EIDL Guidance On January 6, 2020 the SBA issued approximately 120 pages of new regulations regarding PPP loans. ## What kinds of PPP loans will be available? There is funding for three categories of PPP loans: - **First time PPP loans** for businesses who qualified under the CARES Act but did not get a loan (“first draw” PPP loans); SBA application Revised 01-08-2021 - **Second draw PPP loans** for businesses that obtained a PPP loan but need additional funding; SBA 2nd Draw PPP Loan Application - **Additional funding** for businesses that returned their first PPP loan or did not get the full amount for which they qualified. For all types of PPP loans, no collateral or personal guarantee is required. For these new loans, any amount not forgiven becomes a loan at 1% for five years. ## **Revised Application for First Time Borrowers Released January 8, 2021** The SBA released a revised PPP application form and Top Line Overview for First Draw Borrowers on January 8, 2021 for first time-borrowers. The guidelines for those seeking a ***first*** PPP loan are essentially the same as in previous rounds, aside from some very specific clarifications on issues that were a bit vague in the past. This will assist lenders in developing digital applications, taking applications and ultimately funding loans. **First-draw PPP loans are available to borrowers that were in operation on Feb. 15, 2020, and come from one of the following groups:** - Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans. - Sole proprietors, independent contractors, and eligible self-employed individuals. - Not-for-profits, including churches. - Accommodation and food services operations (those with North American Industry Classification System (NAICS) codes starting with 72) with fewer than 500 employees per physical location. - Sec. 501(c)(6) business leagues, such as chambers of commerce, visitors’ bureaus, etc., and “destination marketing organizations” that have 300 or fewer employees and do not receive more than 15% of receipts from lobbying. The lobbying activities must comprise no more than 15% of the organization’s total activities and have cost no more than $1 million during the most recent tax year that ended prior to Feb. 15. 2020. Sports leagues are not eligible. - News organizations that are majority-owned or controlled by an NAICS code 511110 or 5151 business or not-for-profit public broadcasting entities with a trade or business under NAICS code 511110 or 5151. The size limit for this category is no more than 500 employees per location. In a change from the original PPP, publicly traded companies and businesses controlled, either directly or indirectly, by the president, vice president, head of executive departments, and members of Congress (or their spouses as defined by applicable common law) are not eligible for PPP loans. **Maximum First Draw Loan Amount** The maximum for a first-draw PPP loan is $10 million, the same as in the original PPP. In general, first time PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan. PPP applicants must submit documentation sufficient to establish eligibility and to demonstrate the qualifying payroll amount, which may include, as applicable, payroll records; payroll tax filings; Form 1099-MISC, *Miscellaneous Income*; Form 1040, Schedule C, *Profit or Loss From Business*, or Schedule F, *Profit or Loss From Farming*; income and expenses from a sole proprietorship; or bank records. ## Second Draw PPP Loans – Who is Eligible? Many small businesses and independent contractors may be eligible for second draw PPP loans if you received a PPP loan previously and qualify. View SBA Second Draw Borrower Application and Top Line Overview. First, similar to the first rounds of PPP, eligible small businesses may include: - Small businesses, nonprofit organizations, veterans organizations, Tribal business concerns, and small agricultural cooperatives that meet the [SBA size standards](https://www.sba.gov/document/support--table-size-standards). - Sole proprietors, self employed individuals or independent contractors. - **New:** Certain small news organizations, destination marketing organizations, housing cooperatives, and 501(c)(6) nonprofits may now also be eligible. In addition, this round of assistance is meant to target smaller businesses impacted by COVID-19. As a result, applicants must also meet the following criteria: 1. The business may not have more than 300 employees (*“NAICS” Code 72 entities (food service providers) and eligible news organizations with more than one physical location may have up to 500 employees)* *and* 2. The business must have at least a 25% reduction in revenues in at least one quarter in 2020 when compared to previous quarters (details below.) Businesses with multiple locations that qualified under the CARES Act may qualify for a second draw provided they employ fewer than 300 people in each location. Affiliation rule waivers from the CARES Act still apply. Businesses must “have used or will use the full amount of the initial PPP loan for authorized purposes on or before the expected date of disbursement of the Second Draw PPP Loan.” Certain types of businesses are *not* eligible including most businesses normally not eligible for SBA loans, businesses where the primary activity is lobbying, and businesses with certain ties to China. (Note the CARES Act made an exception for certain non-profits and agricultural cooperatives, for example, which are not normally eligible for SBA 7(a) loans.) Publicly traded companies are ***not*** eligible to receive second draw PPP loans. **How is the 25% reduction in revenues calculated?** Business owners will compare gross receipts of the business ***before*** expenses are subtracted. The guidelines are clear that this reduction needs to compare the same time frame in 2020 as 2019. For example, Q1 2020 vs. Q1 2019, or the entire year of 2020 vs. 2019. **What if you weren’t in business all of 2019?** First, a business must have been in operation by Feb. 15, 2020 to be eligible. - If you were not in business during the first or second quarter of 2019 but you were in business in the third and fourth quarter of 2019, then you may compare any quarter in 2020 with the third *or* fourth quarter of 2019 to determine whether gross receipts were reduced by at least 25%. - If you were not in business during the first, second or third quarter of 2019, but you were in business in the fourth quarter of 2019, then you may compare any quarter in 2020 with the fourth quarter of 2019 to determine whether gross receipts were reduced by at least 25%. - A business that wasn’t in business in 2019 but was in business before February 15, 2020 will compare gross receipts from the second, third or fourth quarter of 2020 to that first quarter of 2020 to determine whether gross receipts were reduced by at least 25%. The legislation and subsequent guidance do not define “quarter” and some business owners that operated on a fiscal basis have asked about using non-calendar quarters. This is not addressed in the current guidance. Note that according to the legislation, for loans of up to $150,000 you can simply certify your revenue loss when you apply, but on or before you apply for forgiveness you will have to produce documentation of that revenue loss. The details of what the SBA will require will be included in future guidance. Also note that for nonprofits and veteran’s organizations, the term gross receipts has the same definition as gross receipts under section 6033 of the Internal Revenue Code of 1986. **What are Gross Receipts?** The guidance from the SBA defines gross receipts as follows: “All revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. Generally, receipts are considered “total income” (or in the case of a sole proprietorship, independent contractor, or self-employed individual “gross income”) plus “cost of goods sold,” and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. **Gross receipts do NOT include the following:** taxes collected for and remitted to a taxing authority if included in gross or total income (such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees); proceeds from transactions between a concern and its domestic or foreign affiliates; and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker. All other items, such as subcontractor costs, reimbursements for purchases a contractor makes at a customer’s request, investment income, and employee-based costs such as payroll taxes, may not be excluded from gross receipts.” **NOTE:** It also specifies that any forgiveness amount of a First Draw PPP Loan that a borrower received in calendar year 2020 is excluded from a borrower’s gross receipts. Also note that for nonprofits and veteran’s organizations, the term gross receipts has the same definition as gross receipts under [section 6033 of the Internal Revenue Code of 1986](https://www.law.cornell.edu/uscode/text/26/6033). **How much can I get with a second draw PPP loan?** In general, the Economic Aid Act provides that the maximum loan amount a borrower may receive for a Second Draw PPP Loan is the lesser of two and half months of the borrower’s average monthly payroll costs or $2 million. Businesses that are part of a single corporate group can’t receive more than $4,000,000 of Second Draw PPP Loans total. An eligible entity may receive only one second draw loan. The Act also provided that the time period that is used for calculating a borrower’s average payroll costs for a Second Draw PPP Loan is either “the 1-year period before the date on which the loan is made” or “calendar year 2019.” The Interim Final Rules provide that the borrower is permitted to use the precise 1-year period before the date on which the loan is made to calculate payroll costs if they choose not to use 2019 or 2020 to calculate payroll costs. The Act itself was interpreted to mean that a borrower’s average monthly payroll costs had to be calculated based upon 12 consecutive calendar months. This can now be any consecutive 365 day period and can start as soon as Jan 1, 2019, but can be, for example, March 12, 2019 to March 11, 2020. **Hard Hit Businesses Can Apply for More** Businesses that fall under NAICS code 72 industries (hotels, restaurants, caterers, bars, etc.) will be eligible to receive 3.5 times their average payroll. Additionally, these business owners can apply for a loan for each location, provided that those locations are separate legal entities. ## **Owners Should Contact their Lender and Start Gathering Documentation** The Second Draw PPP Loan application is now available. Contact your lender and review the application and documentation requirements. If you qualify, we encourage you to apply as soon as possible as this is a first-come, first-served program. Once the funds are exhausted, no more loans may be made unless Congress Acts to replenish available resources. #### Documentation includes: *“The documentation required to substantiate an applicant’s payroll cost calculations is generally the same as documentation required for First Draw PPP Loans. However, no additional documentation to substantiate payroll costs will be required if the applicant:* - - *(i) used calendar year 2019 figures to determine its First Draw PPP Loan amount,* - *(ii) used calendar year 2019 figures to determine its Second Draw PPP Loan amount (instead of calendar year 2020), and* - *(iii) the lender for the applicant’s Second Draw PPP Loan is the same as the lender that made the applicant’s First Draw PPP Loan.”* The Interim Final Rules provide that in such cases described above, “additional documentation is not required because the lender already has the relevant documentation supporting the borrower’s payroll costs.” For loans with a principal amount greater than $150,000, the Interim Final Rules state that borrowers must submit documentation “adequate to establish that the applicant experienced a revenue reduction of 25% or greater in 2020 relative to 2019.” This documentation may include: - Relevant tax forms, including annual tax forms, or - Quarterly financial statements or bank statements if relevant tax forms are not available. Self-employed business owners will be applying based on net income from a Schedule C, plus any employees’ wages if applicable. Farmers and ranchers will be able to use Schedule F gross income, plus employee wages if applicable. For partnerships, the requirements remain the same as during the last rounds. They will need to apply at a partnership level and cannot apply individually. ## Are These Loans Forgivable? PPP borrowers can have their first- and second-draw loans forgiven if the funds are used on eligible costs. As with the first round of the PPP, the costs eligible for loan forgiveness in the revised PPP include payroll, rent, covered mortgage interest, and utilities. In addition, the following costs are now eligible: - Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines. - Covered property damage costs related to property damage and vandalism or looting due to public disturbances in 2020 that were not covered by insurance or other compensation. - Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations. - Covered operating expenditures, which refer to payments for any business software or cloud computing service that facilitates business operations; product or service delivery; the processing, payment, or tracking of payroll expenses; human resources; sales and billing functions; or accounting or tracking of supplies, inventory, records, and expenses. To be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period between eight or 24 weeks. ## Simplified forgiveness Borrowers that receive a PPP loan of $150,000 or less shall receive forgiveness if the borrower signs and submits to the lender a certification that is not more than one page in length, includes a description of the number of employees the borrower was able to retain because of the loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount. The SBA has yet to create the simplified application form but must do so by Jan. 20. The form may not require additional materials unless necessary to substantiate revenue loss requirements or satisfy relevant statutory or regulatory requirements. Borrowers are required to retain relevant records related to employment for four years and other records for three years, as the SBA may review and audit these loans to check for fraud. ## Minority, underserved, veteran, and women-owned businesses The Economic Aid Act provided set-asides for new and smaller borrowers, for borrowers in low- and moderate-income communities, and for community and smaller lenders. The set-asides include: - $15 billion across first- and second-draw PPP loans for lending by community financial institutions; - $15 billion across first- and second-draw PPP loans for lending by insured depository institutions, credit unions, and Farm Credit System institutions with consolidated assets of less than $10 billion; - $35 billion for new first-draw PPP borrowers; and - $15 billion and $25 billion for first-draw and second-draw PPP loans, respectively, for borrowers with a maximum of 10 employees or for loans of less than $250,000 to borrowers in low- or moderate-income neighborhoods. The SBA has determined that at least 25% of each of those set-asides will go to each one of the groups: loans to borrowers with a maximum of 10 employees and loans of less than $250,000 to borrowers in low- or moderate-income neighborhoods. ## **Conclusion** **This information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors.** For the most part, the changes included in this legislation apply to all PPP loans except those already forgiven. In addition, the way the legislation is written, most provisions take effect immediately after the legislation is enacted, as if they were in the CARES Act that was passed March 27, 2020. ## **Questions? Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: SBA, U.S. Treasury, IRS and AICPA ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Important PPP Changes and Guidance](https://waradydavis.com/the-new-stimulus-act-and-ppp/) **Published:** January 7, 2021 **Author:** Leslie Flinn **Content:** #### IMPORTANT NOTE: ##### On January 6, 2021 the SBA issued approximately 120 pages of new regulations regarding PPP loans. ##### We have updated the below article on PPP Changes with significant new details, including: - New methods to calculate a 25% reduction in gross receipts - Clarifications regarding eligibility for second draw PPP loans - Denial of loan eligibility for those in bankruptcy - Borrowers can amend their initial loan application if they are eligible to receive more because of rule changes, but not if they simply miscalculated the loan amount they were eligible for. - The Interim Final Rules do not affect forgiven loans unless specifically stated otherwise - IRS Revenue Ruling 2021-02 clarifies tax treatment of PPP loans - No new guidance on the Employee Retention Tax Credit - On January 8th, the SBA released a revised PPP application form for first time borrowers and a new application for second draw borrowers. - The new simplified PPP forgiveness application for loans under $150,000 is not yet released but due the 3rd week of January. The **“Economic Aid Act” or Consolidated Appropriations Act of 2021** funds the government through most of 2021 and provides COVID-19 relief including extending federal unemployment benefits, providing for $600 cash payments to Americans, extending eviction moratoriums, providing housing assistance payments, funding food assistance programs, and creating a second round of Paycheck Protection Program (“PPP”) loans for small businesses. The new law includes welcomed additions, clarifications, and changes to the PPP. The first round of the program featured a number of hurdles and questions so this second round will serve as an opportunity for many first time borrowers who missed out on the initial process to participate and for many repeat borrowers to continue funding their payrolls with forgivable loans. ## **Here’s what businesses and not-for-profit organizations need to know:** #### **Expenses Paid with Forgiven PPP Loans Will Be Deductible** In May, the IRS issued Revenue Notice 2020-32, which took the position that expenses paid for with forgiven loans would not be deductible. In relevant part, the new law states: “(2) no deduction shall be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph (1).” In addition, the Act provides that owners of S corporations and partnerships will receive a step-up in basis attributable to the “tax-exempt income” that results from PPP loan forgiveness. Unfortunately, for most borrowers this increase in basis will not occur until the 2021 tax year when forgiveness is confirmed by the SBA. Therefore, owners wishing to have losses flow through on their personal tax returns may not have sufficient basis to take the loss in 2020 unless contributions are made to the entity prior to year-end, and the loss will remain suspended until basis is increased in 2021 after the loan is forgiven. #### **PPP Loan Recipients Now Eligible To Receive the Employee Retention Credit** Under the CARES Act, PPP loan recipients were not eligible to receive employee retention tax credits because both the loans and the credit were intended to be expended on employee payroll, so Congress made the two mutually exclusive. Now, however, the eligibility requirements for the Retention Credit have been further reduced on top of PPP loan recipients becoming eligible for the Credit. The one caveat for borrowers who receive PPP loans as well as the Retention Credit is that they may only claim the Credit on employee wages ***NOT*** paid with PPP funds. To be eligible for the Employee Retention Credit an employer must either (1) have the operation of the business fully or partially suspended due to orders from a government authority limiting commerce, travel, or group meetings due to COVID-19 OR (2) suffer a 20% reduction in gross receipts when comparing any quarter in 2020 to the same quarter in 2019. #### **Second Draw – Eligible Recipients May Receive a Second PPP Loan** The Act now permits repeat borrowers to receive a PPP loan if they meet the requirements of an **“eligible recipient.” NOTE:** In order to qualify for a second draw PPP loan, a borrower must have received a PPP loan during the first round. Borrowers seeking their first PPP loan will be eligible based upon the requirements previously set forth by the CARES Act and restated in the [January 6th Interim Final Rules](https://home.treasury.gov/system/files/136/PPP-IFR-Paycheck-Protection-Program-as-Amended-by-Economic-Aid-Act.pdf "https://home.treasury.gov/system/files/136/PPP-IFR-Paycheck-Protection-Program-as-Amended-by-Economic-Aid-Act.pdf"). An ***“eligible recipient”*** is defined as “any business concern, nonprofit organization, housing cooperative, veterans organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative” that meets the following three requirements: - **Employs not more than 300 employees.** ***The January 6th Interim Final Rules** further clarified that North American Industry Classification System (“NAICS”) Code 72 entities (food service providers) and eligible news organizations with more than one physical location may have up to 500 employees.* - **Has or will use the full amount of their first PPP loan**. ***The January 6th Interim Final Rules** confirmed that a borrower applying for a second draw loan must certify that, before the Second Draw Loan is disbursed (but not necessarily at the time of application), they will have used the full loan amount (including any increase) of the First Draw Paycheck Protection Program Loan only for eligible expenses.* - **25% reduction**. Had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter in 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the same quarter in 2019. ***The January 6th Interim Final Rules** state that t**he borrower must demonstrate that they suffered a 25% reduction in gross receipts during one quarter in calendar year 2020 when compared to the corresponding quarter in calendar year 2019. For the purposes of this 25% rule, gross receipts will include all revenues from the normal operation of the business before subtraction of expenses but will not include amounts borrowed, including amounts received and forgiven for PPP loans. **The IFRs** further provide that borrowers who were in operation for all 4 quarters in 2019 may compare their calendar year 2019 gross receipts to calendar year 2020 gross receipts in order to determine if they satisfy the 25% reduction test.* - - For purposes of the above 25% reduction in gross receipts test, borrowers who were not in business during the first, second, or third quarter of 2019 (January 1 – September 30), but were in business during the fourth quarter of 2019 (October 1 – December 31), can compare the first, second, or third quarter of 2020 (January 1 – September 30) to the fourth quarter of 2019. - If the entity was not in business during 2019 but was in business by February 15, 2020, then such borrower can compare their gross receipts during the second or third quarter of 2020 (April 1 – June 30) to the first quarter of 2020 (January 1 – March 30) to see if they qualify. - For purpose of the above tests, non-profit entities can compare their gross receipts in the first, second, or third quarter of 2020 to gross receipts in the same quarter of 2019. Provided they meet the requirements above, an “eligible recipient” will also still need to satisfy the **“Necessity Test.”** Borrowers were required to certify in good faith on their initial PPP loan application that the loan is “necessary to support the on-going operations of the applicant.” This “necessity requirement” still appears to be in place following the passage of this Act. It may be a stretch for businesses that have survived one or two difficult quarters to state that the loan is “necessary” for the ongoing operation of the business, even though the business could reasonably argue that they need the loan. ***The SBA’s Interim Final Rule** released on January 6th reinforced their stance that the necessity certification for a borrower’s loan would not be questioned for either the first or second round of loans, provided the amount of each loan was less than $150,000.* ##### **IMPORTANT NOTE:** [The PPP forgivable loan program reopens January 11, 2021.](https://waradydavis.com/ppp-reopens/) [CLICK HERE](https://waradydavis.com/ppp-reopens/) for details. (Check with your lender for more information.) In addition, you are not required to have applied for PPP loan forgiveness of your first PPP loan at the time of applying for a second draw PPP loan. #### **Increased Maximum Amount of New PPP Loans For Seasonal Employers, New Entities, and Businesses With More Than One Physical Location** For seasonal employers, the maximum amount of new PPP loans is based upon 2.5 times the average monthly payroll costs for the 12-week that begins February 15, 2019 or March 1, 2019 and ends February 15th, 2020. The loan can be for up to, but not exceeding, $2 million. For new entities, the maximum amount of new PPP loans is based upon at the election of the borrower the greater of - 2.5 times the average monthly payroll costs for any one year period before the date on which the loan is made or - the average monthly payroll costs for the 2019 calendar year multiplied by 2.5, but not exceeding $2 million in either case. For businesses with more than one physical location, the maximum amount of new PPP loan will be as follows: - $2,000,000 as the total amount of all covered loans; and - in applying this paragraph, the Administrator shall substitute ‘not more than 300 employees per physical location’ for the term ‘not more than 500 employees per physical location’ in paragraph (36)(D)(iii). #### **Maximum Amount of New PPP Loans For NAICS Code 72 Borrowers (Primarily Food, Beverage and Hospitality Related)** Under the new law most borrowers may receive 2.5 times the average total monthly payroll costs incurred or paid during the 1-year period before the date on which the loan is made or, at the election of the borrower, calendar year 2019. This amount may not exceed $2,000,000. This is not the case for NAICS Code 72 borrowers. For these borrowers, the maximum loan amount they are eligible to receive is based upon **3.5 times** the average total monthly payroll costs incurred or paid during the 1-year period before the date on which the loan is made or, at the election of the borrower, calendar year 2019, as opposed to the 2.5 multiplier that applies to all other borrowers. That means these borrowers are eligible to receive 40% more than their counterparts in other industries. View the chart below to see if your business falls into this category. ![NAICS Codes for Accommodation and Food Service Businesses](https://waradydavis.com/wp-content/uploads/2020/12/NAICS-Codes.jpg "NAICS-Codes | Warady & Davis LLP") *Regarding seasonal employers and NAICS Code 72 entities, the January 6th Interim Final Rules recognized the fact that there may be some overlap in these industries and clarified that a business that qualifies as both a seasonal employer and a NAICS Code 72 entity may calculate their payroll costs used to determine their loan amount based upon either the seasonal employer payroll costs formula, or the standard formula used to calculate payroll costs for every other type of borrower, while still being allowed to utilize the 3.5 times multiplier that is applied to NAICS Code 72 entities under the new Act.* #### **Chinese Owned Entities Are Ineligible For a Second Draw PPP Loan** Publicly traded businesses and entities affiliated with the People’s Republic of China are on the list of entities that cannot qualify for a new PPP loan. China is the only restricted country included in the new Act. #### **Additional Loans Cannot Exceed $2,000,000 per Borrower–90 Day Wait Between Loans** The loan amounts for a vast majority of borrowers will be almost identical to what the borrower received for their original PPP loan. This second round of funding, however, is capped at $2 million per borrower rather than $10 million under the initial round of PPP loans in the CARES Act. For those few borrowers who received a PPP loan within the last 90 days, the new Act requires that the aggregate of the new and old loan will not exceed $10 million. #### **No Enforcement Action Against Banks** The Act provides that there will be no “enforcement action” with respect to lenders. #### **It now Appears that Loans will NOT be Permitted for Borrowers in Bankruptcy** ***The January 6th Interim Finals Rules** provide the followng: “If the applicant or the owner of the applicant is the debtor in a bankruptcy proceeding, either at the time it submits the application or at any time before the loan is disbursed, the applicant is ineligible to receive a PPP loan.” The January 6th Interim Final Rules also provide that if your business is permanently closed then you will not be eligible to receive a PPP loan.* This determination seems contrary to what Congress initially permitted under the new Act. This rule could change again under the new administration and once the next session of Congress begins. #### **Simplified Forgiveness Application for Loans Under $150,000** Borrowers who received less than $150,000 in PPP loans during the first round will now only have to submit a one-page application for forgiveness, ***but all of the same rules apply.*** The Treasury has 24 days from the date the Act was signed to create and release the new form. It is not available yet, but is expected later in January. ***Eligible recipients will only be required to provide—*** 1. a description of the number of employees the eligible recipient was able to retain because of the covered loan; 2. the estimated amount of the covered loan amount spent by the eligible recipient on payroll costs; and 3. the total loan value; Borrowers will still need to complete all certifications and retain related employment records for a 4-year period following submission of the form; and other pertinent records for a 3-year period following submission of the form. #### **PPP Borrowers Can Select A Covered Period of a minimum of 8-Weeks up to 24-Weeks** Borrowers are now able to choose a covered period that can be as short as 8 weeks and as long as 24 weeks immediately after the second loan is received, during which the borrower is required to spend a sufficient amount on qualified expenses to receive forgiveness. This period thus ends on any day selected by the borrower, but no earlier than 8-weeks from the date the loan proceeds are received and no later than 24 weeks after such date of origination. This change will enable borrowers to cut off the testing period before having a reduction in workforce that would cause the applicable reduction in workforce penalties to apply, as long as the workforce is at its pre-February 15 levels on the last day of the Covered Period. ***In the January 6th Interim Final Rules** the SBA eliminated the “alternative covered period” which allowed borrowers to start their covered period on the start date of a payroll period for payroll cost purposes rather than on the date the loan was received. The covered period is now strictly any date between 8 and 24 weeks after receipt of the loan.* #### **Owner’s $100,000 Wage Limitation Now Applied On An Annualized Basis** Some borrowers may recall that during PPP round one, when calculating their payroll expenses, an S or C corporation owner’s countable wage was capped at $100,000. This meant that, depending on which covered period the borrower selected (either 8 or 24 weeks exactly), forgiveness for an owner’s compensation would be capped at $15,384 or $46,153 respectively. Now, however, in recognition of the new rule which allows a borrower to choose any covered period between 8 and 24 weeks long, an owner’s forgivable wage will be applied on an annualized basis. This means that an S or C corp owner who makes $100,000 or more per year will have a forgivable wage amount capped somewhere between $15,384 or $46,153 depending on which day between 8 to 24 weeks the borrower chooses to end their covered period on. #### **Expanded Eligibility for 501(c)(6) Organizations** Organizations that are classified as a 501(c)(6) will have expanded eligibility to PPP loans. “Any organization that is described in section 501(c)(6) of the Internal Revenue Code and that is exempt from taxation under section 501(a) of such Code (excluding professional sports leagues and organizations with the purpose of promoting or participating in a political campaign or other activity) shall be eligible to receive a covered loan if— - does not receive more than 15 percent of its receipts from lobbying activities; - lobbying activities of the organization do not comprise more than 15 percent of the total activities of the organization; and - cost of the lobbying activities of the organization did not exceed $1,000,000 during the most recent tax year of the organization that ended prior to February 15, 2020; and - employs not more than 300 employees.” #### Additional Eligible Expenses That Count Towards Forgiveness The Act expands on the list of forgivable expenses to now include the following: - **Covered operations expenditures** defined as “a payment for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses.” - **Covered property damage cost** defined as “a cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation.” - **Covered supplier cost** defined as “an expenditure made by an entity to a supplier of goods for the supply of goods that (1) are essential to the operations of the entity at the time at which the expenditure is made; and (2) is made pursuant to a contract, order, or purchase order in effect at any time before the covered period with respect to the applicable covered loan, or with respect to perishable goods in effect before or at any time during the covered period with respect to the applicable covered loan.” - **Covered worker protection expenditure** defined as means an operating or a capital expenditure to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance issued by the Department of Health and Human Services, the Centers for Disease Control, or the Occupational Safety and Health Administration, or any equivalent requirements established or guidance issued by a State or local government, during the period beginning on March 1, 2020 and ending the date on which the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the Coronavirus Disease 2019 (COVID–19) expires related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19. The Act includes specific examples of what may be included as a Covered Worker Protection Expenditure as well as examples of items that do not qualify for such expense. #### **Borrowers Can Amend Loan Applications to Request An Increase In Their PPP Loan Amount As A Result of A Rule Change** The Act requires that the SBA issue guidance to lenders within 17 days to provide a process for borrowers who returned all or part of their PPP loan to reapply for the maximum allowable amount so long as they have not filed for forgiveness. The Act also allows borrowers that would have received an increased loan amount due to changes in interim final rules issued by the SBA or as a result of the Act to reapply for the difference. **The January 6th Interim Final Rule** does provide that the following borrowers can reapply or request an increase for their first round loan: - Borrowers who returned all of their initial PPP loan amount - Borrowers who returned part of their initial PPP loan amount - Borrowers who did not accept the full amount of their initial PPP loan #### **Relief for Schedule F Farmers** The Act includes specific provisions that allow farmers reporting income on a Schedule F to qualify for a PPP loan based on their 2019 Schedule F income in a similar manner that applies to Schedule C taxpayers. #### **EIDL Advance Non-Taxable and No Longer Reduces PPP Loan Forgiveness** The Act also replenishes the EIDL Advance fund, which allows businesses suffering a substantial economic injury to apply for an advance that does not need to be repaid or up to $1,000 per employee limited to $10,000 total. Prior law stated that any EIDL Advance received would reduce PPP Loan Forgiveness, essentially requiring the Advance to be repaid. The new Act repeals this provision so the receipt of an EIDL Advance will have no impact on PPP loan forgiveness. Borrowers that have already applied for and received loan forgiveness presumably may now amend their application to request that the $10,000 EIDL Advance (or amount actually received) not reduce their forgiveness amount and request repayment. #### **EIDL Program For Businesses Hardest Hit by the Coronavirus** The Act creates a targeted EIDL program to assist businesses that were hardest hit by the economic impacts of the Coronavirus. The EIDL program was initially enacted many years ago to provide loans to businesses that have suffered from major storms, droughts, and other federally-declared disasters. EIDL loans bear interest at 3.75% and come with significant loan program requirements. Businesses that receive EIDL loans are unable to pay several things without SBA approval, including paying dividends, paying bonuses to any employees, including non-owners, and using EIDL funds for anything other than business purposes. ## **Conclusion** This new law will provide much needed relief to small businesses affected by COVID-19. In addition to COVID-19 relief, this new law makes a number of important tax changes that we will communicate in separately. As has been the case with these COVID-19 stimulus acts, there will almost certainly be additional guidance, announcements, and interpretations to come. We will continue to keep you updated and informed on what you need to know in order to maximize your benefits and make proper financial, tax and business decisions. ## **Questions? Contact your Warady & Davis advisor or our PPP team at 847-267-9600; [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** You can also visit the **[Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/)** for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. ###### SOURCE: SBA, U.S. Treasury and IRS ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** COVID, PPP, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, deductibility of ppp loan expenses, emergency business loan assistance, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan expenses, ppp loan forgiveness, PPP2, Second PPP Loans, Stimulus Relief, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Important Employee Retention Credit Updates - Deadline Approaching](https://waradydavis.com/important-employee-retention-credit-updates-deadline-approaching/) **Published:** November 14, 2024 **Author:** Leslie Flinn **Content:** The IRS has released several important Employee Retention Credit Updates. In addition, the deadline is approaching to participate in the [second IRS ERC Voluntary Disclosure Program](https://www.irs.gov/newsroom/irs-reopens-voluntary-disclosure-program-to-help-businesses-with-problematic-employee-retention-credit-claims-sending-up-to-30000-letters-to-address-more-than-1-billion-in-errant-claims). Applications will be accepted only until ***Nov. 22, 2024***. This program is for employers who claimed and received an ERC refund for a tax period in 2021 but were not eligible. Like the first ERC-VDP, the program will allow claimants to repay ERC at a reduced rate of 85% of the credit; this is slightly less favorable than the original ERC-VDP that allowed employers to repay 80% of their credits. The [Frequently Asked Questions about the second ERC Voluntary Disclosure Program ](https://www.irs.gov/newsroom/frequently-asked-questions-about-the-second-employee-retention-credit-voluntary-disclosure-program)can help employers understand the terms of the program. This second program also waives penalties and interest on the full amount, not just the 85% returned. Accepted applicants must execute a closing agreement confirming that they are not entitled to ERC and will be required to provide the name and contact information for any preparer or advisor who assisted in claiming the ERC. This second round of the program is open for tax periods in 2021. Employers can’t use the second ERC VDP to disclose and repay ERC money from tax periods in 2020. > Bear in mind that like the first, this second ERC-VDP program is to provide relief for employers who submitted ERTC claims prepared by unscrupulous ERTC promoters or who did not fully understand the complex requirements of the credit. Many ERTC claims were valid and met the intent of the credit to keep people employed during the pandemic, particularly those prepared with a reputable accounting firm’s assistance. Warady & Davis LLP, for example, chose to take a very conservative approach and only assist clients with claiming the ERTC if they met quantifiable criteria for decline in gross receipts. ## IRS Continues to Make Progress with Valid ERC Claims The IRS continues to make [progress](https://www.irs.gov/newsroom/irs-moves-forward-with-employee-retention-credit-claims-agency-accelerates-work-on-complex-credit-as-more-payments-move-into-processing-vigilance-monitoring-continues-on-potentially-improper-claims) processing the backlog of ERC claims, with the goal of paying out low-risk claims more quickly, including another 50,000 valid claims that are in payment processing. The agency intends to continue carefully processing low-risk claims, including those filed through Jan. 31, 2024, while also [pursuing](https://www.irs.gov/newsroom/irs-reopens-voluntary-disclosure-program-to-help-businesses-with-problematic-employee-retention-credit-claims-sending-up-to-30000-letters-to-address-more-than-1-billion-in-errant-claims) erroneous refunds with more than 30,000 “clawback” notices to recapture improper ERC payments, and 28,000 letters disallowing unpaid claims. The agency emphasized those with ERC claims should ***not call IRS toll-free lines*** because additional information is generally not available on these claims as processing work continues. The IRS will keep the processing moratorium in place on ERC claims submitted after Jan 31, 2024. Additionally, the IRS shared [five more red flag issues](https://www.irs.gov/newsroom/irs-shares-more-warning-signs-of-incorrect-claims-for-the-employee-retention-credit-urges-businesses-to-proactively-resolve-erroneous-claims-to-avoid-penalties-interest-audit) they are regularly seeing in newly processed ERC claims; the agency recommends that businesses whose claims fall into any of these warning sign categories act quickly and consider participating in the[ second ERC-VDP or the ERC Withdrawal Program.](https://www.irs.gov/pub/irs-drop/a-24-30.pdf) ### **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2024 All Rights Reserve **Categories:** Business, COVID, E-Alerts, Tax --- ### [Comparison of Better Care Reconciliation Act, American Health Care Act and Affordable Care Act - Obamacare](https://waradydavis.com/comparison-of-better-care-reconciliation-act-american-health-care-act-and-affordable-care-act-obamacare/) **Published:** September 18, 2016 **Author:** WaradyDavis **Excerpt:** The Senate unveiled last week its own version of health care legislation designed to replace ObamaCare, called the “Better Care Reconciliation Act of 2017.”  The Senate plan does vary somewhat from the House’s already passed bill.  Read on for some key differences between the plans of Obamacare, The House American Healthcare Act  and The Senate Better Care Reconciliation Act. **Content:** Amid ongoing health reform efforts, the Better Care Reconciliation Act of 2017— the Senate’s version of legislation intended to replace the [Affordable Care Act](https://waradydavis.com/key-provisions-of-the-tax-cuts-and-jobs-act-2/ "Read more about the key provisions of the TCJA and Affordable Care Act")—has stalled without the necessary votes to pass. As the healthcare debate continues to evolve, employers must stay informed about the latest changes and proposals. A revised version of the Senate bill is expected soon, with plans to move quickly to a vote. While the Senate plan shares some elements with the House’s American Health Care Act, key differences are worth noting. Read on to compare major provisions among the **Affordable Care Act (Obamacare), the House’s American Health Care Act, and the Senate’s Better Care Reconciliation Act**. **SOURCE: [NPR – View ‘Words You’ll Hear: The Better Care Reconciliation Act”](https://www.npr.org/2017/07/09/536328454/words-youll-hear-the-better-care-reconciliation-act "Click to read related Better Care Reconciliation Act content on NPR.org - Link opens in new window.")** ## Highlights of the “Better Care Reconciliation Act of 2017”** **Coverage** The Senate health care legislation is expected to provide coverage for 4 to 5 million additional people, according to an analysis from the health care advocacy group the Council for Affordable Health Coverage. They also predicted that premium increases expected with the House bill would be scaled back. **Tax credits** The Senate’s health care legislation would give tax credits based on age, income and geography — to a certain extent — like the Affordable Care Act already does. Tax credits under the House plan would primarily only be based on age. **More flexibility on insurance regulations** The bill doesn’t include the controversial House waivers letting states charge consumers more based on health status and lifting a requirement to cover certain health services. But it bolsters waivers created under the Affordable Care Act that gives states creative ways to implement ObamaCare. The new powers give the states more flexibility to use waivers to decide the rules of insurance for their state. Senior GOP Senate aides say the waivers can be used to waive essential health benefits. But in a departure from the House bill, states can’t opt of regulations governing pre-existing conditions. **Changes the age rating to 5:1** That means insurers can charge older adults five times as much as younger people. ObamaCare only lets insurers charge older people three times as much. **Repeals all of ObamaCare’s taxes** The only tax kept is the Cadillac tax, a fee levied on high cost employer insurance plans, though it would be delayed until 2026. **Individual mandate** Under the Senate bill, the individual mandate — an Obamacare tax penalty imposed on those who don’t purchase health insurance — would be eliminated. The House legislation also does away with the individual mandate, but it does allow for insurance companies to impose a surcharge on those who purchase a new plan after letting their previous coverage lapse. While insurers would be able to impose up to a 30 percent surcharge, states would have the option to make the penalty harsher. **Opioid epidemic** The Senate legislation creates a $2 billion fund to provide grants to states for substance abuse and mental health treatment. The House did not include such an allocation. Under ObamaCare, Medicaid expansion has enabled many states to provide comprehensive treatment to people caught in the opioid epidemic. **Medicaid** The Senate’s “Better Care Reconciliation Act of 2017,” stretches the phase-out of Medicaid expansion financing and higher payments would be provided through 2023. The bill uses a less generous inflation adjustment than the House bill. But Medicaid cuts would be greater with this legislation than under the House bill. Under the House bill, the federal government’s monetary match for expanded Medicaid would be reduced beginning in 2020. The program would also no longer be an open-ended entitlement. --- Stay tuned for updates and changes. Remember, for now, Obamacare is still the law of the land and employers should follow all outlined requirements and deadlines. If you have any questions regarding Obamacare compliance or health insurance benefits for your employees or yourself, please contact your W&D advisor at (847) 267-9600. . ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Tax Legislation --- ### [Your nonprofit’s bylaws](https://waradydavis.com/your-nonprofits-bylaws/) **Published:** April 10, 2021 **Author:** WaradyDavis **Excerpt:** Has your organization outgrown its bylaws? Sometimes, as a nonprofit expands and matures, the guiding rules set when it was just a twinkle in its founders’ eyes need to be revisited and brought up to date. Revising your bylaws involves more than just altering the language of rarely visited documents. The process provides you with an opportunity to look closely at how your nonprofit is evolving and whether such developments are consistent with your original mission. **Content:** ## Those golden rules may need more than polishing Has your organization outgrown its bylaws? Sometimes, as a nonprofit expands and matures, the guiding rules set when it was just a twinkle in its founders’ eyes need to be revisited and brought up to date. Revising your bylaws involves more than just altering the language of rarely visited documents. The process provides you with an opportunity to look closely at how your nonprofit is evolving and whether such developments are consistent with your original mission. ### Serving as your architectural framework Bylaws are the rules and principles that define your governing structure. They serve as your not-for-profit’s architectural framework. Although bylaws aren’t required to be public documents, making them available to the public can boost your accountability and transparency. Your bylaws might cover such topics as the broad charitable purpose of the organization; the size and function of your board; and the election, terms and duties of your nonprofit’s directors and officers. They also usually cover your nonprofit’s basic rules for voting, holding meetings, electing directors and appointing officers. And without being too specific, your bylaws should provide procedures for resolving internal disputes, such as the removal and replacement of a board member. ### Forming a bylaw committee Before you attempt to revise the bylaws, make sure you have the authority to do so. Most bylaws contain an amendment paragraph that defines the procedures for changing these rules. Then consider creating a bylaw committee made up of a cross-section of your organization’s membership or constituency. This committee will be responsible for reviewing existing bylaws and recommending revisions to your board or members for a full vote. It’s important that your bylaw committee focus on your not-for-profit’s mission, not organizational politics. A bylaw revision is appropriate only if you want to change your nonprofit’s governing structure — not to cater to one of your leader’s pet projects. ### Revising what’s important If your nonprofit is incorporated, you’ll need to ensure that any proposed bylaw changes conform with your articles of incorporation, which spell out your nonprofit’s purpose and outline its allowable activities. For example, the “purposes” clause in your bylaws must match that in your articles of incorporation. Any new provision or language changes in your bylaws, contrary to the objectives and ideals included in your incorporation documents, could invalidate the revisions. Wanting to change the rules about how you operate suggests that you may have drifted from your original purpose. Bylaw revisions that indicate you’ve strayed from your initial mission can jeopardize your federal tax-exempt status. By all means, make sure your bylaw amendments remain consistent with your tax-exempt purpose. And notify the IRS if they represent a “structural or operational” change by reporting the amendments on your Form 990. In addition, review your state’s statute that governs nonprofits, because it may contain mandatory provisions that affect your bylaws. In the absence of bylaws, when faced with issues about your governance, your state may dictate a proper course of action. If you don’t coordinate your bylaws with such a statute, you may unwittingly hinder your governing board’s ability to operate. ### An accurate reflection Through the years, your nonprofit is likely to experience a number of changes: Its constituency and support may grow and its goals and priorities may shift. Your professional advisors can work with you to amend your bylaws and make sure they accurately reflect your organization as it exists today. ## About: Susan Greggo, CPA, Partner heads Warady & Davis LLP’s not-for-profit industry team. She is a recognized leader in the Not-for-Profit sector and is often called upon as a consultant for issues specific to the industry both by clients and non-clients alike. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2021 **Categories:** Not-for-Profit --- ### [Avoid Tax Scams: IRS 2025 "Dirty Dozen"](https://waradydavis.com/avoid-tax-scams-irs-2025-dirty-dozen/) **Published:** March 5, 2025 **Author:** Leslie Flinn **Excerpt:** The IRS’s 2025 Dirty Dozen warns taxpayers about the latest tax scams, from phishing to false credit claims. Stay informed to protect your finances. **Content:** ## IRS Warns Taxpayers About the 2025 “Dirty Dozen” Tax Scams The IRS has released its annual [Dirty Dozen](https://www.irs.gov/newsroom/dirty-dozen) list for 2025, warning taxpayers, businesses, and tax professionals about common tax [scams](https://www.irs.gov/help/tax-scams/recognize-tax-scams-and-fraud) that threaten financial and personal information. These schemes, which range from [email phishing](https://www.irs.gov/privacy-disclosure/report-phishing) to fraudulent tax credit claims, tend to peak during tax season but occur year-round as fraudsters seek to steal money and data. Originally launched in 2002 by IRS Communications Senior Adviser Terry Lemons, the Dirty Dozen campaign aims to educate taxpayers and tax professionals about emerging scams. In coordination with the Security Summit, the IRS has worked alongside state tax agencies, tax software providers, and financial institutions to combat tax-related identity theft, protecting millions of taxpayers and billions in refunds. To address the rise of social media-driven scams, the [Coalition Against Scam and Scheme Threats (CASST)](https://www.irs.gov/newsroom/irs-states-tax-industry-announce-new-joint-effort-to-combat-growing-scams-and-schemes-ongoing-coordination-to-follow-in-footsteps-of-security-summits-identity-theft-efforts-to-help-taxpayers-and) was introduced last year. The [2025 Dirty Dozen](https://www.irs.gov/newsroom/dirty-dozen-tax-scams-for-2025-irs-warns-taxpayers-to-watch-out-for-dangerous-threats) list continues to highlight these evolving threats, helping taxpayers stay informed and vigilant against [fraud. ](https://waradydavis.com/tax-scams-proliferate-during-filing-season/) ### **The full IRS 2025 “Dirty Dozen” list includes:** 1. **Email phishing & smishing scams** – Scammers pose as IRS or financial organizations via email (phishing) or text messages (smishing) to steal personal information and install malware. 2. **Bad social media advice** – Misinformation on platforms like TikTok misleads taxpayers into filing fraudulent returns, potentially leading to identity theft and penalties. 3. **IRS Individual Online Account help from scammers** – Fraudsters offer to help set up IRS online accounts but instead steal personal data for tax fraud. 4. **Fake charities** – Scammers create fraudulent charities, especially during crises, to steal money and personal information. 5. **False Fuel Tax Credit claims** – Misleading promotions encourage taxpayers to claim an ineligible fuel tax credit to inflate refunds. 6. **Credits for Sick Leave & Family Leave** – Some taxpayers are incorrectly using Form 7202 to claim the pandemic-era self-employed tax credit, which expired after 2021. 7. **Bogus self-employment tax credit**– Social media falsely promotes a nonexistent “Self-Employment Tax Credit,” misleading taxpayers into filing fraudulent claims. 8. **Improper household employment taxes** – Fraudsters fabricate household employees to claim refunds for wages never paid. 9. **The overstated withholding scam** – Scammers encourage taxpayers to falsify income and withholding on W-2 or 1099 forms to receive large refunds. 10. **Misleading Offers in Compromise (OIC)** – Tax debt relief “mills” mislead taxpayers into paying fees for OIC programs they don’t qualify for. 11. **Ghost Tax Preparers** – Unethical tax preparers refuse to sign returns or include their IRS PTIN, often charging fees based on refund size or filing false claims. 12. **New client scams & spear phishing** – Cybercriminals impersonate clients to target tax professionals, gaining access to sensitive data. The IRS urges taxpayers to rely on trusted sources, avoid unsolicited messages, and verify tax claims before filing. ### IRS Urges Vigilance The Dirty Dozen is an educational campaign, not an enforcement list, aimed at protecting taxpayers. Beyond this list, the IRS warns of other abusive tax avoidance strategies, such as trusts, offshore schemes, and fraudulent retirement arrangements. The IRS encourages reporting fraud via [Form 14242](https://www.irs.gov/pub/irs-pdf/f14242.pdf) and warns that filing false tax claims can lead to severe penalties. For more details on IRS tax scams and fraud prevention, visit the Dirty Dozen section on IRS.gov. ### Questions? Please contact your Warady & Davis LLP business advisor with any additional questions or concerns – (847) 267-9600 or [**info@waradydavis.com**](mailto:info@waradydavis.com)**.** **Source:** IRS, *[Dirty Dozen Tax Scams for 2025](https://www.irs.gov/newsroom/dirty-dozen-tax-scams-for-2025-irs-warns-taxpayers-to-watch-out-for-dangerous-threats)*, IRS.gov. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** Tax, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [BOI Reporting Back On With New Deadline](https://waradydavis.com/boi-reporting-back-on-with-new-deadline/) **Published:** December 24, 2024 **Author:** Leslie Flinn **Excerpt:** IMPORTANT: Beneficial Ownership Information Reporting Preliminary Injunction Reversed - New Deadline to Comply **Content:** > **IMPORTANT UPDATE – February, 2025**On February 18, 2025, following a decision by the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Department of Treasury, et al., 6:24-cv-00336 (E.D. Tex.), **beneficial ownership information [(BOI) reporting requirements](https://waradydavis.com/act-now-on-boi-reporting-deadlines/) under the Corporate Transparency Act (“CTA”) are once again back in effect with a new deadline of March 21, 2025**. ## NEW BOI Reporting Deadline(s) - Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial BOI reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.) - Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial BOI reports with FinCEN. - Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial BOI reports with FinCEN. - Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later. Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial BOI reports with FinCEN after receiving actual or public notice that their creation or registration is effective. - As indicated in the alert titled ***[“Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)](https://www.fincen.gov/boi)***—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time. ### **Background** Under the CTA, P.L. 116-283, which Congress passed in 2021 as an anti-money-laundering initiative, reporting companies must disclose the identity and information about beneficial owners of the entities. For new entities incorporated after Jan. 1, 2024, reporting companies must also disclose the identity of “applicants” — defined as any individual who files an application to form a corporation, limited liability company, or other similar entity. Willful violations are punishable by a fine of $591 a day, up to $10,000, and two years in prison with similarly serious penalties for unauthorized disclosure. ### **More Information** For more information regarding the BOI reporting requirements including FAQs and a helpful short instructional video visit **[https://www.fincen.gov/boi. ](https://www.fincen.gov/boi)**The AICPA has also created a [**BOI reporting resource center**](https://www.aicpa-cima.com/resources/landing/beneficial-ownership-information-boi-reporting). You may also contact your Warady & Davis LLP business advisor with any additional questions or concerns – (847) 267-9600 or**[ info@waradydavis.com. ](mailto:info@waradydavis.com)** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2024 All Rights Reserved **Categories:** Business, Business Management, E-Alerts, General **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [W&D Stands with Highland Park, IL](https://waradydavis.com/wd-stands-in-support-with-our-highland-park-il-neighbors/) **Published:** July 5, 2022 **Author:** Leslie Flinn **Content:** # W&D Stands with Highland Park, IL **Categories:** Managing Partner --- ### [Clean Vehicle Credit Comes with Caveats](https://waradydavis.com/clean-vehicle-credit-comes-with-caveats/) **Published:** September 27, 2022 **Author:** Leslie Flinn **Excerpt:** The Inflation Reduction Act’s Clean Vehicle Credit might alter the timing of purchasing a new or used qualifying electric vehicle. Learn why. **Content:** ## Clean Vehicle Credit Comes with Caveats [**The Inflation Reduction Act (IRA)**](https://waradydavis.com/inflation-reduction-act/) includes a wide range of tax incentives aimed at combating the dire effects of climate change. One of the provisions receiving considerable attention from consumers is the expansion of the Qualified Plug-in Electric Drive Motor Vehicle Credit (IRC Section 30D), now known as the Clean Vehicle Credit. While the expanded credit seems promising, questions have arisen about just how immediate its impact will be. Here’s what you need to know about the credit if you’re thinking about purchasing an electric vehicle (EV). ### The Credit in a Nutshell **[The Qualified Plug-in Electric Drive Motor Vehicle Credit](https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit)** has been around since 2008. For passenger vehicles and light trucks acquired after December 31, 2009, the credit starts at $2,500. Vehicles with battery capacities rated at five kilowatt hours qualify for an additional $417, plus an additional $417 for each kilowatt hour of capacity exceeding five kilowatt hours. The credit’s maximum amount is $7,500. The credit amount begins to phase out for a manufacturer’s vehicle when at least 200,000 qualifying vehicles have been sold for use in the United States (for sales after December 31, 2009). As a result of this limitation, vehicles, including those manufactured by Tesla and General Motors, no longer qualify for the credit. The IRA extends the newly named Clean Vehicle Credit through December 31, 2032. It also makes several significant changes to the credit, most of which will phase in over time. For example, the credit now applies to any “clean” vehicle, so a hydrogen fuel cell car or a plug-in hybrid could qualify. It also eliminates the manufacturer production cap after 2022. The IRA leaves intact the $7,500 max credit amount but bifurcates it. You can earn a $3,750 credit if the qualifying vehicle meets a critical minerals requirement and another $3,750 credit if the vehicle meets a new battery component requirement (see “Potential hurdles” below). **The credit now includes income limitations, too. It’s not available to:** - Single filers with modified adjusted gross income (MAGI) over $150,000, - Married couples filing jointly with MAGI over $300,000, or - Heads of household with MAGI over $225,000. The credit is also limited by the price of the vehicle. Vans, pickup trucks and SUVs with manufacturer’s suggested retail prices (MSRPs) of more than $80,000 don’t qualify. Other cars must have MSRPs no higher than $55,000. One critical change took effect immediately after President Biden signed the bill into law: the so-called “final assembly” requirement. It limits the credit to vehicles for which final assembly occurred in North America. Final assembly generally refers to the production of an EV at the location from which it’s delivered to a seller with all of the necessary component parts included. The requirement is designed to encourage domestic production. The IRS has established a two-step process to check whether a specific vehicle satisfies the final assembly requirement. First, check the [**Department of Energy’s Alternative Fuels Data Center’s list of 2022 and 2023 EVs**](https://afdc.energy.gov/laws/inflation-reduction-act) that *likely* meet the requirement. Be aware that because some models are assembled in multiple locations, some of the listed vehicles might not meet the requirement. Then, to confirm that a specific vehicle’s final assembly occurred in North America, enter its Vehicle Identification Number (VIN) into the **[National Highway Traffic Safety Administration’s VIN decoder tool.](https://www.nhtsa.gov/vin-decoder)** By scrolling to the bottom of the result page, you’ll see the vehicle’s “Plant Information,” which includes the country where the plant is located. For now, taxpayers who purchase qualifying EVs will continue to claim a credit on their annual tax returns. The IRA, however, provides an alternative — and much more taxpayer-friendly — option beginning in 2024. At that point, EV purchasers can transfer their credit to dealers at the point of sale, rather than waiting to claim it on their annual tax returns. The credit will directly and immediately reduce the purchase price. ### Transitional Relief for Purchasers **What if you signed a contract on an EV before August 16, 2022, when the IRA was enacted, but haven’t yet received the vehicle?** The IRS has stated that the changes in the law won’t affect your tax credit. You can claim it under the rules in effect when you signed the purchase contract. Unfortunately, that means the manufacturer cap will still apply. If you purchase a vehicle from a manufacturer that hit the 200,000 vehicle threshold more than a year prior, you don’t qualify for the EV credit. On the other hand, the final assembly requirement won’t apply. If you purchase and take possession of a qualifying EV after the law was signed (August 16, 2022) but before January 1, 2023, the only difference to the prior rules is the applicability of the final assembly requirement. That means the manufacturer cap also would apply to your purchase. So, if you’re interested in a model that’s disqualified under the cap, it might pay off to wait until 2023 if the vehicle meets the requirements then. ### New Credits for Used and Commercial Vehicles The IRA also creates tax credits for used EVs (Sec. 25E) and commercial EVs (Sec. 45W), both starting in 2023. The IRS has indicated it will release more information on these credits in the coming months. According to the IRA, the Sec. 25E credit is worth the lesser of $4,000 or 30% of a qualified vehicle’s sale price. The sale price can’t exceed $25,000. The credit is available only for EVs with model years at least two years earlier than the year of purchase. **No credit is available if the lesser of the taxpayer’s MAGI for the year of purchase or the preceding year exceeds:** - $75,000 for single filers, - $150,000 for married couples filing jointly, or - $112,500 for heads of household. The credit for commercial EVs is the lesser of 1) 15% of the vehicle’s basis (30% for vehicles not powered by a gas or diesel engine) or 2) the incremental cost of the vehicle over the cost of a comparable gas- or diesel-powered vehicle. The maximum credit per vehicle is $7,500 for vehicles with a gross vehicle weight under 14,000 pounds and $40,000 for heavier vehicles. ### Only the Beginning The IRS and Treasury Department have promised to issue additional guidance about the various new and existing EV-related tax credits in the coming weeks and months. We’ll keep you up to date on new developments. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2022 All Rights Reserved **Categories:** Business, Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Inflation, Inflation Reduction Act, Northshore CPA, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [What is SECURE 2.0?](https://waradydavis.com/secure-2-0/) **Published:** March 30, 2022 **Author:** Leslie Flinn **Excerpt:** If you are saving for retirement, Congress may make it easier for both employees and employers alike. Learn about new proposed legislation - SECURE 2.0. **Content:** ## Congress eyes further retirement savings enhancements SECURE 2.0 is pending legislation that builds on the **[Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. ](https://waradydavis.com/new-law-helps-businesses-make-their-employees-retirement-secure/)**The intent is to substantially improve retirement savings accounts, including 401(k)s and 403(b)s, in the U.S. Currently, the House and Senate each have their version of SECURE 2.0. The House version (H.R. 2954) was passed by that body on March 29, 2022, with tremendous (414-5) bipartisan support. The Senate version (S. 1770) was introduced in the Senate on May 20, 2021, and remains in the Senate Finance Committee. Although many parts of both bills are similar, differences remain that must be worked out. Both bills contain numerous provisions that — if enacted — would affect both individuals and employers, including in the following areas: ### Catch-up contributions Currently, qualified individuals age 50 or older can make catch-up contributions, on top of the standard contribution limits, to certain retirement accounts — an extra $6,500 for 401(k) plan accounts and $3,000 for SIMPLE plans. Beginning in 2024, SECURE 2.0 would boost those figures for individuals age 62 to 64 to $10,000 for 401(k)s and $5,000 for SIMPLE plans (indexed for inflation). In addition, the $1,000 annual catch-up for IRAs, which hasn’t changed in years, would be indexed going forward. The bill also would change the taxation of catch-up contributions, reducing the upfront tax savings for those who max out their annual contributions. Such contributions would be treated as post-tax Roth contributions starting in 2023. Under existing law, you can choose whether to make catch-up contributions on a pre- or post-tax basis. SECURE 2.0 would also allow you to determine whether your employer’s matching contributions should be treated as pre- or post-tax. Currently, these contributions can be pre-tax only. ### Required Minimum Distributions (RMDs) The SECURE Act eased the rules for required minimum distributions (RMDs) from traditional IRAs and other qualified plans. It generally raised the age at which you must begin to take your RMDs — and pay taxes on them — from 70½ to 72. SECURE 2.0 would increase the age over the course of a decade. As of 2023, RMDs wouldn’t be mandated until age 73, going up to age 74 in 2030 and age 75 in 2033. This would give you more time to grow your retirement savings tax-free, bearing in mind that delayed RMDs may translate to larger withdrawal requirements down the road. The bill would relax the penalty for failing to take full RMDs, too. Currently, the failure results in a 50% excise tax of the amount that should have been withdrawn. SECURE 2.0 would reduce the tax to 25% beginning in 2023. If corrected in a “timely” manner, the penalty would further drop to 10%. ### Qualified Charitable Distributions (QCDs) Some taxpayers use qualified charitable distributions (QCDs) to satisfy both their RMD requirements and their philanthropic inclinations. With a QCD, you can distribute up to $100,000 per year directly to a 501(c)(3) charity after age 70½. You can’t claim a charitable deduction for this donation, but the distribution is removed from taxable income. The bill would make this option more attractive. SECURE 2.0 would annually index the $100,000 limit for inflation. It also would allow you to make a one-time QCD transfer of up to $50,000 through a charitable gift annuity or charitable remainder trust (as opposed to directly to the charity). Both provisions would take effect in the taxable year following enactment of the law. ### Automatic enrollment The House bill would require employers to automatically enroll all newly eligible employees in their 401(k) plans at a deduction rate of at least 3% (but no more than 10%) of the employee’s pay, increasing it by 1% each year until the employee is contributing 10%. Employees could opt out or change their contribution rates. ### Annuities Annuities can help reduce the risk that retirees run out of money during their lifetimes. The SECURE Act encouraged reluctant employers to offer annuities by immunizing them from breach of fiduciary duty liability if they choose an annuity provider that meets certain requirements. But an actuarial test in the regulations for RMDs has interfered with the availability of annuities. For example, the test commonly prohibits annuities with guaranteed annual increases of only 1% to 2%, return of premium death benefits and period-certain guarantees. Without such guarantees, though, many individuals are hesitant to choose an annuity option in a defined contribution plan or IRA. SECURE 2.0 would specify that these guarantees are allowed. The changes would take effect upon enactment of the law. ### Matching contributions on student loan payments SECURE 2.0 recognizes that many employees are unable to contribute to their retirement accounts because of student loan payment responsibilities. Such employees miss out on matching contributions from their employers. The bill would allow employers to contribute to certain retirement plans for employees who are making qualified student loan payments. If enacted, this would take effect for contributions made for plan years beginning after 2022. ### Part-time employee eligibility The SECURE Act generally requires employers to allow part-time employees who work at least 500 hours for three consecutive years to participate in their 401(k) plans. Under SECURE 2.0, part-time employees would need to work at least 500 hours for only two consecutive years to be eligible for their employer’s 401(k) plan. The provision would be effective for plan years beginning after 2022. ### Small business tax credits SECURE 2.0 would create or enhance some tax credits for small businesses for tax years after 2022. For example, the SECURE Act increased the potential amount of the credit for retirement plan startup costs by capping it at $5,000 (up from $500). The three-year credit currently is available for 50% of “qualified startup costs” for employers with no more than 100 employees. The new bill hikes the credit to 100% of qualified costs for employers with up to 50 employees. It provides an additional credit, too, except for defined benefit plans. The additional amount generally is a percentage of the amount the employer contributes on behalf of employees, up to $1,000 per employee. The full additional credit is limited to employers with 50 or fewer employees, gradually phasing out for employers with 51 to 100 employees. ### Next steps While the odds for passage of some form of retirement savings reform seem high in light of the bipartisan support for the SECURE Act and the new House bill, it remains to be seen what will be in the final version. The Senate is working on its own bill, and the two would need to be reconciled before it reaches President Biden’s desk. The final legislation could add to, revise or remove the provisions described above. We’ll keep you up to date. **Questions?** ***Please contact your Warady & Davis LLP advisor(s) with your questions at 847-267-9600;* .** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2021 All Rights Reserved **Categories:** Employee Benefit Plans, Retirement, Tax, Wealth **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, American Rescue Plan Act Businesses, American Rescue Plan Act of 2021, American Rescue Plan Act PPP, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Biden stimulus relief, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CARES Act, Consolidated Appropriations Act of 2021, Coronavirus Chicago, COVID-19 Resources, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, emergency business loan assistance, How to apply for IL B2B grant, IL B2B grant, Il business grants, IL COVID-19 relief, Illinois Back to Business Grant, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, ppp loan forgiveness, PPP Loan Forgiveness for loans under $150, PPP2 loan forgiveness, Stimulus Relief, Streamlined PPP Loan Forgiveness, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Payment Apps Tax Reporting Requirements](https://waradydavis.com/payment-apps-tax-reporting-requirements/) **Published:** February 8, 2022 **Author:** Leslie Flinn **Content:** If you run a business and accept payments through third-party networks such as Zelle, Venmo, Square or PayPal, you could be affected by new payment apps tax reporting requirements that take effect for 2022. They don’t alter your tax liability, but they could add to your record keeping burden, as well as the number of tax-related documents you receive every January in anticipation of tax-filing season. ## Form 1099-K primer Form 1099-K, “Payment Card and Third-Party Network Transactions,” is an information return that reports certain payment transactions to the IRS and the taxpayer who receives the payments. Since it was first introduced in 2012, the form has been used to report payments: - From payment card transactions (for example, debit, credit or stored-value cards), and - In settlement of third-party network transactions, when above a certain minimum threshold amount. For 2021 and prior years, the threshold was defined as gross payments that exceeded $20,000 and more than 200 such transactions. Note that no minimum threshold applies to payment card transactions — all such payments must be reported. Taxpayers should receive a Form 1099-K from each “payment settlement entity” (PSE) from which they received payments in settlement of reportable payment transactions (that is, a payment card or third-party network transaction) during the tax year. Form 1099-K reports the gross amount of all reportable transactions for the year and by month. The dollar amount of each transaction is determined on the transaction date. In the case of third-party network payments, the gross amount of a reportable payment doesn’t include any adjustments for credits, cash equivalents, discounts, fees, refunds or other amounts. In other words, the full amount reported might not represent the taxable amount. Businesses (including independent contractors) should consider the amounts reported when calculating their gross receipts for income tax purposes. Depending on filing status, the amounts generally should be reported on Schedule C (Form 1040), “Profit or Loss From Business, Sole Proprietorship;” Schedule E (Form 1040), “Supplemental Income and Loss;” Schedule F (Form 1040), “Profit or Loss From Farming;” or the appropriate return for partnerships or corporations. ## Understanding the new rules The American Rescue Plan Act (ARPA), which was signed into law in March of 2021, brought significant changes to the requirements regarding Form 1099-K. The changes are intended to improve voluntary tax compliance. Beginning in 2022, the number of transactions component of the threshold for reporting third-party network transactions is eliminated, and the gross payments threshold drops to only $600. The change is expected to boost the number of Forms 1099-K many businesses receive in January 2023 for the 2022 tax year and going forward. The ARPA also includes an important clarification. Since Form 1099-K was introduced, stakeholders have been uncertain about which types of third-party network transactions should be included. The ARPA makes clear that these transactions are reportable only if they’re for goods and services. Payments for royalties, rent and other transactions settled through a third-party network are reported on Form 1099-MISC, “Miscellaneous Information.” The ARPA changes heighten only the reporting obligations of third-party payment networks; they don’t affect individual taxpayer requirements. They might, however, reduce your odds of inadvertently underreporting income and paying the price down the road. ## Taking steps toward accurate reporting While the increased reporting doesn’t require any specific changes of affected taxpayers, you’d be wise to institute some measures to ensure the reporting is accurate. For example, consider monitoring your payments and the amounts so you know whether you should receive a Form 1099-K from a particular PSE. Notably, you’re required to report the associated income regardless of whether you receive the form. You’ll also want to step up your recordkeeping to allow you to reconcile any Forms 1099-K with the actual amounts received. If you have multiple sources of income, track and report each separately even if you receive a single Form 1099-K with gross payments for all of the businesses. For example, if you process both retail sales and rent payments on the same card terminal, your tax preparer would report the retail sales on Schedule C and the rent on Schedule E. If you permit customers to get cash back when using debit cards for purchases, the cash back amounts will be included on Form 1099-K. Those amounts generally aren’t included in your gross receipts or businesses expenses, though, making it critical that you track cash-back activity to prevent inclusion. Amounts reported could be inaccurate if you share a credit card terminal with another person or business. Where required, consider filing and furnishing the appropriate information return (for example, Form 1099-K or Form 1099-MISC) for each party with whom you shared a card terminal. In addition, keep records of payments issued to every party sharing your terminal, including shared terminal written agreements and cancelled checks. ## Other potential landmines include: - Incorrect amounts due to mid-tax year changes in entity type (for example, from a sole proprietorship to a partnership), - Forms issued to you as an individual, with your Social Security number, rather than to your C corporation, S corporation or partnership, with its taxpayer identification number, - Incorrect amounts due to a mid-tax year sale or purchase of a business, and - Duplicate payments that appear on both a Form 1099-K and either a Form 1099-MISC or a Form 1099-NEC, “Nonemployee Compensation.” If you receive a form with errors in your taxpayer identification number or payment amount, request a corrected form from the PSE and maintain records of all related correspondence. ### Don’t dawdle It may seem tempting to put off the steps necessary to establish solid recordkeeping procedures for payments from third-party networks, but that would be a mistake. We can help you set up the necessary processes and procedures now so you’re in compliance and not scrambling at tax time. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2022 All Rights Reserved **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, business tax services deerfield, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, Chicago Business tax services --- ### [Why companies succeed - 3 keys to building a healthy business](https://waradydavis.com/why-companies-succeed-3-keys-to-a-building-a-healthy-business/) **Published:** November 1, 2021 **Author:** WaradyDavis **Content:** Businesses fail for complicated reasons — from dysfunctional management to insufficient capital; too rapid growth to an inability to respond to changing markets. Why businesses succeed, on the other hand, is often easily explained. Regardless of size and sector, most healthy companies share three characteristics: 1) strong revenues, 2) low production costs and 3) low operating expenses. Here’s how to achieve them. ## Revenue paving the way To determine how much revenue your company needs to be profitable, perform a profitability breakeven analysis. At its most basic, the formula is: If your operating expense is $500,000 and your interest expense is $50,000, a gross profit margin of 25% would require $2.2 million in sales for you to break even. Your accounting software should be able to calculate more sophisticated analysis based on various scenarios. The results provide a baseline for setting revenue goals. If you calculate your profitability breakeven point and find you may fall short, review your sales and determine where you can make changes. For example, you may need to invest more in R&D or focus more on prospective customers. ### Production costs in check For most companies, labor is their biggest production cost, particularly when benefits and taxes are factored into the equation. You need to ask whether your labor force increases the value of products or services enough to offset its high cost. If not, consider such solutions as providing more training or better incentives, improving production processes, or investing in more modern facilities. To keep materials costs in check, use cost management software. It can help you evaluate materials purchases, measure optimal ordering quantities and reduce waste. Finally, keep an eye on production overhead. Many businesses mistakenly allocate production overhead costs based on sales volume. Say, for example, a product accounts for 25% of sales volume, yet it uses 50% of plant space. Production overhead makes it less profitable than its sales numbers would suggest. When production overhead costs are too high relative to a product’s sales price, take action. You might increase the price of the product, find better production methods or even discontinue the product. ### Toward leaner operations Operating expenses — costs you incur to run your business that aren’t directly attributable to production — also should be minimized. For example, compensation takes a big bite out of your operations budget, so monitor staffing needs relative to sales and adjust staffing levels when necessary. And while you can’t eliminate marketing expenditures, you can review your sales levels relative to them and ensure you’re getting bang for your buck. Also, regularly revisit your R&D budget and the progress you’re making toward established goals. Are you squandering resources on projects unlikely to come to fruition? It may be time to redeploy resources. ### Establish a foundation A company with strong revenues, low production costs and minimal operating expenses can still fail due to poor management decisions and other pitfalls. But if you’re trying to build the foundation for a healthy, long-lived business, start by focusing on these three keys. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2021 **Categories:** Business, Business Management --- ### [Planning for the Cost of Healthcare](https://waradydavis.com/planning-cost-healthcare/) **Published:** November 18, 2020 **Author:** Leslie Flinn **Excerpt:** Learn more about planning and preparing for potential healthcare costs as part of your retirement plan – Fort Worth Retirement Financial Planning **Content:** Helping clients plan their financial freedom requires a serious look at the impact of healthcare costs. The fact is, as we age, we increase our chances that we will spend more on healthcare-related expenses. It is not just for treating ailments but the costs of staying healthy and active can add up quickly too. Hearing aids, glasses, orthotics, routine tests, and other procedures contribute to a growing line item in your budget even if you are healthy. And if you happen to have underlying health issues or chronic conditions, you can easily bust your budget. Every year, the Milliman insurance group produces a forecast of projected costs for medical expenses. The 2020 report estimates that a healthy 65-year-old couple beginning retirement this year will spend approximately $351,000, in 2020 dollars, on a variety of medial related costs throughout their retirement. Included in this estimate are the average premiums plus out-of-pocket costs for Medicare Supplement Plan G and Medicare Part D (prescription drug) coverage. The life expectancy assumption is the male living to age 88 and the female living to 90. The silver lining to such a large projected expense is that this figure is down from the 2019 projection of $369,000. It is important to understand that these are averages. For people entering retirement with chronic underlying health issues, medical expenses will be higher. And for those with a few years to go before retirement, the inflation on medical costs will require that you prepare a larger healthcare budget. For example, couple in their mid-forties in good health is projected to exceed $500,000 for healthcare costs in retirement according to the report. How can you prepare? First, take your health seriously as an ounce of prevention is worth a pound of cure. Second, be sure to maximize your contributions to retirement plans such as 401(k) plans, to increase your available resources in retirement. Third, participate in a health savings account (HSA), which allows for tax-free growth of your funds. You are not required to spend the balance each year which allows you to accumulate funds in your HSA year over year. Withdrawals from an HSA used for qualified medical expenses are tax free. (Note that to qualify for an HSA, you must be enrolled in a high-deductible health plan—HDHP). For more information about planning for healthcare costs in retirement, please contact us. **Categories:** Financial Planning, Retirement, Wealth **Tags:** healthcare, retirement --- ### [New Overtime Rules](https://waradydavis.com/new-overtime-rules/) **Published:** November 2, 2016 **Author:** WaradyDavis **Excerpt:** The U.S. Department of Labor (DOL) has issued a final rule updating white collar overtime regulations, increasing the exemption thresholds and extending overtime pay protections to over four million workers within the first year. How will the new rules affect not-for-profits? **Content:** #### In May, the U.S. Department of Labor (DOL) issued a final rule updating white collar overtime regulations, increasing the exemption thresholds and extending overtime pay protections to over four million workers within the first year. How will the new rules affect not-for-profits? The final rule raises the salary threshold for exemption from overtime protections, adjusting it from $455 a week ($23,660 annually) to $913 a week ($47,476 annually), effective December 1, 2016. Unless exempt, employees covered by the Fair Labor Standards Act (FLSA) must receive pay for work in excess of 40 hours a week at a minimum rate of one and one-half times their regular rate of pay. Neither the FLSA nor the DOL regulations provide a blanket exemption from overtime requirements for nonprofit organizations. ### Is the Employee Covered by the FLSA? In order to be subject to overtime requirements, employees must be “covered” by the FLSA. There are two types of coverage: enterprise and individual. Under enterprise coverage, the FLSA applies to businesses with annual sales of at least $500,000. However, nonprofit charitable organizations are not considered covered enterprises unless they engage in commercial activities that result in a sufficient amount of sales, such as operating a gift shop. Enterprise coverage does not apply to the organization’s charitable activities. Thus, income from contributions, membership fees, dues, and donations (cash or noncash) used for charitable activities are not counted toward the $500,000 threshold. In addition, certain entities are always covered by the FLSA, regardless of the amount of gross sales. These entities include hospitals, schools and preschools, government agencies, and businesses providing medical or nursing care for residents. However, many organizations that are not covered by FLSA on an enterprise basis are likely to still have some employees who are covered on an individual basis. Generally, to be covered under the FLSA, the employee’s work activities must in some way be connected to interstate commerce, whether through making out-of-state phone calls or otherwise. ### Applying the Overtime Tests Once it’s determined that the employee is covered by the FLSA — whether on an enterprise or individual basis — the individual will be exempt from the overtime protections only if certain conditions are met. Under individual coverage, to qualify for exemption, an employee generally must be salaried, be paid at least $913 per week, and primarily perform executive, administrative, or professional duties. Many employees of nonprofit organizations will not be affected by the final rule, including: - Hourly workers\* - Workers with regular workweeks of 40 or fewer hours - Salaried workers who do not primarily perform executive, administrative, or professional duties\* - Highly compensated workers — those who earn more than $134,004 in a year Many of our not-for-profit clients have questions regarding how the new rules apply to them. Please contact us to help answer your questions about the new overtime rule. **In addition, [CLICK HERE](https://paychex.webex.com/paychex/lsr.php?RCID=fc01bb22672f464fb04e63b62b4f6ef6) to view a recent Warady & Davis LLP and Paychex webinar on the new Overtime Regulations.** ###### \* These employees may be eligible for overtime under other existing rules. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Newsbits: IRS releases FY 2016 compliance results](https://waradydavis.com/irs-releases-fy-2016-compliance-results/) **Published:** July 18, 2017 **Author:** WaradyDavis **Excerpt:** In its Tax Exempt and Government Entities FY 2017 Work Plan, the IRS reported on the nearly 5,000 examinations of exempt organizations it conducted in the 2016 fiscal year. **Content:** In its **[*Tax Exempt and Government Entities FY 2017 Work Plan*](https://www.irs.gov/pub/irs-tege/tege_fy2017_work_plan.pdf),** the IRS reported on the nearly 5,000 examinations of exempt organizations it conducted in the 2016 fiscal year. The exams focused on five issues: exemption (including nonexempt purpose activity and private inurement), protection of assets (including self-dealing and excess benefit transactions), the tax gap related to areas where a nonprofit *is* subject to a tax (including employment taxes and unrelated business income taxes), international transactions (including oversight of funds spent outside the United States) and emerging issues (including nonexempt charitable trusts). In FY 2016, the IRS revoked the status of 43 organizations — almost two-thirds of these were revoked for not operating for an exempt purpose. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Not-for-Profit, Profitable Solutions for Nonprofits --- ### [Should You Refinance Your Home?](https://waradydavis.com/should-you-refinance-your-home/) **Published:** November 27, 2020 **Author:** Leslie Flinn **Excerpt:** Learn more about why you should consider refinancing your home and the steps – Fort Worth Mortgage Loan Refinancing **Content:** This question as to whether you should refinance your home has been popular recently as mortgage rates are falling to new historic lows. In the 1970s and 1980s, it was common to see interest rates in the double digits. Fortunately, rates have consistently fallen and settled around 4.5% in 2019. The ongoing coronavirus pandemic in 2020 has affected the housing market and interest rates have experienced another decrease to under 3.0% as of the date of this post. ### Top Three Considerations The first factor to consider in the refinance decision is how long you plan to be in your home. The process to refinance includes closing costs that will either be paid out of pocket or added to the new loan principal. You need to live in the home long enough to benefit beyond the break-even point where the interest savings is greater than the closing costs. The next factor in the decision process is your new rate. A popular rule of thumb says: if you can reduce the interest rate by at least a full percentage point, you should move forward with the refinance. For a 30-year note with a $400,000 balance, reducing your interest rate from 4% to 3% will reduce your monthly payment by about $220 per month. Another option to consider when refinancing is to shorten the term to a 15- or 20-year mortgage. The shorter-term will typically have a lower interest rate than the 30-year mortgage. The shorter-term may cause your monthly payment to increase but will save you even more money in interest expenses. Finally, review your credit score report to ensure that you will qualify for the lower rates. If you have made any recent large purchases on credit such as a car, you want to allow time for your credit to bounce back from the dip created by the new debt. Any inaccurate information on your credit report should be reported to the bureaus before applying to refinance. After considering the three factors above, use a mortgage savings calculator to confirm that the refinance will help you meet your financial goal. The[ calculator](https://www.nerdwallet.com/mortgages/refinance-calculator) allows you to enter your current mortgage information and projected new rate to analyze the potential savings. Refinancing can be a smart financial decision if it lowers your monthly payment, reduces the term of your mortgage, or helps you build equity faster. **Categories:** Financial Planning, Wealth **Tags:** financial planning, interest rates, mortgage loans, refinancing --- ### [Last round of ITINs will expire in 2020](https://waradydavis.com/last-round-of-itins-will-expire-in-2020-irs-encourages-early-renewal-to-prevent-refund-delays/) **Published:** September 10, 2020 **Author:** Leslie Flinn **Content:** More than 1 million Individual Taxpayer Identification Numbers are set to expire at the end of 2020 as the Internal Revenue Service completes the expiration of ITINs assigned prior to 2013. The IRS continues to urge affected taxpayers to submit their renewal applications early to avoid refund delays next year. Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal tax return at least once in the last three consecutive years and those issued before 2013 will expire. This year ITINs with middle digits 88 will expire Dec. 31, 2020. Additionally, ITINs with middle digits 90, 91, 92, 94, 95, 96, 97, 98 or 99, that were assigned before 2013 and have not already been renewed, will also expire at the end of the year. ITINs are used by people who have tax filing or payment obligations under U.S. law but who are not eligible for a Social Security number. ITIN holders who have questions should visit the **[ITIN information page on IRS.gov ](https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMjksInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMDA4MTcuMjU3NTkwMjEiLCJ1cmwiOiJodHRwczovL3d3dy5pcnMuZ292L2luZGl2aWR1YWxzL2luZGl2aWR1YWwtdGF4cGF5ZXItaWRlbnRpZmljYXRpb24tbnVtYmVyLWl0aW4ifQ.fx-hGOaz8ChT5AbWDvKQqjqrTWw_cSdssW4QS0X7RAo/s/1125362424/br/82447030027-l)**and take a few minutes to understand the guidelines. The IRS continues a nationwide education effort to share information with ITIN holders. To help taxpayers, the IRS offers a variety of informational materials, including flyers and fact sheets, available in up to seven languages, including English, Spanish, Chinese, Russian, Vietnamese, Korean and Haitian/Creole on [**IRS.gov**. ](https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMzAsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMDA4MTcuMjU3NTkwMjEiLCJ1cmwiOiJodHRwczovL3d3dy5pcnMuZ292L3B1Yi9pcnMtcGRmL3A1MjYxLnBkZiJ9.U2QVnv0SzOs35sXVlR1aynFSUlTovzVOgALqyiQBXAE/s/1125362424/br/82447030027-l) **You can also visit the [Warady & Davis LLP COVID-19 Resource Center](https://waradydavis.com/resource-center/covid-19-resources/) for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us; we are here to help.** **SOURCE: IRS.gov** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, International Taxation, ITINs expiring, Northshore CPA, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Filing season ends with no red flags](https://waradydavis.com/filing-season-ends-with-no-red-flags/) **Published:** May 1, 2017 **Author:** WaradyDavis **Excerpt:** The IRS processed more than 128 million returns and issued some 97 million refunds without hitting any major roadblocks by the end of the filing season. As in past years, the vast majority of returns were filed electronically. Likewise, most refunds were deposited electronically. Although the filing season has ended for most individuals, millions are on extensions. **Content:** The IRS processed more than 128 million returns and issued some 97 million refunds without hitting any major roadblocks by the end of the filing season. As in past years, the vast majority of returns were filed electronically. Likewise, most refunds were deposited electronically. Although the filing season has ended for most individuals, millions are on extensions. ## **Returns** The IRS always expects a rush of last-minute filers and this filing season was no exception. A few days before April 18, the IRS reported that it expected to receive some 17 million returns before the filing deadline. Overall, the IRS received approximately 135 million returns during the filing season. This reflects a decrease of roughly one percent compared to the same time last year. Millions more will be filed by October 16, 2017, when taxpayers on extensions must file their returns. The IRS predicted that some 12 million taxpayers would request extensions of time to file their 2016 returns. The IRS reminded taxpayers that an extension of time to file is not an extension of time to pay any tax due. Penalties and interest accrue on unfiled returns if taxes are not paid by April 18. There is no penalty for filing a late return after the tax deadline if the taxpayer receives a refund. ## **Refunds** By the end of the filing season, the IRS reported it had issued some 97 million refunds. The average refund is $2,763, compared to $2,711 at this time last year, the agency reported. Some early filers experienced delayed refunds this year. A law passed in late 2015 took effect for the first time this filing season. The Protecting Americans from Tax Hikes Act (PATH Act) generally required the IRS to hold refunds on earned income tax credit (EITC) and additional child tax credit (ACTC) returns until February 15. After February 15, the IRS released these refunds. ## **Cybercrime** Tax-related identity theft surges during the filing season. Although the IRS has not yet released any figures, the agency has claimed to have done a better job curbing cybercrime. The IRS has partnered with the tax preparation industry and tax professionals to enhance e-filing security and safeguards. Many of these measures are behind the scenes. One online tool was compromised by cybercriminals. The IRS took the Data Retrieval Tool (DRT) offline in March. The DRT is used by individuals completing the Free Application for Federal Student Aid (FAFSA). The IRS has reported that the DRT will remain offline until security features are improved. ## **Looking ahead** IRS Commissioner John Koskinen is in the last year of his five-year term. Koskinen has said that he hopes to complete his term, which ends in November, but recognized that he serves at the pleasure of the President. Speaking in Washington, D.C. in April, Koskinen recommended that Congress quickly approve his successor to ensure the smooth running of the agency. *If you have any questions about the filing season, please contact our office.* ### ***If you have any questions about tour tax planning or filing compliance, please contact your Warady & Davis LLP advisor at (847) 267-9600.*** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** The Bottom Line --- ### [Congress Passes Biggest Tax Bill Since 1986 - The Tax Cuts and Jobs Act (TCJA)](https://waradydavis.com/congress-passes-biggest-tax-bill-since-1986-the-tax-cuts-and-jobs-act-tcja/) **Published:** December 22, 2017 **Author:** WaradyDavis **Content:** ## Congress passes biggest tax bill since 1986 On December 22, President Trump signed into law H.R. 1, the **“Tax Cuts and Jobs Act,”** a sweeping tax reform law that promises to entirely change the tax landscape. The bill makes small reductions to income tax rates for most individual tax brackets, significantly reduces the income tax rate for corporations and eliminates the corporate alternative minimum tax (AMT). It also provides a large new tax deduction for owners of pass-through entities and significantly increases individual AMT and estate tax exemptions. And it makes major changes related to the taxation of foreign income. It’s not all good news for taxpayers, however. The TCJA also eliminates or limits many tax breaks, and much of the tax relief is only temporary. Here is a quick rundown of some of the key changes affecting individual and business taxpayers. Except where noted, these changes are effective for tax years beginning *after* December 31, 2017. ## **Key changes affecting individuals** - Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% — through 2025 - Near doubling of the standard deduction to $24,000 (married couples filing jointly), $18,000 (heads of households), and $12,000 (singles and married couples filing separately) — through 2025 - Elimination of personal exemptions — through 2025 - Doubling of the child tax credit to $2,000 and other modifications intended to help more taxpayers benefit from the credit — through 2025 - Elimination of the individual mandate under the Affordable Care Act requiring taxpayers not covered by a qualifying health plan to pay a penalty — *effective for months beginning after December 31, 2018* - Reduction of the adjusted gross income (AGI) threshold for the medical expense deduction to 7.5% for regular and AMT purposes — *for 2017 and 2018* - New $10,000 limit on the deduction for state and local taxes (on a combined basis for property and income taxes; $5,000 for separate filers) — through 2025 - Reduction to the mortgage debt limit for the home mortgage interest deduction, to $750,000 ($375,000 for separate filers), with certain exceptions — through 2025 - Elimination of the deduction for interest on home equity debt — through 2025 - Elimination of the personal casualty and theft loss deduction (with an exception for federally declared disasters) — through 2025 - Elimination of miscellaneous itemized deductions subject to the 2% floor (such as certain investment expenses, professional fees and unreimbursed employee business expenses) — through 2025 - Elimination of the AGI-based reduction of certain itemized deductions — through 2025 - Elimination of the moving expense deduction (with an exception for members of the military in certain circumstances) — through 2025 - Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary, secondary and home school expenses, up to $10,000 per student per tax year - AMT exemption increase, to $109,400 for joint filers, $70,300 for singles and heads of households, and $54,700 for separate filers — through 2025 - Doubling of the gift and estate tax exemptions, to $10 million (expected to be $11.2 million for 2018 with inflation indexing) — through 2025 ## **Key changes affecting businesses** - Replacement of graduated corporate tax rates ranging from 15% to 35% with a flat corporate rate of 21% - Repeal of the 20% corporate AMT - New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships — through 2025 - Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets — *effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023* - Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million - Other enhancements to depreciation-related deductions - New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply) - New limits on net operating loss (NOL) deductions - Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction — effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers - New rule limiting like-kind exchanges to real property that is *not* held primarily for sale - New tax credit for employer-paid family and medical leave — through 2019 - New limitations on excessive employee compensation - New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation ## **Year-end planning opportunities still available** We’ve only briefly covered some of the most significant TCJA provisions here. There are additional rules and limits that apply, and the law includes many additional provisions. Look for more e-Alerts and information coming from Warady & Davis LLP soon. Also keep in mind that, as a result of the TCJA, you may have some last-minute year-end 2017 tax planning opportunities — but quick action (before January 1, 2018) will be needed. If you have questions about what you can do before year end to maximize your savings, or you’d like to learn more about how these and other tax law changes will affect you in 2018 and beyond, please contact us at (847) 267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2017 **Categories:** Tax Legislation --- ### [Steps to trim your 2019 personal taxes](https://waradydavis.com/steps-to-trim-your-2019-personal-taxes/) **Published:** November 7, 2019 **Author:** Leslie Flinn **Content:** Winter is around the corner and that means it’s time to turn your attention to year-end tax planning. While several clear strategies and tactics emerged during the first tax filing season under the **Tax Cuts and Jobs Act (TCJA)**, 2019 and subsequent years bring potential twists that must be considered, too. Let’s take a closer look at year-end tax planning strategies that can reduce your 2019 income tax liability. ## **Deferring income and accelerating expenses** Deferring income into the next tax year and accelerating expenses into the current tax year is a time-tested technique for taxpayers who don’t expect to be in a higher tax bracket the following year. Independent contractors and other self-employed individuals can, for example, hold off on sending invoices until late December to push the associated income into 2020. And all taxpayers, regardless of employment status, can defer income by taking capital gains after January 1. Be careful, though, because by waiting to sell you also risk the possibility that your investment might become less valuable. Bear in mind, also, that there may be other reasons that taking the income this year can be more beneficial. For starters, future tax rates can go up. It’s possible that income tax rates might increase substantially by 2021, especially for those with higher incomes, depending on 2020 election results. In any event, in 2026, the higher tax rates that were in place for 2017 are scheduled to return. Moreover, taxpayers who qualify for the **qualified business income (QBI) deduction** for pass-through entities (that is, sole proprietors, partnerships, limited liability companies and S corporations) could end up reducing the size of that deduction if they reduce their income. It might make more sense to maximize the QBI deduction — which is scheduled to end after 2025 — while it’s available. ## **Timing itemized deductions** The TCJA substantially boosted the standard deduction. For 2019, it’s $24,400 for married couples and $12,200 for single filers. With many of the previously popular itemized deductions eliminated or limited, some taxpayers can find it challenging to claim more in itemized deductions than the standard deduction. Timing, or “bunching,” those deductions may make it easier. Bunching basically means delaying or accelerating deductions into a tax year to exceed the standard deduction and claim itemized deductions. You could, for example, bunch your charitable contributions if it means you can get a tax break for one tax year. If you normally make your donations at the end of the year, you can bunch donations in alternative years — say, donate in January and December of 2020 and January and December of 2022. If you have a donor-advised fund (DAF), you can make multiple contributions to it in a single year, accelerating the deduction. You then decide when the funds are distributed to the charity. If, for instance, your objective is to give annually in equal increments, doing so will allow your chosen charities to receive a reliable stream of yearly donations (something that’s critical to their financial stability), and you can deduct the total amount in a single tax year. If you donate appreciated assets that you’ve held for more than one year to a DAF or a nonprofit, you’ll avoid long-term capital gains taxes that you’d have to pay if you sold the property and (subject to certain restrictions) also obtain a deduction for the assets’ fair market value. This tactic pays off even more if you’re subject to the 3.8% net investment income tax or the top long-term capital gains tax rate (20% for 2019). What if you’re looking to divest yourself of assets on which you have a loss? Rather than donate the asset, the better move from a tax perspective is more likely going to be to sell it to take advantage of the loss and then donate the proceeds. Timing also comes into play with medical expenses. The TCJA lowered the threshold for deducting unreimbursed medical expenses to 7.5% of adjusted gross income (AGI) for 2017 and 2018, but it bounces back to 10% of AGI for 2019. Bunching qualified medical expenses into one year could make you eligible for the deduction. You also could bunch property tax payments (assuming local law permits you to pay in advance). This approach might, however, bring your total state and local tax deduction over the $10,000 limit, which means that you’d effectively forfeit the deduction on the excess. As with income deferral and expense acceleration, you need to consider your tax bracket status when timing deductions. Itemized deductions are worth more when you’re in a higher tax bracket. If you expect to land in a higher bracket in 2020, you’ll save more by timing your deductions for that year. ## **Loss harvesting against capital gains** 2019 has been a turbulent year for some investments. Thus, your portfolio may be ripe for loss harvesting — that is, selling under performing investments before year end to realize losses you can use to offset taxable gains you also realized this year, on a dollar-for-dollar basis. If your losses exceed your gains, you generally can apply up to $3,000 of the excess to offset ordinary income. Any unused losses, however, may be carried forward indefinitely throughout your lifetime, providing the opportunity for you to use the losses in a subsequent year. ## **Maximizing your retirement contributions** As always, individual taxpayers should consider making their maximum allowable contributions for the year to their IRAs, 401(k) plans, deferred annuities and other tax-advantaged retirement accounts. For 2019, you can contribute up to $19,000 to 401(k)s and $6,000 for IRAs. Those age 50 or older are eligible to make an additional catch-up contribution of $1,000 to an IRA and, so long as the plan allows, $6,000 for 401(k)s and other employer-sponsored plans. ## **Accounting for 2019 TCJA changes** Most — but not all — provisions of the TCJA took effect in 2018. The repeal of the individual mandate penalty for those without qualified health insurance, for example, isn’t effective until this year. In addition, the TCJA eliminates the deduction for alimony payments for couples divorced in 2019 or later, and alimony recipients are no longer required to include the payments in their taxable income. ## **Act now** The future of tax planning is uncertain — even without dramatic change in Washington, D.C., many of the most significant TCJA provisions are set to expire within six years. Contact Warady & Davis LLP at 847-267-9600 for help with your personal and/or business year-end tax planning. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [IL Manufacturing Sales Tax Exemption](https://waradydavis.com/il-manufacturing-sales-tax-exemption/) **Published:** August 28, 2019 **Author:** webmaster **Content:** Illinois sales tax law has changed and now expands the manufacturing machinery and equipment exemption to include production-related, tangible personal property purchased on or after July 1, 2019. Consequently, this sales tax law change will have a large impact on Illinois manufacturers. ## **What this Sales Tax Law Change Means for Illinois Manufacturers** Production-related tangible personal property means all tangible personal property primarily used or consumed in the production related process. For Illinois, the property must be by an Illinois manufacturer in the manufacturing process. This includes many items in the manufacturing process, such as: - Tangible personal property purchased for incorporation into real estate within the manufacturing facility for use in the production process, - Tangible personal property that is primarily used or consumed in production activities such as research and development (R&D), preproduction material handling, receiving, quality control, inventory control, storage, staging, and packaging for shipping and transportation purposes, and - Supplies and consumables primarily used in a manufacturing process, including fuels, coolants, solvents, oils, lubricants, adhesives, hand tools, protective apparel and fire and safety equipment. ## **Primary Use of Equipment Must be in the Production Process** The main piece of this expanded exemption is that all items need to be used primarily in the manufacturing process in a manufacturing facility. Therefore, these items now qualify for the manufacturing machinery and equipment exemption. It is important to note some tangible personal property does not qualify if it’s **not** used in the production process. For example, using property in sales, purchasing, accounting, marketing, or management process will not qualify. In addition, property required to be titled and registered with a department, agency or unit of government will not qualify. ## **Form ST-587** A manufacturer can fill out **[Form ST-587](https://www2.illinois.gov/rev/forms/sales/Documents/sales/st-587.pdf)** and give to the seller in order to make the purchase of tangible personal property without sales tax. This form is required for each exempt purchase and must contain facts that establish the exemption for the transaction. Illinois Department of Revenue is currently drafting emergency regulations to reflect this expansion of the manufacturing machinery and equipment exemption. ## **How W&D Can Help** Manufacturers should review how the tax law change will affect their business. This sales tax law change will have a large impact on Illinois manufacturers. If you have further questions about the change in Illinois law for manufacturers, please reach out to W&D at 847-267-9600. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Stuart R. Goldsand, CPA Merges Practice with W&D](https://waradydavis.com/stuart-r-goldsand-cpa-merges-practice-with-wd/) **Published:** August 15, 2019 **Author:** webmaster **Content:** We are pleased to announce that Stuart R. Goldsand, CPA, has merged his practice with Warady & Davis LLP. Stuart is joined by Linda Hirsch, CPA. Stuart has been in private practice for more than 50 years and serves privately-held businesses, business owners, their families and other individuals in similar industries to W&D. Together, we share the same commitment to excellence and high level of service quality. Stuart’s primary goal, along with Linda, is to ensure a smooth transition and make certain each client receives the high level of personal attention and quality service they have come to expect. We are enthused about the synergies between our two firms and join together in welcoming Stuart, Linda and their clients to W&D. ## New Contact Information **Warady & Davis LLP** **1717 Deerfield Rd, Suite 300 South, Deerfield, IL 60015** **Main: (847) 267-9600** **Stuart R. Goldsand, CPA** **Direct Line:** 847-965-3773 **e-mail:** **Linda Hirsch, CPA** **Direct Line:** 262-607-6472 **e-mail:** **Categories:** Managing Partner --- ### [IRS warns about 2019 tax scams](https://waradydavis.com/irs-warns-about-2019-tax-scams/) **Published:** March 11, 2019 **Author:** Leslie Flinn **Content:** As tax season hits full swing, the IRS is warning filers and professionals about familiar phishing scams and some new ones, particularly in the wake of major data breaches in the past year. The [warning](https://www.irs.gov/newsroom/irs-kicks-off-annual-list-of-most-prevalent-tax-scams-agency-warns-taxpayers-of-pervasive-phishing-schemes-in-its-dirty-dozen-campaign) comes this week as part of the IRS’s “Dirty Dozen” list of tax scams, which has historically focused on techniques like spoofed phone calls but has since evolved to modern scams, like phishing. The IRS warns taxpayers, businesses and tax professionals to be alert for a continuing surge of fake emails, text messages, websites and social media attempts to steal personal information. These attacks tend to increase during tax season and remain a major danger of identity theft. “Taxpayers should be on constant guard for these phishing schemes, which can be tricky and cleverly disguised to look like it’s the IRS,” said IRS Commissioner Chuck Rettig. “Watch out for emails and other scams posing as the IRS, promising a big refund or personally threatening people. Don’t open attachments and click on links in emails. Don’t fall victim to phishing or other common scams.” The IRS also urges taxpayers to learn how to protect themselves by reviewing safety tips prepared by the [Security Summit](https://www.irs.gov/newsroom/security-summit "Security Summit "), a collaborative effort between the IRS, state revenue departments and the private-sector tax community. “Taking some basic security steps and being cautious can help protect people and their sensitive tax and financial data,” Rettig said. ## New variations on phishing schemes The IRS continues to see a steady stream of new and evolving phishing schemes as criminals work to victimize taxpayers throughout the year. Whether through legitimate-looking emails with fake, but convincing website landing pages, or social media approaches, perhaps using a shortened URL, the end goal is the same for these con artists: stealing personal information. In [one variation](https://www.irs.gov/newsroom/scam-alert-irs-urges-taxpayers-to-watch-out-for-erroneous-refunds-beware-of-fake-calls-to-return-money-to-a-collection-agency "Scam Alert: IRS Urges Taxpayers to Watch Out for Erroneous Refunds; Beware of Fake Calls to Return Money to a Collection Agency"), taxpayers are victimized by a creative scheme that involves their own bank account. After stealing personal data and filing fraudulent tax returns, criminals use taxpayers’ bank accounts to direct deposit tax refunds. Thieves then use various tactics to reclaim the refund from the taxpayer, including falsely claiming to be from a collection agency or the IRS. The IRS encourages taxpayers to review some basic tips if they see an [unexpected deposit in their bank account](https://www.irs.gov/newsroom/scam-alert-irs-urges-taxpayers-to-watch-out-for-erroneous-refunds-beware-of-fake-calls-to-return-money-to-a-collection-agency "Scam Alert: IRS Urges Taxpayers to Watch Out for Erroneous Refunds; Beware of Fake Calls to Return Money to a Collection Agency"). Those on the other side of the tax-filing process, like tax and human resources professionals, should be on the watch for phishing as well, the IRS warns, saying its seen “more advanced” schemes targeting them, like what it calls business email compromise or spoofing. Through these techniques, criminals pose as a business seeking payment on an invoice, an employee needing to re-route a direct deposit or someone a taxpayer has entrusted to perform a wire transfer. As always, if a taxpayer or professional encounter or suspect a phishing attempt using the IRS’s name or association, they should report it to [phishing@irs.gov](mailto:phishing@irs.gov "phishing@irs.gov"). The agency also reminds: “The IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.” ##### **Source: IRS.gov** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax Scams **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [2019 Tax Deadlines (and Extension Deadlines)](https://waradydavis.com/2019-tax-deadlines-and-extension-deadlines/) **Published:** January 1, 2019 **Author:** Leslie Flinn **Content:** Below is a list of tax filing dates and important deadlines for 2019. The filing dates listed are relevant to your personal and business’s federal tax return. **If you plan to file for an extension of state taxes, you’ll need to do that separately. Note: Depending on the nature of your business, you may also need to meet other filing deadlines and requirements not listed in this post.** Take a few minutes to save each relevant filing date to your calendar, and stay ahead of the IRS. ## January 15, 2019 ### Estimated quarterly payments Say a final goodbye to 2018. The fourth (and final) estimated quarterly tax payment for the previous tax year is due today. **Forms:** - [Form 1040-ES, Estimated Tax for Individuals](https://www.irs.gov/forms-pubs/form-1040-es-estimated-tax-for-individuals) ## January 31, 2019 ### Form W-2 filing deadline **Heads up:** Don’t let this deadline surprise you. It’s only been in place since the 2016 filing year. If you have employees, you’ll need to fill out two copies of [Form W-2](https://www.irs.gov/uac/about-form-w2) for each one. One W-2 must be submitted to the IRS. The other must be sent to the employee. The deadline for both is January 31, 2019. **Forms:** - [Form W-2, Wage and Tax Statement](https://www.irs.gov/forms-pubs/about-form-w2) ### Form 1099-MISC Copy A filing deadline If you work with independent contractors, the new January 31 filing deadline also applies to certain types of [1099s](https://www.irs.gov/uac/Form-1099-MISC,-Miscellaneous-Income-). [The IRS explains](https://www.irs.gov/forms-pubs/changes-to-current-forms-publications/filing-forms-1099-misc-with-nec-in-box-7-with-the-irs-dec-2017). But, in short: If you are filing a Form 1099-MISC and reporting amounts in Box 7, this deadline applies to you. **Copy A** must be filed with the IRS by this date. **Copy B** must be furnished to the contractor no later than February 15, 2019. If you don’t have amounts in Box 7 on your Form 1099, February 28 is the deadline for paper filing, or April 1 for electronic filing. **Forms:** - [Form 1099-MISC, Miscellaneous Income](https://www.irs.gov/forms-pubs/about-form-1099-misc-miscellaneous-income) ## February 15, 2019 ### Form 1099-MISC Copy B filing deadline If you are filing a 1099-MISC, regardless of whether Box 7 is filled, you must get **Copy B** to the contractor in question no later than February 15, 2019. ## February 28, 2019 ### Form 1099-MISC Copy A filing deadline If you work with independent contractors, this filing deadline applies to certain types of [1099s](https://www.irs.gov/uac/Form-1099-MISC,-Miscellaneous-Income-). The IRS offers a [thorough explanation](https://www.irs.gov/forms-pubs/changes-to-current-forms-publications/filing-forms-1099-misc-with-nec-in-box-7-with-the-irs-dec-2017). But, in short: If you are filing Form 1099-MISC and don’t have amounts in Box 7, February 28 is the deadline for paper filing. April 1 is the deadline for electronic filing. You must deliver one copy to the IRS, and one copy to your contractor. If you are filing a Form 1099-MISC and reporting amounts in Box 7, this deadline doesn’t apply to you. You need to file earlier, on January 31, 2019. **Forms:** - [Form 1099-MISC, Miscellaneous Income](https://www.irs.gov/forms-pubs/about-form-1099-misc-miscellaneous-income) ## March 15, 2019 ### S corporation and partnership tax returns due Today is the deadline to file your S corporation tax return ([Form 1120-S](https://www.irs.gov/pub/irs-pdf/f1120s.pdf)) or Partnership return ([Form 1065.](https://www.irs.gov/pub/irs-pdf/f1065.pdf)) Note that S corporations and Partnerships do not pay taxes on their income. That tax is paid on the individual incomes of the shareholders or partners, respectively. **March 15 is also the deadline to file for an extension for S corp and partnership tax returns.** **Forms:** - [Form 1120S, Income Tax Return for an S Corporation](https://www.irs.gov/forms-pubs/about-form-1120s) - [Form 1065, US Return of Partnership Income](https://www.irs.gov/forms-pubs/about-form-1065-us-return-of-partnership-income) ## April 15, 2019 ### Estimated quarterly payments So it begins. If your business pays taxes on a quarterly basis, the first 2019 estimated quarterly tax payment is due today. **Forms:** - [Form 1040-ES, Estimated Tax for Individuals (Payment Voucher 1)](https://www.irs.gov/forms-pubs/form-1040-es-estimated-tax-for-individuals) ### Individual tax returns due Today is the deadline to file Individual tax returns ([Form 1040](https://www.irs.gov/pub/irs-pdf/f1040.pdf), [1040A](https://www.irs.gov/uac/about-form-1040a), or [1040EZ](https://www.irs.gov/uac/about-form-1040ez)). If you’re a sole proprietor filing Schedule C on your personal tax returns, the April 15, 2019 deadline applies to you too. **April 15 is also the deadline to file for an extension to file your individual tax return.** ### Corporation tax returns due Today is the deadline to file Corporation tax returns ([Form 1120](https://www.irs.gov/pub/irs-pdf/f1120.pdf)). **April 15 is also the deadline to file for an extension to file your corporate tax return.** **Forms:** - [Form 1120, U.S. Corporation Income Tax Return](https://www.irs.gov/forms-pubs/about-form-1120-us-corporation-income-tax-return) - [Form 7004, Application for an Automatic Extension of Time](https://www.irs.gov/forms-pubs/about-form-7004) ## June 17, 2019 ### Estimated quarterly payments The second 2019 estimated quarterly tax payment is due today. **Forms:** - [Form 1040-ES, Estimated Tax for Individuals (Payment Voucher 2)](https://www.irs.gov/forms-pubs/form-1040-es-estimated-tax-for-individuals) ## September 16, 2019 ### Estimated quarterly payments The third 2019 estimated quarterly tax payment is due today. **Forms:** - [Form 1040-ES, Estimated Tax for Individuals (Payment Voucher 3)](https://www.irs.gov/forms-pubs/form-1040-es-estimated-tax-for-individuals) ## November 1, 2019 ### Start making tax moves End of year tax moves can help grow your business and reduce your taxable income for the year. If you haven’t done so already, now’s the time to plan and take action. ## December 31, 2019 ### Tax moves deadline Today is the final day to make any tax moves for the 2019 tax year. ### Set up a solo 401 (k) If you are self-employed, today is the deadline to set up a [solo 401 (k)](https://www.irs.gov/retirement-plans/one-participant-401k-plans). Work with your accountants early on to ensure you’re well aware of your filing obligations throughout the year. **Please contact Warady & Davis LLP at 847-267-9600 with any questions.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2019 All Rights Reserved. **Categories:** Tax **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Audit Chicago, Audit Deerfield, Audit Elk Grove Village, Audit Highland Park, Audit Rosemont, Audit Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax Cuts and Jobs Act, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [2025 Employee Benefit Plan Updates](https://waradydavis.com/2025-employee-benefit-plan-updates/) **Published:** March 8, 2025 **Author:** Leslie Flinn **Excerpt:** Stay informed on the latest 2025 employee benefit plan updates, including SECURE 2.0 changes, new audit standards, and updated contribution limits. **Content:** # 2025 Employee Benefit Plan Updates **Categories:** Audit & Accounting, Employee Benefit Plans **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [What taxpayers need to know as the IRS ends paper checks](https://waradydavis.com/what-taxpayers-need-to-know-as-the-irs-ends-paper-checks/) **Published:** September 29, 2025 **Author:** Samantha Reyes **Excerpt:** IRS and Treasury will end paper checks by Sept. 30, 2025. Learn how this shift to direct deposit impacts tax refunds and federal benefit payments. **Content:** # What taxpayers need to know as the IRS ends paper checks **Categories:** E-Alerts, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [IRS Issues 2025 Tip and Overtime Guidance](https://waradydavis.com/irs-issues-2025-tip-and-ot-guidance/) **Published:** December 12, 2025 **Author:** Samantha Reyes **Excerpt:** Learn how IRS Notice 2025-69 guides workers in calculating qualified tip and overtime deductions for 2025 when employers don’t provide separate reporting. **Content:** # IRS Issues 2025 Tip and Overtime Guidance **Categories:** Business, Business Management, OBBBA, OBBBA Business --- ### [2025 Budget Passes, Tax Reform Next](https://waradydavis.com/2025-budget-resolution-passed/) **Published:** April 22, 2025 **Author:** Leslie Flinn **Excerpt:** Congress passed the 2025 budget resolution, setting the stage for major tax reform, potential R&D expensing changes, and significant business impacts. **Content:** # 2025 Budget Passes, Tax Reform Next **Categories:** E-Alerts, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [OBBBA Tax Law Brings Major Changes for Individual Taxpayers](https://waradydavis.com/obbba-tax-law-brings-major-changes-for-individual-taxpayers/) **Published:** July 23, 2025 **Author:** Samantha Reyes **Excerpt:** Broad changes are in store for individual taxpayers under the One, Big, Beautiful Bill Act, including updates to credits, deductions, and tax rates. **Content:** # OBBBA Tax Law Brings Major Changes for Individual Taxpayers **Categories:** E-Alerts, Hot Topics, OBBBA, OBBBA Individual, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [OBBBA: Key Provisions Impacting Tax-Exempt Organizations](https://waradydavis.com/one-big-beautiful-bill-act-key-provisions-that-will-impact-tax-exempt-organizations/) **Published:** July 30, 2025 **Author:** Samantha Reyes **Excerpt:** The OBBBA brings major tax changes for not-for-profits. Learn how new rules impact fundraising, deductions, and compliance for your organization. **Content:** # OBBBA: Key Provisions Impacting Tax-Exempt Organizations **Categories:** E-Alerts, Hot Topics, Not-for-Profit, OBBBA, OBBBA Nonprofit, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [Important federal tax filing dates for 2026](https://waradydavis.com/important-federal-tax-filing-dates-for-2026/) **Published:** January 29, 2026 **Author:** Samantha Reyes **Excerpt:** Review key 2026 tax deadlines for individuals, businesses, employers, and organizations, including filing, payment, and reporting due dates. **Content:** # Important federal tax filing dates for 2026 **Categories:** Business, General, Tax --- ### [Credit Loss Rules for Nonprofits](https://waradydavis.com/credit-loss-rules-for-nonprofits/) **Published:** April 6, 2025 **Author:** Leslie Flinn **Excerpt:** Is your nonprofit ready for CECL? Learn what the new credit loss reporting rules mean, what’s covered, and how to stay compliant under GAAP standards. **Content:** # Credit Loss Rules for Nonprofits **Categories:** Not-for-Profit **Tags:** NFP accounting, NFP audit, NFP audit Chicago, NFP CPA, NFP CPA Chicago, NFP funding, NFP planning, Not-for-profit accounting, not-for-profit audit, not-for-profit audit firm, Not-for-profit cpa chicago, Not-for-Profit CPA firm, Not-for-profit funding, Not-for-Profit Planning --- ### [Inside the House Version of the One, Big, Beautiful Bill](https://waradydavis.com/inside-the-one-big-beautiful-bill/) **Published:** June 3, 2025 **Author:** Samantha Reyes **Excerpt:** Learn how the One, Big, Beautiful Bill Act could affect your taxes, with TCJA extensions, new deductions, and key business and individual changes. **Content:** # Inside the House Version of the One, Big, Beautiful Bill **Categories:** Business, Business Management, E-Alerts, Hot Topics, OBBBA, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [COVID-19 IRS Penalty Relief: What Taxpayers Need to Know](https://waradydavis.com/covid-19-irs-penalty-relief-what-taxpayers-need-to-know/) **Published:** May 29, 2026 **Author:** Samantha Reyes **Excerpt:** A recent court ruling may provide relief from COVID-19 IRS penalties. Learn who may qualify and why the July 10, 2026, deadline matters. **Content:** # COVID-19 IRS Penalty Relief: What Taxpayers Need to Know **Categories:** COVID **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [What’s in the “One Big Beautiful Bill Act” H.R.1](https://waradydavis.com/whats-in-the-one-big-beautiful-bill-act-h-r-1/) **Published:** July 7, 2025 **Author:** Leslie Flinn **Excerpt:** Learn how the One, Big, Beautiful Bill Act could affect your taxes, with TCJA extensions, new deductions, and key business and individual changes. **Content:** # What’s in the “One Big Beautiful Bill Act” H.R.1 **Categories:** E-Alerts, Hot Topics, OBBBA, OBBBA Business, OBBBA Individual, OBBBA Nonprofit, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [Cut Your Business’s 2025 Taxes with Year-End Strategies](https://waradydavis.com/cut-your-businesss-2025-taxes-with-year-end-strategies/) **Published:** December 9, 2025 **Author:** Leslie Flinn **Excerpt:** Reduce your business’s 2025 federal tax liability with year-end planning steps, new OBBBA opportunities, and strategies to maximize deductions. **Content:** # Cut Your Business’s 2025 Taxes with Year-End Strategies **Categories:** Business, Business Management, COVID, OBBBA, OBBBA Business --- ### [What the OBBBA Means for Your Business](https://waradydavis.com/what-the-obbba-means-for-your-business/) **Published:** July 23, 2025 **Author:** Samantha Reyes **Excerpt:** The OBBBA extends key business tax breaks, including QBI, bonus depreciation, R&D deductions, and employer credits. Learn how it may affect your business. **Content:** # What the OBBBA Means for Your Business **Categories:** E-Alerts, Hot Topics, OBBBA, OBBBA Business, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [How the new Trump Accounts for children will work](https://waradydavis.com/how-the-new-trump-accounts-for-children-will-work/) **Published:** January 29, 2026 **Author:** Samantha Reyes **Excerpt:** Learn how Trump Accounts work, including eligibility, contribution limits, tax benefits, and how families can save for a child’s future. **Content:** # How the new Trump Accounts for children will work **Categories:** E-Alerts, General, Hot Topics, OBBBA --- ### [Accounting Today 2026 Regional Leader](https://waradydavis.com/accounting-today-2026-regional-leader/) **Published:** April 28, 2026 **Author:** Samantha Reyes **Excerpt:** Warady & Davis named a 2026 Great Lakes Regional Leader by Accounting Today for the 10th consecutive year in its Top 100 Firms and Regional Leaders report. **Content:** # Accounting Today 2026 Regional Leader **Categories:** E-Alerts, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) **Published:** July 24, 2026 **Author:** Samantha Reyes **Excerpt:** Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. **Content:** ## Midyear tax planning: Review opportunities to save taxes this year (or next) Summer is a good time to see whether your income, deductions and investment activity are lining up as expected. Let’s take a look at a few areas that commonly provide tax-saving opportunities. ### Your tax bracket The legislation commonly known as the [One Big Beautiful Bill Act (OBBBA)](https://waradydavis.com/2026-obbba-tax-changes-key-items-to-review-this-year/), which was signed into law on July 4, 2025, retained federal income tax rates ranging from 10% to 37%. For tax planning purposes, it’s important to look at your *marginal* rate, which is the rate that will apply to your next dollar of income (generally after any adjustments, deductions and exclusions have been applied). For single filers, the [brackets](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill) above the 10% rate begin at the following income levels: - 12% bracket: $12,401 - 22% bracket: $50,401 - 24% bracket: $105,701 - 32% bracket: $201,776 - 35% bracket: $256,226 - 37% bracket: $640,601 For head-of-household filers, the brackets begin at the same income levels as those for singles — *except* that the first two brackets above the 10% rate begin at the following income levels: - 12% bracket: $17,701 - 22% bracket: $67,451 For married couples filing jointly, the brackets above the 10% rate begin at the following income levels: - 12% bracket: $24,801 - 22% bracket: $100,801 - 24% bracket: $211,401 - 32% bracket: $403,551 - 35% bracket: $512,451 - 37% bracket: $768,701 For married taxpayers filing separately, the brackets begin at half the amount for joint filers. (They’re the same as those for singles except for the 37% bracket.) If you expect this year’s income to be near the threshold for a higher bracket, consider strategies for reducing your taxable income and staying out of that bracket. For example, you could accelerate some deductible expenses. But carefully consider how the OBBBA will impact your deductions this year. For instance, it kept the standard deduction at high levels, and itemizing deductions saves you taxes only if your total itemized deductions for the year exceed the standard deduction for your tax bracket. For 2026, the standard deduction is $16,100 for singles (and separate filers), $24,150 for heads of household and $32,200 for joint filers. The OBBBA also affects itemized deductions. For example, some deductions now offer greater potential benefits (such as the state and local tax deduction), while others are now more limited (such as the charitable deduction). In addition, the OBBBA created some *new* deductions that can be claimed whether or not you itemize. These include deductions for qualified tips and overtime, the “senior” deduction for taxpayers age 65 or older, and the deduction for qualified auto loan interest. ### Medical expenses If you expect to benefit from itemizing on your 2026 return, see whether you can benefit from accelerating deductible medical expenses into this year. You can deduct only medical expenses that exceed 7.5% of your adjusted gross income (AGI). AGI is your income from taxable sources *after* certain so-called “above-the-line” adjustments but *before* the standard deduction or itemized deductions and certain other deductions, such as the new OBBBA deductions noted earlier, are applied. Deductible medical expenses may include: - Health insurance premiums, - Long-term care insurance premiums, - Medical and dental services and prescription drugs, and - Mileage driven for health care purposes. If it’s looking like your deductible medical expenses will be close to exceeding the 7.5% of AGI floor, you may be able to control the timing of additional medical expenses so you can bunch them into 2026 and exceed the floor. If your expenses already exceed the floor, bunching additional medical expenses into 2026 can maximize your deduction. But if it looks like you won’t be itemizing for 2026 or your medical expenses will be far from exceeding 7.5% of your AGI this year, you may want to take the opposite approach: Bunch medical expenses into 2027. Of course, your and your family’s health is more important than tax savings. So don’t accelerate or delay medical services if it would be harmful health-wise. Also consider how the timing will affect what’s covered by health insurance, especially if you have a high deductible. ### Investment gains (and losses) The OBBBA didn’t change the long-term capital gains rates, so they remain at 0%, 15% and 20%. The long-term gains rate applies to gains on investments held more than one year. Short-term gains are subject to your ordinary-income tax rate, which will be substantially higher. However, be aware that the top long-term gains rate kicks in *before* the top ordinary-income tax rate. For singles, the long-term gains brackets above the 0% rate begin at the following income levels: - 15% bracket: $49,451 - 20% bracket: $545,501 For heads of household, the brackets above the 0% rate begin at the following income levels: - 15% bracket: $66,201 - 20% bracket: $579,601 For joint filers, the brackets above the 0% rate begin at the following income levels: - 15% bracket: $98,901 - 20% bracket: $613,701 For separate filers, the brackets begin at half the amount for joint filers. If you’ve realized, or expect to realize, significant capital gains this year, consider selling some depreciated investments to generate losses you can use to offset those gains. It may be possible to repurchase those investments, so long as you wait at least 31 days to avoid the “wash sale” rule. You also may need to plan for the 3.8% net investment income tax (NIIT). It can affect taxpayers with modified AGI (MAGI) over $200,000 for singles and heads of household, and over $250,000 for joint filers (half that for separate filers). You may be able to lower your tax liability by reducing your MAGI, reducing net investment income or both. ### Don’t wait until year end Planning opportunities often become more limited as the end of the year approaches. Reviewing your tax picture now gives you more time to take steps to reduce or defer taxes. If you’d like help evaluating these or other midyear tax strategies, **please contact your Warady & Davis LLP advisor at (847) 267-9600 or [info@waradydavis.com](mailto:info@waradydavis.com "mailto:info@waradydavis.com").** *© 2026* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2026 All Rights Reserved **Categories:** E-Alerts, Hot Topics, OBBBA, OBBBA Individual, Tax, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [Tips for dealing with tariff-driven turbulence](https://waradydavis.com/tips-for-dealing-with-tariff-driven-turbulence/) **Published:** April 15, 2025 **Author:** Leslie Flinn **Excerpt:** Discover key strategies to reduce risk and manage costs amid evolving global tariffs, from financial planning to tax strategies and supplier shifts. **Content:** ## How to Navigate Tariff Challenges and Reduce Risk The announcement of global tariffs caught businesses, as well as foreign countries and worldwide financial markets, off guard. While the president has long endorsed the imposition of tariffs, many businesses expected him to take a targeted approach. Instead, Trump rolled out a baseline tariff on all imports to the United States and higher tariffs on certain countries, including some of the largest U.S. trading partners. (On April 9, Trump announced a 90-day pause on some reciprocal tariffs, with a 10% baseline tariff remaining in effect for most countries and a 145% tariff on imports from China, with electronics excluded and some other exceptions.) The tariff plan sent businesses, both large and small, scrambling. Even companies accustomed to dealing with tariffs have been shaken because this round is so much more extensive and seemingly subject to more change than those in the past. Proponents of tariffs say they can be used as a negotiating tool to get other countries to lower their tariffs on U.S. imports, thereby leveling the global trade playing field. They also argue that if domestic and foreign companies relocate to the United States, it’ll create jobs for Americans, fuel construction industry growth and provide additional tax revenue. Since more changes are expected as countries and industries negotiate with the administration for reduced rates and exemptions, some degree of uncertainty is likely to prevail for at least the short term. In the meantime, businesses have several areas they should focus on to reduce the tariff hit to their bottom lines. **1. Financial forecasting** No business should decide how to address tariff repercussions until they’ve conducted a comprehensive financial analysis to understand how U.S. and retaliatory tariffs will affect costs. You might find, for example, that your business needs to postpone plans for capital asset purchases or expansion. Modeling, or scenario planning, is often helpful during unpredictable periods. Begin by identifying all the countries involved in your supply chain, whether you deal with them directly or through your suppliers, and the applicable tariffs, whether you’re importing or exporting goods. You can then develop a model that projects how different sourcing scenarios might play out. The model should compare not only the costs of foreign vs. domestic options but also the resulting impact on your pricing, labor costs, cash flow and, ultimately, profitability. This information can allow you to build contingency plans to help reduce the odds of being caught flat-footed as new developments unfurl. Modeling can also provide valuable guidance if you’re considering reshoring your operations. Of course, reshoring isn’t a small endeavor. Moreover, U.S. infrastructure may not be adequate for your business needs. Manufacturers also should note the shortage of domestic manufacturing workers. According to pre-tariff analysis from the [National Association of Manufacturers](https://nam.org/2024-third-quarter-manufacturers-outlook-survey/), the U.S. manufacturing industry could require some 3.8 million jobs by 2033, and more than 1.9 million may go unfilled. **2. Pricing** Perhaps the most obvious tactic for companies incurring higher costs due to tariffs is to pass the increases along to their customers. It’s not that simple, though. Before you raise your prices, you must take into account factors such as your competitors’ pricing and how higher prices might affect demand. The latter is especially critical for price-sensitive consumer goods where even a small price jump could undermine demand. Consumers have already been cutting back on spending based on rising fears of inflation and a possible recession. Price increases, therefore, are better thought of as a single component in a more balanced approach. **3. Foreign Trade Zones** You may be able to take advantage of [Foreign Trade Zones (FTZs)](https://www.cbp.gov/border-security/ports-entry/cargo-security/cargo-control/foreign-trade-zones/about) to minimize your tariff exposure. In these designated areas near U.S. ports of entry, a company can move goods in and out of the country for operations (including assembly, [manufacturing](https://waradydavis.com/industry/manufacturing-audit-accounting-and-tax-services/) and processing) but pay reduced or no tariffs. Tariffs are paid when the goods are transferred from an FTZ into the United States for consumption. While in the zone, though, goods aren’t subject to tariffs. And, if the goods are exported, no tariff applies. Note: Trump already has narrowed some of the potential benefits of FTZs, so avoid making them a cornerstone of your tariff strategy. **4. Internal operations** If your company’s suppliers are in high-tariff countries, you can look into switching to lower-cost suppliers in countries that have negotiated lower tariffs. You may not be able to escape higher costs stemming from tariffs, but you can take steps to cut other costs by streamlining operations. For example, you could invest in technologies to improve efficiency or trim worker hours and employee benefits. You also should try to renegotiate contracts with suppliers and vendors, even if those relationships aren’t affected by tariffs. Such measures might make it less necessary to hike your prices. You can control your overall costs as well by breaking down departmental silos so the logistics or procurement department isn’t making tariff-related decisions without input from others. Your finance and tax departments need to weigh in to achieve the optimal cost structures. **5. Tax planning** Maximizing your [federal and state tax credits](https://waradydavis.com/service/tax-services/) is paramount in financially challenging times. Technology investments, for example, may qualify for Section 179 expensing and bonus depreciation (which may return to 100% in the first year under the upcoming tax package being negotiated in Congress). Certain sectors may benefit from the Sec. 45X Advanced Manufacturing Production Credit or the Sec. 48D Advanced Manufacturing Investment Credit. Several states also offer tax credits for job creation, among other tax incentives. This may be a wise time to consider changing your inventory accounting method, if possible. The last-in, first-out (LIFO) method assumes that you use your most recently purchased materials first. The cost of the newer, pricier items is charged first to the cost of goods sold, boosting it and cutting both your income and taxes. Bear in mind, though, that LIFO isn’t permitted under the International Financial Reporting Standards and is more burdensome than the first-in, first-out method. **6. Compliance** Regardless of the exact percentages of U.S. and retaliatory tariffs, you can count on tighter scrutiny of your compliance with the associated rules and requirements. These probably will become more complicated than they’ve been in the past. For example, expect greater documentation requirements and shifting rules for identifying an item’s country of origin. The higher compliance burden alone will ramp up your costs — but the costs of noncompliance could be far greater. ### **Stay vigilant** The tariff landscape is rapidly evolving. Be sure to monitor Trump administration actions, the responses of other countries and how they affect your business operations. You may have to pivot as needed to keep costs low (by reshoring or switching to suppliers in low-tariff countries). If you don’t have the requisite financial expertise on staff to keep up with it all, we can help. Please contact your Warady & Davis LLP business advisor today at (847) 267-9600 or [**info@waradydavis.com**](mailto:info@waradydavis.com) to plan ahead—and stay ahead of the changes. **Categories:** Business, Business Management, E-Alerts, Manufacturing, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Business Accounting Chicago, Business Accounting Deerfield, Business Tax Planning Chicago, Business Tax Planning Deerfield, business taxes chicago, business taxes deerfield, CPA Chicago, distribution, manufacturing, Tax legislation, tax planning, Tax Planning Chicago, trump tariffs, wholesale --- ### [What Small Businesses Need to Do Now for R&D](https://waradydavis.com/what-small-businesses-need-to-do-now-for-rd/) **Published:** August 29, 2025 **Author:** Samantha Reyes **Excerpt:** Learn how 2024 R&D expensing changes impact small businesses under IRS Rev. Proc. 2025-28, with steps to maximize deductions or amortization. **Content:** ## What Small Businesses Need to Do Now for R&D Expensing 2024 The One Big Beautiful Bill Act (OBBBA) permanently allows the deduction of domestic R&D expenses in the year incurred, starting with the 2025 tax year of all eligible businesses. ***The OBBBA also allows “small businesses” (those with average annual gross receipts of $31 million or less) to claim the deduction retroactively to 2022.*** The IRS recently issued guidance ([Rev. Proc. 2025-28](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)) which now allows qualifying small business taxpayers to apply §174A to domestic research expenditures in applicable taxable years, those beginning after December 31, 2021, and before January 1, 2025 (generally 2022–2024). Practically, you may [deduct 2024 R&D costs](https://waradydavis.com/service/tax-services/) on your 2024 original return (or elect §174A(c) amortization) if you qualify and follow the mechanics. ### 1) Confirm You’re Eligible You are a small business taxpayer if both are true: - You are not a tax shelter, and - You meet the §448(c) gross-receipts test for your first tax year beginning after 12/31/2024 (i.e., average gross receipts for 2022–2024 are under $31 million). ### 2) Choose How to Treat 2024 Domestic R&D on an Original Return Pick one approach (and use the same approach for all applicable years you had domestic R&D—2022–2024): - Option A — Deduct now: deduct in the year paid or incurred (for 2024, deduct on the 2024 return). - Option B — Elect to amortize: elect §174A(c), capitalize, and amortize ≥60 months. ### 3) How to Make the Election (And When a Statement Isn’t Needed) Attach a statement to your original, AAR (“Administrative Adjustment Request”) or amended Federal Tax Return titled exactly: **[FILED PURSUANT TO SECTION 3.03 OF REV. PROC. 2025-28](https://3615782.fs1.hubspotusercontent-na1.net/hubfs/3615782/RD%20-%20IRS%20Form.pdf)** Include all of the following in the statement: 1\. Name and TIN of the taxpayer. 2\. A declaration you are not a tax shelter for your first tax year beginning after December 31, 2024 (note if you will make the related §1.448-2(b)(2)(iii)(B) election). 3\. A declaration you meet the §448(c) gross-receipts test for that first year after December 31, 2024 (i.e. average prior-3-year gross receipts for 2022-2024 of less than $31 million). 4\. State which election you are making for domestic R&D in applicable years: - Deduct in the year paid/incurred, or - Capitalize and amortize under §174A(c). If amortizing, state you’ll capitalize the costs and amortize over at least 60 months, and list the number of months. 5\. A declaration you will file AARs/amended returns (as needed) to apply the election to any other applicable years already filed before 9/15/2025 (i.e. 2022-2023 and 2024 if you’ve filed) ##### ***Insight*** ***If you use this small-business election, you cannot also use the separate method-change route in Rev. Proc. 2025-23 §7.02(3)(c) for the same issue.*** 6\. Deemed election. If you timely filed an applicable taxable year on an original return on or before November 15, 2025, and deducted domestic R&D on that return, you are deemed to have made the Section 3.03 election, no statement is required, provided you otherwise comply with Section 3.03 for all other applicable years. This deemed rule does not substitute for a §174A(c) amortization election. ##### ***Insight*** ***For taxpayers looking for additional clarity/certainty, attach the statement on applicable tax filings regardless of deemed election.*** ### 4) 2024 Filing Relief: Superseding Returns If you filed a timely 2024 return and did not extend, you may **file a superseding return within six months of the original due date to make elections related to Section 174A.** ### 5) Key Deadline for Amended/AAR Filings File by July 6, 2026, or earlier if the refund statute (§6511) for an affected year expires sooner. Watch 2022 closely, if you filed 2022 before July 6, 2023, that earlier §6511 date controls. ##### ***Insight*** ***If you make a valid election under Section 3, you won’t need to file a separate method change for your first tax year beginning after December 31, 2024, as long as the treatment of your R&D expenses in subsequent years is consistent with what is filed on your 2024 return.*** ### Conclusion **Rev. Proc. 2025-28 provides welcome certainty and a practical path to deduct domestic R&D costs for 2024 under §174A.** [Eligible small businesses](https://waradydavis.com/industry/small-businesses/) can either rely on the deemed-election route (if qualified), make an affirmative election with the Section 3.03 statement, or a superseding return. Taxpayers should work with their advisors to pick a path now, calendar the deadlines, and coordinate their tax strategy heading into the 2025 tax compliance season. **Warady & Davis LLP can help you evaluate your options and implement strategies to optimize your tax outcomes**. **Contact your W&D advisor at (847) 267-9600 or for guidance.** ###### **This article was originally published by KBKG and is republished here with permission.** Written by Jonathan Tucker and Paul McVoy, Principals – Research & Development Tax Credits, KBKG ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** Business, E-Alerts, Hot Topics, OBBBA, OBBBA Business, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [SALT Deduction Boost for 2025 Returns](https://waradydavis.com/salt-deduction-boost-for-2025-returns/) **Published:** March 26, 2026 **Author:** Samantha Reyes **Excerpt:** If you have high state and local tax expenses but have been claiming the standard deduction in recent years, it’s time to revisit itemizing. **Content:** ## Quadrupled SALT deduction limit means more taxpayers will benefit from itemizing on their 2025 returns An important decision to make when filing your individual income tax return is whether to claim the standard deduction or itemize deductions. A change under the [One Big Beautiful Bill Act (OBBBA)](https://waradydavis.com/2025-tax-filing-whats-new-under-the-obbba/) will make it beneficial for more taxpayers to itemize deductions on their 2025 returns. Specifically, if you paid more than $10,000 in [state and local taxes (SALT)](https://waradydavis.com/service/state-and-local-tax/) last year, you might save tax by itemizing on your 2025 return even if claiming the standard deduction has saved you more tax in recent years. ### Claiming the standard deduction vs. itemizing Taxpayers can choose to itemize certain deductions on Schedule A or take the standard deduction based on their filing status instead. Itemizing deductions when the total will be larger than the standard deduction saves tax, but it makes filing more complicated. The OBBBA made permanent and, for 2025, slightly increased the [Tax Cuts and Jobs Act’s (TCJA’s)](https://www.congress.gov/115/plaws/publ97/PLAW-115publ97.pdf) nearly doubled standard deduction for each filing status: $15,750 for single and separate filers, $23,625 for heads of household, and $31,500 for married couples filing jointly. (The new amounts have been adjusted for inflation for 2026 and will continue to be adjusted annually going forward.) Because of the higher standard deduction and the TCJA’s reduction or elimination of many itemized deductions (mostly made permanent by the OBBBA), many taxpayers who once benefited from itemizing have been better off taking the standard deduction for the last several years. If you’re among those taxpayers and you have significant SALT expenses, OBBBA changes could increase your SALT itemized deduction for 2025 enough that your total itemized deductions may exceed your standard deduction, causing itemizing to make sense once again for you. ### Increased limit on the SALT deduction Deductible SALT expenses include property taxes (for homes, vehicles and boats) and either income tax or sales tax, but not both. Historically, eligible SALT expenses were generally 100% deductible on federal income tax returns if an individual itemized deductions. This provided substantial tax savings to many taxpayers in locations with higher income or property tax rates (or higher home values), as well as those who owned both a primary residence and one or more vacation homes. For 2018 through 2025, the TCJA limited the deduction to $10,000 ($5,000 for married couples filing separately). This SALT cap was scheduled to expire after 2025. Rather than letting the $10,000 cap expire or immediately making it permanent, the OBBBA temporarily quadrupled the limit. Beginning in 2025, taxpayers can deduct up to $40,000 ($20,000 for married couples filing separately), with 1% increases each subsequent year. The $10,000 cap is scheduled to return in 2030. The increased SALT cap could lead to major tax savings compared with the $10,000 cap. For example, a married couple filing jointly in the 32% tax bracket with $40,000 in SALT expenses and MAGI below the threshold for the income-based reduction (see below) could save an additional $9,600 in taxes \[32% × ($40,000 − $10,000)\]. ### Reduced limit for higher-income taxpayers While the higher SALT limit is in place, the allowable deduction drops by 30% of the amount by which modified adjusted gross income (MAGI) exceeds a threshold amount. For 2025, the threshold is $500,000; when MAGI reaches $600,000, the previous $10,000 cap applies. (These amounts are halved for separate filers.) The MAGI threshold will also increase 1% each year through 2029. Here’s how the earlier example would be different if the taxpayer’s MAGI exceeded the threshold by $20,000: The cap would be reduced by $6,000 (30% × $20,000), leaving a maximum SALT deduction of $34,000 ($40,000 − $6,000). Even reduced, that’s more than three times what would be permitted under the $10,000 cap. The reduced deduction would still save an additional $7,680 in taxes compared to when the $10,000 cap applied \[32% × ($34,000 − $10,000)\]. ### Factoring in other itemized deductions Depending on your 2025 SALT expenses, MAGI and filing status, your SALT deduction alone might be enough for your itemized deductions to exceed your standard deduction. If it isn’t, you’ll need to review your other potential itemized deductions and see if all of them, in aggregate, will exceed your standard deduction. Other possible itemized deductions include: **Medical expenses.** This deduction is limited to the amount of eligible medical expenses that, in aggregate, exceeds 7.5% of adjusted gross income (AGI). **Home mortgage interest.** This deduction is available for acquisition debt of up to $750,000. (A $1 million limit still applies to indebtedness incurred on or before December 15, 2017.) **Charitable donations.** For 2025, cash donations to qualified charities are generally deductible up to 60% of AGI. (Beginning in 2026, the deduction will also be limited to the amount of eligible donations that, in aggregate, exceeds 0.5% of AGI.) Noncash donations may also be deductible, but additional requirements and limits apply. **Casualty and theft losses.** For 2025, these losses are generally deductible only if they’re due to a disaster declared by the President. (Beginning in 2026, losses due to certain state-declared disasters also will be deductible.) The deduction is limited to the amount of eligible losses that, in aggregate, exceeds 10% of AGI. Keep in mind that additional rules and limits apply to these deductions. ### A return to itemizing? If you have high SALT expenses but have been claiming the standard deduction in recent years, it’s time to revisit itemizing. A return to itemizing on your 2025 return might save you tax. If you’ve already been itemizing, a larger SALT deduction could also increase your tax savings, perhaps significantly, depending on your SALT expenses, MAGI, filing status and tax bracket. We can assess the impact of the SALT limit increase — and other OBBBA changes — on your tax situation and help ensure you claim all the tax breaks you’re entitled to on your 2025 return.To discuss your tax position, **contact your W&D advisor at (847) 267-9600 or info@waradydavis.com for guidance.** *© 2026* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2026 All Rights Reserved **Categories:** E-Alerts, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [OBBBA: Key Changes to the SALT Deduction Cap](https://waradydavis.com/obbba-key-changes-to-the-salt-deduction-cap/) **Published:** August 28, 2025 **Author:** Samantha Reyes **Excerpt:** The OBBBA raises the SALT deduction cap temporarily. See how these changes affect your taxes and why planning now can help minimize future liability. **Content:** ## How will the changes to the SALT deduction affect your tax planning? The [One Big Beautiful Bill Act (OBBBA)](https://waradydavis.com/whats-in-the-one-big-beautiful-bill-act-h-r-1/) shifts the landscape for federal income tax deductions for [state and local taxes (SALT)](https://waradydavis.com/service/state-and-local-tax/), albeit temporarily. If you have high SALT expenses, the changes could significantly reduce your federal income tax liability. But it requires careful planning to maximize the benefits — and avoid potential traps that could increase your effective tax rate. ### A little background Less than a decade ago, eligible SALT expenses were generally 100% deductible on federal income tax returns if an individual itemized deductions. This provided substantial tax savings to many taxpayers in locations with higher income or property tax rates (or higher home values). Beginning in 2018, the Tax Cuts and Jobs Act (TCJA) put a $10,000 limit on the deduction ($5,000 for married couples filing separately). This SALT cap was scheduled to expire after 2025. ### What’s new? Rather than letting the $10,000 cap expire or immediately making it permanent, Congress included a provision in the OBBBA that temporarily quadruples the limit. Beginning in 2025, taxpayers can deduct up to $40,000 ($20,000 for separate filers), with 1% increases each subsequent year. Then in 2030, the OBBBA reinstates the $10,000 cap. While the higher limit is in place, it’s reduced for taxpayers with incomes above a certain level. The allowable deduction drops by 30% of the amount by which modified adjusted gross income (MAGI) exceeds a threshold amount. For 2025, the threshold is $500,000; when MAGI reaches $600,000, the previous $10,000 cap applies. (These amounts are halved for separate filers.) The MAGI threshold will also increase 1% each year through 2029. Deductible SALT expenses include property taxes (for homes, vehicles and boats) and either income tax or sales tax, but not both. If you live in a state without income taxes or opt for the sales tax route for another reason, you don’t have to save all your receipts for the year and manually calculate your sales tax; you can use the [IRS Sales Tax Deduction Calculator](https://www.irs.gov/credits-deductions/individuals/use-the-sales-tax-deduction-calculator "https://url.us.m.mimecastprotect.com/s/ZHkzCL9n16FRYPN5HBf5syzdC_") to determine the amount of sales tax you can claim. (It includes the ability to add actual sales tax paid on certain big-ticket items, such as a vehicle.) The increased SALT cap could lead to major tax savings compared with the $10,000 cap. For example, a single taxpayer in the 35% tax bracket with $40,000 in SALT expenses and MAGI below the threshold amount would save an additional $10,500 \[35% × ($40,000 − $10,000)\]. The calculation would be different if the taxpayer’s MAGI exceeded the threshold. Let’s say MAGI is $560,000, which is $60,000 over the 2025 threshold. The cap would be reduced by $18,000 (30% × $60,000), leaving a maximum SALT deduction of $22,000 ($40,000 − $18,000). Even reduced, that’s more than twice what would be permitted under the $10,000 cap. ### The itemization decision The SALT deduction is available only to taxpayers who itemize their deductions. The TCJA nearly doubled the standard deduction. As a result of that change and the $10,000 SALT cap, the number of taxpayers who itemize dropped substantially. And, under the OBBBA, the standard deduction is even higher — for 2025, it’s $15,750 for single and separate filers, $23,625 for heads of household filers, and $31,500 for joint filers. But the higher SALT cap might make it worthwhile for some taxpayers who’ve been claiming the standard deduction post-TCJA to start itemizing again. Consider, for example, a taxpayer who pays high state income tax. If that amount combined with other itemized deductions (generally, certain medical and dental expenses, home mortgage interest, qualified casualty and theft losses, and charitable contributions) exceeds the applicable standard deduction, the taxpayer will save more tax by itemizing. ### Beware the “SALT torpedo” Taxpayers whose MAGI falls between $500,000 and $600,000 and who have large SALT expenses should be aware of what some are calling the “SALT torpedo.” As your income climbs into this range, you don’t just add income. You also lose part of the SALT deduction, increasing your taxable income further. Let’s say your MAGI is $600,000, you have $40,000 in SALT expenses and you have $35,000 in other itemized deductions. The $100,000 increase in income from $500,000 actually raises your taxable income by $130,000: MAGI $500,000 $600,000 SALT deduction $40,000 $10,000 Other itemized deductions $35,000 $35,000 Total itemized deductions $75,000 $45,000 Taxable income $425,000 $555,000 At a marginal tax rate of 35%, you’ll pay $45,500 (35% × $130,000) in additional taxes, for an effective tax rate of 45.5%. In this scenario, even with your SALT deduction reduced to $10,000, you’d benefit from itemizing. But if your $10,000 SALT deduction plus your other itemized deductions didn’t exceed your standard deduction, the standard deduction would save you more tax. ### Tax planning tips Your MAGI plays a large role in the amount of your SALT deduction. If it’s nearing the threshold that would reduce your deduction or already over it, you can take steps to stay out of the danger zone. For example, you could make or increase (up to applicable limits) pre-tax 401(k) plan and Health Savings Account contributions to reduce your MAGI. If you’re self-employed, you may be able to set up or increase contributions to a retirement plan that allows you to make even larger contributions than you could as an employee, which also would reduce your MAGI. Likewise, you want to avoid moves that *increase* your MAGI, like Roth IRA conversions, nonrequired traditional retirement plan distributions and asset sales that result in large capital gains. Bonuses, deferred compensation and equity compensation could push you over the MAGI threshold, too. Exchange-traded funds may be preferable to mutual funds because they don’t make annual distributions. At the same time, because the higher cap is temporary, you may want to try to maximize the SALT deduction every year it’s available. If your SALT expenses are less than $40,000 and your MAGI is below the reduction threshold for 2025, for example, you might pre-pay your 2026 property tax bill this year. (This assumes the amount has been assessed — you can’t pre-pay based only on your estimate.) ### Uncertainty over PTETs In response to the TCJA’s $10,000 SALT cap, 36 states enacted pass-through entity tax (PTET) laws to help the owners of pass-through entities, who tend to pay greater amounts of state income tax. The laws vary but typically allow these businesses to pay state income tax at the entity level, where an unlimited amount can be deducted as a business expense, rather than at the owner level, where a deduction would be limited by the SALT cap. The OBBBA preserves these PTET workarounds, and PTET elections may remain worthwhile for some pass-through entities. An election could reduce an owner’s share of self-employment income or allow an owner to take the standard deduction. Bear in mind, though, that some states’ PTET laws are scheduled to expire after 2025, when the TCJA’s $10,000 cap was set to expire absent congressional action. There’s no guarantee these states will renew their PTETs in their current form, or at all. ### SALT deduction and the AMT It’s worth noting that SALT expenses aren’t deductible for purposes of the alternative minimum tax (AMT). A hefty SALT deduction could have the unintended effect of triggering the AMT, particularly after 2025. Individual taxpayers are required to calculate their tax liability under both the regular federal income tax and the AMT and pay the higher amount. Your AMT liability generally is calculated by adding back about two dozen “preference and adjustment items” to your regular taxable income, including the SALT deduction. The TCJA increased the AMT exemption amounts, as well as the income levels for the phaseout of the exemptions. For 2025, the exemption amount for singles and heads of households is $88,100; it begins to phase out when AMT income reaches $626,350. For joint filers for 2025, the exemption amount is $137,000 and begins to phase out at $1,252,700 of AMT income. The OBBBA makes these higher exemptions permanent, but for joint filers it sets the phaseout threshold back to its lower 2018 level beginning in 2026 — $1 million, adjusted annually for inflation going forward. (It doesn’t call for this change for other filers, which might be a drafting error. A technical correction could be released that would also return the phaseout thresholds to 2018 levels for other filers.) The OBBBA also doubles the rate at which the exemptions phase out. These changes could make high-income taxpayers more vulnerable to the AMT, especially if they have large SALT deductions. ### Navigating new ground The OBBBA’s changes to the SALT deduction cap, along with other individual tax provisions, may require you to revise your tax planning. The Warady & Davis LLP team can help you chart the best course to minimize your tax liability. **Contact your W&D advisor at (847) 267-9600 or info@waradydavis.com for guidance.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** E-Alerts, Hot Topics, OBBBA, OBBBA Business, OBBBA Individual, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [Protecting nonprofit operations when disaster strikes](https://waradydavis.com/protecting-nonprofit-operations-when-disaster-strikes/) **Published:** May 20, 2026 **Author:** Samantha Reyes **Excerpt:** When disaster strikes, your nonprofit needs to be ready. Learn how to build organizational continuity, whatever comes your way. **Content:** ## Protecting nonprofit operations and financial stability when disaster strikes From winter storms and flash floods to wildfires and hurricanes, nearly every region of the United States faces the risk of natural disasters. But organizations must also consider disruptions such as [cybersecurity incidents](https://waradydavis.com/irs-gets-budget-boost/), system failures and facility damage. By preparing for potential disasters, your nonprofit will be better positioned to protect staff, volunteers and clients — while maintaining financial stability and continuity of operations. Consider these key steps for your nonprofit’s [disaster preparedness plan](https://www.fema.gov/). ## Identify risks and financial exposure A well-designed disaster plan helps mitigate risk and support faster recovery. While no organization can eliminate every threat, you can reduce the impact of risks specific to your operations. Start by identifying vulnerabilities across your people, programs and technology. For example, organizations serving vulnerable populations may need specialized evacuation procedures for wheelchair-bound or senior clients. Equally important is assessing the financial impact of disruptions. Consider how events could affect revenue, grant funding and expenses. What would property damage or an interruption in your operations mean for your cash flow? How would you continue to meet payroll, vendor obligations and program commitments? Evaluate whether your insurance coverage, reserve levels and access to credit are sufficient to withstand these scenarios. Disruptions can also affect financial reporting. Examine your ability to close the books, support audit requirements and meet Form 990 filing deadlines. Delays or gaps in documentation may create downstream compliance and governance challenges. ### Define roles and protect financial processes Designate a leader to oversee disaster planning and implementation, and assign teams to handle key responsibilities. A communications team may coordinate updates to staff, volunteers and stakeholders, while other teams focus on safety procedures, technology and financial operations. Financial responsibilities should include safeguarding accounting records, maintaining internal controls and ensuring timely access to critical data. Establish contingency procedures for key processes such as cash disbursements and payroll while maintaining segregation of duties to reduce the risk of errors or fraud during disruptions. One of the most important components of your plan will be recovery. Consider how your organization will restore operations, resume financial processes and maintain compliance. Phased recovery plans can help address varying levels of disruption. Maintaining documentation and audit trails during and after an event is critical. ### Prioritize the most likely risks For smaller nonprofits, limited resources can make disaster planning feel overwhelming. Focus on the most likely risks in your region. For example, organizations in the southeastern United States may prioritize hurricanes in their preparedness plans, while those in the far west may focus on earthquakes and wildfires. Even with limited resources, prioritizing key financial safeguards — such as maintaining secure backups of accounting data, reviewing insurance coverage and [establishing emergency cash reserves](https://waradydavis.com/prepare-your-nonprofit-for-financial-downturns/) — can significantly reduce risk. ### Strengthen resilience before it’s needed Beyond preparing your organization for whatever risk scenarios you’re most likely to face, a thoughtful disaster plan should protect your nonprofit’s financial health and long-term sustainability. Contact us to help assess your organization’s financial risks, strengthen internal controls and build a disaster plan tailored to your nonprofit that supports both operational and financial continuity. If you have questions about strengthening your nonprofit’s financial health, improving governance or developing a strategic plan for long-term sustainability, we can help. **Contact your W&D advisor at (847) 267-9600 or[ info@waradydavis.com](mailto:info@waradydavis.com)** to help assess your organization’s financial risks, strengthen internal controls, and build a disaster plan tailored to your nonprofit that supports both operational and financial continuity. *© 2026* **Legal Notice:** The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2026 All Rights Reserved **Categories:** Not-for-Profit, Tax, Tax Planning, The Bottom Line **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [401(K) Rollovers](https://waradydavis.com/401k-rollovers/) **Published:** August 1, 2015 **Author:** WaradyDavis **Excerpt:** High workforce mobility means that many employees leave a collection of “orphan” 401(k) plan balances in their wake. As a plan fiduciary, why should you care? Helping new employees roll over their accounts from former employers can be beneficial for both parties. **Content:** ## How rollovers to your plan can benefit everyone High workforce mobility means that many employees leave a collection of “orphan” 401(k) plan balances in their wake. As a plan fiduciary, why should you care? Helping new employees roll over their accounts from former employers can be beneficial for both parties. ### Dealing with orphans One reason participants orphan their previous employers’ plans is that the process of rolling over an old 401(k) plan balance to a new employer’s plan can be cumbersome. Leaving a trail of orphan accounts may be the path of least resistance; however, many employees fail to properly manage their accounts even when they have only one plan to look after, let alone two or three former employer 401(k) accounts. As for employers, small orphaned accounts add to plan administration costs, including the possibility of going over the threshold where an independent audit is required. To manage your 401(k) plan participant roster, you can roll accounts of terminated participants worth between $1,000 and $5,000 to an IRA in the participant’s name. You’ll need to perform due diligence in selecting an IRA provider, and you may be able to set up an automatic process. If your plan doesn’t roll over former participants’ accounts to an outside IRA, what can be done? Consider advising former participants to consult with an independent investment advisor who can help them roll their balances into an IRA. Is this good for participants? Maybe. The overall fees that individuals pay on relatively small IRA accounts can be higher than those on accounts held in a 401(k) plan. Also, depending on the investments available to the participant on the rolled over funds, the former participant might be better off leaving funds in the investments available in the 401(k) plan. ### Accepting rollovers into a plan Even though a former employer might benefit from having smaller accounts rolled out of the plan after an employee’s departure, the new employer can benefit from having dollars rolled into its 401(k). This is especially true for larger accounts. Generally, the larger a 401(k) plan’s total assets and participant head count, the greater its ability to negotiate competitive fees for plan services. In addition, an Investment Company Institute study identified another asset size-fee relationship: the larger the average participant account size, the lower the fees. This pattern is independent of the plan’s overall size. For example, the median “all-in” fee for small plans (with assets between $1 million and $10 million) was 1.29%, if the average account balance was $25,000. But the median all- in fee was 1.03% if average account sizes fell between $25,000 and $100,000. And they dropped to 0.96% for plans with average account sizes exceeding $100,000. The study found the same pattern for plans with substantially more assets — plus, the all- in fees were much lower for all account size categories. For example, the median all-in fees for very large plans with aggregate assets exceeding $500 million were 0.43%, 0.39% and 0.29%, based on the same average account size groupings. ### Doing the right thing Reducing plan fees deducted from participant accounts even by a small percentage can have a significant impact on the value of the accounts at retirement. Encouraging your new employees to roll assets from their former employer’s 401(k) plan into yours may improve employees’ retirement preparedness. Lower administrative costs for the plan and increased savings for the participants can benefit both your company and its employees. ## IRS provides safe harbor examples for rollover eligibility What standard are plan administrators held to when determining if a rollover into a 401(k) plan on behalf of a new employee is proper? IRS Revenue Ruling 2014-9 provided two safe harbor scenarios. In the first, the employee received a distribution from the former plan’s trustee in the form of a check written out to the employee’s account in the new plan. To make sure the distribution was eligible for a rollover, the new plan’s administrator checked the former plan’s Form 5500 to determine if the former plan was a qualified plan. In the second scenario, the facts were the same except that the source of the rollover was the new employee’s IRA. The new employee certified that she was below age 70½ — the age at which she would have to begin receiving minimum distributions. The revenue ruling addressed whether the administrator of the employee’s new plan could reasonably rely on this evidence to determine that the checks were suitable for a rollover — even if they were misrepresentations. The IRS ruled that, without any evidence to the contrary, the answer is yes. But if the plan later determines that the rollover amount is an invalid rollover contribution, it must distribute the amount rolled over plus any attributable earnings to the employee within a reasonable time. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. ©2015 **Categories:** Employee Benefit Plans, Perspectives on Employee Benefits --- ### [FinCen Reverses U.S. BOI Reporting Requirements](https://waradydavis.com/u-s-businesses-persons-now-exempt-from-boi-reporting/) **Published:** March 24, 2025 **Author:** Leslie Flinn **Content:** **Important Update: U.S. businesses and persons are now exempt from BOI reporting (beneficial ownership information) filing requirements of the [Corporate Transparency Act](https://waradydavis.com/corporate-transparency-act-beneficial-ownership-information-reporting-requirement/) (CTA).** > *After a roller coaster ride of legal challenges, deadline changes and compliance uncertainty, the Treasury announcement and subsequent FinCen Interim Final rule eliminate BOI reporting compliance concerns for U.S. domestic companies and persons. The new rule will dramatically reduce the number of companies required to report.* Consistent with the U.S. Department of the Treasury’s March 2, 2025 [announcement](https://home.treasury.gov/news/press-releases/sb0038) on March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an [interim final rule](https://fincen.gov/resources/statutes-regulations/federal-register-notices/beneficial-ownership-information-3) that removes the BOI reporting requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act. In that interim final rule, FinCEN revises the definition of *“reporting company”* to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also specifically added domestic companies—those entities formed in the U.S.— to the list of exempted entities. Non-U.S. companies with certain contacts to the U.S., however, will still have to file the BOI report. It is important to note that these companies need not report the beneficial ownership of U.S. equity owners and those U.S. equity owners of foreign companies are no longer required to file a separate report. Foreign reporting companies that only have beneficial owners that are U.S. persons will be exempt from the requirement to report any beneficial owners. Previously, reporting requirements applied to a broad range of businesses created in the U.S. and foreign companies registered to do business in any U.S. state or Indian tribe. ## What this means for you and your business Through this interim final rule, ALL entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners are exempt from the requirement to report BOI to FinCEN. *Any BOI penalties and fines related to prior regulations will not be enforced.* In addition, US beneficial owners of foreign entities are exempted from from having to share personal information. ## What the Interim Final Rule changes about BOI reporting - **Domestic Companies No Longer Need To Report.** Entities formed in the U.S.— corporations, LLCs, and others — are exempt from BOI (Beneficial Ownership Information) reporting requirements. This exemption also extends to any updates or corrections to previously submitted reports. - **U.S. Citizens Exempt From Reporting.** Even if a U.S. person is a Beneficial Owner of a foreign company doing business in the U.S., they are not required to report their ownership information. Foreign reporting companies are similarly exempt from reporting the BOI of their U.S. owners. - **Foreign Companies Still Have To Report — But With Limits.** Foreign reporting companies must continue filing BOI — but only for non-U.S. persons. If all beneficial owners are U.S. persons, no reporting is required. Additionally, deadlines have been adjusted – see below. ## New foreign entity BOI reporting deadlines - Foreign entities that are reporting companies must file within 30 days of the interim rule’s publication (March 21, 2025) if they were registered before that date. - Reporting companies registered to do business in the U.S. on or after the rule’s publication have 30 calendar days to file an initial BOI report after they receive notice that their registration is effective. ### In summary The Treasury announcement and subsequent FinCen Interim final rule eliminate BOI compliance concerns for U.S. domestic companies. FinCEN will continue to enforce requirements for foreign reporting companies. Under the law as written and passed by Congress, approximately 32 million companies were subject to the CTA in 2024, the first year the law was in effect. Now, however, under the most recent application by the Treasury, the number of businesses impacted by the new rule is estimated to be just a fraction of the CTA’s original scope. **Note:** The CTA was enacted on Jan. 1, 2021, as part of the broader Anti-Money Laundering Act of 2020. The regulations aimed to increase transparency, aid law enforcement, and combat illicit financial flows. The U.S. is under some international pressure to adopt greater transparency rules for entity ownership to help fight illegal activities. It is possible that Congress may try to find a middle ground by seeking to amend CTA or to force a broader enforcement of the statute in the future. Such an action, however, is unlikely at this time. ### Questions? Contact your W&D advisor at 847-267-9600 or info@waradydavis.com. For more information, see [FinCEN reporting update](https://www.fincen.gov/news/news-releases/fincen-removes-beneficial-ownership-reporting-requirements-us-companies-and-us). Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** Business, E-Alerts **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, Northshore CPA, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ### [Prepare Your Nonprofit for Financial Downturns](https://waradydavis.com/prepare-your-nonprofit-for-financial-downturns/) **Published:** April 6, 2025 **Author:** Leslie Flinn **Excerpt:** Worried about funding cuts? Discover how your not-for-profit can build operating reserves to stay resilient during financial uncertainty and crises. **Content:** ## Preparing for a financial downturn? Build up operating reserves You never know when your [not-for-profit](https://waradydavis.com/industry/not-for-profit/) might experience a financial blow. With the current efforts in Washington to slash expenses, some nonprofits have already lost federal funding and more may lose it in the near future. But that’s not the only risk. A significant grant from a foundation or state government might not be renewed, or a major donor could decide to stop supporting your organization. If such uncertainty has ever forced you to suspend services and scramble to implement Plan B, you probably understand how important operating reserves can be. This financial cushion can help you manage acute shortfalls. If your nonprofit’s operating reserves are low or nonexistent, start looking for ways to build them. ### **Written reserves policy** A formal written reserves policy is a crucial first step. Among other things, your policy should set the target amount to hold in a separate fund. Although no universal benchmark applies, six months of operating expenses will be sufficient for many organizations. Incorporate your risk appetite and current financial position into the target calculation. In general, greater risk calls for higher reserves. So, for example, if your organization heavily relies on a handful of funding sources, assess the shortfall if one or more sources were to disappear overnight. Avoid setting your reserves target too high, though. Donors and grant-makers generally don’t favor stockpiling when funds might otherwise be used to pursue your mission. Your policy also should establish triggers for when your organization can dip into its reserves. ### **Windfalls and budget items** Next, consider how you’ll reach — and maintain — your target amount. If you’ve received increased donations over the past couple of years, you might be able to fully fund your reserves with unrestricted net assets. Other sources include unexpected windfalls such as large bequests. Most nonprofits, however, need to include a line item for reserves in their budgets. This amount shouldn’t hinder day-to-day operations, but it will help you begin to make real progress toward your reserves goal. It may be necessary to [cut expenses](https://waradydavis.com/cut-nonprofit-costs-not-staff/), cancel projects or divest investments to free up funds. Remember to leave illiquid fixed assets (buildings and equipment), endowments and [temporarily restricted funds](https://www.irs.gov/forms-pubs/about-publication-557) out of the equation. Keep in mind that budget surpluses aren’t necessarily available to fund reserves because they might include funds already earmarked for future expenses. ### **Enlist Support — With Our Guidance** How long it will take to build your nonprofit’s reserves depends on your goals and resources. But it’s critical to enlist the support of your board and leadership team so that contributions to the reserves fund become a priority. We can help educate decision-makers, as well as advise your organization on an effective operating reserves policy. Contact your W&D Not-for-Profit Services advisor at 847-267-9600 or . ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** Not-for-Profit **Tags:** NFP accounting, NFP audit, NFP audit Chicago, NFP CPA, NFP CPA Chicago, NFP funding, NFP planning, Not-for-profit accounting, not-for-profit audit, not-for-profit audit firm, Not-for-profit cpa chicago, Not-for-Profit CPA firm, Not-for-profit funding, Not-for-Profit Planning --- ### [Don’t sleep on these after-tax-day tips](https://waradydavis.com/dont-sleep-on-these-after-tax-day-tips/) **Published:** April 28, 2026 **Author:** Samantha Reyes **Excerpt:** Learn smart after-tax-day tips for keeping IRS records, adjusting withholding, and avoiding penalties before next tax season. **Content:** ## How Long Should You Keep Tax Records? A Post-Filing Checklist ### Smart tax moves to make after tax day With the April 15 tax filing deadline in the rearview mirror, you’re likely to turn your attention to other items. But before you do, it’s in your best interest to tie up a few tax-related loose ends. ### How Long Does the IRS Have to Audit You? Understanding the Statute of Limitations Generally, the IRS’ statute of limitations for auditing a tax return is three years from the return’s due date or the filing date, whichever is later. However, some tax issues are still subject to scrutiny after three years. For example, if the IRS suspects that income has been understated by 25% or more, the statute of limitations for an audit extends to six years. If no return was filed or fraud is suspected, there’s no limit on when the IRS can launch an inquiry. It’s a good idea to keep copies of your tax returns indefinitely as proof of filing. Supporting records generally should be kept until the three-year statute of limitations expires. These documents may also be helpful if you need to amend a return. So, which records can you throw away now? Based on the three-year rule, in late April 2026, you’ll generally be able to discard most records associated with your 2022 return if you filed it by the April 2023 due date. Extended 2022 returns could still be vulnerable to audit until October 2026. But if you want extra protection, keep supporting records for six years. ### Tax Records to Keep: A Year-by-Year Retention Guide Documentation supporting your income, deductions and credits that you generally should retain following the three-year rule may include: - Various series 1099 forms, such as Form 1099-NEC, “Nonemployee Compensation,” Form 1099-MISC, “Miscellaneous Income,” and Form 1099-G, “Certain Government Payments,” - Form 1098, “Mortgage Interest Statement,” - Property tax payment documentation, - Charitable donation substantiation, - Records related to contributions to and withdrawals from Section 529 plans and Health Savings Accounts, and - Records related to deductible [retirement plan contributions](https://waradydavis.com/401k-and-retirement-plan-limits-for-the-tax-year-2016/). You’ll also want to hang on to some tax-related records beyond the statute of limitations. For example: - Retain Forms W-2, “Wage and Tax Statement,” until you begin receiving Social Security benefits. That may seem long, but if questions arise regarding your work record or earnings for a particular year, you’ll need your W-2 forms as part of the required documentation. - Keep records related to investments and real estate for as long as you own the assets, plus at least three years after you sell them and report the sales on your tax return (or six years if you want extra protection). - Hang on to records associated with retirement accounts until you’ve depleted the accounts and reported the last withdrawal on your tax return, plus three (or six) years. - Retain records that support figures affecting multiple years, such as carryovers of charitable deductions or casualty losses, until they have no effect, plus seven years. - Keep records that support deductions for bad debts or worthless securities that could result in refunds for seven years because you have up to seven years to claim them. ### Post-Filing Tax Checklist: Withholding, Estimated Payments, and Mileage Logs As you can see, keeping tax-related records is critical. So put yourself in a good position for filing your 2026 return next year by carefully tracking expenses potentially eligible for deductions or credits on an ongoing basis. For example, if you’re self-employed and use your personal vehicle for business purposes, maintain a mileage log recording the date, mileage, purpose and destination of each trip. Or if you regularly donate to charity, keep the receipts or written acknowledgments you receive. (Additional substantiation may be required depending on the size and type of donation.) In addition, this is a good time to reassess your current tax withholding to determine if you need to update your [Form W-4, “Employee’s Withholding Certificate.”](https://www.irs.gov/forms-pubs/about-form-w-4) You may want to increase withholding if you owed taxes this year. Conversely, you might want to reduce it if you received a hefty refund. Changes also might be in order if you experience certain major life events, such as marriage, divorce, birth of a child or adoption, this year. If you make estimated tax payments throughout the year, consider reevaluating the amounts you pay. You might want to increase or reduce the payments due to changes in self-employment income, investment income, Social Security benefits and other types of nonwage income. To preempt the risk of a penalty for underpayment of tax, consider paying at least 100% of the tax shown on your 2025 tax return (110% if your 2025 adjusted gross income was over $150,000 — or over $75,000 if you’re married and filed separately) through withholding and/or four equal estimated tax payments. ### Received an IRS Letter After Filing? Here’s What to Do After filing your tax return, you may receive a letter in the mail from the IRS. While such letters can be alarming, don’t assume the worst. The letter might simply inform you of a refund adjustment (up or down) based on a math or similar error on your return. If you agree with the change, generally no response is needed. If you disagree, contact your Warady & Davis LLP advisor right away so we can help you respond to the IRS by the date indicated. The letter might also propose a change to your return based on information reported by third parties, such as employers or financial institutions. In this case, follow the instructions to respond, include any required documentation, and note whether you agree or disagree with the proposed change. Once again, we are happy to help with your response. Of course, an IRS letter could inform you that your return is being audited. It’s important to remember that being selected for an audit doesn’t always mean there’s a significant error on your return. For example, your return could have been flagged based on a statistical formula that compares similar returns for deviations from “norms.” Further, if selected, you’re most likely going to undergo a correspondence audit. These account for a majority of IRS audits. They’re conducted by mail for a single tax year and involve only a few issues that the IRS anticipates it can resolve by reviewing relevant documents. According to the IRS, most audits involve returns filed within the last two years. If you receive notification of a correspondence audit, notify your tax advisor immediately. We can request additional time if you can’t submit all the documentation requested by the specified deadline. Don’t ignore the letter. Failure to respond can lead to the IRS disallowing some tax breaks you claimed and issuing a Notice of Deficiency (that is, a notice that a tax balance is due). ### Stay Ahead: How Organized Tax Records Make Your Next Filing Easier Organizing your past and current-year tax records now can facilitate a smoother [tax filing next year](https://waradydavis.com/important-federal-tax-filing-dates-for-2026/) or a less painful audit of a recent return. Similarly, adjusting your withholding or estimated tax payments can mean more money in your pocket now or no (or smaller) underpayment penalties next April. If you have questions about which files to keep, how long to keep them, or how to adjust withholding, estimated tax payments or any other matters, we can help. If you receive an IRS letter and need guidance on complying with any IRS request, **contact your W&D advisor at (847) 267-9600 or[ info@waradydavis.com](mailto:info@waradydavis.com).** *© 2026* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2026 All Rights Reserved **Categories:** E-Alerts, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [4 year-end planning steps to trim your 2025 taxes](https://waradydavis.com/4-year-end-planning-steps-to-trim-your-2025-taxes/) **Published:** November 20, 2025 **Author:** Samantha Reyes **Excerpt:** Prepare for 2025 tax changes under the OBBBA. Learn how updated deductions, SALT limits, and charitable rules can help you reduce your year-end tax liability. **Content:** ## How to Prepare Now to Reduce Your 2025 Tax Liability Now is the time of year when taxpayers search for last-minute moves to reduce their federal income tax liability. Adding to the complexity this year is the[ One Big Beautiful Bill Act (OBBBA)](https://waradydavis.com/whats-in-the-one-big-beautiful-bill-act-h-r-1/), which significantly changes various tax laws. Here are some of the measures you can take now to reduce your 2025 taxes in light of the OBBBA. ### 1. Reevaluate the standard deduction Taxpayers can choose to itemize certain deductions or take the standard deduction based on their filing status. Itemizing deductions saves tax if the total exceeds the standard deduction. The number of taxpayers who itemize dropped dramatically after the [Tax Cuts and Jobs Act (TCJA)](https://waradydavis.com/the-tax-cut-and-jobs-act-tcja/) nearly doubled the standard deduction. The OBBBA increases it further. The standard deduction for 2025 is: - $15,750 for single filers and married individuals filing separately, - $23,625 for heads of households, and - $31,500 for married couples filing jointly. Taxpayers age 65 or older or blind are eligible for an additional standard deduction of $2,000 or, for joint filers, $1,600 per spouse age 65 or older or blind. (For taxpayers both 65 or older and blind, the additional deduction is doubled.) But other OBBBA changes could make itemizing more beneficial. For example, if you’ve been claiming the standard deduction recently, the expanded state and local tax (SALT) deduction might cause your total itemized deductions to exceed your standard deduction for 2025. (See No. 2 below.) If it does, you might benefit from accelerating other itemized deductions into 2025. In addition to SALT, potential itemized deductions include: - Qualified medical and dental expenses (to the extent that they exceed 7.5% of your adjusted gross income) - Home mortgage interest (generally on up to $750,000 of home mortgage debt on a principal residence and a second residence) - Casualty losses (from a federally declared disaster) - Charitable contributions (see No. 3 below) Note, too, that higher earners will face a limit on their itemized deductions in 2026. The [OBBBA](https://www.congress.gov/bill/119th-congress/house-bill/1/text) effectively caps the value of itemized deductions for taxpayers in the highest tax bracket (37%) at 35 cents per dollar, compared with 37 cents per dollar this year. If you’re among that group, you may want to accelerate itemized deductions into 2025 to leverage the full value. ### 2. Maximize your SALT deduction The OBBBA temporarily quadruples the so-called “SALT cap.” For 2025 through 2029, taxpayers who itemize can deduct up to $40,000 ($20,000 for separate filers), with 1% increases each subsequent year, meaning $40,400 in 2026 and so on. Deductible SALT expenses include property taxes (for homes, vehicles and boats) and either income tax or sales tax, but not both. The SALT cap is scheduled to return to the TCJA’s $10,000 cap ($5,000 for separate filers) beginning in 2030. In the meantime, the temporary limit increase could substantially boost your tax savings, depending on your SALT expenses and your modified adjusted gross income (MAGI). The allowable deduction drops by 30% of the amount by which your MAGI exceeds a threshold of $500,000 ($250,000 for separate filers). When MAGI reaches $600,000 ($300,000 for separate filers), the $10,000 (or $5,000) cap applies. If your [2025 SALT deductions](https://waradydavis.com/obbba-key-changes-to-the-salt-deduction-cap/) exceed the old $10,000 cap but your total itemized deductions would still be under the standard deduction, “bunching” could help you make the most of the higher SALT cap. For example, if you receive your 2026 property tax bill before year end, you can pay it this year and deduct both your 2025 and 2026 property taxes in 2025. You might increase the deduction further by accelerating estimated state or local income tax payments into this year, if applicable. You could bunch other itemized deductions into 2025 as well. (See No. 1 above.) In 2026, you’d go back to claiming the standard deduction. And then you’d repeat the bunching for the 2027 tax year and itemize that year. ### 3. Prepare for changes to charitable giving rules Donating to charity is a valuable and flexible year-end tax planning tool. You can give as much or as little as you like. As long as the recipient is a qualified charity, you can properly substantiate the donation and you itemize, you’ll likely be able to claim a tax deduction. But beginning in 2026, the OBBBA imposes a 0.5% of adjusted gross income (AGI) “floor” on charitable contribution deductions. The floor generally means that only charitable donations in excess of 0.5% of your AGI can be claimed as an itemized deduction. In other words, if your AGI for a tax year is $100,000, you can’t deduct the first $500 ($100,000 × 0.5%) of donations made that year. So if you can afford it, you might want to bunch donations you’d normally make in 2026 into 2025 instead, so that you can avoid the new floor. (Bear in mind that a charitable deduction might nonetheless be more valuable next year if you’ll be in a higher tax bracket.) One way to save even more taxes with your charitable donations is to give appreciated stock instead of cash. You can avoid the long-term capital gains tax you’d owe if you sold the stock and also claim a charitable deduction for the fair market value (FMV) of the shares. On the other hand, if you *don’t* itemize, you may want to delay your 2025 charitable contributions until next year. Beginning in 2026, the OBBBA creates a permanent deduction for nonitemizers’ cash contributions, up to $1,000 for individuals and $2,000 for married couples filing jointly. Donations must be made to public charities, not foundations or donor-advised funds. ### 4. Manage your MAGI MAGI is the trigger for certain additional taxes and the phaseouts of many tax breaks, including some of the newest deductions. For example, the OBBBA establishes a temporary “senior” deduction of $6,000 for taxpayers age 65 or older. This can be claimed in addition to either the standard deduction or itemized deductions. But the senior deduction begins to phase out when MAGI exceeds $75,000 ($150,000 for joint filers). As discussed in No. 2, the enhanced SALT deduction is also subject to MAGI phaseouts. So, too, are the Child Tax Credit and the new temporary deductions for qualified tips, overtime pay and car loan interest. In terms of being a tax trigger, your MAGI plays a role in determining your liability for the 3.8% net investment income tax. It can pay, therefore, to take steps to reduce your MAGI. For example, you might spread a Roth conversion over multiple years, rather than completing it in a single year. You can also max out your contributions to traditional retirement accounts and Health Savings Accounts. If you’re age 70½ or older, qualified charitable distributions (QCDs) from your traditional IRA are another avenue for reducing your MAGI. While a charitable deduction can’t be claimed for QCDs, the amounts aren’t included in your MAGI and can be used to satisfy an IRA owner’s required minimum distribution (RMD), if applicable. This can be beneficial because charitable donation deductions (and other itemized deductions) *don’t* reduce MAGI and RMDs typically *are* included in MAGI. ### Begin planning now Don’t miss out on both new and traditional planning opportunities to reduce your 2025 taxes. The best strategies for you depend on your specific situation. The Warady & Davis LLP team is here to help you make the most of your year-end tax planning. **Contact your W&D advisor at (847) 267-9600 or info@waradydavis.com for guidance.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** E-Alerts, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [Retirement Tax Planning: Four Financial Questions to Ask Right Now](https://waradydavis.com/four-financial-questions-to-ask-right-now/) **Published:** March 26, 2026 **Author:** Samantha Reyes **Excerpt:** Tax season is the perfect time to review your finances. Ask these 4 key questions to optimize withdrawals, Roth conversions, Medicare & Social Security. **Content:** ## Key Financial Questions to Consider This Tax Season (Retirement Tax Planning Strategies) > *[Tax season](https://waradydavis.com/2025-tax-filing-whats-new-under-the-obbba/) is one of the few times a year when your entire financial picture is sitting right in front of you. Your income, your accounts, your distributions, your trajectory. It’s a uniquely clear moment—and it can be one of the most underused opportunities in financial planning.* Many clients understandably focus on gathering documents and getting through the filing process. That makes sense—tax prep is stressful enough. But there are a handful of questions that, if they are discussed during this window, can make a real difference over time. Not complicated strategies. Just the right conversations at the right moment. Here are four key questions worth your attention this spring. ### 1. Retirement Account Withdrawal Order: Why the Sequence Matters for Your Tax Bill? This one surprises a lot of people. If you’re retired and pulling from your savings, it turns out that *which account you draw from first* matters almost as much as how much you take. Without a coordinated strategy, it’s easy to pull from whichever account feels easiest. But done thoughtfully, the sequence can keep you in a lower tax bracket, reduce what you pay in taxes over your lifetime, and help you avoid some nasty Medicare surcharges we’ll talk about in a moment. The general idea: taxable accounts first, then traditional IRAs and 401(k)s, and let the Roth sit as long as possible. But there’s real strategy in how you apply that—and it should connect directly to what’s happening on your tax return each year. Tax season can be a good time to reevaluate your distribution strategy. ### 2. Roth Conversion Strategy: How to Identify the Right Year to Convert? A [Roth conversion](https://www.irs.gov/retirement-plans/roth-iras?utm_source=chatgpt.com) is simple in concept: you move money from a traditional IRA into a Roth, pay the tax now, and everything that grows from there comes out tax-free. The question is always *when* to do it. The years that make the most sense are often the quieter ones—a year where income dipped because of a career change, the early years of retirement before Social Security kicks in, or a year where business was slower than usual. Those are windows where you’re paying a lower rate than you likely will later, especially once Required Minimum Distributions start pushing your taxable income up. *If your income looks lower than usual this year, it may be worth evaluating whether a Roth conversion makes sense before you file your return.* ### 3. Medicare IRMAA Surcharges: How a Single High-Income Year Can Cost You Thousands This is the one that catches people off guard the most. Medicare premiums aren’t a flat rate—they’re based on your income. And if you cross certain thresholds, your Part B and Part D premiums can increase meaningfully. We’re talking thousands of dollars a year in some cases. Here’s the part most people don’t know: Medicare uses your income from **two years ago**. So a large Roth conversion, a property sale, or a big RMD this year could quietly raise your Medicare premiums in 2028. For clients who are retired and sitting on large IRA balances, this is something we think about carefully before making any major moves. *It’s not a reason to avoid these strategies—it’s just a reason to plan them thoughtfully.* ### 4. When to Take Social Security: Why Waiting Could Mean $100,000 More in Retirement If you’re anywhere in your 60s, this question is probably in the back of your mind. Social Security is one of the biggest financial decisions you’ll make in retirement—and most people make it based on when they become eligible, not based on an actual analysis. The gap between claiming at 62 versus waiting until 70 can be over $100,000 in lifetime income. The right answer is different for everyone—it depends on your health, your other income, your spouse’s situation, and how your retirement is structured. *Taking a closer look at the numbers can help clarify when it may make the most sense to start Social Security.* ### We’re Here to Help None of this has to be resolved before April 15th. But the window where your financial picture is this clear doesn’t stay open long. If anything here is on your radar—or should be—reach out to your Warady & Davis LLP advisor to talk through it. **Contact your W&D advisor at (847) 267-9600 or info@waradydavis.com for guidance.** That’s what we’re here for. *© 2026* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2026 All Rights Reserved **Categories:** E-Alerts, Financial Planning, Retirement, Tax, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [IRS: Review Your Withholding Now for Next Year](https://waradydavis.com/irs-review-your-withholding-now-for-next-year/) **Published:** April 22, 2025 **Author:** Samantha Reyes **Excerpt:** The IRS urges taxpayers to review their withholding early in the year using its online estimator to avoid penalties, big refunds, or tax bills in 2026. **Content:** ## How and Why to Review Your IRS Tax Withholding The IRS is urging taxpayers to check their federal tax withholding early in the year to avoid unexpected tax bills or large refunds when filing in 2026. With taxes operating on a pay-as-you-go system, adjusting withholding sooner allows individuals to better manage their income, avoid penalties, and potentially increase take-home pay throughout the year. ### Use the IRS Tax Withholding Estimator To help taxpayers stay on track, the IRS offers a free [Tax Withholding Estimator](https://www.irs.gov/individuals/tax-withholding-estimator). This online tool helps workers, self-employed individuals, and retirees determine whether they have the right amount of federal income tax withheld. Based on the results, individuals may choose to: - Submit a new Form W-4 to their employer, or - Update your withholdings to boost your take-home pay rather than waiting for a refund. ### Why Review Withholding? Using the estimator annually—or after major life events like marriage, childbirth, a new job, or home purchase—can help avoid surprises at tax time. It also enables taxpayers to: - Reduce the risk of owing taxes and penalties - Align withholdings to match current financial situations - Avoid over-withholding and receive more money throughout the year ### What You’ll Need Before using the estimator, taxpayers should gather: - Include all income statements, including your spouse’s if filing jointly - Information about other income sources (like gig work or investments) - Most recent tax return(s) Taxpayers with more complex financial situations—such as those subject to the alternative minimum tax, capital gains, or qualified dividends—may need to refer to IRS [Publication 505, Tax Withholding and Estimated Tax](https://www.irs.gov/forms-pubs/about-publication-505), for further guidance. Of course, your W&D advisors are also here to help. ### Stay Proactive The IRS emphasizes that[ early planning](https://waradydavis.com/category/tax/) is the [best way to avoid filing season surprises](https://waradydavis.com/get-ready-for-2016/). The Tax Withholding Estimator is updated regularly and available year-round at [IRS.gov](http://irs.gov). #### **Questions?** Please contact your Warady & Davis LLP business advisor with any additional questions or concerns – (847) 267-9600 or . Additional information is available in the [IRS Tax Withholding Estimator FAQs](https://www.irs.gov/individuals/tax-withholding-estimator-faqs) at IRS.gov. **Source:** IRS.gov ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** Financial Planning, Hot Topics, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [2025 Tax Filing: What’s New Under the OBBBA](https://waradydavis.com/2025-tax-filing-whats-new-under-the-obbba/) **Published:** November 20, 2025 **Author:** Samantha Reyes **Excerpt:** Learn how new OBBBA tax provisions effective in 2025 may impact your return. See key updates for individuals and small businesses and plan ahead with W&D. **Content:** ## 2025 Tax Updates Under the OBBBA: How New Provisions May Affect You As 2025 comes to an end and we look ahead to the 2026 filing season, many taxpayers doing tax planning are starting to review how this year’s tax legislation may affect their personal finances and business planning. With the [One Big Beautiful Bill Act (OBBBA)](https://waradydavis.com/whats-in-the-one-big-beautiful-bill-act-h-r-1/) signed into law in July 2025, many provisions became effective immediately, and several new and [updated tax rules](https://waradydavis.com/demystifying-plan-audits-irs-releases-updated-guidance/) will directly impact your 2025 tax return. These changes affect both individuals and small businesses and may influence deductions, credits, reporting requirements, and year-end planning decisions. Below is an overview of the key [OBBBA](https://www.congress.gov/bill/119th-congress/house-bill/1/text) provisions to keep in mind as you prepare for the upcoming filing season. If you’d like to discuss how these updates apply to your situation, your W&D advisor is here to help you plan with confidence. ### Provisions for Individuals **Alternative minimum tax** The act permanently extended the TCJA’s higher alternative minimum tax (AMT) exemption amounts and exemption phaseout thresholds, indexed for inflation. For 2025, the exemption amount for single taxpayers is $88,100 ($68,500 for married individuals filing separately), and it begins to phase out at taxable income of $626,350. For married taxpayers filing jointly, the exemption amount is $137,000 and begins to phase out at $1,252,700. **Standard and itemized deductions** The act made the TCJA’s increased standard deduction permanent. For 2025, it is set at $15,750 for single filers, $31,500 for married individuals filing jointly, and $23,625 for heads of household. Along with the increased standard deduction, the act made permanent the TCJA’s suspension of miscellaneous itemized deductions (although it removed eligible educators’ unreimbursed employee expenses from the miscellaneous itemized deductions list, those expenses remain deductible under the separate educator expense deduction). The act also created a new limit beginning in 2026 on the amount of benefit high-income taxpayers can get from their itemized deductions. The act limits the amount of itemized deductions available to taxpayers in the 37% tax rate bracket. Their itemized deductions (determined before the limitation on itemized deductions) will be reduced by 2/37 of the lesser of the amount of the taxpayer’s itemized deductions or the amount of the taxpayer’s taxable income (before the limitation on itemized deductions and increased by the amount of itemized deductions) that exceeds the start of the 37% tax rate bracket. The act also made permanent the TCJA’s removal of the deduction for personal exemptions (setting it at zero). **Senior deduction** Under the act, individuals who are age 65 and older may claim a deduction of $6,000 in 2025 through 2028. The $6,000 amount is per person — so married couples can claim a $12,000 deduction if they both qualify. However, the deduction phases out for taxpayers with modified adjusted gross income (MAGI) over $75,000 ($150,000 for joint filers). To qualify, a taxpayer must turn 65 on or before the last day of the tax year. This new deduction is in addition to the current additional standard deduction for seniors of $1,600, or $2,000 if the individual is unmarried and not a surviving spouse. Because the extra senior deduction was created as a substitute for a “no tax on Social Security” promise that could not be adopted under the budget reconciliation rules that governed the passage of the act, clients may think they have to be receiving Social Security benefits to take the deduction. Individuals age 65 and older can claim the deduction even if they haven’t started taking Social Security. On the other hand, individuals between the ages of 62 and 64 are not eligible for the deduction, even if they have started receiving Social Security benefits. **SALT Cap** For 2025, the limit on the federal deduction for state and local taxes (the SALT cap) increases to $40,000 ($20,000 for married taxpayers filing separately) from the previous $10,000. The amount of the deduction available to a taxpayer is reduced by 30% of the amount the taxpayer’s MAGI exceeds $500,000 ($250,000 for married taxpayers filing separately), but the phaseout stops when the deduction reaches $10,000 ($5,000 for married taxpayers filing separately). The act did not limit the various workarounds that states have enacted and taxpayers are currently using to avoid the SALT cap. **Car loan interest** The act allows individuals to deduct up to $10,000 in interest paid on a loan used to purchase a qualified vehicle, but various restrictions embedded in the provision may prove a trap for the unwary client (including a phaseout beginning at $100,000 of MAGI ($200,000 for married taxpayers filing jointly)). To qualify for the deduction, the interest must be paid on a loan that is originated after Dec. 31, 2024; used to purchase a vehicle, the original use of which starts with the taxpayer (used vehicles do not qualify); for a personal-use vehicle (not for business or commercial use); and secured by a first lien on the vehicle. A qualified vehicle is a car, minivan, van, SUV, pickup truck, or motorcycle with a gross vehicle weight rating of less than 14,000 pounds that has undergone final assembly in the United States, among other requirements. Finally, for many eligible clients, the interest deduction will not outlast the car loan; the provision is set to expire after 2028. **Mortgage interest** The TCJA’s provision limiting the qualified residence interest deduction to the first $750,000 in home mortgage acquisition debt was made permanent by the act. It also made permanent the exclusion of interest on home-equity indebtedness from the definition of qualified residence interest. The act also reinstates the provision (which had expired after Dec. 31, 2021) allowing certain mortgage insurance premiums on acquisition indebtedness to count as qualified residence interest. **Casualty losses** The TCJA’s provision limiting the itemized deduction for personal casualty losses to losses resulting from federally declared disasters is now permanent. The act also expanded the provision to include certain state-declared disasters, but that change is not effective until next year. **Excess business losses** The act makes the Sec. 461(l)(1) limitation on excess business losses of noncorporate taxpayers permanent. **Moving expenses** The act makes permanent the TCJA’s elimination of the moving expense deduction, except for active-duty members of the U.S. armed forces. A new provision added by the act allowing a moving expense deduction for certain members of the intelligence community takes effect in 2026. **“No tax on tips”** The act labels one of its new, temporary (effective 2025 through 2028) deductions “no tax on tips,” and this is how it has been portrayed in the media, so many clients may be surprised to discover that they will still owe tax on tips. Some may have already been surprised to find taxes were still being withheld on their tip income after the act was enacted. The first thing to recognize is that the deduction applies only to federal income tax; taxpayers will still owe Social Security and Medicare taxes on their tip income. The second is that states have so far not followed the federal government’s lead, so state income tax will still be owed on tip income (in states with an income tax). And not all taxpayers will be eligible for the deduction, either because they work in an occupation that does not customarily and regularly receive tips or because their tip income was not reported to them on the appropriate form (Form W-2, Wage and Tax Statement; various versions of Form 1099; or Form 4137, Social Security and Medicare Tax on Unreported Tip Income). The IRS released on Oct. 2 a [list](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors) of occupations that customarily and regularly receive tips and therefore make the recipient eligible for the deduction. The IRS has also promised transition relief for tax year 2025 for individuals claiming the deduction and for employers subject to new reporting requirements. Taxpayers conducting or employed by a trade or business that is a specified service trade or business (SSTB) under Sec. 199A(d)(2) are ineligible for the “no tax on tips” deduction. SSTBs include any trade or business involving the performance of services in the fields of health; law; accounting; actuarial science; performing arts; consulting; athletics; financial services; brokerage services; investing and investing management; trading or dealing in securities, partnership interests, or commodities; or any trade or business where the principal asset of the trade or business is the reputation or skill of one or more of its employees or owners. In addition, some taxpayers may find the deduction reduced because their MAGI is too high (the deduction phases out for taxpayers with MAGI over $150,000 ($300,000 in the case of a joint return)). And the maximum deduction is $25,000, so taxpayers with tip income over that amount will end up paying income tax on the overage (or over the phased-down amount, if their MAGI exceeds the threshold). For self-employed taxpayers, the deduction cannot exceed the individual’s net income (without regard to the “no tax on tips” deduction) from the trade or business in which the tips were earned. And married taxpayers must file jointly in order to claim the deduction. **“No tax on overtime”** Another deduction that may catch some clients unaware is the new, temporary (effective 2025 through 2028) deduction called “no tax on overtime.” This deduction holds many of the same potential surprises as the “no tax on tips” deduction. First, it applies only to federal income tax, not Federal Insurance Contributions Act (FICA) taxes and not state taxes. Also, if the taxpayer’s overtime is not reported as qualified overtime compensation on the appropriate form (Form W-2, Form 1099, or other specified statement furnished to the individual), it is not eligible for the deduction. Only the portion of overtime pay that exceeds the taxpayer’s regular rate of pay (e.g., the “half” portion of time-and-a-half pay) is potentially deductible, up to a maximum deduction of $12,500 ($25,000 in the case of a joint return), so taxpayers earning more than that in overtime pay will have to pay income tax on the overage. And, finally, the deduction phases out by $100 for every $1,000 the taxpayer’s MAGI exceeds $150,000 ($300,000 in the case of a joint return). This means it will phase out for single taxpayers at $275,000 of MAGI and for joint filers at $550,000 of MAGI. As with the “no tax on tips” deduction, married individuals must file jointly to claim the deduction. The IRS has promised transition relief for tax year 2025 for individuals claiming the deduction and for employers subject to new reporting requirements. **Child tax credit** The nonrefundable child tax credit was permanently increased to $2,200 per child. The additional child tax credit (the refundable child tax credit) of $1,400, adjusted for inflation, was also made permanent. The additional child tax credit after adjustment for inflation is $1,700 for 2025. The credit starts to phase out at MAGI of $200,000 ($400,000 in the case of a joint return). There is also a $500 nonrefundable credit available for each dependent of the taxpayer other than a qualifying child. As formerly, Social Security numbers must be shown on the return for each child for whom the credit is being claimed. New for 2025, however, is a requirement that the taxpayer claiming the credit (or in the case of a joint return, at least one of the spouses) also must have a Social Security number, which must be included on the taxpayer’s return. **Adoption credit** Starting in 2025, a portion of the adoption credit is refundable — up to $5,000. **Clean energy credits** Certain energy credits are being eliminated during 2025. The clean vehicle credit, the previously owned clean vehicle credit, and the qualified commercial clean vehicle credit all were terminated at the end of September. Clients who bought qualifying vehicles before Oct. 1 may qualify for a credit; those who bought on or after that date will not. **Sec. 529 plans** For distributions made after July 4, 2025, the act allows tax-exempt distributions from Sec. 529 savings plans to be used for additional qualified higher education expenses, including “qualified postsecondary credentialing expenses” in connection with “recognized postsecondary credential programs” and “recognized postsecondary credentials.” Another change to Sec. 529 plans that clients may have heard about — allowing distributions to be used for certain educational expenses in connection with enrollment or attendance at an elementary or secondary school — also applies to distributions made after July 4, 2025. ### Small Business Provisions **Bonus depreciation** The allowance is increased to 100% for property acquired and placed in service on or after Jan. 19, 2025, as well as for specified plants planted or grafted on or after Jan. 19, 2025. Property placed in service in the first 18 days of 2025 is subject to the former, reduced rate of 40% in effect before the enactment of the act. **Sec. 179** For property placed in service in 2025, the maximum amount a taxpayer may expense under Sec. 179 is $2.5 million, reduced by the amount by which the cost of the qualifying property exceeds $4 million. The $2.5 million and $4 million amounts are adjusted for inflation for tax years beginning after 2025. **R&D** The act allows taxpayers to immediately deduct domestic research or experimental expenditures paid or incurred in tax years beginning after Dec. 31, 2024. However, research or experimental expenditures attributable to research that is conducted outside the United States will continue to be required to be capitalized and amortized over 15 years under Sec. 174. Small business taxpayers with average annual gross receipts of $31 million or less (other than a tax shelter) can retroactively apply this change to tax years beginning after Dec. 31, 2021. In addition, all taxpayers that made domestic research or experimental expenditures in tax years beginning after Dec. 31, 2021, and before Jan. 1, 2025, can elect to accelerate the remaining unamortized deductions for those expenditures over a one- or two-year period. **Sec. 163(j)** The act changed the definition of adjusted taxable income (ATI) under Sec. 163(j) for tax years beginning after Dec. 31, 2024, permanently excluding depreciation, depletion, and amortization from the computation of ATI. The act also amended the definition of “motor vehicle” to allow interest on floor plan financing for certain trailers and campers to be deductible. **Small business stock** The act modified the Sec. 1202 exclusion for gain from qualified small business stock (QSBS) by providing a tiered gain exclusion for QSBS acquired after July 4, 2025. For QSBS acquired after that date and held for three years, 50% of the gain will be excluded from gross income. If the QSBS is held for four years, the exclusion rises to 75%. If the QSBS is held for five years or more, 100% of the gain will be excluded from income. **Farmland sales** The act created a new Sec. 1062 that allows income tax resulting from the sale of qualified farmland property to a qualified farmer to be paid in four installments. The new section applies to sales or exchanges in tax years beginning after July 4, 2025. (So, for calendar-year taxpayers, it will not apply until 2026.) ### Reporting Requirements **Form 1099-K** The act provides that with respect to reporting on Form 1099-K, *Payment Card and Third Party Network Transactions*, a third-party settlement organization is not required to report unless the aggregate value of third-party network transactions with respect to a participating payee for the year exceeds $20,000 and the aggregate number of such transactions with respect to a participating payee exceeds 200. A lower reporting threshold of $600 (with no minimum transaction number) had been enacted as part of the American Rescue Plan Act of 2021, P.L. 117-2, but the IRS had issued guidance that phased in the implementation of that threshold over a multiple-year period, and under that guidance, the reporting threshold had been scheduled to be $2,500 in 2025 — and $600 in 2026. However, these lower thresholds will not go into effect. Under the OBBBA, the higher $20,000/200-transaction threshold remains in place for 2025 and beyond unless future legislation changes it. **Form 1099** The act increased the information-reporting threshold for certain payments to persons engaged in a trade or business and payments of remuneration for services to $2,000 in a calendar year (from $600), but this change is not effective until 2026. ### What This Means for You As you consider how these changes may affect your 2025 return, thoughtful planning can make a meaningful difference in your overall tax position. Every taxpayer’s situation is unique, and the strategies that work best will depend on your individual circumstances. The Warady & Davis LLP team is here to help you navigate these updates and identify opportunities that align with your financial goals. If you’d like to discuss year-end planning or how these new provisions may impact you, **contact your W&D advisor at (847) 267-9600 or info@waradydavis.com for guidance.** *Source: Journal of Accountancy* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** E-Alerts, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [IRS CP53E Scam Alerts: What Taxpayers Need to Know](https://waradydavis.com/irs-cp53e-scam-alerts-what-taxpayers-need-to-know/) **Published:** May 14, 2026 **Author:** Samantha Reyes **Excerpt:** Learn how to identify IRS CP53E scam notices, avoid fraud, and safely verify tax refund requests and account information. **Content:** ## What to Know About IRS CP53E Notices and Potential Scams Some taxpayers filing 2025 federal income tax returns have reported receiving [IRS Notice CP53E](https://www.irs.gov/individuals/understanding-your-cp53e-notice) requesting [bank account information to process a refund](https://waradydavis.com/what-taxpayers-need-to-know-as-the-irs-ends-paper-checks/). In certain cases, this notice has been issued even when no refund was requested. Receiving this notice unexpectedly is not, by itself, cause for alarm. At the same time, tax professionals are seeing an increase in fraudulent versions of this notice. Because it references a refund and bank account information, it can appear legitimate and prompt quick action. ### What Is Notice CP53E? Notice CP53E is a legitimate notice from the Internal Revenue Service. It is typically issued when the IRS cannot process a direct deposit refund due to missing or incorrect bank account information. ### Indications a CP53E Notice May Be Fraudulent Be cautious if the notice: - Directs you to a website that is not IRS.gov - Provides a phone number not associated with the IRS - Includes a QR code - Requests payment or refund processing via gift card or other unusual methods - Asks for a response by email or text message - Uses language that feels urgent, threatening, or inconsistent ### What To Do If You Receive a CP53E Notice - Do not click links or scan QR codes included in the notice - Go directly to IRS.gov by typing the address into your browser - Log in to your IRS Online Account to verify the notice and update information if needed - Allow 2 to 5 days for updates to process, then check your refund status using the IRS “Where’s My Refund?” tool - If unsure whether the notice is legitimate, rely only on your IRS Online Account for next steps ### Key Reminder The CP53E notice itself is real, but scammers are actively exploiting it. The safest approach is to ignore links and alternate contact instructions and use only official IRS channels to verify and respond. **Taxpayers should only respond to IRS notices by:** - Accessing the IRS website directly - Using verified IRS phone numbers or mailing addresses - Independently confirming any unfamiliar contact information ### Questions? If you have questions about a notice you received or would like assistance verifying its legitimacy, **contact your W&D advisor at (847) 267-9600 or [info@waradydavis.com.](mailto:info@waradydavis.com)** *© 2026* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2026 All Rights Reserved **Categories:** E-Alerts, Not-for-Profit, Tax, Tax Planning, The Bottom Line **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [What the New Tips and Overtime Deductions Mean for You](https://waradydavis.com/what-the-new-tips-and-overtime-deductions-mean-for-you/) **Published:** January 29, 2026 **Author:** Samantha Reyes **Excerpt:** The IRS has issued guidance for taxpayers wanting to claim new deductions for qualified tips income and qualified overtime compensation for 2025. **Content:** ## IRS releases critical guidance on calculating tips and overtime deductions for 2025 The [One Big Beautiful Bill Act (OBBBA)](https://waradydavis.com/2025-tax-filing-whats-new-under-the-obbba/) creates new income tax deductions for tax years 2025 through 2028 for qualified cash tips and overtime compensation. If you receive tips or overtime pay, you likely have questions about whether you’re eligible for a deduction and how big it might be. The IRS has issued [guidance](https://www.irs.gov/pub/irs-drop/n-25-69.pdf) on how workers can determine the amount of their deductions for 2025, because ***employers aren’t required to provide detailed information on tips income or overtime compensation until the 2026 tax year.*** Here’s an overview of what you need to know. ### The new deductions Rather than eliminating taxes on all tips income and overtime compensation, the OBBBA establishes partial deductions available to both itemizers and nonitemizers, subject to income-based limitations. Qualified tips income and overtime compensation remain subject to federal payroll taxes and state income and payroll taxes where applicable. Moreover, because the tax breaks are in the form of deductions claimed at tax time, employers must continue to withhold federal income taxes from employees’ paychecks. #### Tips For qualified tips, you may be able to claim a deduction of up to $25,000. “Qualified tips” generally refers to cash tips received by an individual in an occupation that customarily and regularly received tips on or before December 31, 2024. The tips must be paid voluntarily, without any consequence for nonpayment, in an amount determined by the payor and without negotiation. Proposed IRS regulations identify 68 eligible occupations within the following categories: - Beverage and food service, - Entertainment and events, - Hospitality and guest services, - Home services, - Personal services, - Personal appearance and wellness, - Recreation and instruction, and - Transportation and delivery. The tips deduction begins to phase out if your modified adjusted gross income (MAGI) exceeds $150,000, or $300,000 if you’re married filing jointly. The deduction is completely phased out if your MAGI reaches $400,000, or $550,000 if you’re a joint filer. #### Overtime The overtime deduction is limited to $12,500, or $25,000 if you’re a joint filer. A phaseout begins if your MAGI exceeds $150,000, or $300,000 if you’re a joint filer. The deduction is completely phased out if your MAGI reaches $275,000, or $550,000 if you’re a joint filer. The overtime deduction is available for overtime pay required by the Fair Labor Standards Act (FLSA), which generally mandates “time-and-a-half” for hours that exceed 40 in a workweek. Notably, though, the deduction applies only to the pay that exceeds the regular pay rate — that is, the “half” component. Because the FLSA definition of overtime varies from some state law definitions, overtime pay under state law might not be deductible. And the deduction doesn’t apply to overtime paid under a collective bargaining agreement or that an employer pays in excess of time-and-a-half (for example, double-time). ### The tips deduction calculation > ***Employers* won’t be required to include the total amount of cash tips reported by the employee and the employee’s occupation code on Form W-2 until the 2026 tax year.** So, for 2025, according to the IRS, if you’re an employee, you can calculate your tips deduction using: - Social Security tips reported in Box 7 of Form W-2, - The total amount of tips you reported to your employer on Forms 4070, “Employee’s Report of Tips to Employer,” or similar forms, or - The total amount of tips your employer voluntarily reports in Box 14 (“Other”) of Form W-2 or a separate statement. You may also include any amount listed on Line 4 of the 2025 Form 4137, “Social Security and Medicare Tax on Unreported Tip Income,” filed with your 2025 income tax return (and included as income on that return). Note that you’re responsible for determining whether the tips were received as part of an eligible occupation. If your employer opts to provide this or other relevant information in Box 14 (“Other”) of Form W-2, you may rely on it. **Tips also won’t be required to be reported on Forms 1099 until the 2026 tax year.** For 2025, if you’re an independent contractor, you can corroborate the calculation of your qualified tips with: - Earnings statements, - Receipts, - Point-of-sale system reports, - Daily tip logs, - Third-party settlement organization records, or - Other documentary evidence. **Note:** Nonemployees must confirm that their tips were received from an eligible occupation. ### The overtime deduction calculation > **Employers won’t be required to include eligible overtime pay on Form W-2 until the 2026 tax year.** So for 2025, if you’re an employee, you can self-report your overtime compensation for the overtime deduction. According to the IRS, you must make a “reasonable effort” to determine whether you’re considered to be an FLSA-eligible employee. The IRS says this may include asking your employers or other service recipients about your FLSA status. To calculate the deduction amount, you must use “reasonable methods” to break out the amount of overtime pay that qualifies. For example, if you were paid time-and-a-half and receive a statement with your total amount for overtime (regular wages plus the overtime premium), then you can use one-third of the total. If you were paid double-time and receive such a statement, you can multiply the total dollar amount by one-fourth to compute the qualifying overtime pay. ### A tax-saving opportunity If you might be eligible for the tips or overtime deduction, don’t miss out on this tax-saving opportunity just because your deduction may be difficult to calculate. We’re here to help. If you’re an employer with employees who receive tips or overtime income, we can also provide guidance on how to answer employee questions for 2025 and how to ensure you’re in compliance with reporting requirements for 2026. **For guidance on how these rules may apply to your situation, contact your W&D advisor at (847) 267-9600 or info@waradydavis.com.** *© 2025* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2026 All Rights Reserved **Categories:** General, OBBBA, OBBBA Business, OBBBA Individual, Tax --- ### [The OBBBA to eliminate certain clean energy tax incentives](https://waradydavis.com/the-obbba-to-eliminate-certain-clean-energy-tax-incentives/) **Published:** August 28, 2025 **Author:** Samantha Reyes **Excerpt:** OBBBA accelerates the phaseout of clean energy tax breaks. See how changes impact solar, wind, EV credits, and energy-efficient upgrades. **Content:** ## What taxpayers and businesses need to know about expiring clean energy incentives Here’s a closer look at some of the individual-related and business-related clean energy tax incentives that were created or enhanced by the Inflation Reduction Act (IRA) that are being scaled back or eliminated by the [One, Big, Beautiful Bill Act (OBBBA)](https://waradydavis.com/whats-in-the-one-big-beautiful-bill-act-h-r-1/). ### Clean energy tax breaks affecting individuals The [OBBBA](https://www.congress.gov/bill/119th-congress/house-bill/1/text) eliminates several tax credits that have benefited eligible individual taxpayers. It provides short “grace periods” before they expire, though, giving taxpayers a window to take advantage of the credits. For example, the Energy Efficient Home Improvement Credit (Section 25C) was scheduled to expire after 2032. It’s now available for eligible improvements put into service by December 31, 2025. The IRA increased the credit amount to 30% and offers limited credits for exterior windows, skylights, exterior doors, and home energy audits. The Residential Clean Energy Credit (Sec. 25D) was scheduled to expire after 2034. It’s also now available only through December 31, 2025. The IRA boosted the credit to 30% for eligible clean energy improvements made between 2022 and 2025. The credit is available for installing solar panels or other equipment to harness renewable energy sources like wind, geothermal or biomass energy. ### Clean energy tax breaks affecting businesses **The Alternative Fuel Vehicle Refueling Property Credit (Sec. 30C)** for property that stores or dispenses clean-burning fuel or recharges electric vehicles will also become unavailable sooner than originally set by the IRA. The credit — worth up to $100,000 per item (each charging port, fuel dispenser or storage property) — had been scheduled to sunset after 2032. Under the OBBBA, property must be placed in service on or before ***June 30, 2026***, to qualify for the credit. The law also eliminates the **Sec. 179D Energy Efficient Commercial Buildings Deduction** for buildings or systems on which the construction begins ***after June 30, 2026***. The deduction has been around since 2006, but the IRA substantially boosted the size of the potential deduction and expanded the pool of eligible taxpayers. ### Wind and solar projects stand to take a big hit. The OBBBA eliminates the Clean Electricity Investment Credit (Sec. 48E) and the Clean Electricity Production Credit (Sec. 45Y) for wind and solar facilities placed in service after 2027, unless construction begins on or before July 4, 2026. Wind and solar projects begun after that date must be put in service by the end of 2027. In addition, wind energy components won’t qualify for the Advanced Manufacturing Production Credit (Sec. 45X) after 2027. The law also modifies the credit in other ways. For example, it adds “metallurgical coal” suitable for the production of steel to the list of critical minerals. And, for critical materials other than metallurgical coal, the credit will now phase out from 2031 through 2033. The credit for metallurgical coal expires after 2029. **Note:** The OBBBA permits taxpayers to transfer clean energy credits while the credits are still available (restrictions apply to transfers to “specified foreign entities”). ### Clean vehicle credits If you’ve been pondering the purchase of a new or used electric vehicle (EV), you’ll want to buy sooner rather than later to take advantage of available tax credits. The Clean Vehicle Credit (Sec. 30D) was scheduled to expire after 2032. Under the OBBBA, the credit is available only through September 30, 2025. The IRA significantly expanded the credit for qualifying clean vehicles placed in service after April 17, 2023. For eligible taxpayers, it extended the credit to any “clean vehicle,” including EVs, hydrogen fuel cell cars and plug-in hybrids. The maximum credit for new vehicles is $7,500, based on meeting certain sourcing requirements for 1) critical minerals and 2) battery components. Clean vehicles that satisfy only one of the two requirements qualify for a $3,750 credit. The IRA also created a new credit, Sec. 25E, for eligible taxpayers who buy used clean vehicles from dealers. The credit equals the lesser of $4,000 or 30% of the sale price. It also expires on September 30, 2025. Additionally, the OBBBA targets the incentive for a business’s use of clean vehicles. The Qualified Commercial Clean Vehicle Credit (Sec. 45W) had been scheduled to expire after 2032. It’s now available only for vehicles acquired on or before September 30, 2025. Depending on vehicle weight, the maximum credit is up to $7,500 or $40,000. ### Other limitations The OBBBA also limits access to the remaining clean energy credits for projects involving “foreign entities of concern” and imposes tougher domestic content requirements. ### Questions? The Warady & Davis LLP team can help you plan for these changes, maximize expiring credits, and avoid compliance issues. **Contact your W&D advisor at (847) 267-9600 or info@waradydavis.com for guidance.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** E-Alerts, Hot Topics, OBBBA, OBBBA Business, OBBBA Individual, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [IRS Guidance on ‘No Tax on Tips’ Under OBBBA](https://waradydavis.com/irs-guidance-on-no-tax-on-tips-under-obbba/) **Published:** September 10, 2025 **Author:** Samantha Reyes **Excerpt:** IRS issues preliminary guidance on the OBBBA No Tax on Tips rule, outlining eligible occupations and new reporting requirements. **Content:** ## No Tax on Tips Guidance The U.S. Department of the Treasury and the Internal Revenue Service (IRS) are rolling out guidance on the new “No Tax on Tips” provision under the[ One Big Beautiful Bill Act (OBBBA)](https://waradydavis.com/whats-in-the-one-big-beautiful-bill-act-h-r-1/), ushering in a significant change for tax collection for employers with employees who receive tips. On September 2, 2025, the Treasury Department and the IRS issued a “preliminary list” of tipped occupations clarifying which employees will be entitled to claim tax deductions for tips and unveiled a draft Form W-2 for 2026 with boxes for tipped wages eligible for the deduction. ### Takeaways - The IRS has released a “preliminary list” of occupations that “customarily and regularly” receive tips that are eligible for the new tax deduction for tipped wages introduced by the OBBBA. - The “No Tax on Tips” provision under OBBBA allows eligible employees to deduct qualified tips from their taxable income, with a cap of $25,000 per year from 2025 to 2028. - A preliminary list of sixty-eight tipped occupations includes unexpected roles such as dishwashers and plumbers, with a final list expected by October 2, 2025. - The IRS has further unveiled a new draft Form W-2 for 2026 that implements the changes introduced by the OBBBA. ### OBBBA ‘No Tax on Tips’ Under the “No Tax on Tips Provision,” effective 2025 through 2028, employees and self-employed workers may deduct qualified tips received while working in occupations that customarily and regularly receive tips as specified by the IRS. “Qualified tips” are defined as voluntary cash or charged tips paid by customers or received through tip sharing. Eligible tipped employees, including those who itemize and do not itemize their taxes, can claim a tax deduction up to $25,000 per year. Employers with tipped employees must file information returns with the IRS or Social Security Administration (SSA) and provide statements to employees showing their cash tips received and occupation. ### Tipped Occupations The “[preliminary list](https://home.treasury.gov/system/files/136/Tipped-Occupations-Detailed-8-27-2025.pdf)” sets forth “occupations that customarily and regularly received tips on or before December 31, 2024” and provides codes for tax reporting purposes. The OBBBA requires the Treasury Department to publish the final list by October 2, 2025. However, while the “preliminary list” is not final, the Treasury Department and IRS said they “anticipate that the official proposed list will be substantially the same as this preliminary list.” Significantly, the list includes some occupations, such as dishwashers, cooks, plumbers, and electricians, that are not typically considered as jobs that “customarily and regularly” receive tips by the U.S. Department of Labor (DOL) for purposes of the Fair Labor Standards Act (FLSA). The preliminary list identifies sixty-eight distinct occupation codes under eight industry categories. ***Beverage and Food Service*** 1. “Bartenders” 2. “Wait Staff” 3. “Food Servers, Nonrestaurant” 4. “Dining Room and Cafeteria Attendants and Bartender Helpers” 5. “Chefs and Cooks” 6. “Food Preparation Workers” 7. “Fast Food and Counter Workers” 8. “Dishwashers” 9. “Host Staff, Restaurant, Lounge, and Coffee Shop” 10. “Bakers” ***Entertainment and Events*** 1. “Gambling Dealers” 2. “Gambling Change Persons and Booth Cashiers” 3. “Gambling Cage Workers” 4. “Gambling and Sports Book Writers and Runners” 5. “Dancers” 6. “Musicians and Singers” 7. “Disc Jockeys, Except Radio” 8. “Entertainers and Performers” 9. “Digital Content Creators” 10. “Ushers, Lobby Attendants, and Ticket Takers” 11. “Locker Room, Coatroom, and Dressing Room Attendants” ***Hospitality and Guest Services*** 1. “Baggage Porters and Bellhops” 2. “Concierges” 3. “Hotel, Motel, and Resort Desk Clerks” 4. “Maids and Housekeeping Cleaners” ***Home Services*** 1. “Home Maintenance and Repair Workers” 2. “Home Landscaping and Groundskeeping Workers” 3. “Home Electricians” 4. “Home Plumbers” 5. “Home Heating and Air Conditioning Mechanics and Installers” 6. “Home Appliance Installers and Repairers” 7. “Home Cleaning Service Workers” 8. “Locksmiths” 9. “Roadside Assistance Workers” ***Personal Services*** 1. “Personal Care and Service Workers” 2. “Private Event Planners” 3. “Private Event and Portrait Photographers” 4. “Private Event Videographers” 5. “Event Officiants” 6. “Pet Caretakers” 7. “Tutors” 8. “Nannies and Babysitters” ***Personal Appearance and Wellness*** 1. “Skincare Specialists” 2. “Massage Therapists” 3. “Barbers, Hairdressers, Hairstylists, and Cosmetologists” 4. “Shampooers” 5. “Manicurists and Pedicurists” 6. “Eyebrow Threading and Waxing Technicians” 7. “Makeup Artists” 8. “Exercise Trainers and Group Fitness Instructors” 9. “Tattoo Artists and Piercers” 10. “Tailors” 11. “Shoe and Leather Workers and Repairers” ***Recreation and Instruction*** 1. “Golf Caddies” 2. “Self-Enrichment Teachers” 3. “Recreational and Tour Pilots” 4. “Tour Guides and Escorts” 5. “Travel Guides” 6. “Sports and Recreation Instructors” ***Transportation and Delivery*** 1. “Parking and Valet Attendants” 2. “Taxi and Rideshare Drivers and Chauffeurs” 3. “Shuttle Drivers” 4. “Goods Delivery People” 5. “Personal Vehicle and Equipment Cleaners” 6. “Private and Charter Bus Drivers” 7. “Water Taxi Operators and Charter Boat Workers” 8. “Rickshaw, Pedicab, and Carriage Drivers” 9. “Home Movers” ### New IRS Form W-2 On August 15, 2025, the IRS unveiled a new [draft of the 2026 Form W-2](https://www.irs.gov/pub/irs-dft/fw2--dft.pdf), including changes made by the OBBBA. Specifically, the draft form includes a new Box 14b for “Treasury tipped occupation code.” Box 14a contains the old Box 14. The draft form also adds to Box 12 the ability for employees to report “TP” or “Total amount of qualified tips” for purposes of the tax deduction. The form instructs employees to claim the deduction using a Schedule 1-A (Form 1040). ### Next Steps Employers in relevant sectors may want to take note of the preliminary list and prepare for the forthcoming regulations. It is essential to understand which occupations within an organization may qualify for the “No Tax on Tips” provision and to ensure compliance. The Treasury Department and the IRS will request public comments on the official proposed list of occupations and other aspects of the proposed regulations. Employers may want to participate in this process to provide feedback and seek clarification. **Warady & Davis LLP can help you understand how the No Tax on Tips provision applies to your situation and explore strategies to reduce your taxable income. Contact your W&D advisor at (847) 267-9600 or for guidance.** ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** Business, E-Alerts, Hot Topics, OBBBA, OBBBA Business, Tax Legislation **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [IRS clarifies theft and fraud loss deductions](https://waradydavis.com/irs-clarifies-theft-and-fraud-loss-deductions/) **Published:** June 3, 2025 **Author:** Samantha Reyes **Excerpt:** Through a Chief Counsel Advice memo, the IRS indicates that more fraud victims can claim a theft loss deduction than previously known. **Content:** ## IRS Explains Which Theft and Fraud Losses May Be Deductible The [Tax Cuts and Jobs Act (TCJA)](https://waradydavis.com/congress-passes-biggest-tax-bill-since-1986-the-tax-cuts-and-jobs-act-tcja/) significantly limited the types of theft losses that are deductible on federal income taxes. But a recent “advice memo” ([CCA 202511015](https://www.irs.gov/pub/irs-wd/202511015.pdf)) from the IRS’s Office of Chief Counsel suggests more victims of fraudulent scams may be able to claim a theft loss deduction than previously understood. ### Casualty loss deduction basics The federal tax code generally allows individuals to deduct the following types of losses, if they weren’t compensated for them by insurance or otherwise: - Losses incurred in a business, - Losses incurred in a transaction entered into for profit (but not connected to a business), or - Losses not connected to a business or a transaction entered into for profit, which arise from a casualty or theft loss (known as personal casualty or theft losses). A variety of fraud schemes may fall under the third category. To deduct a theft loss, the taxpayer/victim generally must establish that: - The loss resulted from conduct that’s deemed theft under applicable state law, and - The taxpayer has no reasonable prospect of recovery of the loss. From 2018 through 2025, though, the TCJA allows the deduction of personal casualty or theft losses only to the extent of personal casualty gains (for example, an insurance payout for stolen property or a destroyed home) except for losses attributable to a federally declared disaster. As a result, taxpayers who are fraud victims generally qualify for the deduction only if the loss was incurred in a transaction entered into for profit. That would exclude the victims of scams where no profit motive exists. The loss of the deduction can compound the cost of scams for such victims. ### The IRS analysis The IRS Chief Counsel Advice memo considers several types of actual scams and whether the requisite profit motive was involved to entitle the victims to a deduction. In each scenario listed below, the scam was illegal theft with little or no prospect of recovery: **Compromised account scam.** The scammer contacted the victim, claiming to be a fraud specialist at the victim’s financial institution. The victim was induced to authorize distributions from IRA and non-IRA accounts that were allegedly compromised and transfer all the funds to new investment accounts. The scammer immediately transferred the money to an overseas account. The IRS Chief Counsel found that the distributions and transfers were made to safeguard and reinvest all the funds in new accounts in the same manner as before the distributions. The losses, therefore, were incurred in a transaction entered into for profit and were deductible. **“Pig butchering” investment scam.** This crime is so named because it’s intended to get every last dollar by “fattening up” the victim with fake returns, thereby encouraging larger investments. The victim here was induced to invest in cryptocurrencies through a website. After some successful investments, the victim withdrew funds from IRA and non-IRA accounts and transferred them to the website. After the balance grew significantly, the victim decided to liquidate the investment but couldn’t withdraw funds from the website. The Chief Counsel determined that the victim transferred the funds for investment purposes. So the transaction was entered into for profit and the losses were deductible. **Phishing scam.** The victim received an email from the scammer claiming that his accounts had been compromised. The email, which contained an official-looking letterhead and was signed by a “fraud protection analyst,” directed the victim to call the analyst at a provided number. When the victim called, the scammer directed the victim to click a link in the email, giving the scammer access to the victim’s computer. Then, the victim was instructed to log in to IRA and non-IRA accounts, which allowed the scammer to grab the username and password. The scammer used this information to distribute all the account funds to an overseas account. Because the victim didn’t authorize the distributions, the IRS weighed whether the stolen property (securities held in investment accounts) was connected to the victim’s business, invested in for profit or held as general personal property. The Chief Counsel found that the theft of property while invested established that the victim’s loss was incurred in a transaction entered into for profit and was deductible. **Romance scam.** The scammer developed a virtual romantic relationship with the victim. Shortly afterwards, the scammer persuaded the victim to send money to help with supposed medical bills. The victim authorized distributions from IRA and non-IRA accounts to a personal bank account and then transferred the money to the scammer’s overseas account. The scammer stopped responding to the victim’s messages. The Chief Counsel concluded this loss wasn’t deductible. The victim didn’t intend to invest or reinvest any of the distributed funds so there was no profit motive. In this case, the losses were nondeductible. **Note:** If the scammer had directed the victim to a fraudulent investment scheme, the results likely would’ve been different. The analysis, in that situation, would mirror that of the pig butchering scheme. **Kidnapping scam.** The victim was convinced that his grandson had been kidnapped. He authorized distributions from IRA and non-IRA accounts and directed the funds to an overseas account provided by the scammer. The victim’s motive wasn’t to invest the distributed funds but to transfer them to a kidnapper. Unfortunately, these losses were also nondeductible. ### What’s next? It’s uncertain whether the TCJA’s theft loss limit will be extended beyond 2025. In the meantime, though, some scam victims may qualify to amend their tax returns and claim the loss deduction. For guidance, contact your Warady & Davis LLP business advisor at (847) 267-9600 or to discuss your situation. ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** Business, Business Management, E-Alerts, General **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [6 Last-minute Tax Tips Your Business Can Use Right Now](https://waradydavis.com/6-last-minute-tax-tips-your-business-can-use-right-now/) **Published:** December 9, 2025 **Author:** Leslie Flinn **Excerpt:** Lower your business’s 2025 taxes with six last-minute year-end tax tips, including income deferral, expense prepayment, equipment purchases, and more. **Content:** ## Essential Year-End Tax Tips to Reduce Your Business’s 2025 Tax Liability Year-round tax planning generally produces the best results, but there are some steps you can still take in December to lower your 2025 taxes. Here are six year-end tax tips to consider: **1. Postpone invoicing.** If your business uses the cash method of accounting and it would benefit from deferring income to next year, wait until early 2026 to send invoices. **2. Prepay expenses.** A cash-basis business may be able to reduce its 2025 taxes by prepaying certain 2026 expenses — such as lease payments, insurance premiums, utility bills, office supplies and taxes — before the end of the year. Many expenses can be deducted even if paid up to 12 months in advance. **3. Buy equipment.** Take advantage of [100% bonus depreciation and Section 179](https://waradydavis.com/2025-tax-filing-whats-new-under-the-obbba/) expensing to deduct the full cost of qualifying equipment or other fixed assets. Under the [One Big Beautiful Bill Act](https://www.congress.gov/bill/119th-congress/house-bill/1/text), 100% bonus depreciation is back for assets acquired and placed in service after January 19, 2025. And the Sec. 179 expensing limit has doubled, to $2.5 million for 2025. But remember that the assets must be placed in service by December 31 for you to claim these breaks on your 2025 return. **4. Use credit cards.** What if you’d like to prepay expenses or buy equipment before the end of the year, but you don’t have the cash? Consider using your business credit card. Generally, expenses paid by credit card are deductible when charged, even if you don’t pay the credit card bill until next year. **5. Contribute to retirement plans.** If you’re self-employed or own a pass-through business — such as a partnership, S corporation or, generally, a limited liability company — one of the best ways to reduce your 2025 tax bill is to increase deductible contributions to retirement plans. Usually, these contributions must be made by year-end. But certain plans — such as SEP IRAs — allow your business to make 2025 contributions up until its tax return due date (including extensions). **6. Qualify for business income deductions.** If your business is a sole proprietorship or pass-through entity, you may be able to deduct up to 20% of qualified business income (QBI). But if your 2025 taxable income exceeds $197,300 ($394,600 for married couples filing jointly), certain limitations kick in that can reduce or even eliminate the deduction. One way to avoid these limitations is to reduce your income below the threshold — for example, by having your business increase its retirement plan contributions. Most of these strategies are subject to various limitations and restrictions beyond what we’ve covered here. Please consult us before implementing them. We can also offer more ideas for reducing your taxes this year and next. The Warady & Davis LLP team is here to help you navigate these updates and identify opportunities that align with your financial goals. To discuss year-end planning or how these tips may impact your business, **contact your W&D advisor at (847) 267-9600 or info@waradydavis.com**. *© 2025* **Categories:** Business, Business Management --- ### [2026 OBBBA Tax Changes: Key Items to Review This Year](https://waradydavis.com/2026-obbba-tax-changes-key-items-to-review-this-year/) **Published:** May 14, 2026 **Author:** Samantha Reyes **Excerpt:** Review key 2026 OBBBA tax changes, including QOF deadlines, 1099 updates, charitable deductions, and new Section 530A “Trump accounts.” **Content:** ## Overview of Key 2026 Tax Law Updates Under OBBBA Several provisions from the [One Big Beautiful Bill Act (OBBBA)](https://waradydavis.com/2025-tax-filing-whats-new-under-the-obbba/), enacted in 2025, are taking effect for the 2026 tax year. While many of these OBBBA tax changes were introduced earlier, their impact becomes more noticeable as key deadlines approach. Understanding these updates can help taxpayers plan ahead and avoid unexpected tax consequences. ### OBBBA Tax Changes for Individuals *Changes that may impact personal tax planning in 2026 include:* ##### Charitable Deduction **For Non-Itemizers** A permanent above-the-line charitable deduction for taxpayers who claim the standard deduction: - The deduction applies only to qualified cash contributions - Non-cash donations are not eligible - The deduction is limited to $1,000 for single filers and $2,000 for joint filers **For Itemizers** A new 0.5% floor will apply to itemized charitable deductions, which may reduce the tax benefit of smaller donations. Taxpayers may want to revisit their charitable giving strategies under the new rules. ##### Itemized Deduction Limitation for High-Income Taxpayers Taxpayers in the 37% federal income tax bracket may see a reduced benefit from itemized deductions, as the tax benefit will generally be limited to the 35% rate. ##### AMT Exemption and Phaseout AMT exemption amounts and phaseout thresholds are reduced: - Exemption amounts are $90,100 for single filers and $140,200 for married filing jointly - Phaseouts begin at $500,000 for single filers and $1,000,000 for joint filers, significantly lower than prior levels ##### Retirement Plan Catch-Up Contributions (Roth Requirement) Higher-income participants in 401(k), 403(b), and 457(b) plans are required to make catch-up contributions as after-tax Roth contributions. For 2026, this applies to individuals with 2025 Social Security wages exceeding $150,000, with the threshold adjusted annually for inflation. ##### 529 Plans The annual federal withdrawal limit for 529 plans increases from $10,000 to $20,000 per beneficiary. ##### Section 530A Accounts (“Trump Accounts”) New savings accounts for children, commonly referred to as [“Trump accounts,” ](https://waradydavis.com/how-the-new-trump-accounts-for-children-will-work/)are expected to begin rollout on July 4, 2026: - Contributions may be made annually, subject to limits - Accounts are intended to support long-term savings for children Additional guidance is expected to clarify eligibility, contribution limits, and reporting requirements. ##### Expiration of Certain Energy Credits Several energy-related tax credits are scheduled to expire: - Energy Efficient Home Improvement Credit (Section 25C) is not available for property placed in service after December 31, 2025 - Residential Clean Energy Credit (Section 25D) is not available for expenditures made after December 31, 2025 - Alternative Fuel Refueling Property Credit (Section 30C) is not available for property placed in service after June 30, 2026 ##### Gambling Loss Limitations New limitations may affect taxpayers with gambling activity: - - Losses are limited to 90% of gambling winnings, reduced from the previous 100% limit - Recordkeeping requirements remain critical - All winnings remain fully taxable These changes may result in higher taxable income for some individuals. ### OBBBA Tax Changes for Businesses *Changes affecting business owners and reporting requirements include:* ##### Qualified Business Income (QBI) Deduction The Qualified Business Income (QBI) deduction is made permanent, and the income phase-in range is expanded: - Phase-in range increases from $50,000 to $75,000 for single filers - Phase-in range increases from $100,000 to $150,000 for married filing jointly ##### Excess Business Loss Limitation (Section 461(l)) The limitation on excess business losses applies once losses exceed certain thresholds: - $256,000 for single filers - $512,000 for married filing jointly ##### Qualified Small Business Stock (QSBS) For stock issued after July 4, 2025, changes to QSBS rules provide expanded benefits and flexibility: - The exclusion limit increases to the greater of $15 million (up from $10 million) or 10 times the taxpayer’s basis in the stock sold - The corporate asset test increases from $50 million to $75 million, with future inflation adjustments, allowing companies to receive larger amounts of venture capital while maintaining QSBS eligibility - For shareholders exiting before the five-year holding period, a new tiered system allows partial gain exclusion for shares held at least three or four years ##### Qualified Opportunity Zone (QOZ) Program Changes to the [Qualified Opportunity Zone program](https://www.irs.gov/credits-deductions/businesses/opportunity-zones) affect both existing and future investments: - Deferred gains from prior Qualified Opportunity Fund (QOF) investments become taxable no later than December 31, 2026, even if the investment has not been sold - Beginning in 2027, the program transitions to a permanent structure with a rolling 10-year designation process - New investments are eligible for a five-year deferral period, with a 10% reduction in deferred gains (rather than 15%) ##### Energy Incentives Certain energy-related incentives for commercial property are scheduled to expire: - Energy Efficient Commercial Buildings (Section 179D) is not available for projects that begin construction after June 30, 2026 - Alternative Fuel Refueling Property (Section 30C) is not available for property placed in service after June 30, 2026 ##### Increased 1099 Reporting Threshold Changes to information reporting requirements will affect businesses and other organizations: - The reporting threshold for Forms 1099-NEC and 1099-MISC increases from $600 to $2,000 - Fewer payments will require 1099 reporting - Income remains taxable regardless of whether a Form 1099 is issued Despite the higher threshold, maintaining accurate records remains important. ##### Standard Business Mileage Rate The standard business mileage rate is 72.5 cents per mile, increased from 70 cents in the prior year. ### 2026 Planning Considerations The OBBBA introduced a wide range of tax changes, many of which extend or modify existing provisions from prior legislation. For 2026, the most important considerations include: - Monitoring deadlines tied to deferred income - Reviewing eligibility for new deductions, credits, and accounts - Adjusting reporting and recordkeeping practices ### How These OBBBA Tax Changes May Affect You With several changes taking effect in 2026, it’s important to understand how OBBBA tax changes, new rules, thresholds, and [deadlines](https://waradydavis.com/important-federal-tax-filing-dates-for-2026/) may impact your overall tax position. A proactive approach can help you stay ahead of potential issues and take advantage of available opportunities. If you’d like to review how these updates apply to your situation or discuss planning strategies, **contact your W&D advisor at (847) 267-9600 or[ info@waradydavis.com](mailto:info@waradydavis.com).** *© 2026* ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2026 All Rights Reserved **Categories:** Business, E-Alerts, Hot Topics, OBBBA, OBBBA Business, OBBBA Individual, Tax, Tax Planning **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, business taxes chicago, business taxes deerfield, CPA Chicago, CPA Deerfield, individual tax planning, OBBBA, OBBBA H.R.1, One Big Beautiful Bill, One Big Beautiful Bill Act, personal tax planning, tax law, Tax legislation, Tax Planning Chicago, Tax Planning Deerfield --- ### [Cut Nonprofit Costs, Not Staff](https://waradydavis.com/cut-nonprofit-costs-not-staff/) **Published:** April 6, 2025 **Author:** Leslie Flinn **Excerpt:** Facing budget cuts? Discover 7 smart ways nonprofits can reduce expenses without layoffs—protect your team and mission with cost-saving strategies. **Content:** ## 7 ways to cut nonprofit costs rather than staffers It wasn’t long ago that the [not-for-profit ](https://waradydavis.com/industry/not-for-profit/)sector was struggling to find enough staffers to hire. Now that many organizations are losing[ federal grants](https://www.irs.gov/charities-and-nonprofits) and facing budget shortfalls, they may be considering layoffs. If you’re in this situation, you probably don’t want to lose valuable employees — and the mission-critical programs they help run. There may be another option — cut expenses. Here are seven ideas to consider: **1. Suspend benefits and wages.** Before laying off workers, consider reducing hours or suspending some employee benefits. You might trim wages or management-level salaries. Staffers may object to such measures, so be careful to explain that you’re trying to prevent layoffs. If possible, provide a timeline or benchmarks that will potentially trigger a “return to normal.” **2. Send staffers home.** Allowing employees to work remotely may lower overhead costs for the leased space, utilities, insurance and maintenance you’ll no longer need to pay for. **3. Renegotiate your lease.** If you rent and need your workers on-site, approach your landlord about renegotiating better lease terms, especially if you’re nearing the end of the lease’s term. Many commercial real estate markets have failed to recover from COVID-19 vacancies, and landlords may be more amenable to rent reductions, abatements or holidays. **4. Consolidate sites.** Nonprofits that run more than one site might be able to consolidate facilities into a single location and shutter the rest. **5. Monetize real estate.** If your nonprofit owns office buildings or other facilities, consider selling, downsizing or renting unused space to other organizations. **6. Review vendor contracts.** If you’ve consolidated worksites or shifted to remote work, your organization may have less need for some goods and services. But before you terminate any contracts, check for penalty or fee provisions that could make canceling costly. Look into consolidating purchases of goods and services with fewer vendors to obtain discounts. Also, be assertive and ask vendors to offer nonprofit discounts or donate their services. **7. Partner up.** Think about entering cost-sharing agreements with other organizations, nonprofit or not. You might also want to merge with another charity that shares or complements your mission and programming. ### **Ready to protect your mission and your team? Let’s talk.** If you’re facing funding cuts and a possible budget shortfall, now isn’t the time to go it alone. Wardy & Davis’ Not-for-Profit Services team can help you slash expenses as well as find new revenue sources. Contact your W&D advisor at 847-267-9600 or . ###### Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2025 All Rights Reserved **Categories:** Audit & Accounting, Not-for-Profit **Tags:** Accounting Chicago, Accounting Deerfield, Accounting Elk Grove Village, Accounting Highland Park, Accounting Rosemont, Accounting Schaumburg, Buffalo Grove Accounting, Buffalo Grove CPA Firm, Business Accounting Chicago, Business Accounting Deerfield, Business Accounting Elk Grove Village, Business Accounting Highland Park, Business Accounting Rosemont, Business Accounting Schaumburg, Business Tax Planning Chicago, Business Tax Planning Deerfield, Business Tax Planning Elk Grove Village, Business Tax Planning Highland Park, Business Tax Planning Rosemont, Business Tax Planning Schaumburg, business tax services chicago, business tax services deerfield, business tax services highland park, business tax services rosemont, business taxes chicago, business taxes deerfield, business taxes highland park, business taxes rosemont, CPA Chicago, CPA Deerfield, CPA Elk Grove Village, CPA Highland Park, CPA Rosemont, CPA Schaumburg, individual tax services chicago, individual tax services deerfield, individual tax services highland park, individual tax services rosemont, individual taxes deerfield, individual taxes highland park, individual taxes rosemont, NFP accounting, NFP audit, NFP audit Chicago, NFP CPA, NFP CPA Chicago, NFP funding, NFP planning, Northshore CPA, Not-for-profit accounting, not-for-profit audit, not-for-profit audit firm, Not-for-profit cpa chicago, Not-for-Profit CPA firm, Not-for-profit funding, Not-for-Profit Planning, Tax legislation, tax planning, Tax Planning Chicago, Tax Planning Deerfield, Tax Planning Elk Grove Village, Tax Planning Highland Park, Tax Planning Rosemont, Tax Planning Schaumburg, Top Buffalo Grove CPA, Top Chicago Accounting Firm, Top Chicago CPA, Top Chicago CPA Firm, Top Northshore Accounting Firm, Top Northshore CPA --- ## Pages ### [Home](https://waradydavis.com/) **Published:** November 18, 2020 **Author:** WaradyDavis **Content:** Growing with our clients for ## [Resource Center](/resource-center/obbba-resources/) OBBBA Updates, Guidance, Webinars and Tools [Explore now](/resource-center/obbba-resources/) ## [Services](https://waradydavis.com/services/) Do what you do best. Together, we’ve got this. [Find Solutions](https://waradydavis.com/services/) ## [About W&D](https://waradydavis.com/about/) The people, resources and knowledge you need. [Explore](https://waradydavis.com/about/) ## New on the Idea Exchange Blog Midyear Tax Planning Strategies to Reduce Your Tax Bill [Read MORE](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Careers](https://waradydavis.com/careers/) Work with one of the top 25 CPA firms in Chicago. [Apply Today](https://waradydavis.com/careers/) [Partner with Us](/about/) # Full-Service Chicago Audit, Accounting, Tax & Consulting CPA Firm Celebrating 75 years of growing with our clients, W&D provides a full range of audit, accounting, tax and consulting services and solutions to privately-held businesses, individuals and their families. With 140+ firm members headquartered in north metropolitan Chicago, we serve clients in a wide variety of industries located throughout the United States and internationally. Client revenues may range from start-up enterprises to $750,000,000+ in annual revenue. ## A Top 25 Chicago CPA Firm and Great Lakes Regional Leader Warady & Davis LLP, a Top 25 Chicago CPA Firm and a Great Lakes Regional Leader, provides the commitment, services, knowledge and resources you need to take your business and personal finances to the next level with confidence. Now, you can focus on what you do best, because ***“Our mission is your success.”*** *—Crain’s Chicago Business and Accounting Today* [Services](/services/) [Services](/services/) ## A Top 25 Chicago CPA Firm and Great Lakes Regional Leader Warady & Davis LLP, a Top 25 Chicago CPA Firm and a Great Lakes Regional Leader, provides the commitment, services, knowledge and resources you need to take your business and personal finances to the next level with confidence. Now, you can focus on what you do best. ***“Together, we’ve got this.”*** *—Crain’s Chicago Business and Accounting Today* ![Crain's Chicago Business - 2021 Largest Accounting Firms](https://waradydavis.com/wp-content/uploads/2021/05/CRAINS-2021-375w.jpg "Crain's Chicago Business - 2021 Largest Accounting Firms | Warady & Davis LLP") ![Warady Davis Named to Accounting Today's Regional Leaders 2025](https://waradydavis.com/wp-content/uploads/2025/05/WD-AT-Regional-Leader-2025-Logo.png "Accounting Today - Regional Leader 2025 | Warady & Davis LLP") ![Forbes - America's Best Tax Firm - 2021 - Logo](https://waradydavis.com/wp-content/uploads/2021/06/Forbes-2021-Tax-logo-jpg-300x217-bw.jpg "Warady Davis LLP named Forbes - America's Best Tax Firm - 2021 | Warady & Davis LLP") [Learn More](/industries/) ## Specializing in Privately-Held & Family Businesses W&D has helped many privately-held and family businesses grow from small start-ups into major industry players while also achieving their personal financial and charitable goals. We’ll do whatever it takes to help you get to the next level of success—matching your dedication step-for-step and challenging you with best practices and innovative ways of doing business. ## Celebrating 75 Years of Growing With Our Clients In 1949, a seed was well-planted. Through the years, it flourished and grew through the strength of relationships with people like you. We would like to thank our clients, friends and staff for your vital role in our growth. We extend our gratitude to each of you for the honor of working together now and in the future. Your successes are our greatest source of pride and satisfaction. [Learn More](/about/) ## [“We started with W&D when they were small, and we were too. We grew along with W&D and they have been with us all the way."](#briar) SHELDON KOGEN, PRINCIPAL BRIAR GRACE MANAGEMENT AND THE KOGEN FAMILY ENTITIES Client of Warady & Davis LLP Since the Firm’s Inception in 1949 Property and HOA Management Services, Residential and Commercial Development, Real Estate Investment and Ownership [Full Quote](#briar) ## ["My W&D advisor is the best CPA I could ask for; he and his team are always there." ](#huen2) DAN PESAVENTO, CHIEF OPERATING OFFICER HUEN ELECTRIC Client of Warady & Davis LLP for 25+ Years Leading commercial electrical contractor and electrical engineering firm [Full Quote](#huen2) ## [“I would never have achieved the level of success I have without the mentorship and support of Bernie Davis and the W&D team. "](#rubin) DAVID RUBIN, OWNER RUBIN BROTHERS, INC. AND UNION LINE Client of Warady & Davis LLP Since 1959 Manufacturers of USA-Made Safety Clothing, Uniforms and Other Apparel [Full Quote](#rubin) ## [“When I ask questions, they have the right answers. I can trust them to tell it like it is. Over the years, I am very glad I listened to W&D and my business has grown as a result.”](#scope) LYDIA DEMSKI, FOUNDER SCOPE SERVICES, INC. Client of Warady & Davis LLP for 20+ Years Premier provider of Smart Grid, Energy Services, Plant Maintenance and Workforce Solutions to Utility and Private Businesses [Full Quote](#scope) ## [“Our relationship with W&D is more than just about business, it’s a friendship. It’s personal."](#harrys) IRA ROSENTHAL, OWNER HARRY’S LUMBER CO. Client of Warady & Davis LLP Since the Firm’s Inception in 1949 Founded in 1940, family owned and operated provider of high-quality building products including lumber, decking materials, doors, windows, millwork, hardware and more [Full Quote](#harrys) ## [“The W&D team knows what they’re doing. They play an integral role in my business success.”](#exterior) SERGEY TAITLER, OWNER ALL AMERICAN EXTERIOR SOLUTIONS Client of Warady & Davis LLP for 25+ Years 40+ year-old commercial and residential roofing, solar, window, siding, doors, insulation, maintenance & warranty contractor [Full Quote](#exterior) ## ["W&D is a one-stop shop with a full-range of consultation services and a depth of resources."](#huen2) DAN PESAVENTO, CHIEF OPERATING OFFICER HUEN ELECTRIC Client of Warady & Davis LLP for 25+ Years Leading commercial electrical contractor and electrical engineering firm [Full Quote](#huen2) ## Services Warady & Davis LLP, Chicago CPAs & Consultants, brings deep industry experience along with comprehensive audit, accounting, tax, and consulting expertise. Our capabilities rival those of large regional and national accounting firms—while still offering the advantages of a smaller CPA firm, including a high level of Partner involvement and personalized, hands-on attention. ***View our highlighted areas of expertise:*** Audit Services Tax Services Business Valuation Wealth Management [View All Services](/services/) ## Industries Warady & Davis LLP drives client success through a deep understanding of your business, supported by specialized industry and service practice groups. From privately-held & family businesses to real estate, construction, and manufacturing & distribution, our team brings focused expertise to every accounting, tax or audit engagement. ***Following are some of the key industries we serve:*** Privately-Held & Family Business Real Estate Construction Manufacturing & Distribution Not-for-Profit Healthcare Transportation Technology [View All Industries](/industries/) Work with one of the best accounting firms in Chicago.Warady & Davis LLP is proud to have been named a “100 Best Accounting Firms to Work for” nationally by Accounting Today, a “Best Place to Work for Millennials” in America by Best Companies and The Center for Generational Kinetics, and a “Best Place to Work in Illinois” by The Daily Herald. Together we create an exceptional, cohesive team of people who are passionate about what we do and are committed to our clients’ success and to each other. [Careers](/careers/) ### **W&D in Three Words** ### **Celebrating 75 Years of Teamwork and Fun** ## Knowledge Center [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Recruiting Schedule](https://waradydavis.com/careers/internships/recruiting-schedule/) **Published:** October 27, 2021 **Author:** WaradyDavis **Content:** # Campus Recruiting Schedule W&D interviews at a variety of Chicago area campuses. We also consider outstanding students from other universities/colleges. Submit your resume directly for consideration. [Apply Now](https://waradydavis.com/careers/submit-your-resume/) ## Campus Recruiting Schedule Warady & Davis interviews at a variety of Chicago-area campuses. We also consider outstanding students from other universities/colleges. **Submit your resume directly for consideration.** The Warady & Davis internship program is offered each year from January through April. Currently, we do not offer summer internships. This fall, we are actively recruiting for our Winter/Spring 2027 and 2028 internship classes. We typically recruit for our internships up to two years in advance, so please plan accordingly. ### Fall 2026 Recruitment Schedule (Winter/Spring 2027 & 2028 Interns) #### **We look forward to returning to the following schools this fall:** **University of Illinois Chicago (UIC)** Business Career Fair: Meet the Firms/Accounting Wednesday, September 23, 2026 | 12:00 p.m. to 4:00 p.m. UIC Student Center East 750 S. Halsted St., Chicago, IL **Virtual On-Campus Interviews — Date to be determined.** Sign-up via [Handshake](https://joinhandshake.com/) For more information, contact: Career Services Tina Truong | Recruitment Coordinator [\[email protected\]](/cdn-cgi/l/email-protection#097d7d7b7c666731497c606a276c6d7c) 312-996-5139 **Northern Illinois University (NIU)** Fall Accountancy Career Fair Tuesday, September 22, 2026 | 6:00 p.m. to 8:00 p.m. NIU Student Center, Duke Ellington Ballroom 340 Carroll Ave., DeKalb, IL **Virtual On-Campus Interviews — Date to be determined.** Sign-up via [Huskies Get Hired](https://niu-csm.symplicity.com/students/index.php?signin_tab=0) For more information, contact: Career Services Jan Wylde | Employer Relations Specialist [\[email protected\]](/cdn-cgi/l/email-protection#2f455856434b4a1d6f41465a014a4b5a) 815-753-8346 **All Other Universities** Contact W&D to schedule a virtual interview. [ \[email protected\]](/cdn-cgi/l/email-protection#2940474f46695e485b484d504d485f405a074a4644) #### Related Information - [About W&D](https://waradydavis.com/about/) - [Our People](/staff/) - [Diversity & Inclusion](/careers/warady-davis-cares-racism-injustice-hate/) #### W&D in 3 Words #### W&D Celebrates 75 Years of Teamwork & Fun #### Submit Your Resume [Apply Now](https://waradydavis.com/careers/submit-your-resume/) ### Learn more. Subscribe to our E-Alerts and receive access to industry best practices, tips and more. Email Address Sign Up --- ### [Experienced Professionals](https://waradydavis.com/careers/experienced-professionals/) **Published:** August 12, 2021 **Author:** WaradyDavis **Content:** # Experienced W&D has received national and state recognition multiple times as a "best place to work." Source: Accounting Today, The Daily Herald Business Ledger, Best Companies and more. [Apply Now](https://waradydavis.com/careers/submit-your-resume/) ## Experienced Chicago CPA Professionals You’ve achieved success. Now, where do you go to make the most impact and get the highest return on your talent? Where can you find a challenging and rewarding professional environment? Make **THE RIGHT CHOICE©:** Warady & Davis LLP, a top 25 Chicago CPA firm located in north metropolitan Chicago, IL. W&D has select openings for talented, proven individuals. If you have what it takes both personally and professionally to be part of an outstanding, professional team, contact us to learn more. [Current Opportunities.](/careers/opportunities/) ### At W&D, We Know What’s Important in Life: - Work that is satisfying & rewarding. - People who are open & supportive. - Outstanding, competitive compensation & benefits. - Surroundings that give you the freedom & opportunity to succeed. - A flexible workplace including hybrid and remote options - A chance to make a difference. - A great team built on friendships. - A professional development curriculum designed to continually build your technical & management skills. - A balance of hard work & fun. Year-round, we host parties & events that celebrate a sense of family & team spirit. - The opportunity to have your opinions heard and respected by management. - Leading paperless office & other technology to enhance your efficiency. - Business casual attire. About 49%+ of our team members have been with us for more than 10 years. 38%+ have spent their entire careers with Warady & Davis. #### Current Open Positions ## [Tax Supervisor](https://waradydavis.com/job/tax-supervisor/) As one of the top 25 CPA firms in the Chicago land area, a top 200 firm nationally, and a Great Lakes Regional Leader (Source: Crain’s Chicago Business, AICPA G400, and Accounting Today), Warady & Davis LLP is seeking a tax supervisor with prior public accounting... --- ### [About](https://waradydavis.com/about/) **Published:** August 3, 2021 **Author:** WaradyDavis **Content:** ![](https://waradydavis.com/wp-content/uploads/2024/09/75YearsLogo_White.webp "75YearsLogo_White | Warady & Davis LLP")# Celebrating 75 Years of Growing With Our Clients ## Warady & Davis Celebrates 75 Years *October 1, 1949 – October 1, 2024* #### #### *In 1949, a seed was well-planted. Through the years, it flourished and grew through the strength of relationships with people like you.* Warady & Davis LLP was founded on October 1, 1949 by our original two partners, Seymour Warady and Bernard Davis, with an initial capital contribution of $200 and an adding machine. Since the beginning, W&D’s guiding principle was to provide the best possible service to clients. Both then and now, we believe that if our clients succeed, we succeed. It’s as simple as that: ***Our mission is your success.*** Maybe that’s why we’ve seen so many clients go from small start-ups to major industry players both across the U.S. and their operations abroad. Or, why clients stay with us into a second or third generation and beyond. We value our long-standing client relationships, many of which span multiple decades. Today, W&D has grown to 150+ members and is a top 25 Chicago CPA firm, Great Lakes Regional Leader and Top 200 public accounting firm nationally (Source: Crains Chicago Business, Accounting Today and AICPA.) Serving a long list of distinguished clientele in multiple industries, Warady & Davis is a full service, mid-size audit, accounting, tax and consulting firm providing solutions to [privately-held businesses](https://waradydavis.com/industry/owner-run-and-family-businesses/), owners, individuals and their families. Clients tell us that W&D’s most distinguising characteristic is our hands-on approach and high level of care and commitment from Partners through staff. In fact, the W&D team extends this same commitment to each other. We refer to ourselves as the ***“W&D Family”*** and live this core value every day. We extend our gratitude to all our clients and team members for the honor of working together in the past, currently and in the future. We would not have reached this milestone without each of you. With thanks and appreciation, ***The Partners of Warady & Davis LLP and W&D Consulting LLC*** ## What W&D’s Long-Standing Clients are Saying ## [“We started with W&D when they were small, and we were too. We grew along with W&D and they have been with us all the way."](#briar) SHELDON KOGEN, PRINCIPAL BRIAR GRACE MANAGEMENT AND THE KOGEN FAMILY ENTITIES Client of Warady & Davis LLP Since the Firm’s Inception in 1949 Property and HOA Management Services, Residential and Commercial Development, Real Estate Investment and Ownership [Full Quote](#briar) ## ["My W&D advisor is the best CPA I could ask for; he and his team are always there." ](#huen2) DAN PESAVENTO, CHIEF OPERATING OFFICER HUEN ELECTRIC Client of Warady & Davis LLP for 25+ Years Leading commercial electrical contractor and electrical engineering firm [Full Quote](#huen2) ## [“I would never have achieved the level of success I have without the mentorship and support of Bernie Davis and the W&D team. "](#rubin) DAVID RUBIN, OWNER RUBIN BROTHERS, INC. AND UNION LINE Client of Warady & Davis LLP Since 1959 Manufacturers of USA-Made Safety Clothing, Uniforms and Other Apparel [Full Quote](#rubin) ## [“When I ask questions, they have the right answers. I can trust them to tell it like it is. Over the years, I am very glad I listened to W&D and my business has grown as a result.”](#scope) LYDIA DEMSKI, FOUNDER SCOPE SERVICES, INC. Client of Warady & Davis LLP for 20+ Years Premier provider of Smart Grid, Energy Services, Plant Maintenance and Workforce Solutions to Utility and Private Businesses [Full Quote](#scope) ## [“Our relationship with W&D is more than just about business, it’s a friendship. It’s personal."](#harrys) IRA ROSENTHAL, OWNER HARRY’S LUMBER CO. Client of Warady & Davis LLP Since the Firm’s Inception in 1949 Founded in 1940, family owned and operated provider of high-quality building products including lumber, decking materials, doors, windows, millwork, hardware and more [Full Quote](#harrys) ## [“The W&D team knows what they’re doing. They play an integral role in my business success.”](#exterior) SERGEY TAITLER, OWNER ALL AMERICAN EXTERIOR SOLUTIONS Client of Warady & Davis LLP for 25+ Years 40+ year-old commercial and residential roofing, solar, window, siding, doors, insulation, maintenance & warranty contractor [Full Quote](#exterior) ## ["W&D is a one-stop shop with a full-range of consultation services and a depth of resources."](#huen2) DAN PESAVENTO, CHIEF OPERATING OFFICER HUEN ELECTRIC Client of Warady & Davis LLP for 25+ Years Leading commercial electrical contractor and electrical engineering firm [Full Quote](#huen2) ## Thank You to our W&D Clients and Team ### **W&D Celebrates 75 Years of Growing With Our Clients** Warady & Davis LLP firm members express their gratitude to clients and each other. They also share insights into W&D’s history, philosophy, service focus and what it takes to reach 75 years in business. ### **75 Years of Teamwork and Fun!** The Warady & Davis team is passionate about what we do and about having a good time together! W&D has a unique, collaborative culture built on friendships and mutual care for our clients and each other. ![](https://waradydavis.com/wp-content/uploads/2024/09/75YearsLogo_White.webp "75YearsLogo_White | Warady & Davis LLP") ![Light Green Quotation mark - Intro for Warady & Davis testimonials for a Top 25 Chicago CPA Firm](https://waradydavis.com/wp-content/uploads/2024/09/Quotes-small-green-20.png "Quotes-small-green-20 | Warady & Davis LLP") ***“We started with W&D when they were small and we were too. We grew along with W&D and they have been with us every step of the way.*** ***Throughout the years, W&D has assisted us in many areas including helping negotiate new deals, projections on cash flow, operating issues, FHA and conventional financing, private equity and too many real estate transactions to count.*** ***They have the ability to get the job done and always provide a fast response to any questions. They are a key part of our team and have helped us grow to where we are today.”*** SHELDON KOGEN, PRINCIPAL BRIAR GRACE MANAGEMENT AND THE KOGEN FAMILY ENTITIES ![Light Green Quotation mark - Intro for Warady & Davis testimonials for a Top 25 Chicago CPA Firm](https://waradydavis.com/wp-content/uploads/2024/09/Quotes-small-green-20.png "Quotes-small-green-20 | Warady & Davis LLP") ***“I had the privilege of working with Bernie Davis, who was one of a kind. I would never have achieved the level of success I have without his mentorship and the support of the Warady & Davis LLP team.*** ***Warady & Davis LLP is like family. They never let me down and are always there when I need them. I would never even consider working with another accounting firm.*** ***Whether related to real estate transactions, my business or personal finances, Warady & Davis LLP introduced me to key players and helped build my team and worked well with all of my advisors.*** ***It has been my pleasure to work with multiple Warady & Davis LLP firm members over the years; each one of them just as good or even better than the last. One thing that stands out is that W&D knows how to hire and keep a great team. I have worked with W&D firm members that started as staff and rose to the top and are now Partners.”*** DAVID RUBIN, OWNER RUBIN BROTHERS, INC. AND UNION LINE ![Light Green Quotation mark - Intro for Warady & Davis testimonials for a Top 25 Chicago CPA Firm](https://waradydavis.com/wp-content/uploads/2024/09/Quotes-small-green-20.png "Quotes-small-green-20 | Warady & Davis LLP") ***“Our relationship with Warady & Davis LLP goes back to the very beginning when they first opened their doors.*** ***W&D is highly competent and meets all our needs but our relationship goes beyond that. Simply put, If you like the people and they do good work, you stick with them. With W&D its more than just about business, it’s a friendship. It’s personal.”*** IRA ROSENTHAL, OWNER HARRY’S LUMBER CO. ![Light Green Quotation mark - Intro for Warady & Davis testimonials for a Top 25 Chicago CPA Firm](https://waradydavis.com/wp-content/uploads/2024/09/Quotes-small-green-20.png "Quotes-small-green-20 | Warady & Davis LLP") ***“One of the things I most value about Warady & Davis LLP is the strength of my relationships with the team and specifically my Partner. He quarterbacks my projects and does a great job of getting the right people involved to get the job done. The Warady & Davis team knows what they are doing and I can count on them to resolve issues and they are always fair.*** ***Warady & Davis has a deep bench and many diversified services. They handle a lot of complex issues with one team. Instead of having to work with many different providers, W&D meets all my needs.*** ***W&D has played an integral role in my business success in many areas including deep dives on organizational performance, business valuation, in-depth tax planning and other consulting services. They bring valuable tax saving ideas and opportunities to the table.”*** SERGEY TAITLER, OWNER ALL AMERICAN EXTERIOR SOLUTIONS ![Light Green Quotation mark - Intro for Warady & Davis testimonials for a Top 25 Chicago CPA Firm](https://waradydavis.com/wp-content/uploads/2024/09/Quotes-small-green-20.png "Quotes-small-green-20 | Warady & Davis LLP") ***“If I had to choose one word to describe Warady & Davis LLP it is “honest.” My W&D advisors have always been honest with me, even if it was to tell me I was doing something wrong or to give an answer I didn’t want to hear. I can trust them to tell it like it is. Over the years I am very glad I listened to them and my business has grown as a result.*** ***The bottom line is that I can always count on W&D for the best advice.*** ***As a result, I value and respect my Warady & Davis LLP team. When I ask questions they always have the right answers. They are always there for me. They have helped my business grow. As far as I am concerned they are the best CPA firm a business owner could ask for and are top of the line.”*** LYDIA DEMSKI, FOUNDER SCOPE SERVICES, INC. ![Light Green Quotation mark - Intro for Warady & Davis testimonials for a Top 25 Chicago CPA Firm](https://waradydavis.com/wp-content/uploads/2024/09/Quotes-small-green-20.png "Quotes-small-green-20 | Warady & Davis LLP") ***“Warady & Davis LLP is a one-stop shop with a full-range of consultation services and a depth of resources. They have provided Huen Electric ownership guidance and support through several events such as audit, sale, succession, acquisition and retirement planning. They are well versed in our business, which allows us to have direct conversations that lead to effective planning.*** ***Warady & Davis LLP was instrumental when Huen Electric went through our business acquisition. They provided insight along the way and were active in the process.*** ***Because of the long standing relationship with Warady & Davis, I can call at any time with questions or concerns and always receive timely, comprehensive answers that help me run our business. My W&D advisor is the best CPA I could ask for; he and his team are always there.”*** DAN PESAVENTO, CHIEF OPERATING OFFICER HUEN ELECTRIC ### Learn more. Subscribe to our E-Alerts and receive access to industry best practices, tips and more. Email Address Sign Up --- ### [Internships](https://waradydavis.com/careers/internships/) **Published:** August 12, 2021 **Author:** WaradyDavis **Content:** # Internships W&D believes strongly in growing from within. Many of our former interns are now leaders with W&D. [Apply Now](https://waradydavis.com/careers/submit-your-resume/) ## Warady & Davis Chicago CPA Firm Internships Warady & Davis LLP, a top 25 Chicago CPA and Consulting firm, is looking for talented winter/spring interns to join our team. - **GAIN** valuable experience working as an audit, accounting and tax staff member. W&D offers a full scope work experience – from workpapers through financials to preparing the tax return. - **DISCOVER** first-hand how one of the top audit, accounting and tax firms in the Chicago area works. - **BENEFIT** from our rewarding scholarship program and competitive salary. If you are looking for an opportunity to have your talent respected, developed and rewarded – make **THE RIGHT CHOICE: Warady & Davis LLP©.** **The Warady & Davis LLP internship and scholarship program is designed to jump start your career with real world, real work experience.** Warady & Davis LLP is proud to be named a “100 Best Accounting Firms to Work for” nationally by Accounting Today, a “Best Place to Work for Millennials” in America by Best Companies and The Center for Generational Kinetics, and a “Best Place to Work in Illinois” by The Daily Herald. Together we create an exceptional, cohesive team of people who are passionate about what we do and are committed to our clients’ success and to each other. ### What it’s About … and What You’ll Gain When you join the W&D team as an intern, you are treated just as if you’ve already graduated, fulfilled the 150 hour requirement and are ready to sit for your CPA exam. Our intensive Winter/Spring – Tax Season internship program is the equivalent of 6-12 months of full-time, staff accountant level work experience. This gives you an invaluable edge in both your career and education development. Our interns unanimously say that after a W&D internship their college coursework makes much more sense. The W&D internship program also offers significant compensation, scholarships and permanent employment opportunities. #### Related Information - [About W&D](https://waradydavis.com/about/) - [Our People](/staff/) - [Diversity & Inclusion](/careers/warady-davis-cares-racism-injustice-hate/) #### W&D in 3 Words #### W&D Celebrates 75 Years of Teamwork & Fun #### Submit Your Resume [Apply Now](https://waradydavis.com/careers/submit-your-resume/) ## "With W&D I have gained knowledge, experience and responsibility at a fast rate." – Angelica, CPA, MAS, Supervisor, Former W&D Intern ## “W&D is a great place to learn and grow. I enjoy coming to work everyday.” – Anastasia, MAS, Staff Accountant, Former W&D Intern ## “I really feel like I am part of a team and have the opportunity to work directly with partners, managers and clients.” – Nick, MAS, CPA, In-Charge Accountant, former W&D Intern ## “My W&D internship taught me more than I could have ever imagined.” – George, Staff Accountant, Former W&D Intern ## “The people are the best! W&D offers a great blend of a close-knit, friendly culture and the major resources needed to grow professionally.” – Josh, Staff Accountant, Former W&D Intern ### Environment Our interns say that one of the best things about the W&D experience is the people. With us, you will work in a great team built on friendships. Due to the success of our internship program, we welcome a sizable intern class each year and we also have a large and growing young professional staff which gives our firm a collegial atmosphere. We offer a balance of hard work and fun including year-round parties, events and activities that celebrate a sense of family and team spirit. ### Major Duties & Responsibilities Work at many accounting firms, and you’re likely to get stuck doing the same tasks day after day. W&D offers a full scope work experience – from workpapers through financials to preparing the tax return. And, we have a diverse client base, so we keep you inspired with assignments that vary by industry sector and service area. You’ll interact regularly with clients, managers and partners, and enjoy challenges that expand your knowledge. With us, you have the opportunity to gain knowledge and grow professionally at a much faster rate. Audit & Accounting. Interns will assist senior auditors with audit of various balance sheet and income statement accounts (i.e. cash, accounts payable, fixed assets, depreciation, etc.), developing spreadsheet analysis (trial balance, reconciliation’s, etc) special projects, and more. Interns will also assist in income tax preparation, accounting compilations and reviews. Tax. Interns will assist in all aspects of our tax practice including federal and state taxation of real estate partnerships and flow-through entities, estate, gift tax, trust, multi-state, S-corporation and individual taxation. ### Training Provided W&D offers training to advance your career. The W&D University curriculum begins at intern year one and goes all the way through Partner level. The curriculum is carefully designed to provide a minimum of 40+ hours annually of in-house and off-site training. W&D University supports performance expectations, professional development, industry and technical specialization, leadership and management skills and your goals. ### Evaluation Process You’ll receive individual feedback after every major engagement, and enjoy open-door access to top management, partners and managers. All university required evaluation reports and procedures are also followed. ### Mentoring & Buddy Program When you join W&D, you will be assigned to a group. The purpose of our group structure is to mentor members in their professional career development and encourage open firm communication. In addition, you will be assigned as a protégé to a specific partner(s). Your assigned partner will be responsible to ensure that you are challenged and trained during your internship period and beyond. Finally, you will also have a tax season “buddy” who has come up though our internship program and is close to you in age. ### Internship Details **Internship Length**: January to April. Approximately 12 weeks, 40+ hour work week. Start and end dates are flexible. Summer internship are NOT currently offered. **Degree Program**: BS, MSAccountancy, MSTaxation **Major**: Accountancy or Taxation only **Qualities**: A motivated team player with commitment to excellence, maturity, communication skills, quality presentation, strong sense of responsibility, dedication and work ethic. **Specific Skills**: Intern should have successfully completed audit course before the start of the internship period. **Car Needed**: Yes **Salary/Pay Rate**: Significant hourly compensation plus overtime and travel expenses. Great opportunity for tuition reimbursement scholarship and permanent employment. ### At W&D, We Know What’s Important in Life: - Work that is satisfying & rewarding. - Outstanding, competitive compensation & benefits. - People who are open & supportive. - Surroundings that give you the freedom & opportunity to succeed. - A flexible workplace including hybrid & remote work options - A chance to make a difference. - A great team built on friendships. - The opportunity to have your opinions heard and respected by management. - A balance of hard work & fun. Year-round, we host parties & events that celebrate a sense of family & team spirit. - Leading paperless office & other technology to enhance your efficiency. - A professional development curriculum designed to continually build your technical & management skills. - Business casual attire. ### Learn more. Subscribe to our E-Alerts and receive access to industry best practices, tips and more. Email Address Sign Up --- ### [Current Opportunities](https://waradydavis.com/careers/opportunities/) **Published:** August 12, 2021 **Author:** WaradyDavis **Content:** # Current Opportunities Warady & Davis LLP is currently seeking talented, motivated professionals – campus and experienced – to join our growing team. Submit your resume and a cover letter for consideration. ### Tax - [Tax Senior](https://waradydavis.com/job/tax-senior/) - [Tax Supervisor](https://waradydavis.com/job/tax-supervisor/) ### Audit & Accounting - [Audit Senior](https://waradydavis.com/job/audit-senior-employee-benefit-plan-audit/) - [Audit Supervisor](https://waradydavis.com/job/audit-supervisor-2/) ### Client Accounting Services - [Accountant Bookkeeper](https://waradydavis.com/job/accountant-bookkeeper/) ### Campus - [Tax 2027 and 2028 Internships](https://waradydavis.com/careers/internships/) #### Submit Your Resume [Apply Now](https://waradydavis.com/careers/submit-your-resume/) #### Related Information - [About W&D](/about/) - [Our People](/staff/) - [Diversity & Inclusion](https://waradydavis.com/careers/warady-davis-cares-racism-injustice-hate/) #### W&D in 3 Words #### W&D Celebrates 75 Years of Teamwork & Fun ### Learn more. Subscribe to our E-Alerts and receive access to industry best practices, tips and more. Email Address Sign Up --- ### [News](https://waradydavis.com/resource-center/news/) **Published:** August 12, 2021 **Author:** WaradyDavis **Content:** # News View recent articles written by and about Warady & Davis LLP appearing in digital, print and broadcast media. ### Joel M. Friedman, JD, CPA, Partner Merges Practice with W&D December 1, 2021 Warady & Davis LLP, Certified Public Accountants and Consultants, is pleased to announce that [Joel M. Friedman, JD, CPA, Partner](https://waradydavis.com/staff/friedman-joel-jd-cpa/), [Joseph M. Tamburello, CPA, Manager](https://waradydavis.com/staff/joe-tamburello-cpa/) and [Eileen Pollard, Accountant ](https://waradydavis.com/staff/eileen-pollard/)merged with our firm effective December 1, 2021. [READ MORE](#h_11836714911638288290044) ### Crain’s Chicago Business names Warady & Davis LLP a Top 25 Chicago CPA Firm for the 22nd Consecutive Year November 22, 2021 Warady & Davis LLP is proud to be named to Crain’s Chicago Business’ 2021 annual largest accounting firms ranking. This marks the twenty-second consecutive year W&D has achieved this distinction. Click below for the full article. [VIEW ARTICLE](https://www.chicagobusiness.com/crains-list/chicago-accounting-firms-make-adjustments-post-covid-age-crains-list) ### W&D Named A 2021 Great Lakes Regional Leader By Accounting Today Accounting Today, the premier publication of the certified public accounting industry, has again included Warady & Davis LLP on the list of 2021 Top Firms in the Great Lakes region – an area that includes the states of Illinois, Indiana, Michigan, Wisconsin and Ohio. The list was released as part of Accounting Today’s annual listing of the Top 100 Firms in the nation and marks W&D’s fourth consecutive placement on this prestigious report. This is Accounting Today’s annual ranking of the largest practices in tax and accounting, both nationwide and in 10 major geographic regions, along with their growth strategies and a host of benchmarking data. Click below for the full article. [VIEW ARTICLE](https://www.accountingtoday.com/report/the-top-100-firms-and-regional-leaders) ### Forbes Names Warady & Davis LLP To America’s Best Tax And Accounting Firms List 2021 December, 2020 For the second year, Forbes has partnered with market research company Statista to create a list of the most recommended firms for tax and **[accounting services](https://waradydavis.com/service/accounting-services/)** in the U.S. based on surveys of tax and accounting professionals and their clients. The firms that received the most recommendations were included on the list. The 278 firms identified include the biggest firms in the country and some of the smallest. According to Statista, they’re all tackling the complexities of the ever-changing tax laws head-on. Read the full list of Forbes’ Top Recommended Tax and Accounting Firms for 2021 below. [VIEW ARTICLE](https://www.forbes.com/best-tax-firms/#69f28c6c24bd) ### U.S. News & World Report – 3 Tax-Deductible Investment Expenses MARCH 8, 2019 David Faje, CPA, MST, Partner is quoted in the article **[“Three Tax Deductible Investment Expenses You Should Take”](https://money.usnews.com/investing/investing-101/articles/3-tax-deductible-investment-expenses-you-should-take)** which appeared in the March 8th edition of US News & World Report. Click below for the full article. [VIEW ARTICLE](https://money.usnews.com/investing/investing-101/articles/3-tax-deductible-investment-expenses-you-should-take) ### Keep Them Healthy and Happy NOVEMBER 19, 2015 Free food during tax season is by far the most common perk offered at accounting firms, but it’s probably not doing staff any favors. [VIEW ARTICLE](https://www.accountingtoday.com/20days-20ways/keep-them-healthy-and-happy-76449-1.html) ### Warady & Davis LLP, Chicago CPAs & Consultants, Named a “Best Place to Work for Millennials” HR.Com BLOG – Jun 8, 2015 – Warady & Davis LLP, Chicago CPAs & Consultants, has been named one of the best places to work for millennial employees in America, Rick … [VIEW ARTICLE](https://www.hr.com/en/app/blog/2015/06/warady-davis-llp-chicago-cpas-consultants-named-a-_ianp5kz6.html) ### Protiviti, CPA firms among “Best Places to Work for Millennials” ACCOUNTING TOMORROW BLOG – MAY 28, 2015 The Center for Generational Kinetics released today its first annual list of The Best Places to Work for Millennials, just in time for this year’s estimated 1.8 million college graduates seeking to launch their careers. The list also offers new insights into what it takes to recruit and retain top Millennial performers. [VIEW ARTICLE](https://www.accountingtoday.com/blogs/accounting-tomorrow/news/protiviti-cpa-firms-among-best-places-to-work-for-millennials-74730-1.html) Newsletter Sign Up Email This field is for validation purposes and should be left unchanged. First Name(Required) Last Name(Required) Company Phone Email(Required) Anti-Spam Challenge - What is 2+4?(Required) CAPTCHA Submit Δ ### Learn more. Subscribe to our newsletter and receive access to industry best practices, tips and more. Email Address Sign Up --- ### [Disclaimer](https://waradydavis.com/disclaimer/) **Published:** August 13, 2021 **Author:** WaradyDavis **Content:** # Disclaimer In making this site available, no client, advisory, fiduciary or professional relationship is implicated or established and neither Warady & Davis LLP or W&D Consulting LLC nor any other person is, in connection with this site, engaged in rendering auditing, accounting, tax, legal, advisory, consulting or other [**professional services**](https://waradydavis.com/industry/professional-services/) or advice. Neither this site nor any content on or accessed through this site shall be considered a substitute for the independent investigations and sound technical and business judgment of the user of this site and the user should consult with a professional advisor familiar with your particular factual situation for advice or service concerning specific matters. Links on this site may lead to servers maintained by individual or organizations other the Warady & Davis LLP or W&D Consulting, LLC. Neither Warady & Davis LLP or W&D Consulting LLC make any representation or warranty regarding the accuracy, timeliness, suitability or any other aspect of the information located on such servers and neither monitors nor endorses such servers or content. WARADY & DAVIS LLP AND W&D CONSULTING LLC, INCLUDING THEIR RESPECTIVE PARTNERS, PRINCIPALS, EMPLOYEES, AGENTS AND REPRESENTATIVES MAKE NO REPRESENTATIONS OR WARRANTIES ABOUT THE ACCURACY, TIMELINESS, SUITABILITY OR ANY OTHER ASPECT OF THIS SITE OR ANY CONTENT ON OR ACCESSED THROUGH THIS SITE FOR ANY PURPOSE, ALL OF WHICH IS PROVIDED “AS IS” AND “AS AVAILABLE” WITHOUT ANY WARRANTY OF ANY KIND. This site and its content are made available only to provide information about Warady & Davis LLP and W&D Consulting LLC. --- ### [Submit Your Tax Info](https://waradydavis.com/submit-your-tax-info/) **Published:** February 7, 2022 **Author:** Leslie Flinn **Content:** # Submit Your 1040 Tax Information Send confidential files to W&D securely through either your W&D electronic 1040 organizer or the W&D Secure File Exchange: **[W&D Secure File Exchange](https://exchange-taxpayer.safesendreturns.com/DropOff/fd70000000000) Instructions:** 1. Access [**W&D Secure File Exchange**](https://exchange-taxpayer.safesendreturns.com/DropOff/fd70000000000)[**.**](https://exchange-taxpayer.safesendreturns.com/DropOff/fd70000000000) Or you may access the W&D Dropbox and send files securely to Partners and staff by clicking on the following link in their email signatures: *“**Send Me Files Securely Through SafeSend Exchange.”*** 2. No login credentials are required. 3. Simply enter your email address in the ***“Your e-mail”*** box. 4. In the box to the right, **select your W&D recipient’s name in the drop down list.** 5. Enter subject where indicated. 6. Type any comments in ***“Secure Message”*** box. 7. Drag and drop or click to select files to upload. You can add as many files as you like. 8. When ready, click ***“Send Files”*** Button. 9. You will receive a one-time access code to your email address. Enter code where prompted and select ***“Continue.”*** 10. Your files will upload automatically and the W&D recipient will be notified. For assistance contact **[W&D Secure File Exchange Help.](/cdn-cgi/l/email-protection#ec85828a83ac9b8d9e8d8895888d9a859fc28f8381)** [W&D Secure File Exchange](https://exchange-taxpayer.safesendreturns.com/DropOff/fd70000000000) --- ### [Submit Your Resume](https://waradydavis.com/careers/submit-your-resume/) **Published:** August 12, 2021 **Author:** WaradyDavis **Content:** # Submit Your Resume Instagram This field is for validation purposes and should be left unchanged. First Name(Required) Last Name(Required) Email Address(Required) Phone Number(Required) Position Applying For(Required)InternshipEntry Level Staff AccountantExperienced TaxExperienced Audit & AccountingBookkeepingPer Diem TaxAdministrativeOther How Did You Hear About This Position?(Required)WebsiteWord of MouthCareerBuilderGlass DoorLinkedInFacebookTwitterCareer FairOther Message If You Selected Other, Please Describe How. Attach File (25MB Limit)Accepted file types: doc, docx, pdf, Max. file size: 25 MB. Anti-Spam Challenge: What is 1+4?(Required) CAPTCHA Submit Δ #### Related Information About W&D Our People ### Learn more. Subscribe to our newsletter and receive access to industry best practices, tips and more. Email Address Sign Up --- ### [MSI Global Alliance](https://waradydavis.com/about/msi-global-alliance/) **Published:** August 10, 2021 **Author:** WaradyDavis **Content:** # MSI Global Alliance International reach and resources. ## International Reach – MSI Global Alliance W&D – backed by the firm’s membership in MSI Global Alliance – assists businesses and individuals with international tax, audit and accounting concerns for U.S. and foreign operations. ### About MSI Global Alliance MSI Global Alliance is a leading U.S. and worldwide association of independent professional service firms including accountants, lawyers, certified auditors, tax advisors, offshore and specialist service providers. MSI includes over 250 member firms doing business in more than 100 countries. Our member MSI firms provide us with first-hand knowledge of different geographic regions, international taxation and accounting requirements, business issues and more. Local resources, including specialized personnel, are also available through the MSI alliance. [![Warady & Davis is a Member of MSI Global Alliance - Independent Legal & Accounting Firms](https://waradydavis.com/wp-content/uploads/2021/11/msiglob-web.png "Member of MSI Global Alliance | Warady & Davis LLP")](https://www.msiglobal.org/) ## “They go above and beyond to help me.” – Real Estate Developer and Owner ## “A trusted business partner and invaluable resource.” – Nationwide Transportation Company ## “Promises = fulfillment and commitment. Thank you.” – Disaster Recovery and Clean-Up Business ## “Excellent, Always Available, Easy to Work with and an Invaluable Advisor.” – National Distribution Company ## “Incredible understanding of our business. Tailors advice to our needs.” – U.S. and International Manufacturing Company ## The Idea Exchange Blog [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Subscribe](https://waradydavis.com/resource-center/subscribe/) **Published:** August 13, 2021 **Author:** WaradyDavis **Content:** # Learn More Fill out the form below to learn more about W&D and receive timely information on tax legislation, audit and accounting regulations, best practices, industry news and more. If you require immediate attention, give us a call us at [(847) 267-9600](tel:+18472679600) or send an email to [\[email protected\]](/cdn-cgi/l/email-protection#b9d0d7dfd6f9ced8cbd8ddc0ddd8cfd0ca97dad6d4). Only one submission, please. Recent Articles ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. --- ### [Ask Warady & Davis LLP](https://waradydavis.com/resource-center/contact-us/) **Published:** August 13, 2021 **Author:** WaradyDavis **Content:** # Ask W+D Fill out the form to start a conversation. You’ll hear back from us soon. Or, if you require immediate attention, give us a call at — (847) 267-9600 or send e-mail to [\[email protected\]](/cdn-cgi/l/email-protection#0a63646c654a7d6b786b6e736e6b7c637924696567). ## Contact Instagram This field is for validation purposes and should be left unchanged. 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Comments Anti-Spam Challenge - What is 5+4?(Required) CAPTCHA Submit Δ Recent Articles ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. --- ### [Mission and Core Values](https://waradydavis.com/about/mission-core-values/) **Published:** August 10, 2021 **Author:** WaradyDavis **Content:** # Mission & Core Values We value our long-standing client relationships, many of which span multiple decades. ## The W&D Mission The Warady & Davis mission “Committed to You” – reflects our client-centric focus and the strong business advisor relationships which result. With Warady & Davis LLP on your side, “You’ve Got This.” The achievement of our mission and strength of our core values is reflected in the depth and longevity of our client relationships and the outstanding reputation W&D has earned and maintains in the financial and banking communities for professionalism, credibility, quality and integrity. ### W+D Core Values The achievement of our mission is supported by Warady & Davis’ core values: - Integrity - Trust - Teamwork - Loyalty - Respect - Family ## “They go above and beyond to help me.” – Real Estate Developer and Owner ## “A trusted business partner and invaluable resource.” – Nationwide Transportation Company ## “Promises = fulfillment and commitment. Thank you.” – Disaster Recovery and Clean-Up Business ## “Excellent, Always Available, Easy to Work with and an Invaluable Advisor.” – National Distribution Company ## “Incredible understanding of our business. Tailors advice to our needs.” – U.S. and International Manufacturing Company ## The Idea Exchange Blog [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Privacy Policy](https://waradydavis.com/privacy-policy/) **Published:** August 13, 2021 **Author:** WaradyDavis **Content:** # Privacy Policy CPAs, like all providers of personal financial services, are now required by law to inform their clients of their policies regarding privacy of client information. CPAs have been and continue to be bound by professional standards of confidentiality that are even more stringent than those required by law. Therefore, we have always protected your right to privacy. ### Types of Nonpublic Personal Information We Collect We collect nonpublic personal information about you that is provided to us by you or obtained by us with your authorization. - In writing via regular mail, email or over the Internet. - Verbally via the phone or personal conferences. - From third parties, with your authorization. - From transactions with our affiliates or us. **Parties to Whom We Disclose Information** For current and former clients, we do not disclose any nonpublic personal information obtained in the course of our practice except as required or permitted by law. Permitted disclosures include, for instance, providing information to our employees, and in limited situations, to unrelated third parties who need to know that information to assist us in providing services to you. In all such situations, we stress the confidential nature of information being shared. **Protecting the Confidentiality and Security of Current and Former Clients’ Information** We retain records relating to professional services that we provide so that we are better able to assist you with your professional needs and, in some cases, to comply with professional guidelines. In order to guard your nonpublic personal information, we maintain physical, electronic, and procedural safeguards that comply with our professional standards. ### COOKIES Cookies are small text files that are sent by the website to your browser and then stored by your browser on your computer. Information collected via cookies is used for statistical reporting. If you are a repeat visitor to our website or have completed a form, cookies may enable the website to improve your experience. You can manage the cookie settings of your browser by referencing the following links: [Microsoft Explorer](https://support.microsoft.com/en-us/help/17442/windows-internet-explorer-delete-manage-cookies "Microsoft Explorer") [Google Chrome](https://support.google.com/chrome/answer/95464?co=GENIE.Platform%3DAndroid&hl=en "Google Chrome") [Mozilla Firefox](https://support.mozilla.org/en-US/kb/enable-and-disable-cookies-website-preferences "Mozilla Firefox") [Apple Safari](https://support.apple.com/ "Apple Safari") In addition, most advertising networks offer you a way to opt out of targeted advertising. If you would like more information, please visit or [https://www.youronlinechoices.com](https://www.youronlinechoices.com/). ### Remove My Information You may request to remove your information from our Marketing System. By [clicking here](/cdn-cgi/l/email-protection#2e474048416e594f5c4f4a574a4f58475d004d4143), you are requesting Warady & Davis LLP to remove your personal data from W&D’s Marketing System. Please call [(847) 267-9600](tel:1-847-267-9600) if you have any questions, because your privacy, our professional ethics, and the ability to provide you with quality financial services are very important to us. --- ### [CPA Firm Succession](https://waradydavis.com/about/cpa-firm-succession/) **Published:** August 10, 2021 **Author:** WaradyDavis **Content:** # CPA Firm Mergers & Acquisitions Practice business continuation solutions and exit strategies. ## Chicago CPA Firm Succession & Exit Strategies **If you’re an equity owner of an accounting firm, you’ve worked a lifetime to build the business. You’ve invested in staff and nurtured your clients. While you’ve been spending your time advocating the importance of planning for the future to those around you, take a moment to consider whether you’ve done the same for yourself.** Whether you’re nearing retirement age or actively building your business and are looking to join a team with expanded resources and a solid infrastructure to support your efforts, it’s important to know your options. Warady & Davis LLP has successfully completed 20+ mergers and acquisitions as part of its controlled, profitable growth strategy. These acquisitions range from sole practitioners to 10+ firm members. We have a proven process in place and a team of experts including Partners, operations, marketing and administration that will support you each step of the way in your decision making process and to ensure a smooth transition. Start a conversation with Warady & Davis LLP’s fellow CPAs who have successfully transitioned their practices, to discuss: - Why or (why not) merge - When to start - Top factors in the selection process - Due diligence - Cultural considerations - Distilling the process into steps for success - Mistakes & pitfalls to avoid - Retaining & transitioning clients - Insurance & legal considerations - Your questions & more ## “They go above and beyond to help me.” – Real Estate Developer and Owner ## “A trusted business partner and invaluable resource.” – Nationwide Transportation Company ## “Promises = fulfillment and commitment. Thank you.” – Disaster Recovery and Clean-Up Business ## “Excellent, Always Available, Easy to Work with and an Invaluable Advisor.” – National Distribution Company ## “Incredible understanding of our business. Tailors advice to our needs.” – U.S. and International Manufacturing Company ## The Idea Exchange Blog [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Warady & Davis Cares](https://waradydavis.com/about/warady-davis-cares/) **Published:** August 10, 2021 **Author:** WaradyDavis **Content:** # Caring for our Communities W&D and our people help dozens of worthy causes and organizations helped each year. ## W&D Cares ### Caring for Our Chicagoland Community At Warady & Davis LLP, a leading Chicago CPA firm headquartered in Lake County, IL, we are committed to the communities and world in which we work and live. We demonstrate this commitment in many ways such as financial support of Chicagoland charitable organizations, participation on boards and other community service activities such as The American Cancer Society’s Relay for Life, natural disaster relief efforts, food drives, fund raising projects and more. ### Caring for Our World In recognition of the importance of preserving our environment, W&D’s Lake County, IL central office employs green workplace practices. This includes the implementation of our paperless office initiative, recycling and a variety of other measures. ## “They go above and beyond to help me.” – Real Estate Developer and Owner ## “A trusted business partner and invaluable resource.” – Nationwide Transportation Company ## “Promises = fulfillment and commitment. Thank you.” – Disaster Recovery and Clean-Up Business ## “Excellent, Always Available, Easy to Work with and an Invaluable Advisor.” – National Distribution Company ## “Incredible understanding of our business. Tailors advice to our needs.” – U.S. and International Manufacturing Company ## The Idea Exchange Blog [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Services](https://waradydavis.com/services/) **Published:** June 29, 2021 **Author:** WaradyDavis **Content:** # Services Full-service audit, accounting, tax and consulting firm working with clients throughout the U.S. and internationally. ## Chicago Audit, Accounting, Tax, and Consulting Services Warady & Davis LLP is a full service Chicago accounting, audit, tax and consulting firm. W&D’s capabilities and offerings are commensurate with large regional and national accounting firms and include a wide range of audit, accounting, tax, consulting and financial services for privately-held companies, individuals and their families. W&D represents clients throughout the U.S. and their interests abroad. W&D ranks in the top 25 largest accounting firms in the Chicago area. *(Source: Crain’s Chicago Business and the Daily Herald Business Ledger, 2021).* [Accounting](https://waradydavis.com/service/accounting-services/) [Tax](https://waradydavis.com/service/tax-services/) [Business Valuation](https://waradydavis.com/service/business-valuation-approach/) [Audit & Advisory](https://waradydavis.com/service/audit-and-accounting-services/) [State & Local Tax](https://waradydavis.com/service/state-and-local-tax/) [Forensic Accounting](https://waradydavis.com/service/forensic-services/) [Employee Benefit Plan Audit](https://waradydavis.com/service/employee-benefit-plan-audit/) [Estate & Gift Tax Planning](https://waradydavis.com/service/estate-gift-tax-planning/) [Wealth Management](https://waradydavis.com/service/wealth-management-services/) [Management Advisory](https://waradydavis.com/service/management-consulting-services/) [Succession Planning](https://waradydavis.com/service/succession-planning/) [Litigation Support](https://waradydavis.com/service/litigation-support-services/) ## “Incredible understanding of our business. Tailors advice to our needs.” Incredible understanding of our business. Tailors advice to our needs ## “Incredible understanding of our business. Tailors advice to our needs.” Incredible understanding of our business. Tailors advice to our needs ## “Incredible understanding of our business. Tailors advice to our needs.” Incredible understanding of our business. Tailors advice to our needs ### The Idea Exchange Blog [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) [E-Alerts](https://waradydavis.com/category/e-alerts/), [Hot Topics](https://waradydavis.com/category/hot-topics/), [OBBBA](https://waradydavis.com/category/obbba/), [OBBBA Individual](https://waradydavis.com/category/obbba-individual/), [Tax](https://waradydavis.com/category/tax/), [Tax Planning](https://waradydavis.com/category/tax-planning/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Careers](https://waradydavis.com/careers/) **Published:** August 6, 2021 **Author:** WaradyDavis **Content:** # Chicago CPA Firm Careers Get to the next level of success. [View Opportunities](/careers/opportunities/) ## Warady & Davis CPA Careers At Warady & Davis, a top 25 Chicago area CPA firm, we are committed to our clients’ and our firm members’ success. We are proud to call ourselves the *“W&D Family.”* ### What matters most to **you**? - Are you looking to do challenging, rewarding work with a great team? - Do you appreciate flexible scheduling, remote work opportunities and other quality of life initiatives? - Do you thrive in in a collaborative, professional environment that encourages your growth? - Are you looking for rapid advancement opportunities? - Do you want to have your contributions recognized, rewarded and valued? - Do you have what it takes to be a valued member of a leading top 25 Chicago CPA & Consulting firm? If the answer to the above is “yes,” make THE RIGHT CHOICE© and join the Warady & Davis team. Since 1949, W&D has enjoyed impressive growth in both size and reputation. Together with W&D Consulting LLC, our momentum is strong. We are committed to your success and the continued expansion of talent, services, client base and rewards. Warady & Davis LLP is proud to be named a “100 Best Accounting Firms to Work for” nationally by Accounting Today, a “Best Place to Work for Millennials” in America by Best Companies and The Center for Generational Kinetics, and a “Best Place to Work in Illinois” by The Daily Herald. Together we create an exceptional, cohesive team of people who are passionate about what we do and are committed to our clients’ success and to each other. [Experienced](https://waradydavis.com/careers/experienced-professionals/) [Internships](https://waradydavis.com/careers/internships/) #### Current Open Positions ## [Tax Supervisor](https://waradydavis.com/job/tax-supervisor/) As one of the top 25 CPA firms in the Chicago land area, a top 200 firm nationally, and a Great Lakes Regional Leader (Source: Crain’s Chicago Business, AICPA G400, and Accounting Today), Warady & Davis LLP is seeking a tax supervisor with prior public accounting... --- ### [Resource Center](https://waradydavis.com/resource-center/) **Published:** August 11, 2021 **Author:** WaradyDavis **Content:** # Resource Center W&D provides insight on best practices, industry trends, accounting and tax changes and management advice as a key component of client service. ## Resource Center W&D delivers timely information in a variety of formats including TIE (The.Idea.Exchange) Blog, e-newsletters, alerts, live and on-demand webinars, industry briefings, round tables and our popular Connections events. [OBBBA resources](https://waradydavis.com/resource-center/obbba-resources/) [Tax Legislation](https://waradydavis.com/resource-center/tax-legislation/) [The Idea Exchange Blog](/blog/) [Events](/events/) Search Resource Center Search for: Search OBBBA Resources Search for: ## NEW! OBBBA Resource Center The One Big Beautiful Bill Act (OBBBA)—signed July 4, 2025—brings major tax changes for businesses, individuals, and nonprofits. For plain-English updates, webinars, and practical tools, visit our OBBBA Resource Center to see what’s changed and what to do next. [Learn More](/resource-center/obbba-resources/) ![Warady & Davis LLP - Chicago - Covid - Photo of couple wearing masks](https://waradydavis.com/wp-content/uploads/2025/08/us-capitol-dome-obbba-tax-legislation-warady-davis-square.jpg "us-capitol-dome-obbba-tax-legislation-warady-davis-square | Warady & Davis LLP") ## The Idea Exchange Blog [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Employees](https://waradydavis.com/employees/) **Published:** August 12, 2021 **Author:** WaradyDavis **Content:** # Employees The following tools are links and resources for W&D firm members: - [**Safesend Exchange**](https://login.safesendreturns.com/Account/Login?ReturnUrl=%2Fconnect%2Fauthorize%2Fcallback%3Fclient_id%3Dsse.client.prod%26redirect_uri%3Dhttps%253A%252F%252Fexchange.safesendreturns.com%252Fsignin-oidc%26response_type%3Did_token%2520token%26scope%3Dopenid%2520profile%2520UserManagementApi%26state%3Daba235dd5f57482d8d6957bde3d6ae33%26nonce%3D09687a3a682443369bee24864ca02931) - [**Suralink Client Portal** ](https://accounts.suralink.com/login?clientId=ecf44ed2-2f20-46d2-82e5-c067eba2ad7e&redirectUri=https%3A%2F%2Fwaradydavis.suralink.com%2Fscripts%2Fviews%2FWelcome.php&coBrandingEnabled=true&state=%7B%22firmLogo%22%3A%22https%3A%2F%2Fwaradydavis.suralink.com%2Fimages%2FusrPhotos%2Fcropped%2Fwdweblogo21641512322_crop.png%22%7D) - **[Web Mail](https://outlook.office.com/mail/)** --- ### [Deerfield Office](https://waradydavis.com/deerfield-headquarters/) **Published:** August 26, 2021 **Author:** WaradyDavis **Content:** # Deerfield Office W&D’s headquarters are conveniently located at the I-294 Tollway Deerfield Road Exit, about 15 minutes North of O’Hare airport. ## Warady & Davis LLP 1717 Deerfield Road Suite 300 South Deerfield, IL 60015 Phone: 847.267.9600 Fax: 847.267-9696 ## The Idea Exchange Blog [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Pay](https://waradydavis.com/pay/) **Published:** August 13, 2021 **Author:** WaradyDavis **Content:** # Make a Payment Warady & Davis LLP and W&D Consulting LLC offer 3 quick and easy online payment options. ## Payment Plan QuickFee offers an easy, no-hassle way for you to spread the cost of your invoice(s) over 3 to 12 monthly payments.\* ## ACH / Bank Transfer ACH transfers funds directly from your bank with no additional fees. ## Credit Card A 3% processing fee will be applied to all credit card transactions. *(Debit cards not accepted)* [Pay Now](https://qsop.quickfee.com/WARADY) ### How QuickFee Payment Plans Help: - Smooths your cash flow. - Keeps working capital in your business for other purposes. - Access an additional line of credit without a formal application process. - No security required. - No early payout fees. - Obtain the additional services you need to grow your business. \* $2,000 minimum \*\* If you have received audit and attest services, you may not use the 12 month QuickFee Payment Plan option to pay existing invoices. Please choose a shorter term from the drop-down. Please contact [\[email protected\]](/cdn-cgi/l/email-protection#e58c8b838aa592849784819c8184938c96cb868a88) with questions. --- ### [Clients](https://waradydavis.com/clients/) **Published:** August 12, 2021 **Author:** WaradyDavis **Content:** # Clients The following tools are useful links and resources for W&D clients: ### Secure File Exchange - Send confidential files to W&D securely with [**Safesend Exchange.** ](https://exchange-taxpayer.safesendreturns.com/DropOff/fd70000000000) *Note: This is for data exchange only.* - [**Instructions.**](https://waradydavis.com/submit-your-tax-info/) - For assistance contact **[W&D Secure File Exchange Help.](/cdn-cgi/l/email-protection#215240474452444f4544594249404f46446156405340455845405748520f424e4c) [W&D Secure File Exchange](https://exchange-taxpayer.safesendreturns.com/DropOff/fd70000000000) ### W&D Portal (Business Clients) Access your secure [**W&D Client Portal HERE**. ](https://accounts.suralink.com/login?clientId=ecf44ed2-2f20-46d2-82e5-c067eba2ad7e&redirectUri=https%3A%2F%2Fwaradydavis.suralink.com%2Fscripts%2Fviews%2FWelcome.php&coBrandingEnabled=true&state=%7B%22firmLogo%22%3A%22https%3A%2F%2Fwaradydavis.suralink.com%2Fimages%2FusrPhotos%2Fcropped%2Fwdweblogo21641512322_crop.png%22%7D) - The W&D portal features state-of-the art encryption technology, unlimited file storage capacity and no file expiration dates. - [**Client Portal Quick Start Guide.** ](https://waradydavis.com/wp-content/uploads/2023/01/Suralink-Client-Quickstart-Guide.pdf) - For assistance or to request portal set-up contact **[W&D Client Portal Help.](/cdn-cgi/l/email-protection#582b2d2a3934313633182f392a393c213c392e312b763b3735)** [W&D CLIENT PORTAL](https://waradydavis.suralink.com) ### Make A Payment Warady & Davis LLP and W&D Consulting LLC offers 3 quick and easy online payment options in addition to traditional check payments. [Learn more.](/pay/) - [**Payment Plan.** ](https://qsop.quickfee.com/#/company/quickfeeus/firm/warady)QuickFee offers an easy, no-hassle way for you to spread the cost of your invoice(s) over 3 to 12 monthly payments.\* - **[ACH / Bank Transfer](https://qsop.quickfee.com/#/company/quickfeeus/firm/warady).** ACH transfer funds directly from your bank with no additional fees. - [**Credit Card.** ](https://qsop.quickfee.com/#/company/quickfeeus/firm/warady)A 3.5% processing fee will be applied to all credit card transactions. Questions? Contact [\[email protected\]](/cdn-cgi/l/email-protection#f99b90959590979eb98e988b989d809d988f908ad79a9694). [Make a Payment](https://qsop.quickfee.com/WARADY) --- ### [Warady & Davis Cares](https://waradydavis.com/careers/warady-davis-cares-racism-injustice-hate/) **Published:** August 10, 2021 **Author:** WaradyDavis **Content:** # Diversity and Inclusion Warady & Davis LLP stands in solidarity against racism, injustice and hate. ## Diversity & Inclusion For Warady & Davis LLP, diversity & inclusion are more than just words. They’re the principles guiding how we create a firm that’s the best fit for every person inside of it. Most importantly, it’s the right thing to do for the W&D family, our clients and the world as a whole. W&D’s “mission is your success.” When we say “your,” we mean both our clients and our people. We want our team to feel appreciated and free to be who they are at work so they can be their best for you. So we’re strengthening our culture where differences are valued. Where there is a deep sense of pride, passion and belonging and a shared commitment to excellence, and social responsibility. Different ideas, perspectives and backgrounds create a stronger team that delivers better results. W&D is committed to preventing discrimination against people regardless of gender, religion, race, ethnicity, sexual orientation and identity or expression, age, behavioral and mental health, disability status, or any other aspect which makes them unique. To support an inclusive environment where employees feel empowered to share their experiences and ideas, we’ve created a Diversity & Inclusion Committee that focuses on education, empowerment and community outreach. ## “W&D is a workplace that lets you grow both professionally and intellectually.” – Seth, EA, Director ## “W&D gives you the opportunity to specialize in different practice areas and industries that interest you and where you can make a difference.” – Chris, CPA, MAS, Partner, Former W+D Intern ## The Idea Exchange Blog [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Industries](https://waradydavis.com/industries/) **Published:** June 30, 2021 **Author:** WaradyDavis **Content:** # Industries W&D provides a solid understanding of your business and multiple specialized industry practice & service groups to support your goals. ## Industries We Serve **Today’s marketplace demands that your advisors know your industry, technical requirements and compliance challenges. We support client success with a solid understanding of your business.** Warady & Davis LLP, a top 25 Chicago accounting, audit, tax & consulting firm, serves a broad range of industries located in Illinois, across the U.S. and internationally. Our industry practice areas are supported by teams comprised of audit, accounting, tax and consulting professionals with significant experience and specialized training. W&D participates in industry professional organizations and associations and firm members also serve on the Illinois CPA Society’s industry and technical committees. ## “They go above and beyond to help me.” – Real Estate Developer and Owner ## “A trusted business partner and invaluable resource.” – Nationwide Transportation Company ## “Promises = fulfillment and commitment. Thank you.” – Disaster Recovery and Clean-Up Business ## “Excellent, Always Available, Easy to Work with and an Invaluable Advisor.” – National Distribution Company ## “Incredible understanding of our business. Tailors advice to our needs.” – U.S. and International Manufacturing Company [Real Estate](https://waradydavis.com/industry/real-estate/) [Transportation + Logistics](https://waradydavis.com/industry/transportation-logistics/) [Technology](https://waradydavis.com/industry/technology/) [Law Firm + Legal](/industry/professional-services/) [Construction](https://waradydavis.com/industry/construction-accounting-audit-tax-consulting/) [Nonprofit](https://waradydavis.com/industry/not-for-profit/) [Privately-Held Businesses](https://waradydavis.com/industry/owner-run-and-family-businesses/) [Hospitality](/industry/real-estate/) [Manufacturing](https://waradydavis.com/industry/manufacturing-audit-accounting-and-tax-services/) [Healthcare](https://waradydavis.com/industry/healthcare-accounting/) [Entrepreneurial + Small Businesses](https://waradydavis.com/industry/small-businesses/) Retail + Restaurants [Wholesale + Distribution](https://waradydavis.com/industry/wholesale-distribution/) [Professional Services](https://waradydavis.com/industry/professional-services/) [Medical + Dental](/industry/healthcare-accounting/) Financial Services ## The Idea Exchange Blog [![Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/wp-content/uploads/2026/07/WD-article-midyear-tax-planning-review-2026-400x250.jpg)](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) ## [Midyear Tax Planning Strategies to Reduce Your Tax Bill](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) Midyear tax planning helps individuals maximize deductions, reduce taxes, manage investments, and identify valuable tax-saving opportunities. [read more](https://waradydavis.com/midyear-tax-planning-strategies-to-reduce-your-tax-bill/) --- ### [Testimonials Celebrating 75 Years](https://waradydavis.com/testimonials-celebrating-75-years/) **Published:** September 27, 2024 **Author:** WaradyDavis **Content:** ![](https://waradydavis.com/wp-content/uploads/2024/03/75YearsLogo-white-orange.png "75YearsLogo-white-orange | Warady & Davis LLP")# Client Testimonials Our mission is your success. ## What Some of Our Long-Standing Clients Are Saying About W&D We value our long-standing client relationships, many of which span multiple decades and generations of business ownership and leadership. We thank each of our clients – past, present, and future – for your loyalty and pivotal role in W&D’s success. It is an honor to work together and act as your trusted business advisors. [Back](#) ##### “We started with W&D when they were small, and we were too. We grew along with W&D and they have been with us all the way." “We started with W&D when they were small and we were too. We grew along with W&D and they have been with us every step of the way. Throughout the years, W&D has assisted us in many areas including helping negotiate new deals, projections on cash flow, operating issues, FHA and conventional financing, private equity and too many real estate transactions to count. They have the ability to get the job done and always provide a fast response to any questions. They are a key part of our team and have helped us grow to where we are today.” **![Briar Grace Management Company Logo](https://waradydavis.com/wp-content/uploads/2024/09/logo-briar-grace-300x125.jpg "logo-briar-grace | Warady & Davis LLP")Sheldon Kogen, Principal, Briar Grace Management and The Kogen Family** *Property and HOA Management Services, Residential and Commercial Development, Real Estate Investment and Ownership* **Client of Warady & Davis LLP since the firm’s inception in 1949** ##### "My W&D advisor is the best CPA I could ask for; he and his team are always there." “Warady & Davis LLP is a one-stop shop with a full-range of consultation services and a depth of resources. They provided Huen Electric ownership guidance and support through several events such as audit, sale, succession, acquisition and retirement planning. They are well versed in our business, which allows us to have direct conversations that lead to effective planning. Warady & Davis LLP was instrumental when Huen Electric went through our business acquisition. They provided insight along the way and were active in the process. Because of the long-standing relationship with Warady & Davis, I can call at any time with questions or concerns and always receive timely, comprehensive answers that help me run our business. My W&D advisor is the best CPA I could ask for; he and his team are always there.” **![](https://waradydavis.com/wp-content/uploads/2024/09/hulen-logo-wd-testimonial.jpg "file.jpg | Warady & Davis LLP")Dan Pesavento, Chief Operating Officer, Huen Electric** *Leading commercial electrical contractor and electrical engineering firm* **Client of Warady & Davis LLP for over 25 years** ##### “I would never have achieved the level of success I have without the mentorship and support of Bernie Davis and the W&D team. " “I had the privilege of working with Bernie Davis, who was one of a kind. I would never have achieved the level of success I have without his mentorship and the support of the Warady & Davis LLP team. Warady & Davis LLP is like family. They never let me down and are always there when I need them. I would never even consider working with another accounting firm. Whether related to real estate transactions, my business or personal finances, Warady & Davis LLP introduced me to key players and helped build my team and worked well with all of my advisors. It has been my pleasure to work with multiple Warady & Davis LLP firm members over the years; each one of them just as good or even better than the last. One thing that stands out is that W&D knows how to hire and keep a great team. I have worked with W&D firm members that started as staff and rose to the top and are now Partners.” ![Logo - Union Line](https://waradydavis.com/wp-content/uploads/2024/09/union-line-logo-300x125.jpg "union-line-logo | Warady & Davis LLP") **David Rubin, Owner, Rubin Brothers, Inc. and Union Line** *Manufacturers of USA-Made Safety Clothing, Uniforms and Other Apparel* **Client of Warady & Davis LLP 1959 through sale of business to National Safety Apparel in 2018. W&D continues to serve the Rubin family and their interests.** ##### “Our relationship with W&D is more than just about business, it’s a friendship. It’s personal." “Our relationship with Warady & Davis LLP goes back to very beginning when they first opened their doors. W&D is highly competent and meets all our needs but our relationship goes beyond that. Simply put, If you like the people and they do good work, you stick with them. With W&D its more than just about business, it’s a friendship. It’s personal.” ![Logo Harry's Lumber Co](https://waradydavis.com/wp-content/uploads/2024/09/harrys-lumber-co-300x125.jpg "harrys-lumber-co | Warady & Davis LLP") **Ira Rosenthal, Owner, Harry’s Lumber Co.** *Founded in 1940, family owned and operated provider of high quality building products including lumber, decking materials, doors, windows, millwork, hardware and more* **Client of Warady & Davis LLP since the firm’s inception in 1949** ##### “The W&D team knows what they’re doing. They play an integral role in my business success.” “One of the things I most value about Warady & Davis LLP is the strength of my relationships with the team and specifically my Partner. He quarterbacks my projects and does a great job of getting the right people involved to get the job done. The Warady & Davis team knows what they are doing and I can count on them to resolve issues and they are always fair. Warady & Davis has a deep bench and many diversified services. They handle a lot of complex issues with one team. Instead of having to work with many different providers, W&D meets all my needs. W&D has played an integral role in my business success in many areas including deep dives on organizational performance, business valuation, in-depth tax planning and other consulting services. They bring valuable tax saving ideas and opportunities to the table.” ![](https://waradydavis.com/wp-content/uploads/2024/09/all-american-ext-sol-logo-300x125.jpg "all-american-ext-sol-logo | Warady & Davis LLP") **Sergey Taitler, Owner, All American Exterior Solutions** *40+ year-old commercial and residential roofing, solar, window, siding, doors, insulation, maintenance & warranty contractor* **Client of Warady & Davis LLP for 25+ years** ### Learn more. Subscribe to our E-Alerts and receive access to industry best practices, tips and more. Email Address Sign Up --- ### [OBBBA Resources](https://waradydavis.com/resource-center/obbba-resources/) **Published:** August 19, 2025 **Author:** Leslie Flinn **Content:** # OBBBA Resource Center One Big Beautiful Bill Act (OBBBA) key tax provisions and take-aways ## OBBBA 2025 Tax Changes: Resource Center The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, reshapes the tax landscape for nearly every taxpayer—extending key provisions of the [2017 Tax Cuts and Jobs Act (TCJA)](/the-tax-cut-and-jobs-act-tcja-summaries/), revising existing rules, and adding new measures that affect businesses, individuals, and not-for-profit organizations. The W&D OBBBA Resource Center serves as a valuable tool for individuals, businesses and organizations to: - Stay updated on the latest provisions of the OBBBA and IRS guidance - Gain clarity and insights on how the OBBBA is applied - Access thought leadership articles, webinars, and expert insights - Connect with industry experts to discuss the OBBBA’s impact on your specific situation(s) The Warady & Davis LLP and W&D Consulting LLC team is here to help you navigate the complexities and changes introduced by this landmark federal legislation. [OBBBA Overview](/whats-in-the-one-big-beautiful-bill-act-h-r-1/) Search OBBBA Resources Search for: [OBBBA for Businesses](#obbba-businesses) [obbba for nonprofits](#obbba-nonprofits) [OBBBA FOR INDIVIDUALS](#obbba-individuals) [Additional Resources](#obbba-resources) Schedule a Meeting ### OBBBA On-Demand Webinars ##### Webinars for Business ##### Webinars for Individuals Resource Menu [Overview](#overview) [Businesses](#obbba-businesses) [Individuals](#obbba-individuals) [Nonprofits](#obbba-nonprofits) [Additional Resources](#obbba-resources) [Q & A’s](#obbba-q-a) ### OBBBA Insights for Businesses [![2026 OBBBA Tax Changes: Key Items to Review This Year](https://waradydavis.com/wp-content/uploads/2026/05/WD-article-2026-obbba-tax-changes-key-items-review-400x250.png)](https://waradydavis.com/2026-obbba-tax-changes-key-items-to-review-this-year/) ## [2026 OBBBA Tax Changes: Key Items to Review This Year](https://waradydavis.com/2026-obbba-tax-changes-key-items-to-review-this-year/) Review key 2026 OBBBA tax changes, including QOF deadlines, 1099 updates, charitable deductions, and new Section 530A “Trump accounts.” --- ## Jobs ### [Accountant Bookkeeper](https://waradydavis.com/job/accountant-bookkeeper/) **Published:** July 28, 2026 **Author:** Leslie Flinn **Content:** As one of the [top 25 CPA firms in the Chicago land area, a top 200 firm nationally, and a Great Lakes Regional Leader](https://waradydavis.com/about/) (Source: Crain’s Chicago Business, AICPA G400, and Accounting Today), Warady & Davis LLP is seeking an accountant bookkeeper with prior public accounting experience to join our team. [CLICK HERE](http://www.waradydavis.comcareers) to learn more or view our job postings. Specializing in privately-held businesses including small businesses, not-for-profit organizations, related business owners, family members and individuals, W&D is dedicated to helping our clients & people succeed. We offer an outstanding career path, significant growth & income potential and excellent, comprehensive benefits. If you are looking for a challenging and rewarding professional environment where you will have opportunity for advancement and your talent will be respected and developed, Warady & Davis LLP is THE RIGHT CHOICE©. You’ll interact regularly with clients, managers and partners, and enjoy challenges that expand your knowledge. With us, you have the opportunity to gain knowledge, responsibility and grow professionally at a fast rate. **Responsibilities** Client responsibilities to include investment accounting, reconciling investment accounts, bank reconciliations, annual and quarterly multi-state payroll and sales tax return filings, adjusted trial balances, monthly financial statements, monthly write-up work (entering of cash receipts and disbursements) grant accounting, and more. ***Knowledge of stock and investment portfolio accounting and income tax return preparation a plus.*** **Requirements:** - Must be familiar with all aspects of bookkeeping (investment accounting, A/P, A/R, general ledger, reconciliations, payroll, sales tax, multi-state filings) - Minimum 2 years of bookkeeping / accountant experience in a CPA firm environment - In-depth Knowledge of QuickBooks (including QuickBooks Online) and Microsoft Excel - Excellent communication and organization skills - Ability to manage multiple tasks and priorities in a deadline sensitive environment - Positive, team player attitude ### The bottom line is that at W&D, we know what’s important in life: - Work that is satisfying & rewarding. - Excellent, competitive compensation & benefits. - Outstanding advancement opportunities. - People who are open & supportive. - Surroundings that give you the freedom & opportunity to succeed. - A great team built on friendships. - The opportunity to have your opinions heard and respected by management. - A balance of hard work & fun. Year-round, we host parties & events that celebrate a sense of family & team spirit. - Leading technology to enhance your efficiency. - A professional development curriculum designed to continually build your technical & management skills. - Business casual attire. - Hybrid workplace with year-round flexible scheduling and summer Fridays. W&D has enjoyed impressive growth over the last 75+ years and together with W&D Consulting LLC, we look forward to continued profitable expansion. As a member of the Warady & Davis team, you will have many advantages including: a comprehensive, hands-on training program, direct client and Partner contact, diverse work and industry exposure, and outstanding salary and benefits, to name a few. Most importantly, you will have the opportunity to become a key player in our firm – and our clients’ – success. We are proud to be named a “100 Best Accounting Firms to Work for” nationally by Accounting Today, a “Best Place to Work for Millennials” in America by Best Companies and The Center for Generational Kinetics, and a “Best Place to Work in Illinois” by The Daily Herald. Together we create an exceptional, cohesive team of people who are passionate about what we do and are committed to our clients’ success and to each other. ### Compensation and Benefits Disclosure The estimated base salary range for this position is $64,000 – $73,000. This range represents a good faith estimate of what Warady & Davis reasonably expects to pay at the time of posting. Actual compensation may vary based on several factors, including, but not limited to, the candidate’s specific skills, certifications, years of experience, relevant education, market conditions, and required travel. This position is also eligible to participate in the Warady & Davis annual bonus compensation program, reflecting our pay-for-performance philosophy. Inclusive of bonus opportunities, the total estimated compensation range for this role is $65,500 – $80,000. In addition to compensation, employees are eligible to participate in Warady & Davis benefit programs, which include medical, dental, and vision coverage, as well as other wellness and employee assistance programs. The salary range information is provided in accordance with applicable state and local salary transparency laws currently in effect and may be updated as new regulations are implemented. ### Equal Opportunity Employer Warady & Davis LLP is an equal opportunity employer and considers all qualified applicants equally without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, veteran status, or disability status. --- ### [Audit Senior](https://waradydavis.com/job/audit-senior-employee-benefit-plan-audit/) **Published:** July 28, 2026 **Author:** Leslie Flinn **Content:** As one of the top 25 CPA firms in the Chicago land area, a top 200 firm nationally, and a Great Lakes Regional Leader (Source: Crain’s Chicago Business, AICPA G400, and Accounting Today), Warady & Davis LLP is seeking an audit senior with prior public accounting and employee benefit plan audit experience to join our team. [CLICK HERE](https://waradydavis.com/careers/) to learn more or view our job postings. Specializing in[ employee benefit plan audit](https://waradydavis.com/service/employee-benefit-plan-audit/), not-for-profit organizations, privately-held businesses and related business owners, family members and individuals, W&D is dedicated to helping our clients & people succeed. We offer an outstanding career path, significant growth & income potential and excellent, comprehensive benefits. If you are looking for a challenging and rewarding professional environment where you will have opportunity for advancement and your talent will be respected and developed, Warady & Davis LLP is THE RIGHT CHOICE©. You’ll interact regularly with clients, managers and partners, and enjoy challenges that expand your knowledge. With us, you have the opportunity to gain knowledge, responsibility and grow professionally at a fast rate. W&D offers a full scope work experience – from work papers through financials to preparing the tax return. You’ll be involved in every aspect of client engagements. And, we have a diverse client base, so we keep you inspired with assignments that vary by industry sector and service area. You also have the opportunity to specialize in industries and practice areas that interest you. This position will be dedicated to serving employee benefit plan audit and for-profit clients. #### **Audit Senior Job duties include:** - Provide outstanding client service and communication - Direct staff accountants as part of a client engagement team - Review programs to see that assignments are accomplished within the budgeted time - Review work papers for accuracy and completeness - Review financial statements for suitability of presentation and adequacy of disclosures - Develop spreadsheet analysis (trial balance, reconciliation’s, etc.) special projects, and more - Conduct accounting compilations and reviews - Business tax return preparation as part of audit engagements #### **Audit Senior Requirements:** - BS/MAS Degree - CPA or actively pursuing - **Public accounting firm experience a MUST** - **Experience serving employee benefit plan audit clientele** **A MUST** - Taxation knowledge a plus - Minimum 3+ year’s audit experience ### The bottom line is that at W&D, we know what’s important in life: - Work that is satisfying & rewarding. - Excellent, competitive compensation & benefits. - Outstanding advancement opportunities. - People who are open & supportive. - Surroundings that give you the freedom & opportunity to succeed. - A great team built on friendships. - The opportunity to have your opinions heard and respected by management. - A balance of hard work & fun. Year-round, we host parties & events that celebrate a sense of family & team spirit. - Leading technology to enhance your efficiency. - A professional development curriculum designed to continually build your technical & management skills. - Business casual attire. - Hybrid workplace with year-round flexible scheduling and summer Fridays. W&D has enjoyed impressive growth over the last 78+ years and together with W&D Consulting LLC, we look forward to continued profitable expansion. As a member of the Warady & Davis team, you will have many advantages including: a comprehensive, hands-on training program, direct client and Partner contact, diverse work and industry exposure, and outstanding salary and benefits, to name a few. Most importantly, you will have the opportunity to become a key player in our firm – and our clients’ – success. We are proud to be named a “100 Best Accounting Firms to Work for” nationally by Accounting Today, a “Best Place to Work for Millennials” in America by Best Companies and The Center for Generational Kinetics, and a “Best Place to Work in Illinois” by The Daily Herald. Together we create an exceptional, cohesive team of people who are passionate about what we do and are committed to our clients’ success and to each other. ### Compensation and Benefits Disclosure The estimated base salary range for this position is $78,000 – $90,000. This range represents a good faith estimate of what Warady & Davis reasonably expects to pay at the time of posting. Actual compensation may vary based on several factors, including, but not limited to, the candidate’s specific skills, certifications, years of experience, relevant education, market conditions, and required travel. This position is also eligible to participate in the Warady & Davis annual bonus compensation program, reflecting our pay-for-performance philosophy. Inclusive of bonus opportunities, the total estimated compensation range for this role is $81,500 – $99,000+. In addition to compensation, employees are eligible to participate in Warady & Davis benefit programs, which include medical, dental, and vision coverage, as well as other wellness and employee assistance programs. The salary range information is provided in accordance with applicable state and local salary transparency laws currently in effect and may be updated as new regulations are implemented. ### Equal Opportunity Employer Warady & Davis LLP is an equal opportunity employer and considers all qualified applicants equally without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, veteran status, or disability status. --- ### [Audit Supervisor](https://waradydavis.com/job/audit-supervisor-2/) **Published:** August 3, 2026 **Author:** Leslie Flinn **Content:** As one of the top 25 CPA firms in the Chicago land area, a top 200 firm nationally, and a Great Lakes Regional Leader (Source: Crain’s Chicago Business, AICPA G400, and Accounting Today), Warady & Davis LLP is seeking an audit supervisor with prior public accounting and employee benefit plan audit experience to join our team. [CLICK HERE](https://waradydavis.com/careers/) to learn more or view our job postings. Specializing in[ employee benefit plan audit](https://waradydavis.com/service/employee-benefit-plan-audit/), privately-held businesses and related business owners, family members and individuals, W&D is dedicated to helping our clients & people succeed. We offer an outstanding career path, significant growth & income potential and excellent, comprehensive benefits. If you are looking for a challenging and rewarding professional environment where you will have opportunity for advancement and your talent will be respected and developed, Warady & Davis LLP is THE RIGHT CHOICE©. You’ll interact regularly with clients, managers and partners, and enjoy challenges that expand your knowledge. With us, you have the opportunity to gain knowledge, responsibility and grow professionally at a fast rate. W&D offers a full scope work experience – from work papers through financials to preparing the tax return. You’ll be involved in every aspect of client engagements. And, we have a diverse client base, so we keep you inspired with assignments that vary by industry sector and service area. You also have the opportunity to specialize in industries and practice areas that interest you. This position will be primarily dedicated to serving employee benefit plan audit and for-profit clients. #### Audit Supervisor Job duties include: - Direct staff accountants as part of client engagement teams. - Develop and train staff. - Serve as the Engagement Lead on specific employee benefit plan audit and other client accounts, taking responsibility for pre-engagement planning, execution, and final deliverable. - Develop a detailed engagement work plan, budgets and schedules. Monitor project status against the work plan and communicate schedule adjustments to Managers and/or Partners. - Develop a professional relationship with the client. Gain the respect and confidence of the client by consistently demonstrating superior client service, quality work products, and professional integrity. - Serve as a point-of-contact to the client. Ensure that the client is fully informed of engagement progress, logistics, and delivery dates. - Formulate audit approach and tailor appropriate audit programs. - Review and/or prepare financial statements, footnotes, workpapers, tax returns, management letters, agreed-upon procedures, and other attestation engagements. - Demonstrate professional creativity in dealing with client matters and make constructive suggestions to improve client operations. - Effectively analyze client transactions and unusual situations. - Recognize and resolve potential and/or existing problems with appropriate research and consulting if necessary. - Manage audit and accounting process (to include resource allocation and budgeting, billing, and collection), submit requests to schedule staff, deliver work products on time and within scope, and communicate engagement status to Warady & Davis LLP management. - Communicate periodically with client following the completion of the engagement to ensure client satisfaction. - Prepare Form 990 and business returns as part of audit engagements. #### Requirements - BS/MAS Degree - CPA preferred - Employee Benefit Plan Audit specialization/knowledge a plus - Taxation knowledge - Minimum 5-7+ year’s public accounting firm audit and tax experience ### The bottom line is that at W&D, we know what’s important in life: - Work that is satisfying & rewarding. - Excellent, competitive compensation & benefits. - Outstanding advancement opportunities. - People who are open & supportive. - Surroundings that give you the freedom & opportunity to succeed. - A great team built on friendships. - The opportunity to have your opinions heard and respected by management. - A balance of hard work & fun. Year-round, we host parties & events that celebrate a sense of family & team spirit. - Leading technology to enhance your efficiency. - A professional development curriculum designed to continually build your technical & management skills. - Business casual attire. - Hybrid workplace with year-round flexible scheduling and summer Fridays. W&D has enjoyed impressive growth over the last 78+ years and together with W&D Consulting LLC, we look forward to continued profitable expansion. As a member of the Warady & Davis team, you will have many advantages including: a comprehensive, hands-on training program, direct client and Partner contact, diverse work and industry exposure, and outstanding salary and benefits, to name a few. Most importantly, you will have the opportunity to become a key player in our firm – and our clients’ – success. We are proud to be named a “100 Best Accounting Firms to Work for” nationally by Accounting Today, a “Best Place to Work for Millennials” in America by Best Companies and The Center for Generational Kinetics, and a “Best Place to Work in Illinois” by The Daily Herald. Together we create an exceptional, cohesive team of people who are passionate about what we do and are committed to our clients’ success and to each other. ### Compensation and Benefits Disclosure The estimated base salary range for this position is $90,000 – $110,000. This range represents a good faith estimate of what Warady & Davis reasonably expects to pay at the time of posting. Actual compensation may vary based on several factors, including, but not limited to, the candidate’s specific skills, certifications, years of experience, relevant education, market conditions, and required travel. This position is also eligible to participate in the Warady & Davis annual bonus compensation program, reflecting our pay-for-performance philosophy. Inclusive of bonus opportunities, the total estimated compensation range for this role is $92,500 – $121,000+. In addition to compensation, employees are eligible to participate in Warady & Davis benefit programs, which include medical, dental, and vision coverage, as well as other wellness and employee assistance programs. The salary range information is provided in accordance with applicable state and local salary transparency laws currently in effect and may be updated as new regulations are implemented. ### Equal Opportunity Employer Warady & Davis LLP is an equal opportunity employer and considers all qualified applicants equally without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, veteran status, or disability status. --- ### [Tax Senior](https://waradydavis.com/job/tax-senior/) **Published:** July 28, 2026 **Author:** Leslie Flinn **Content:** As one of the [top 25 CPA firms in the Chicago land area, a top 200 firm nationally, and a Great Lakes Regional Leader](https://waradydavis.com/about/) (Source: Crain’s Chicago Business, AICPA G400, and Accounting Today), Warady & Davis LLP is seeking a tax senior with prior public accounting and not-for-profit client experience to join our team. [CLICK HERE](http://www.waradydavis.com/careers) to learn more or view our job postings. W&D is a recognized tax leader specializing in privately-held businesses and related business owners, family members, nonprofit organizations and individuals. Revenues range from start-ups to $750,000,000 annually and include high net-worth individuals, estate, gift and trust, private foundations and a full scope of specialized taxation matters. [CLICK HERE ](https://waradydavis.com/service/tax-services/)for more information on W&D’s tax practice and types of clients served. If you are looking for a challenging and rewarding professional environment where you will have opportunity for advancement and your talent will be respected and developed, Warady & Davis LLP is THE RIGHT CHOICE©. You’ll interact regularly with clients, managers and partners, and enjoy challenges that expand your knowledge. With us, you have the opportunity to gain knowledge, responsibility and grow professionally at a fast rate. #### Tax Senior Job duties include: - Provide outstanding client service and communication - Direct staff accountants as part of a client engagement team - Preparation of medium to high complexity tax returns - Review of low complexity tax returns - Research tax issues and filing requirements that affect tax compliance - Research tax issues using internal revenue code, treasury regulations and other relevant authorities/guidance - Assist in drafting tax technical memorandums - Resolve IRS and State Tax notices - Mentor interns and staff accountants #### Tax Senior Requirements: - BS/MAS Degree - CPA or EA; or actively pursuing - **Public accounting firm experience a MUST** - Accounting knowledge a plus - Minimum 3+ years tax experience ### The bottom line is that at W&D, we know what’s important in life: - Work that is satisfying & rewarding. - Excellent, competitive compensation & benefits. - Outstanding advancement opportunities. - People who are open & supportive. - Surroundings that give you the freedom & opportunity to succeed. - A great team built on friendships. - The opportunity to have your opinions heard and respected by management. - A balance of hard work & fun. Year-round, we host parties & events that celebrate a sense of family & team spirit. - Leading technology to enhance your efficiency. - A professional development curriculum designed to continually build your technical & management skills. - Business casual attire. - Hybrid workplace with year-round flexible scheduling and summer Fridays. W&D has enjoyed impressive growth over the last 75+ years and together with W&D Consulting LLC, we look forward to continued profitable expansion. As a member of the Warady & Davis team, you will have many advantages including: a comprehensive, hands-on training program, direct client and Partner contact, diverse work and industry exposure, and outstanding salary and benefits, to name a few. Most importantly, you will have the opportunity to become a key player in our firm – and our clients’ – success. We are proud to be named a “100 Best Accounting Firms to Work for” nationally by Accounting Today, a “Best Place to Work for Millennials” in America by Best Companies and The Center for Generational Kinetics, and a “Best Place to Work in Illinois” by The Daily Herald. Together we create an exceptional, cohesive team of people who are passionate about what we do and are committed to our clients’ success and to each other. ### Compensation and Benefits Disclosure The estimated base salary range for the position of Tax Senior is $78,000 – $90,000. This range represents a good faith estimate of what Warady & Davis reasonably expects to pay at the time of posting. Actual compensation may vary based on several factors, including, but not limited to, the candidate’s level – Senior or Supervisor,- specific skills, certifications, years of experience, relevant education, market conditions, and required travel. This position is also eligible to participate in the Warady & Davis annual bonus compensation program, reflecting our pay-for-performance philosophy. Inclusive of bonus opportunities, the total estimated compensation range for this role is estimated to be $80,500 – $99,000. In addition to compensation, employees are eligible to participate in Warady & Davis benefit programs, which include medical, dental, and vision coverage, as well as other wellness and employee assistance programs. The salary range information is provided in accordance with applicable state and local salary transparency laws currently in effect and may be updated as new regulations are implemented. ### Equal Opportunity Employer Warady & Davis LLP is an equal opportunity employer and considers all qualified applicants equally without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, veteran status, or disability status. --- ### [Tax Supervisor](https://waradydavis.com/job/tax-supervisor/) **Published:** August 3, 2026 **Author:** Leslie Flinn **Content:** As one of the [top 25 CPA firms in the Chicago land area, a top 200 firm nationally, and a Great Lakes Regional Leader](https://waradydavis.com/about/) (Source: Crain’s Chicago Business, AICPA G400, and Accounting Today), Warady & Davis LLP is seeking a tax supervisor with prior public accounting experience to join our team. [CLICK HERE](http://www.waradydavis.com/careers) to learn more or view our job postings. W&D is a recognized tax leader specializing in privately-held businesses and related business owners, family members, nonprofit organizations and individuals. Revenues range from start-ups to $750,000,000 annually and include high net-worth individuals, estate, gift and trust, private foundations and a full scope of specialized taxation matters. [CLICK HERE ](https://waradydavis.com/service/tax-services/)for more information on W&D’s tax practice and types of clients served. Warady & Davis LLP is dedicated to helping our clients & people succeed. We offer an outstanding career path, significant growth & income potential and excellent, comprehensive benefits. If you are looking for a challenging and rewarding professional environment where you will have opportunity for advancement through partner and your talent will be respected and developed, **Warady & Davis LLP is THE RIGHT CHOICE©.** You’ll interact regularly with clients and partners, and enjoy challenges that expand your knowledge. With us, you have the opportunity to gain knowledge and grow professionally at a fast rate. #### Tax Supervisor Job duties include: - Preparation of more complex business, partnership, not-for-profit and trust tax returns on a timely and efficient basis - Research tax issues and filing requirements. - Perform complete and efficient reviews of individual, business and not-for-profit tax returns. - Exhibit an understanding of clients’ business objectives and perform tax research to assist in tax structuring and modeling. - Accept responsibility for and complete tasks in a timely fashion including managing multiple client projects at a time. - Exhibit a desire to understand more complex business transactions and issues. - Develop professional relationship with clients. - Mentor and train staff #### Tax Supervisor Requirements: - BS, MSA or MST in Accounting or Taxation - Enrolled Agent or CPA or in process of pursuing - Minimum 4+ years public accounting firm experience - **Public accounting firm experience a MUST** - Accounting knowledge a plus - Strong communication, tax research and writing skills ### The bottom line is that at W&D, we know what’s important in life: - Work that is satisfying & rewarding. - Excellent, competitive compensation & benefits. - Outstanding advancement opportunities. - People who are open & supportive. - Surroundings that give you the freedom & opportunity to succeed. - A great team built on friendships. - The opportunity to have your opinions heard and respected by management. - A balance of hard work & fun. Year-round, we host parties & events that celebrate a sense of family & team spirit. - Leading technology to enhance your efficiency. - A professional development curriculum designed to continually build your technical & management skills. - Business casual attire. - Hybrid workplace with year-round flexible scheduling and summer Fridays. W&D has enjoyed impressive growth over the last 78+ years and together with W&D Consulting LLC, we look forward to continued profitable expansion. As a member of the Warady & Davis team, you will have many advantages including: a comprehensive, hands-on training program, direct client and Partner contact, diverse work and industry exposure, and outstanding salary and benefits, to name a few. Most importantly, you will have the opportunity to become a key player in our firm – and our clients’ – success. We are proud to be named a “100 Best Accounting Firms to Work for” nationally by Accounting Today, a “Best Place to Work for Millennials” in America by Best Companies and The Center for Generational Kinetics, and a “Best Place to Work in Illinois” by The Daily Herald. Together we create an exceptional, cohesive team of people who are passionate about what we do and are committed to our clients’ success and to each other. ### Compensation and Benefits Disclosure The estimated base salary range for the position of Tax Supervisor is $90,000 – $120,000. This range represents a good faith estimate of what Warady & Davis reasonably expects to pay at the time of posting. Actual compensation may vary based on several factors, including, but not limited to, the candidate’s level – Senior or Supervisor,- specific skills, certifications, years of experience, relevant education, market conditions, and required travel. This position is also eligible to participate in the Warady & Davis annual bonus compensation program, reflecting our pay-for-performance philosophy. Inclusive of bonus opportunities, the total estimated compensation range for this role is estimated to be $92,500 – $132,000+. In addition to compensation, employees are eligible to participate in Warady & Davis benefit programs, which include medical, dental, and vision coverage, as well as other wellness and employee assistance programs. The salary range information is provided in accordance with applicable state and local salary transparency laws currently in effect and may be updated as new regulations are implemented. ### Equal Opportunity Employer Warady & Davis LLP is an equal opportunity employer and considers all qualified applicants equally without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, veteran status, or disability status. --- ## Services ### [Employee Benefit Plan Audit](https://waradydavis.com/service/employee-benefit-plan-audit/) **Published:** April 21, 2016 **Author:** WaradyDavis **Content:** ## Employee Benefit Plan Audit Services Helping Chicago and nationwide businesses meet regulatory compliance through employee benefit plan audit services. Employee benefit plan audits — which must follow complex regulatory requirements from multiple government agencies—are under greater scrutiny than ever before. This means that having an advisor who understands the myriad of issues impacting your plan is essential. Warady & Davis LLP [audits](/service/audit-and-accounting-services/) a significant number of employee benefit plans annually. As one of the top 25 largest CPA firms in the Chicago area, we have a team of CPAs that specialize in employee benefit plan audits. We audit plans with investments of less than $1 million to more than $100,000,000+ including those for privately held, not-for-profit and public organizations. We understand the complexities involved – from compliance with laws and regulations to coordination between plan sponsors and various service providers. We allocate appropriate resources to ensure our staff is trained in audit procedures and disclosure requirements unique to the benefit plan industry. ### Commitment to Quality To demonstrate our commitment to quality benefit plan audits, we are a member of [AICPA’s Employee Benefit Plan Audit Quality Center (EBPAQC)](https://www.aicpa.org/INTERESTAREAS/EMPLOYEEBENEFITPLANAUDITQUALITY/Pages/EBPAQhomepage.aspx). That means we subject ourselves to additional scrutiny so that we can ensure we maintain the highest level of audit quality. ### Types of Employee Benefit Plans We Audit W&D’s employee benefit plan audit services cover numerous plans subject to the Employee Retirement Income Security Act (ERISA) under the regulatory authority of the U.S. Department of Labor. Whether your plan requires a full-scope audit or is eligible for the limited-scope audit exemption, our professionals have experience with a wide-range of employee benefit plans including: - Defined benefit pension plans - Defined contribution pension plans - Profit sharing plans - 401(K) plans - 403(B) plans **Categories:** benefit plan audit, Chicago audit, Chicago CPA firm, Chicago employee benefit plan audit, EBP audit, employee benefit plan audit, Top Chicago audit firm --- ### [Management Advisory](https://waradydavis.com/service/management-consulting-services/) **Published:** April 21, 2016 **Author:** WaradyDavis **Content:** ## Management Advisory Services W&D delivers proven management advisory solutions for a wide range of business challenges and opportunities including such key areas as mergers & acquisitions and succession planning. The success of your business is as important to us as it is to you. Warady & Davis LLP works with clients across a broad range of industries and geographic locations to help you discover and implement new business strategies to enhance financial health, profitability and performance. W&D is positioned to proactively assist you in the areas of [management consulting](https://waradydavis.com/service/wealth-management-advisory-services/), strategic planning, mergers & acquisitions, [business valuations](https://waradydavis.com/service/business-valuation-approach/), litigation/mediation, fraud examination and prevention, real estate development, specialized financing, **[technology](https://waradydavis.com/industry/technology/)**, and more. ### Service Offerings Our business management consultants help owners, CEOs, CFOs, and other decision makers with the following: - Strategic planning - [Litigation](/service/litigation-support-services/) & [forensic services](/service/forensic-services/) - Mergers & acquisitions - Information technology - [Succession planning](/service/succession-planning/) - Specialized financing - [Business valuation](/service/business-valuation-approach/) - [Real estate brokerage](/industry/real-estate/) - Operational & profitability performance - Real estate development - Budgeting & forecasting - 1031 exchanges --- ### [Tax](https://waradydavis.com/service/tax-services/) **Published:** April 21, 2016 **Author:** WaradyDavis **Content:** ## Tax Services for Business & Individuals W&D helps you, your family and business develop optimal tax strategies, anticipate problems and seize opportunities. At Warady & Davis LLP, tax services go beyond tax return preparation and include identification of areas of risk and planning opportunities. Our team members are experienced in identifying a broad range of issues affecting your organization. You can depend on W&D for highly experienced and timely guidance on optimal tax structuring, compliance and preparation. ### Tax Planning Strategic tax planning works to align tax regulations and obligations as closely as possible with your business and personal goals. In doing so, it helps minimize tax liability and increase resources available. We regard tax planning as a year-round activity—not something to be addressed briefly at year-end. We provide ongoing communication with clients regarding regulatory developments and are available to discuss how they relate to your business and personal situation. W&D has a proven track record of successfully representing our clients before Federal, state and local tax authorities. ### W&D can help you, your family and your business in the following areas: - Consultation, planning & structuring - [Estate & gift tax](/service/estate-gift-tax-planning/) returns - Liquidations & reorganizations - Income tax return preparation - IRS tax representation - Inventory tax areas - Estate, gift & [succession planning](/service/succession-planning/) - [Real estate taxation](https://waradydavis.com/industry/real-estate/) - Multi-state taxation - [State & local taxation](/service/state-and-local-tax/) - Projections & forecasts - Mergers & acquisitions - [International taxation](/services/) - R&D Credit and IC-DISC --- ### [Business Valuation](https://waradydavis.com/service/business-valuation-approach/) **Published:** April 21, 2016 **Author:** WaradyDavis **Content:** ## Chicago Business Valuation Services With an accurate valuation, business owners are more able to plan for the future, negotiate during a merger or acquisition and have easier access to investors, among other key considerations. Our Chicago certified valuation experts assess and value assets on a confidential basis for closely-held business owners and high net-worth individuals and families, as well as their professional advisors, in accordance with nationally certified and recognized professional standards. Our Chicago Business Valuation team has nationally recognized accreditations and keeps current with current economic and industry trends, theories and techniques that generate insightful analyses. ### How we approach the valuation process - **Care.** Our analyses are prepared under the assumption that there will be scrutiny; accordingly, care is taken to maintain and document the data supporting our work. - **Credentials.** Our professionals have nationally recognized accreditations and keep current with current economic and industry trends, theories and techniques that generate insightful analyses. - **Quality.** With our reputation and unbiased point-of-view, you can expect objective, reliable and high quality work. - **Communication.** We communicate with the client and other professionals to avoid surprises and proactively move the project to completion in a timely manner. - **Business Advisor Relationship.** We devote time to understand your business, the environment in which you operate and the risks facing your enterprise. We have diversified industry knowledge, practical business insight and years of experience in advising and executing strategies for clients. - **Resources.** Warady & Davis LLP is a top 25 Chicago certified public accounting and consulting firm with a 75+ year history of excellence. Our breadth and depth of resources enable us to assemble an appropriate service team in a responsive manner to facilitate clients’ specific objectives. - **Cost Effective Fees.** We consider it our responsibility to coordinate an efficient process that generates fee cost savings to our clients while maintaining a high level of service and quality. ### A Chicago business valuation firm with diverse areas of experience W&D Consulting assists business owners, investors and professional advisors such as CPAs, attorneys, and financial planning consultants in value determination for the following areas: - Sales, mergers & acquisitions - Estate & gift valuations - Succession planning - Economic damages - Shareholder disputes - Buy/sell agreements - Fair value measurements - Valuation of shares and options - S Corp election (C Corp to S Corp) - Asset allocation - Goodwill impairment - Matrimonial litigation - Real estate property “Estimates of Value” - Expert witness testimony - Valuation mediation - Partnership admissions & dissolutions - Family wealth transition - Litigation support ### Industry areas Valuations range from small companies to businesses with annual sales of over $500,000,000 in the following industries: - [Real estate](https://waradydavis.com/industry/real-estate/) - Construction - Hospitality - [Manufacturing](https://waradydavis.com/industry/manufacturing-audit-accounting-and-tax-services/) - Distribution - [Wholesale](https://waradydavis.com/industry/wholesale-distribution/) - Retail - [Transportation](https://waradydavis.com/industry/transportation-logistics/) - Medical - [Technology](https://waradydavis.com/industry/technology/) - Service - Professional practices - [Family Limited Partnerships/LLCs](https://waradydavis.com/industry/owner-run-and-family-businesses/) - Preferred Limited Partnerships/LLCs ### Credentials & memberships Dedicated W&D professionals have met the rigorous professional standards to earn recognition as Accredited Valuation Analysts, Certified Public Accountants and Certified Forensic Examiners and are current members of: - National Association of Certified Valuation Analysts (NACVA) - American Institute of Certified Public Accountants (AICPA) - Illinois CPA Society (ICPAS) - The Business Valuation Association (BVA) - Association of Certified Fraud Examiners (CFE) - Greater North Shore Estate & Financial Planning Council --- ### [Estate & Gift Tax Planning](https://waradydavis.com/service/estate-gift-tax-planning/) **Published:** June 3, 2016 **Author:** WaradyDavis **Content:** ## Estate & Gift Tax Planning Estate and gift tax planning is critical to ensure that a person’s property passes according to his/her wishes, in a form and manner which is consistent with family and business goals and with the minimum possible loss to gift and estate taxes. ### W&D’s Estate & Gift Tax Planning Services Our goal is to help you achieve the most advantageous future financial position. W&D’s estate and [succession planning](https://waradydavis.com/service/succession-planning/) professionals help address the following key areas: - Developing efficient gifting strategies to meet both family and philanthropic goals - Assessing generation-skipping transfers - Identifying appropriate uses for a variety of trusts and ensuring proper implementation - Reviewing all estate-related documents (wills, trusts, etc.) to ensure estate tax efficiency and compliance with client wishes - Assisting with all gift and estate tax-related compliance services, including preparation of Form 706, Form 709, Form 1041, Form IH-6, etc. - Assessing retirement strategies - Determining distribution plans for IRAs, 401(k) and qualified plans ### Business succession planning W&D has in-depth experience with helping businesses transition from one generation to the next. [Learn More.](https://waradydavis.com/service/succession-planning/) --- ### [Forensic Accounting](https://waradydavis.com/service/forensic-services/) **Published:** April 21, 2016 **Author:** WaradyDavis **Content:** ## Forensic Accounting, Investigations and Financial Consulting The professionals of Warady & Davis LLP and W&D Consulting LLC provide financial forensic accounting services including assistance in both the detection and prevention of fraud, accounting investigations, financial consulting and expert witness testimony. W&D’s team of professionals has recognized knowledge in both financial investigation and [litigation support services](https://waradydavis.com/service/litigation-support-services/). We draw upon our accounting, auditing and investigative skills to gather and present the financial evidence needed to resolve or refute a case. ### Our forensic accounting services include the following areas: - Criminal and civil investigations - Shareholder and partnership disputes - Business interruption, property loss and employee dishonesty insurance claims - Business or employee fraud investigations - Marital disputes, often focusing on tracing and evaluating assets - Business economic losses linked to contract disputes, construction claims, expropriations, product liability claims, trademark and patent infringements or breach of non-compete agreements - Professional negligence investigations - Mediation and arbitration ### W&D’s experienced team of accountants provide: ##### DETECTION: - Internal controls evaluation - Resolving allegations of fraud - Obtaining evidence of fraud - Investigating suspected area(s) of defalcation - Determining exposure - Interviewing employees & vendors - Report preparation to document & support findings - Testifying to examination of findings ##### PREVENTION: - Performing internal control evaluations - Developing an internal control structure - Documenting policies & procedures - Providing training on fraud awareness --- ### [Wealth Management Advisory Services](https://waradydavis.com/service/wealth-management-advisory-services/) **Published:** November 28, 2017 **Author:** WaradyDavis **Content:** ## Chicago Wealth Management Advisory Services Working with clients across the U.S, and internationally, our focus is to understand your goals and develop a plan to reach them. We will meet with you to present an analysis and discuss our recommendations. Together with your advisors, we prioritize and implement the recommendations and monitor your progress. From here, we plan regular meetings to assess the progress toward your goals and, when necessary, make adjustments to your financial plan. With these goals in mind, we will work together to assess your total financial planning needs. ### Wealth management products and services include: - Retirement planning - Wealth accumulation - ERISA retirement plans/ SEP-IRAs/ Roth IRAs - 529 Qualified Tuition Plans - [Estate and gift planning](https://waradydavis.com/service/estate-gift-tax-planning/) - Life insurance consulting - Long-term care insurance consulting - Annuities --- ### [Wealth Management](https://waradydavis.com/service/wealth-management-services/) **Published:** July 20, 2016 **Author:** WaradyDavis **Content:** ## Wealth Management Advisory Services Warady & Davis supports individuals and their advisors in [goal-driven wealth management](https://waradydavis.com/juggling-wealth-management-is-no-trick/), retirement, financial, tax, estate and succession planning and preparation. Our collaborative approach merges sound planning and intelligent investing. Working with clients across the U.S, and internationally, our focus is to understand your goals and develop a plan to reach them. We will meet with you to present an analysis and discuss our recommendations. Together with your advisors, we prioritize and implement the recommendations and monitor your progress. From here, we plan regular meetings to assess the progress toward your goals and, when necessary, make adjustments to your financial plan. With these goals in mind, we will work together to assess your total financial planning needs. ### Wealth management products and services include: We are committed to acting in your best interests. Accordingly, we offer a flexible team approach to meet your needs in the following areas: - Personal financial planning - [Estate and gift planning](/service/estate-gift-tax-planning/) - [Business succession planning](/service/succession-planning/) - Coordination with your other advisors (e.g. investment advisors, attorneys, bankers, insurance professionals) - [Individual income tax planning and compliance](/service/state-and-local-tax/) - Trust administration and compliance - Investment bookkeeping - ERISA retirement plans/ SEP-IRAs/ Roth IRAs - 529 Qualified Tuition Plans - Cash flow analysis and projections - Life insurance consulting - Long-term care insurance consulting - Annuities --- ### [Audit and Advisory](https://waradydavis.com/service/audit-and-accounting-services/) **Published:** April 21, 2016 **Author:** WaradyDavis **Content:** ## Audit and Advisory Services Quality decision making begins with dependable, fairly presented financials that provide a clear picture of the health of your organization. W&D’s audit services provide accurate, meaningful, unbiased and objective information. Accurate, reliable audits, reviews and compilations — whether of financial statements, employee benefit plans or not-for-profits — are a central part of business integrity, affecting the availability of capital, the quality of internal decision making and the confidence of business partners, investors and donors. W&D provides a full range of audit and assurance services to businesses in Chicago, across the U.S. and their interests abroad. Our reputation, quality and independence provide third party credibility that can enhance a company’s position with the financial community. In fact, our firm is called upon by lending institutions to perform auditing services. W&D is a participant in the [AICPA’s Peer Review Program](https://us.aicpa.org/interestareas/peerreview/community/firmsearch/forthepublic.html) receiving the highest quality ratings. We also act as a reviewer for other firms and serve on the Illinois CPA Society’s Peer Review Committee. Our most recent review was successfully completed for the year ended March 31, 2023. W&D is also a member of the [AICPA’s Governmental Audit Quality Center](https://us.aicpa.org/interestareas/governmentalauditquality) and [Employee Benefit Plan Audit Quality Center](https://www.aicpa.org/topic/employee-benefit-plans). ### Accounting standards changes & advisory services An independent view of your accounting processes is often necessary when changes in regulatory standards, financial reporting requirements, trade laws, and the move toward global IFRS adoption initiate a need for review. Warady & Davis will make recommendations and provide clarity on how accounting changes impact your tax compliance, IT systems, and reporting platforms. ### W&D’s audit & accounting services include: - Application of new accounting standards & regulations - Business and [not-for-profit](/industry/not-for-profit/) audits - [Employee benefit plan audits](https://waradydavis.com/service/employee-benefit-plan-audit/) - [Accounting advisory services](https://waradydavis.com/service/accounting-services/) - Financing & refinancing - Reviews & compilations - Controllership services - Internal audits - Operational reviews & audits - Special reports & analyses - Bank loan audits - Projections & forecasts - Due diligence reviews - [Litigation services](https://waradydavis.com/service/litigation-support-services/) - Investment accounting - [Business valuations](https://waradydavis.com/service/business-valuation-approach/) - Internal control - Fraud prevention & investigation - [Entrepreneurial/Small business accounting](https://waradydavis.com/industry/owner-run-and-family-businesses/) **Categories:** audit, business audit, Chicago audit, Chicago business audit, Chicago CPA audit, Chicago CPA firm, Chicago nonprofit audit, employee benefit plan audit, nonprofit audit, Top Chicago CPA firm --- ### [Succession Planning](https://waradydavis.com/service/succession-planning/) **Published:** May 17, 2016 **Author:** WaradyDavis **Content:** ## Succession Planning Services for Your Business Succession planning includes the evaluation of numerous business and personal factors. W&D’s professionals develop customized strategies to navigate an increasingly complex maze of alternatives. Succession planning can include transferring your life’s work to family heirs, the handing down of a business to key employees, or the positioning of a company for sale. There are many considerations involved in finding the right succession plan for your situation. We help you address issues such as restructuring the business, choice of entity, tax consequences, and retirement income projections. We are also sensitive to the many personal issues that affect any family business situation. Our goal is to structure a succession plan that meets the needs of all generations. Our multidisciplinary team of professionals are knowledgeable and committed to helping implement a plan that will meet the needs of the company and the ownership, and also make sure that all the hard work of creating and growing a business is safeguarded. ### Our succession planning services include: - [Business valuation](/service/business-valuation-approach/) - Buy/sell agreements - [Tax planning](/service/tax-services/) - [Estate and gift tax planning](/service/estate-gift-tax-planning/) - Intra-family transfers - Mergers and acquisitions - Divisive reorganization - Key employee buyout - Minimization of estate and capital gain taxes - Ownership and structuring control - Retention of key employees - Maintaining liquidity ### Estate & gift tax planning W&D has in-depth experience in estate, gift and generation skipping tax planning including trust structure and administration. [Learn More](/service/estate-gift-tax-planning/). --- ### [Litigation Support](https://waradydavis.com/service/litigation-support-services/) **Published:** April 21, 2016 **Author:** WaradyDavis **Content:** ## Financial Litigation Support Services W&D’s litigation support team provides attorneys with in-depth knowledge, simplified case management, rapid response and preparation and courtroom poise, presence as expert witnesses. Warady & Davis LLP and W&D Consulting LLC provide a complete range of litigation services including [business valuations](/service/business-valuation-approach/) — to assist attorneys, business owners, and individuals with financial related legal matters. ### W&D’s experienced litigation team assists with the following: - Expert witness testimony - Asset entity valuation - Intellectual property - Breach of contract - Business interruption claims - Fraud - Damages - Family law (Marital dissolutions) - Class actions - Loss of income/profit - Personal economic loss - Professional negligence/malpractice - [Real estate](/industry/real-estate/) - Shareholder/partner disputes --- ### [Accounting](https://waradydavis.com/service/accounting-services/) **Published:** September 23, 2019 **Author:** WaradyDavis **Content:** ## Chicago Client Accounting Services Consistent, reliable and timely accounting information is vital for keeping your business running smoothly. W&D’s accounting advisory services give you the information needed to make better business decisions and effectively plan for the future. Warady & Davis LLP provides a comprehensive range of accounting, advisory, back office and outsource accounting and tax services to businesses of all sizes. We provide a cost-effective, team-based approach with the full resources of a mid-sized accounting firm. When tax and/or accounting issues arise, trained experts and CPAs are available to assist in all areas. Our team is proficient with most commonly used software such as [QuickBooks](https://quickbooks.intuit.com/oa/get-quickbooks/?cid=ppc_G_e_US_.QB_US_GGL_Brand_Top-Terms_Exact_Search_Desktop._quickbooks_txt&gclid=EAIaIQobChMIv7bB7OWf9AIVBGpvBB0hqAkJEAAYASAAEgJusvD_BwE&gclsrc=aw.ds), Sage / Peachtree and many others including industry specific applications. ### Outsource accounting and bookkeeping services include: - Financial statements (profit & loss, balance sheets and personal) - Accounting system recommendations, set-up and training - Bookkeeping (Monthly, quarterly, or annual) - Payroll processing & reporting - General ledger and record-keeping - Investment accounting - Bank and credit card reconciliations - Financing & refinancing - Cash flow budgets and forecasting - [Tax planning & preparation](https://waradydavis.com/service/tax-services/) - Outsource controller & CFO services - [Audit, reviews & compilations ](https://waradydavis.com/service/audit-and-accounting-services/) - Special reports & analyses ### QuickBooks and other accounting software consulting Working with QuickBooks Online, any QuickBooks desktop version and a wide variety of other accounting software solutions, our team can manage many of your important monthly closing activities, including recording standard journal entries and reconciling bank accounts. - Set up and establish: - Chart of accounts - Customer and vendor detail - Item lists for invoicing and payroll purposes - Security, passwords, and system preferences - Memorized transactions and reports - Accrual vs. cash basis statements - Budgets - Design balance sheet and income statements - Perform maintenance, review, and ongoing bookkeeping for monthly, quarterly, semi-annually and / or annually - Provide employee software training **Categories:** Accounting, bookkeeping, Chicago accounting, Chicago bookkeeping, Chicago CPA firm, Chicago CPA firm accounting, Chicago CPA firm bookkeeping, Chicago outsource accounting, outsource accounting, Top Chicago CPA firm --- ### [State and Local Tax](https://waradydavis.com/service/state-and-local-tax/) **Published:** April 21, 2016 **Author:** WaradyDavis **Content:** ## State and Local Tax Services The state and local tax (SALT) rules can be complex and challenging. A lack of awareness or understanding of these rules can present costly risks to taxpayers. By thoroughly understanding your business objectives, operational structures, and industry issues, we develop proactive, practical approaches to SALT planning and compliance designed to help you manage your state and local tax exposure and compliance. ### W&D’s key state & local tax services include: - Business incentives and tax credits - Income/franchise and gross receipt taxes - Nexus reviews - Sales and use tax - Tax controversy - Transactional planning and M&A due diligence - Unclaimed property --- ### [IT Services](https://waradydavis.com/service/technology-solutions/) **Published:** April 21, 2016 **Author:** WaradyDavis **Content:** ## Chicago IT Services & Solutions W&D’s outsourcing partners provide a wide range of IT services backed by a depth of experience to serve clients’ information technology needs quickly and effectively. Through our strategic alliances, we offer a full range of IT services including ongoing technology support and infrastructure solutions. ### Ongoing technology support Our partners utilize dedicated IT professionals to assist companies in need of service and provide support both onsite and remotely. They provide a depth of experience to serve client needs quickly and effectively. ### Technology infrastructure services - Cybersecurity - Desktop services (workstation, laptop) - Network services (servers, local & wide area networks) - Anti-virus, Anti-spyware - E-mail & messaging services - Internet connectivity - Software sizing, review & recommendations - Hardware sizing, review & recommendations - Project management - Disaster recovery/business continuance --- ## Industries ### [Privately-Held Businesses](https://waradydavis.com/industry/owner-run-and-family-businesses/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Owner-Run, Family & Privately-Held Businesses From taxes to [wealth management](https://waradydavis.com/service/wealth-management-services/) to [succession planning](https://waradydavis.com/service/succession-planning/), owners of privately-held businesses often find substantial overlap between their professional lives and their personal financial situation. W&D helps you navigate both. We look out for your business and your heirs, and help you protect both your life’s work and family. Privately-held, owner-run and family businesses have needs and perspectives that set them apart from other companies. The business often represents a significant percentage of the owners’ assets, requiring a mix of personal and business planning. Family-owned businesses can have complex succession and corporate governance issues and need support for optimal planning and decision making. Warady & Davis started as a small business and today, as a partnership, remains owner-run. We’re also directly familiar with the fine line between your business and your personal finances. ### W&D’s Chicago CPA’s services for privately-held, owner-run and family businesses: - [Accounting and financial statement preparation](/service/audit-and-accounting-services/) - [Audit, review and compilation](/service/audit-and-accounting-services/) - Payroll processing and related filings - [Tax return preparation & planning](/service/tax-services/) - IRS representation - [Multi-State & Local Taxes](/service/state-and-local-tax/) - [Individual income tax planning and compliance](/service/tax-services/) - [Estate and gift planning and compliance](/service/estate-gift-tax-planning/) - [International tax planning and compliance](/services/) - [Employee benefit plan audit and tax](/service/employee-benefit-plan-audit/) - Income allocation and compensation plans - Cash flow management - Financial reporting & forecasting - Internal procedures and controls - Industry and financial benchmarking - [Succession planning and exit strategies](/service/succession-planning/) ### Business consulting services for organizations of all sizes - Start-up services - [Litigation support and expert witness testimony](/service/litigation-support-services/) - [Business valuations](/service/business-valuation-approach/) - [Forensic accounting](/service/forensic-services/) and fraud investigations - Mergers & acquisitions - [Outsourced accounting](https://waradydavis.com/service/accounting-services/) - Accounting position placements for all levels from staff to senior management/CFO --- ### [Professional Services](https://waradydavis.com/industry/professional-services/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Chicago Professional Services Audit, Accounting, Tax & Consulting Warady & Davis LLP’s professional services audit, accounting, tax and consulting team provides in-depth financial and operational experience so that you can focus on serving your clients and managing your business. Facing an environment of intense competition and rapid change, successful professional services businesses must deliver quality and practice effective business management. This requires having improved control over financial information, professional time, overhead and cash flow. ### We understand your challenges Since we’re also a professional services business, the W&D’s team has first-hand knowledge of the administrative, operational, service, talent acquisition, staffing and succession issues you face. We leverage our own experience as a successful professional services organization and knowledge of best practices to help you run your business for greater efficiency and profitability. ### Professional services industry experience: - Law firms and attorneys - Accounting firms - Insurance agencies - Real estate agencies and brokerages - Technology consulting - Business consulting - Public relations agencies - Advertising and graphic design agencies - Architects - Engineers - Interior designers - And more ### Services offered: - Professional services [accounting and financial statement preparation](https://waradydavis.com/service/audit-and-accounting-services/) - Payroll processing and related filings - [Audit, review and compilation](https://waradydavis.com/service/audit-and-accounting-services/) - Professional services [tax return preparation, planning and IRS representation](https://waradydavis.com/service/tax-services/) - [Multi-state and local taxes](/service/state-and-local-tax/) - [Individual income tax planning and compliance](/service/tax-services/) - [Estate and gift planning and compliance](/service/estate-gift-tax-planning/) - [International tax planning and compliance](/services/) - Employee benefit plan audit and tax - Consulting on income allocation and compensation plans - [Benefits consulting, including 401(k) plans, pensions, profit sharing, cafeteria plans and other employee benefit programs](/service/employee-benefit-plan-audit/) - Financial reporting & forecasting - Cash flow management - Internal procedures and controls - Industry and financial bench marking ### Our team also has extensive experience providing business consulting services: - Start-up services - [Succession planning and exit strategies](/service/succession-planning/) - [Business valuations](/service/business-valuation-approach/) - [Litigation support and expert witness testimony](/service/litigation-support-services/) - [Forensic accounting](/service/forensic-services/) and fraud investigations - Mergers & acquisitions - Outsourced accounting - Accounting position placements for all levels from staff to senior management/CFO --- ### [Manufacturing](https://waradydavis.com/industry/manufacturing-audit-accounting-and-tax-services/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Chicago Manufacturing Audit, Accounting and Tax Services W&D is proud to provide manufacturing audit, accounting and [tax solutions](https://waradydavis.com/service/tax-services/) tailored to meet the unique needs of manufacturers and distribution companies—whether large or small, domestic or international. With deep experience across a [broad range of industries](https://waradydavis.com/industries/) and markets, we understand what drives profitability and success for manufacturers and distributors operating in the U.S. and around the world. Manufacturing and distribution businesses in Chicago, across the US and their interests abroad have special accounting, audit and tax requirements. We guide you in choosing accounting methods, tax and consulting strategies to help your business grow. ### We understand manufacturing & distribution business challenges. W&D’s team of CPAs are committed to helping U.S. and Chicago manufacturing and distribution businesses increase their competitiveness at home and abroad. We take into account the many complex issues you face including the world economy, trade agreements, shortage of skilled labor, increasing business costs, regulatory compliance and the expanding role of technology, to name a few. The W&D team can analyze how efficiently your business is operating financially and recommend changes to focus on long-term growth and profitability. ### W&D has extensive experience in the following manufacturing & distribution industry segments: - Plastics - [Medical instruments](https://waradydavis.com/industry/healthcare-accounting/) - Electronics - Steel & metals - Food and beverage - Direct mail/distribution - Metal fabrication - Fabric - [Transportation](https://waradydavis.com/industry/transportation-logistics/) - Heavy construction equipment - Pharmaceuticals - and many others ### Our manufacturing audit, accounting and tax services include: - [Audit, review, and compilations](/service/audit-and-accounting-services/) - [Employee benefit plan audits](/service/employee-benefit-plan-audit/) - Inventory optimization - Outsourced accounting - Cost Controls - Budgeting, Forecasting & Cash Flow Analysis - [Preparation of company and ownership tax returns](/service/tax-services/) - [Business tax planning and compliance](/service/tax-services/) - Sales and use tax - [International tax](/services/) - Industry specific tax regulations and methods - [Multi-state and local tax planning and compliance](/service/State-and-local-tax/) - R&D Tax Credits - IC-DISC export incentive and tax credits - Transaction support - [Fraud and forensic auditing and investigations](/service/forensic-services/) - [Litigation support and expert witness testimony](/service/litigation-support-services/) - [Business succession planning](/service/succession-planning/) and exit strategies - [Business valuations](/service/business-valuation-approach/) - [Mergers & acquisitions](/service/management-consulting-services/) ### Doing business Across the U.S. and Internationally Do you know which taxes to pay in other states or countries? We can help assess your state, local and international tax exposure and compliance. Our membership in [MSI Global Alliance](/about/msi-global-alliance/) provides resources throughout the nation and the world. As a result, we’re equipped with expert advice on taxes in other states and countries. [Learn more about MSI Global Alliance](https://www.msiglobal.org/ "W&D is part of the MSI Global Alliance which is one of the world's leading international associations of independent legal and accounting firms providing access to a wide network of professional advisers. Link opens in new window."). Warady & Davis can help your manufacturing company navigate complex issues. [Contact us](https://waradydavis.com/resource-center/contact-us/) to start a conversation — [847-267-9600](tel:1-847-267-9600). --- ### [Wholesale & Distribution](https://waradydavis.com/industry/wholesale-distribution/) **Published:** September 27, 2021 **Author:** WaradyDavis **Content:** ## Wholesale & Distribution W&D has experience advising wholesale and distribution companies from start-ups to established organizations. We provide traditional tax, accounting, and audit services as well as value-added consulting solutions that contribute to enhanced performance and drive financial results. There is no shortage of challenges facing companies in the [wholesale and distribution industries](https://waradydavis.com/industries/). Along with complex tax requirements, companies face increased domestic and international competition and the need to optimize processes like ordering, shipping, sales, warehouse management, inventory, and scheduling to maintain efficiencies. We understand the variety of operational, logistical, and regulatory issues facing manufacturers, distributors and supply chain professionals. In addition to distribution and transportation, we specialize in privately-held manufacturers. W&D’s advisors have decades of experience navigating this sector’s challenges and opportunities. Our experienced accountants and consultants can translate your business numbers into real information to help you gain insight into the relationships between your inventory, margins and cash flow. We’ve helped other wholesale and distribution businesses grow, now it’s your turn. ### W&D has a depth of experience the following wholesale & distribution industry segments: - Plastics - Medical instruments - Electronics - Steel & metals - Food and beverage - Consumer Goods & Retail - Direct mail /distribution - Metal fabrication - Fabric and Clothing - [Transportation](https://waradydavis.com/industry/transportation-logistics/) - Heavy construction equipment - Pharmaceuticals - and many others ### Our wholesale & distribution accounting, audit, tax and consulting services include: - [Audit, review, and compilations](/service/audit-and-accounting-services/) - [Employee benefit plan audits](/service/employee-benefit-plan-audit/) - Inventory optimization - Outsourced accounting - Cost Controls - Budgeting, Forecasting & Cash Flow Analysis - [Preparation of company and ownership tax returns](/service/tax-services/) - [Business tax planning and compliance](/service/tax-services/) - Sales and use tax - [International tax](/services/) - Industry specific tax regulations and methods - [Multi-state and local tax planning and compliance](/service/State-and-local-tax/) - R&D Tax Credits - IC-DISC export incentive and tax credits - Transaction support - [Fraud and forensic auditing and investigations](/service/forensic-services/) - [Litigation support and expert witness testimony](/service/litigation-support-services/) - [Business succession planning](/service/succession-planning/) and exit strategies - [Business valuations](/service/business-valuation-approach/) - [Mergers & acquisitions](/service/management-consulting-services/) ### Doing business Across the U.S. and Internationally Do you know which taxes to pay in other states or countries? We can help assess your state, local and international tax exposure and compliance. Our membership in [MSI Global Alliance](/about/msi-global-alliance/) provides resources throughout the nation and the world. As a result, we’re equipped with expert advice on taxes in other states and countries. --- ### [Technology](https://waradydavis.com/industry/technology/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Specialized Services for Technology Companies Warady & Davis LLP serves a wide range of technology business sectors including software, cloud, mobility and data analytics. We work with clients at all stages – from start-up to exit. We understand the challenges of building and operating a technology business. Warady & Davis’ accounting, audit, tax, and advisory capabilities are essential to technology companies as they start-up, attract investment, mature, and evolve. We provide advisory services to help you improve business and financial performance, boost profitability, attract investment and, if desired, position for sale. ### Technology Tax Planning and Compliance As technology companies grow, the tax consequences for these companies – and their founders – often grow as well. W&D provides a range of [strategic tax planning](https://waradydavis.com/service/tax-services/), structuring, and reporting services to maintain compliance and minimize obligations. Through proactive tax planning, tax credit advisory, state and local nexus planning and international tax and transfer pricing services, we help company owners and their businesses mantain compliance and maximize potential tax savings. ### Services offered: - Professional services [accounting and financial statement preparation](https://waradydavis.com/service/audit-and-accounting-services/) - Payroll processing and related filings - [Audit, review and compilation](https://waradydavis.com/service/audit-and-accounting-services/) - [tax return preparation, planning and IRS representation](https://waradydavis.com/service/tax-services/) - [Multi-state and local taxes](/service/state-and-local-tax/) - [Individual income tax planning and compliance](/service/tax-services/) - [Estate and gift planning and compliance](/service/estate-gift-tax-planning/) - [International tax planning and compliance](/services/) - [Employee benefit plan audit and tax](https://waradydavis.com/service/employee-benefit-plan-audit/) - Consulting on income allocation and compensation plans - Financial reporting & forecasting - Cash flow management - Internal procedures and controls - Industry and financial bench marking - Mergers & Acquisitions - [Business Valuation](https://waradydavis.com/service/business-valuation-approach/) ### Technology Mergers & Acquisitions and Capital Transactions We help technology companies strengthen their businesses in advance of a merger, acquisition or capital transaction. Whether on the buy or sell side, we assist clients with all phases of the process – from strategic planning and financial presentation through structuring, due diligence, business valuation and implementation. --- ### [Nonprofit](https://waradydavis.com/industry/not-for-profit/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Chicago Nonprofit Audit, Accounting and Tax Services W&D is proud to serve many local and national nonprofit organizations which have a profound impact on those they serve. Nonprofit organizations, ranging from professional and trade associations to charitable organizations and foundations, operate under intense donor scrutiny and oversight from regulatory and tax authorities. Your organization must comply with best practices in accounting and financial management to protect its tax-exempt status while maintaining focus on your mission. W&D serves not-for-profit organizations from start-ups to those with significant annual revenue, complex operating budgets and government funding. Many of our not-for-profit clientele have multiple related organizations including 501(c)3, 501(c)4 and 501(c)6 organizations, political action committees, for-profit entities and more. We are very familiar with both stand-alone and consolidated audits for not-for-profit and for-profit entities up to $500+ million in annual revenue with complex structures, national and international operations. ### Warady & Davis LLP Chicago Not-for-Profit CPA Team Warady & Davis has a dedicated, multi-disciplinary not-for-profit team. This team is comprised of audit, accounting, tax, and consulting professionals with not-for-profit, governmental and foundation experience. Specialized training, including Yellow Book certification, and a consistent team provide valuable insight as we conduct audits and provide business counsel to our not-for-profit clients. W&D team not-for-profit team members also attend professional conferences to further enhance their knowledge. Members of W&D’s Not-for-Profit team are involved in related industry organizations including the Association Forum and the Illinois CPA Society’s Not-for-Profit Committee and Audit Sub-Committee, wherein Susan Greggo, CPA, Partner-in-Charge of Not-for-Profit Services served as immediate past Chairperson. ### Types of Local and National Nonprofit organizations served: - Professional Trade & Membership organizations – 501(c) 6 - Charitable organizations – 501(c) 3 - Health and scientific research organizations - Arts & educational institutions - Environmental organizations - Social welfare - Public policy and advocacy - Religious organizations - Foundations ### Nonprofit Services: W&D’s nonprofit CPAs provide a comprehensive range of services to not-for-profit clientele including audit, tax, accounting and consulting. We understand your needs as a not-for-profit organization to be in compliance with applicable laws and regulations, reporting deadlines, and to be fiscally prudent. - [Audit, Review & Compilation](/service/audit-and-accounting-services/) - Single audit - New accounting pronouncements and IRS developments - Not-for-Profit and association specific [management advisory services](https://waradydavis.com/service/management-consulting-services/) - Donor restrictions - Budget review & analysis - Preparation of IRS Form 990, 990T and applicable state returns - [Preparation of IRS Forms](/service/tax-services/) 1023 and 1024 for tax exemption - Establishment of funds - [Employee benefit plan audits](/service/employee-benefit-plan-audit/) - Accounting assistance - Special procedures/due diligence - Grant funding requirements – Federal, state, pass-through & private - IRS Section 501(c)(3) status - Internal accounting controls - Not-for-Profit consulting - IRS Form 5500 - Bookkeeping ### Governmental audit and accounting compliance requirements W&D has wide-ranging experience in governmental and not-for-profit accounting and auditing including experience auditing under Government Auditing Standards and the Single Audit Act. W&D’s Not-for-Profit Team has knowledge of federally and state sponsored programs, which is an important factor in our ability to service not-for-profit organizations. We understand compliance with the Single Audit Act and have assisted clients in complying with these complex requirements. We currently provide audit services to many organizations who receive federal funding and others who receive state and local government agency funds. All of our senior audit engagement team members are Yellow Book certified. W&D is a member of the AICPA’s Governmental Audit Quality Center which is primarily focused on ensuring quality standards for governmental audits including single audits, financial statement audits of both governments and not-for-profit organizations, and audits performed under the HUD Consolidated Audit Guide. **Tags:** 501(c)3, 501(c)6, advocacy organizations, Charitable organizations, Chicago CPA, Chicago Nonprofit audit, Chicago Nonprofit CPA, Membership Organizations, Professional Trade organizations, religious organizations, social service organizations, social welfare organizations --- ### [Transportation & Logistics](https://waradydavis.com/industry/transportation-logistics/) **Published:** September 27, 2021 **Author:** WaradyDavis **Content:** ## Transportation & Logistics W&D is a partner in providing solutions that help improve transportation and logistics businesses’ profitability, financial reporting and tax efficiency. Transportation and logistics are a crucial part of the US and world economy. You are the link between suppliers and consumers, with businesses in every market relying on transportation services to deliver materials and ship goods. Our work with privately‐held transportation, logistics and warehousing companies located throughout North America and their interests abroad, gives us first-hand knowledge of the issues unique to the industry including significant tax and government regulations, multi‐state tax exposure and more. W&D LLP not only understands these pressures, but also provides comprehensive solutions and forward‐thinking, cost‐saving strategies to help our transportation and logistics clients companies thrive. We work with organizations of all sizes, from owner‐operators to national and international businesses. Many of these clients have been with W&D for many years; into the 2nd, 3rd and 4th generation and beyond. ### Our Transportation and Logistics clients include: - Third‐party logistics providers - Land, air and maritime carriers - Freight forwarders - Warehouses - Movers - Expeditors - Related service providers - Railway and bus manufacturers ### Consulting Services - Business valuation - Budgeting & forecasting - [Litigation & forensic services](https://waradydavis.com/service/forensic-services/) - Mergers & acquisitions - Operational & profitability performance - Strategic planning - Succession planning - Specialized financing - Information technology - COVID‐stimulus relief ### Audit & Accounting - Audits - Reviews & compilations - Internal audits - Special reports & analyses - Projections & forecasts - Internal control - Financing & refinancing - Controllership services - Operational reviews & audits - Bank loan audits - Due diligence reviews - [Employee benefit plan audits](https://waradydavis.com/service/employee-benefit-plan-audit/) ### Tax - Consultation, planning & structuring - Multi‐state taxation - State & local taxation - International taxation - Income tax return preparation - IRS tax representation - Projections & forecasts - Liquidations & reorganizations --- ### [Healthcare](https://waradydavis.com/industry/healthcare-accounting/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Chicago Healthcare, Medical & Veterinary Accounting, Audit, Tax and Consulting Warady & Davis’ healthcare accounting and medical accounting practice group brings together experienced CPAs, tax advisors, and consultants who understand the unique financial and regulatory challenges of today’s healthcare industry. We support institutions as well as physician, dental, veterinary, and specialty practices of all sizes; from sole practitioners to large multi-professional groups, surgical and imaging centers, clinics, and medical-related businesses and associations. Warady & Davis LLP also serves Chicago hospice and long-term care facilities and medical related real estate and construction throughout the United States. ### Our Chicago CPAs work with diverse practice types across the healthcare industry - Doctors - Veterinarian Practices - Medical practices - Dental and oral health practices - Physician groups - Clinics, surgical and imaging centers - Hospice and long-term care - Optometrists - Podiatrists - Chiropractors - Home health care - Physical therapists - Mental health care - Medical-related businesses and associations ### Healthcare Accounting Services provided: - Healthcare accounting and financial statement preparation - [Corporate, multi-state, local and personal tax preparation and consulting](https://waradydavis.com/service/tax-services/) - International tax planning and compliance - Payroll processing and related filings - Financial statement audits - Cost segregation and fixed asset studies - Assistance with implementation of internal controls/reviews of internal controls procedures - IRS problem resolution - Practice management and consulting services - Practice acquisition/divestiture consulting - Joint venture analysis - Practice valuation and comprehensive economic analysis for both buyers and sellers. Learn more at [Business Valuation Services.](/service/business-valuation-approach/) - [Benefits consulting](/service/employee-benefit-plan-audit/), including 401(k) plans, pensions, profit sharing, cafeteria plans and other employee benefit programs - [Estate and succession planning](/service/succession-planning/) - Consulting on income allocation and compensation plans #### Your Chicago Partner for Reliable Healthcare & Medical Accounting Solutions As one of Chicago’s most trusted advisors to physicians, specialists, and medical organizations, Warady & Davis LLP delivers comprehensive healthcare accounting solutions designed to strengthen financial operations, support compliance, and improve long-term practice performance. Our dedicated team brings deep experience in medical accounting, tax planning, audit services, and strategic consulting to help healthcare providers navigate regulatory complexity, manage growth, and operate with confidence. Whether you are a solo practitioner, a specialty group, or a multi-location medical organization, W&D is committed to providing the insight and guidance you need to achieve stability, efficiency, and lasting success. --- ### [Small Businesses](https://waradydavis.com/industry/small-businesses/) **Published:** June 9, 2016 **Author:** WaradyDavis **Content:** ## Entrepreneurs & Small Businesses W&D provides a complete scope of services to entrepreneurs and small businesses. With our support, you can focus on what you do best – running and growing your business. From an understanding of your industry and markets, to assistance with entity selection and structuring, from outsourced accounting, to tax, audit and consulting services, W&D provides a complete scope of services to help start-ups become success stories. Starting a business venture or stepping out on your own is equal parts opportunity, initiative and risk. In the early stages, every dollar counts. Cash flow is critical. Relying on your accounting software alone to give you all the financial performance insight you need can lead to missed opportunities or even costly mistakes. With W&D, our team will provide the services you need, when you need them. ### Expertise For Business Start-Ups and Entrepreneurs: Our Start-Up, Early Stage & Growth Services Include: - [Audit & Advisory](/service/audit-and-accounting-services/) - Agreed Upon Procedures (AUP) - [Business Management Advising & Consulting](/service/management-consulting-services/) - Outsource Accounting & Bookkeeping - [Accounting Services](/service/accounting-services/) - [Business Valuation](/service/business-valuation-approach/) - Cash-Flow Modeling & Projections - [US & International Tax](/service/tax-services/) - Due Diligence for Buyers & Sellers - Compensation Planning - Debt & Equity Structuring - Entity Formation - Forecasting & Budgeting - Financial Modeling for Transactions - GAAP Compliance - Internal Control Setup & Internal Control Reviews --- ### [Real Estate](https://waradydavis.com/industry/real-estate/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Real Estate Audit, Accounting, Tax & Consulting Services W&D was built upon the solid foundation of our real estate & construction audit, accounting, tax and consulting knowledge. Combined, they represent W&D’s oldest and largest practice groups. Since 1949, Warady & Davis’s Chicago real estate CPA’s have helped builders, developers, investors, contractors and property managers across the U.S. face economic challenges and achieve goals and objectives. We represent local and national real estate companies and their projects, with partners which include public companies, insurance, and high net worth individual and foreign investors. By partnering with Warady & Davis LLP’s real estate experts, many of our clients have grown from local builders into national developers. ### We’re more than just accountants; we are trusted advisors to our real estate clients The Chicago and national real estate industry is highly volatile and subject to numerous pressures. Based on our long track record in the real estate industry, through both up cycles and down, we have insight into today’s markets and conditions. You’ll receive more than traditional accounting, assurance, and tax services — we offer technical knowledge and advice to guide you through every stage of the real estate lifecycle and across all industry sectors. ### W&D was built on our real estate and construction industry knowledge Real estate transactions are complex and often deal in large sums of money, which makes sound accounting and tax planning and structuring vital to your business. Our Chicago real estate CPAs are experienced working within diverse types of real estate ventures, including the following: - Multi-family - Office - Industrial - Retail - Hospitality - Mixed-use developments - Special use projects - Residential - Healthcare ### Real Estate Services: - [Preparation of audited, reviewed or compiled financial statements](/service/audit-and-accounting-services/) - [Preparation of company, ownership, partnership and project tax returns](/service/tax-services/) - [Tax structuring & planning](/service/tax-services/) - Year-end Federal, [state and local tax planning](/service/state-and-local-tax/) - [Multi-state tax consulting and return preparation](/service/state-and-local-tax/) - [Sales and use tax](/service/state-and-local-tax/) - [International taxation](/services/) - Special industry tax regulations and credits - Tax credits including renewable energy and incentives - Common Area Maintenance (CAM) and Common Interest Realty Association (CIRA) audits - Assist in finding projects, land and property - Forecasts & projections - Loan packaging - Financing and/or equity assistance - Creditor protection planningInvestment analysis - [Succession](/service/succession-planning/), [estate & gift planning](/service/estate-gift-tax-planning/) - [Business valuations](/service/business-valuation-approach/) & real estate appraisals - Building operating audits - HUD & IHDA audit & accounting - 1031 exchange transactions - Due diligence for institutions & banks - Accounting position placements for all levels from staff to senior management/CFO ### Real Estate Equity & Financing Warady & Davis LLP has developed a network of professional, equity, mezzanine and financing sources – including banking, institutional, Wall Street and private investors. We also maintain contact with the real estate brokerage and investment community regarding available land and properties in select markets. - Assist in finding projects, land and property - Financing and/or equity assistance - Creditor protection planning - Business valuations & real estate estimates of value - 1031 exchange transactions - Loan packaging ### Warady & Davis is a proud member of Real Estate and Construction Industry organizations In order to keep up with issues important to our real estate and construction clientele, our firm is actively involved in the following local and national organizations: - Building Owners & Managers Association (BOMA) - Home Builders Association of Greater Chicago (HBAGC) - International Council of Shopping Centers (ICSC) - Association of Subcontractors and Affiliates (ASA) - Real Estate Investment Association (REIA) - Chicago Building Congress (CBC) - Builders Association of Greater Chicago (BAGC) - Construction Financial Management Association (CFMA) - Illinois Road & Transportation Builders Association (IRTBA) - Illinois CPA Society Committee on Real Estate --- ### [Construction](https://waradydavis.com/industry/construction-accounting-audit-tax-consulting/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Chicago Construction Accounting, Audit, Tax and Consulting Services W&D was built upon the solid foundation of our **real estate** & **construction audit**, **accounting**, **tax,** and **consulting** knowledge. Combined, they represent W&D’s oldest and largest practice groups. In the construction industry, competition is fierce, business is cyclical, receivables are often high, and cash flow tight. Since our formation in 1949, Warady & Davis LLP’s Chicago construction accounting, audit, tax, and consulting team has helped contractors, real estate developers, builders, and subcontractors in Chicago and across the U.S. face industry challenges and achieve goals and objectives. We have extensive experience working with a wide range of construction companies, including general and commercial construction contractors, engineering and architecture firms, heavy and highway contractors, developers, subcontractors and suppliers, and homebuilders. W&D’s Chicago construction team helps clients meet complex regulatory, financial statement, and bonding requirements while focusing on improving business performance and profitability. ### Related Industry Organizations Warady & Davis’ Chicago Construction team is active in many related industry organizations, including: [American Subcontractor Association (ASA)](https://www.asaonline.com/ "Warady & Davis is a proud member of the American Subcontractor Association (ASA)."), [Building Industry Association of Greater Chicago (BIAGC)](https://www.biagc.org/ "Warady & Davis is a proud member of the Building Industry Association of Greater Chicago (BIAGC)."), [Chicago Building Congress (CBC)](https://chicagobuildingcongress.org/ "Warady & Davis is a proud member of the Chicago Building Congress (CBC)."), [Construction Financial Management Association (CFMA)](https://cfma.org/ "Warady & Davis is a proud member of the Construction Financial Management Association (CFMA).") and the [Illinois Road and Transportation Builders Association (IRTBA)](https://www.irtba.org/ "Warady & Davis is a proud member of the Illinois Road and Transportation Builders Association (IRTBA)."). ### Warady & Davis serves all segments of the construction industry - Build-to-suit - Shopping centers - Mixed-use - Commercial - Industrial - Retail - Healthcare - Heavy & highway - Residential - General contractors - Subcontractors ### Our team of Chicago construction industry experts provides the following: - [Audited, reviewed or compiled financial statements](/service/audit-and-accounting-services/) - [Multi-state tax consulting and return preparation](/service/state-and-local-tax/) - Company and ownership [tax planning and compliance](/service/tax-services/) - Year-end company and ownership [federal, state and local tax planning and compliance](/service/state-and-local-tax/) - Sales and use tax - International taxation - Special industry tax regulations and credits - Assistance with bonding and surety issues - Cash flow projections - Internal controls analysis and reporting - Job costing systems and job profitability planning - [Business succession and estate planning](/service/succession-planning/) - [Employee benefit plan audits](/service/employee-benefit-plan-audit/) - Cost segregation studies and related services - IRS examination assistance & representation #### Consulting services include: - Surety credit & bank financing assistance - [Valuation services](/service/business-valuation-approach/) - Business acquisitions and sale - [Forensic accounting/Fraud investigations](https://waradydavis.com/service/forensic-services/) - [Litigation support/expert witness testimony](/service/litigation-support-services/) - Accounting position placements for all levels from staff to senior management/CFO ##### Trusted Construction Accounting, Audit & Tax Support for Long-Term Success As one of Chicago’s most experienced accounting firms serving the construction industry, Warady & Davis LLP delivers the specialized insight contractors need to strengthen financial performance, reduce risk, and stay compliant in a rapidly changing market. Our dedicated team provides comprehensive **construction accounting services**, **construction audit services** and **tax planning and compliance** designed to support long-term stability, profitability, and help you confidently navigate regulatory and bonding requirements. Whether you’re a contractor, developer, builder, or subcontractor, W&D is committed to being your trusted advisor at every stage of the project and every phase of your business. To connect, call us at [847.267.9600](tel:+18472679600) or fill out the form and we’ll contact you. --- ## People ### [Sean Snowden, MBA, CVA](https://waradydavis.com/staff/sean-snowden-mba-cva-managing-member-wd-consulting-llc/) **Published:** April 18, 2016 **Author:** WaradyDavis **Content:** ## Background [Sean Snowden, MBA, CVA, is the Managing Member](https://waradydavis.com/wd-spotlight-sean-snowden-mba-cva-wd-consulting-llc/) and Director of Business Valuation Services at W&D Consulting LLC, an affiliate of Warady & Davis LLP, Certified Public Accountants and Consultants. W&D Consulting specializes in business valuation services for clients in a wide range of industries and market niches. Sean has performed over 800 valuations in various industries with an expertise in estate and gift (for both controlling and minority interests), sale and/or purchase of interests in closely held entities, S corporation elections, mergers and acquisitions and other business purposes. Valuations cover a wide range of industries including manufacturing, retail, wholesale distribution, investment partnerships, professional service businesses and real estate ventures. Valuations have ranged from small businesses to companies with over $350,000,000 in annual sales. ### Areas of Specialization Sean has over 15 years of combined experience as a business valuation professional and as a financial and business analyst, which has provided an additional specialized expertise in business valuation services that includes succession planning, dissenting shareholder disputes, purchase of minority interests, matrimonial matters and litigation services. In addition, he has expertise in management consulting, business plan development, strategic planning, analysis and projections. Sean also develops comprehensive business plans for financing and strategic planning purposes that include cash flow analysis and projections, market research and market analysis, infrastructure and marketing strategies, etc. Additionally, he has consulted with [start-up entities](https://waradydavis.com/many-factors-are-involved-when-choosing-a-business-entity/) and worked with receivers in turning around problem businesses. Sean expands his professional experience in valuing businesses through specialized courses and training through the National Association of Certified Valuation Analysts. Further, he participates at the Illinois Society of Certified Public Accountants roundtable discussion groups for business valuation. As part of continuing professional education, he attends seminars conducted by the American Institute of Certified Public Accountants, the National Association of Certified Valuation Analysts and the Illinois Society of Certified Public Accountants. ### Professional and Civic Affiliations - NACVA (National Association of Certified Valuation Analysts) - Illinois CPA Society Professional Affiliate Member - Greater North Shore Estate and Financial Planning Council - Business Valuation Association - MSI Global Alliance ### Education - M.B.A. in International Finance & Marketing, DePaul University of Chicago - Certified Valuation Analyst (CVA) through NACVA (National Association of Certified Valuation Analysts) > “The best approach is to size up the chances, calculate the risks involved, estimate our ability to deal with them, and then make our plans with confidence.” > – H. Ford --- ### [Eileen Pollard](https://waradydavis.com/staff/eileen-pollard/) **Published:** November 18, 2021 **Author:** Leslie Flinn **Content:** ## Background Eileen Pollard is an accountant and paralegal in Warady & Davis LLP’s tax practice and focuses her work on accounting matters, including write-ups, tax work papers, payroll filings and other regulatory processes. Eileen works with trusts, foundations, [business entities](https://waradydavis.com/many-factors-are-involved-when-choosing-a-business-entity/) and individuals—all with highly-specialized accounting needs—for whom she assists in regulatory and payroll matters, as well as trust administration and client service. Elleen provides accuracy and technical expertise to handle important client business processes efficiently and effectively. ### Education - Bachelor of Science in Accountancy, University of Illinois --- ### [Joel M. Friedman, JD, CPA](https://waradydavis.com/staff/friedman-joel-jd-cpa/) **Published:** November 16, 2021 **Author:** Leslie Flinn **Content:** ## Background Formerly of Horwood, Marcus & Berk, [Joel M. ](https://waradydavis.com/joel-friedman-merges-practice-with-wd/)[Friedman is a tax partner](https://waradydavis.com/joel-friedman-merges-practice-with-wd/) with Warady & Davis LLP where he specializes in [estate and gift planning](https://waradydavis.com/service/estate-gift-tax-planning/), related tax matters, high net-worth individuals, trusts, foundations and [not-for-profit organizations](https://waradydavis.com/industry/not-for-profit/). Joel provides both tax and legal technical acumen and knowledge of the individuals, families and entities that are involved. With his extensive background, Joel often assists clients and attorneys in matters related to taxation, estate planning and business law. In addition, Joel does extensive work in the not-for-profit area. He is President of the [Alvin H.](https://baumfund.org/) [Baum Family Fund](https://baumfund.org/), a significant donor to many charities. Among his awards and activities are the John Marshall Law School Spirit Award and the Cove School’s Prism Award. Joel is also the founder of the Environmental Change Institute at the University of Illinois (Champaign/Urbana campus), which has become the Institute For Sustainability, Energy and Environment (iSEE). [Joel maintains an active role in iSEE’s activities](https://waradydavis.com/joel-friedman-merges-practice-with-wd/). He is also a two-time Recipient of Chicago Magazine’s Five Star Wealth Manager Award and has achieved a Martindale -Hubbell AV® Preeminent™ Peer Review Rating. ### Areas of Specialization Joel specializes in the areas of estate and gift planning, trust planning and administration including acting in a fiduciary capacity, foundations and not-for-profit organizations, asset protection, closely-held businesses and high net-worth individual tax and [accounting services](https://waradydavis.com/service/accounting-services/). [His consulting activities](https://waradydavis.com/service/wealth-management-advisory-services/) include entity formation, family limited partnerships, estate, gift and overall tax planning, buy/sell agreements, as well as general business and tax consulting services. ### Professional Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - American Bar Association - Chicago Bar Association - Illinois State Bar Association ### Community & Business Involvement - Alvin H. Baum Fund, President - Environmental Change Institute at the University of Illinois Champaign Urbana, Founder - Jewish Federation of Metropolitan Chicago, Government Affairs Committee, Member - John Marshall Center for Real Estate Law Advisory Board, Member - Institute Of Environmental Sustainability, Loyola University of Chicago, Director - Cove School Advisory Board, Member ### Education - University of Illinois, Chicago School of Law, J.D. - University of Illinois, B.S. in Accounting --- ### [Jea Song, CPA](https://waradydavis.com/staff/jea-song-cpa-partner/) **Published:** April 18, 2016 **Author:** WaradyDavis **Content:** ## Background Jea is a Partner in Warady & Davis LLP’s Audit and Accounting practice. Jea has more than 14 years experience serving clients in the areas of manufacturing and distribution, **[real estate](https://waradydavis.com/industry/real-estate/)**, construction, employee benefit plan audits and a wide range of other types of privately-held and family-owned businesses and high net worth individuals. He has spent his entire professional career with Warady & Davis LLP. ### Areas of Specialization Jea’s technical and business background includes audit, accounting, tax structuring, and general business and tax consulting. In addition, he has in-depth expertise in the management of engagements, consultation with business owners and individuals regarding company operations and strategic planning, employee benefit plan audits and compliance, overall tax planning including individuals and their closely-held corporations, family tax planning, entity formation, analysis and control of costs and gross profits and budgeting. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science in Accounting, University of Illinois at Chicago - Licensed C.P.A. in the state of Illinois > “Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.”- Steve Jobs --- ### [Kenneth Pinsky, CPA](https://waradydavis.com/staff/kenneth-pinsky-cpa-co-managing-partner-executive-committee-member/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Kenneth S. Pinsky is an immediate past Co-Managing Partner of Warady & Davis LLP. Mr. Pinsky also served on the firm’s Executive Committee, which is responsible for the strategic direction of the firm. With over 35+ years of experience, Mr. Pinsky has in-depth expertise primarily in the representation of closely-held operating businesses and real estate developers, operators of residential and commercial properties and management companies. His real estate specialization includes development and management of commercial and residential projects, construction companies, due diligence, partnership and joint venture structuring, syndications, tax planning and financial structuring of real estate transactions. Prior to joining W&D in 1994, Mr. Pinsky was a Partner at Altschuler, Melvoin & Glasser and at Laventhol & Horwath in Chicago. His responsibilities at AM&G and L&H included the management of **[audit, accounting and tax engagements of real estate industry](https://waradydavis.com/industry/real-estate/)** clients and he was the director of L&H’s real estate industry practice. As a leading real estate industry expert, Mr. Pinsky has provided audit, accounting, tax and consulting services to numerous real estate development companies and their subsidiaries, which included construction companies, ownership and management of office buildings, regional and local shopping centers, hotels, single family and multi-family housing, condominium conversions, mobile home and recreational vehicle parks and other commercial property. In addition, he has in-depth experience in multi-family housing projects, including LLC’s and partnerships financed by mortgages from the Department of Housing and Urban Development (HUD) and Illinois Housing Development Authority (IHDA). ### Areas of Specialization Ken’s areas of technical expertise include tax planning, loan structuring, buy/sell consulting to owners, examinations and compilations of financial forecasts included in private placement offering memorandums in connection with real estate syndications, acquisition and disposition due diligence, job costing, troubled debt restructuring, failed syndication’s and workouts, and valuation analysis on various types of real estate projects. Mr. Pinsky has appeared as an expert witness in several court cases including the U.S. Department of Justice regarding accounting and income tax matters contained in a syndicated real estate time share development. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - Florida Institute of Certified Public Accountants - MSI Global Alliance ### Community and Business Involvement - Frequent speaker on real estate, accounting and tax related topics to business & community groups - Written articles and serves as a quote source for industry and business publications ### Education - Bachelor of Science in Commerce, DePaul University of Chicago - Certificate in Effective Executive Curriculum, Wharton School of Business, University of Pennsylvania - C.P.A. licenses in the states of Illinois and Florida > “If you are content with the best you have done, you will never become the best you can be. Pursue excellence in all things.” --- ### [Robert Weismann, CPA](https://waradydavis.com/staff/robert-weismann-cpa-partner-managing-director-of-professional-services-executive-committee-member/) **Published:** April 18, 2016 **Author:** WaradyDavis **Content:** ## Background Bob Weismann, CPA, Co-Managing Partner, oversees the delivery of all **[professional services](https://waradydavis.com/industry/professional-services/)** for Warady & Davis LLP. In this capacity, he directs the management of the firm’s professional audit, accounting, tax and consulting practices, related staff and the delivery of the highest level of client service excellence. Since 1987, Bob has provided audit, accounting, tax and consulting services to a wide variety of industries including real estate, construction, employee benefit plans, manufacturing, distribution and numerous service industries. He serves as a Partner in the Audit and Accounting Department of Warady & Davis LLP. He also serves on the firm’s business development team and is actively involved in numerous industry associations. Bob has in-depth expertise in [audit, accounting and tax issues for construction](https://waradydavis.com/industry/construction-accounting-audit-tax-consulting/) and real estate organizations and projects. He currently is involved with a number of significant construction contractors, real estate developers, manufacturers and distributors and a wide variety of other types of organizations. ### Areas of Specialization Bob’s technical and business background includes auditing, tax structuring, and general business and tax consulting. In addition, he has in-depth expertise in the management of engagements, consultation with business owners and individuals regarding company operations and strategic planning, overall tax planning including individuals and their closely-held corporations, family tax planning, entity formation, analysis and control of costs and gross profits and budgeting. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance - Chicago Building Congress - Construction Financial Management Association - Builders Association - Illinois Road and Transportation Builders Association ### Community and Business Involvement - Rotary Club of Gurnee - Member of Board of Directors for Rotary Club of Gurnee, Director of Community Service ### Education - Bachelor of Science in Accountancy, University of Illinois, Chicago - C.P.A. license in the state of Illinois > “Nothing is so contagious as enthusiasm.” > – S.T. Coleridge --- ### [Steve O'Connor, CPA](https://waradydavis.com/staff/steve-oconnor-cpa-partner-executive-committee-member/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Since 1978, Steve has specialized in providing privately-held and **[family owned businesses](https://waradydavis.com/industry/owner-run-and-family-businesses/)** with accounting, tax and consulting services. Serving a wide variety of clients, large and small, in many industries – including manufacturers and distributors, employee benefit plans and construction contractors – Steve’s strengths lie in his creative ability to objectively analyze and assess client needs and situations. Steve offers suggestions and ideas that make his clients’ businesses and lives more profitable and efficient. Steve’s consultations center on his client’s business needs and include discussions on tax planning, strategic planning, management challenges, business succession planning, retirement and estate planning and financial planning. ### Areas of Specialization Mergers and acquisitions, entity formation, estate planning, overall tax planning, benefit planning, buy/sell agreements, short and long range strategic planning, financial planning, as well as general business and tax consulting services. He also is trustee of the Warady & Davis LLP 401(k) Plan. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Masters of Science in Accountancy, DePaul University of Chicago - C.P.A. license in the state of Illinois > “There are no traffic jams along the extra mile.”- R. Staubach --- ### [Katherine Hunt, CPA](https://waradydavis.com/staff/katherine-hunt-cpa-partner-director-of-audit-accounting-services-executive-committee-member/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## In Memoriam Kathy is an audit and accounting Partner in the certified public accounting and consulting firm of Warady & Davis LLP. She has more than 30 years of public accounting experience serving the firm’s diverse clientele. As the account Partner for numerous clients – including some of the firm’s largest accounts, Kathy provides in-depth expertise in engagement management. She is responsible for supervising all audit, accounting, tax and consulting work performed including managing staff. She also participates in teaching in-house seminars for the firm. Kathy has experience across a wide range of companies, ranging from national organizations to small businesses. She has provided services including preparation of audited and unaudited financial statements, tax returns, projections and budgets. Additionally, consulting projects have included mergers and acquisitions, accounting software and agreed upon procedures. Kathy works with clients from a wide range of industries including **[manufacturing](https://waradydavis.com/industry/manufacturing-audit-accounting-and-tax-services/)**, distribution, real estate, construction, hospitality, retail & wholesale and professional services. Kathy’s strengths lie in her creative ability to objectively analyze and assess client needs and situations. Kathy offers suggestions and ideas that make clients’ businesses and lives more profitable and efficient. ### Areas of Specialization Kathy’s technical and business background includes auditing, tax structuring, and general business and tax consulting. In addition, she has in-depth expertise in the management of engagements, consultation with business owners and individuals regarding company operations and strategic planning, overall tax planning including individuals and their closely-held corporations, family tax planning, entity formation, analysis and control of costs and gross profits, and budgeting. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Business Administration, St. Norbert College - C.P.A. license in the state of Illinois > “Don’t aim for success if you want it; just do what you love and believe in, and it will come naturally.”- D. Frost --- ### [Robert J. Giblichman, CPA](https://waradydavis.com/staff/robert-j-giblichman-cpa-partner-director-of-quality-control/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background With over 30 years of public accounting experience, Robert Giblichman, CPA, Partner with Warady & Davis LLP, oversees the design, implementation and compliance with all auditing, accounting, and internal quality control procedures. Bob has considerable technical experience in the review of closely-held businesses in a wide variety of industries, including **[manufacturing](https://waradydavis.com/industry/manufacturing-audit-accounting-and-tax-services/)**, distribution, real estate, construction and employee benefit plans. Bob’s primary responsibilities at the firm include monitoring the firm’s compliance with quality control and assurance standards, Concurring Partner review of the firm’s financial statements, keeping the staff abreast of recent pronouncements and technical issues concerning accounting and audit engagements, as well as guiding the firm through its own internal, annual review and its external peer review process which is conducted every three years. Under Bob’s direction, W&D consistently meets the highest quality standards. In addition, Bob currently serves on the Peer Review Alliance (Illinois CPA Society et. al.), Peer Review Acceptance Subcommittee and the Executive Committee. Bob also acts as an instructor of continuing education courses in accounting and auditing, serves as an instructor for the firm’s professional development curriculum, “W&D University” and on W&D’s curriculum committee. ### Areas of Specialization Bob’s areas of specialization include technical performance and overall quality assurance of all audit and accounting engagements on historical and prospective financial statements. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society – Member of Peer Review Acceptance Committee and Peer Review Executive Committee - MSI Global Alliance - Special Olympics Coach and Volunteer ### Education - Bachelor of Science in Accounting from the University of Illinois - C.P.A. license in the state of Illinois > “Quality means doing it right when no one is looking.” > – H. Ford --- ### [Michael Boban, CPA](https://waradydavis.com/staff/michael-boban-cpa-partner/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background For over 20 years, Mike has provided audit, accounting, tax and consulting services to a wide variety of industries including real estate, construction, manufacturing, distribution, employee benefit plans and numerous service industries. He serves as a Partner in the Audit and Accounting Department of Warady & Davis LLP and is also a lead Partner for Warady & Davis LLP’s employee benefit plan team. Mike has in-depth expertise in [audit, accounting and tax issues of all phases of construction](https://waradydavis.com/industry/construction-accounting-audit-tax-consulting/), manufacturing and distribution projects. He currently is involved with a number of significant manufacturers, distributors, construction contractors and a wide variety of other types of organizations. ### Areas of Specialization Mike’s technical and business background includes auditing, tax structuring, and general business and tax consulting. In addition, he has in-depth expertise in the auditing of employee benefit plans, management of engagements, consultation with business owners and individuals regarding company operations and strategic planning, overall tax planning including individuals and their closely-held corporations, family tax planning, entity formation, analysis and control of costs and gross profits, and budgeting. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - B.S. Degree in Accounting from the University of Illinois - C.P.A. license in the state of Illinois > “Promise only what you can deliver. Then deliver more than you promise.” --- ### [William A. Nichols, CPA](https://waradydavis.com/staff/william-a-nichols-cpa-partner-executive-committee-chairman/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background William Nichols is a former Managing Partner of Warady & Davis LLP. In this capacity, he worked closely with the partners and staff to promote client satisfaction, growth, development and to set the firm’s strategic direction. Bill’s services center on his client’s business needs and include an emphasis on tax planning, strategic planning, management challenges, due diligence, mergers & acquisitions and business succession, retirement, estate and financial planning among other key issues. ### Areas of Specialization His wide range of experience in finance and [management consulting](https://waradydavis.com/service/management-consulting-services/) includes extensive work with real estate and construction enterprises, manufacturers, distributors, wholesale and retail firms and professionals. Additional areas of expertise include: audit and accounting, mergers and acquisitions, due diligence, entity formation, estate planning, overall tax planning, benefit planning, buy/sell agreements, short and long range strategic planning, financial planning as well as general business and tax consulting services. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science in Commerce, DePaul University of Chicago - C.P.A. license in the state of Illinois > “Do what’s right, the right way, at the right time.”- A. Glasgow --- ### [Lawrence Silverman, CPA](https://waradydavis.com/staff/lawrence-silverman-cpa-partner/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Lawrence D. Silverman is a Partner in the certified public accounting and consulting firm of Warady & Davis LLP. In this capacity, he directs, oversees and manages accounting, tax and consulting services for his clients. With 40+ years of experience, Larry has in-depth expertise primarily in representation of closely-held operating businesses and professional practices including health care practitioners, attorneys, law firms, engineering firms, graphic designers and similar businesses. He also has expertise in the metal processing, fabrication and manufacturing industry and in real estate. In addition, his clients include high net worth individuals. **Mr. Silverman’s former positions included:** - Partner in the public accounting firm of Steinberger, Silverman & Company LLP - Corporate Tax Director of TSC Industries, Inc., Chicago, Illinois - Tax supervisor with J.K. Lasser, Chicago, Illinois - Staff auditor and tax senior with Ernst & Ernst, in Chicago, Illinois and Raphael & Raphael, in Boston, Massachusetts. ### Areas of Specialization Larry’s areas of technical expertise include tax planning and consulting to owners of closely held businesses and high net worth individuals. He conducts due diligence analysis, and provides divorce [litigation support services](https://waradydavis.com/service/litigation-support-services/), expert witness testimony and [business valuations](https://waradydavis.com/service/business-valuation-approach/). Larry has also worked extensively in Internal Revenue Service examinations and negotiations. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Business Administration, University of Massachusetts - Licensed C.P.A. in the state of Illinois > “It’s easy to make a buck. It’s a lot tougher to make a difference.” > – T. Brokaw --- ### [Norman Nagel, CPA](https://waradydavis.com/staff/norman-nagel-cpa-partner/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** # In Memoriam March 13th, 1944 – November 1st, 2023. **Obituary, shiva and funeral details may be viewed [HERE](https://www.goldmanfuneralgroup.com/memorials/norman-nagel/5318816/index.php).** For over 45 years, Norm has been a Partner in large, local CPA firms, which included managing and directing offices and real estate and construction practices. He provides accounting, tax and consulting services to a wide variety of industries, especially real estate. Norm has acted as a business advisor and consultant to many large real estate companies as well as leading businesses in various industries. He has served a number of well-known companies in the Chicago and throughout the United States. ### Areas of Specialization His consulting activities include mergers and acquisitions, entity formation, estate planning, overall tax and business planning, benefit planning, buy/sell agreements, analysis and control of costs and gross profits, budgeting, short and long range strategic planning, negotiating deals, financing for clients as well as [litigation support](https://waradydavis.com/service/litigation-support-services/), general business and tax consulting services. He has been heavily involved in “PUD” structuring and refurbishing main town centers such as Willow Springs, Arlington Heights, etc. Norm was also responsible for handling the Carl Sandburg Village conversion, which to date is the largest condo conversion in the United States (3300 units plus 250 townhouses.) Norm maintains an extensive network of debt and equity financing sources including numerous banks, private companies, institutional and Wall Street. He has in-depth experience with tax incremental financing (TIFs), bond financing, tax and accounting requirements as well as industrial revenue bonds (IRBs) and numerous other government and conventional financing alternatives for all types of businesses. He has written articles and served as an on-going source of information for many Chicago area publications. He also has taught continuing professional education courses and has written technical manuals for CPA firms. ### Professional and Civic Affiliations Norm has been involved in The White House Small Business Conference, numerous community chambers of commerce and was a member of the Illinois CPA society where he served on the Real Estate Committee. In addition, he is an active member of numerous associations including: Real Estate Investment Association (REIA), the Urban Land Institute (ULI), Homebuilders’ Association of Illinois (HBAI), Northern Illinois Homebuilders’ association (NIHBA) and the Homebuilders’ Association of Greater Chicago (HBAGC) where he served on the Board of Directors of the Lake County Division as Treasurer. He was also a Director for 8 years for the Chicago Chamber of Commerce and Industry as well as a Director for four years on The Roosevelt University School of Real Estate Board. - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science in Accountancy, Roosevelt University, Chicago - C.P.A. license in the state of Illinois > “Sooner or later, those who win are those who think they can.”- P. Tournier --- ### [Joseph G. Ferrari, MST, MBA, CPA](https://waradydavis.com/staff/joseph-g-ferrari-mst-mba-cpa/) **Published:** February 7, 2018 **Author:** WaradyDavis **Content:** ## Background Joe has over 40 years of experience in the accounting profession that covers a broad range of experience in public accounting, industry, and academia. Prior to joining Warady & Davis, he developed and managed his own practice, Joseph G. Ferrari CPA, LLC, where he provided a wide range of accounting and tax services to businesses and individuals for 29 years. For over 10 years he has reached out to high school and college students to attract the next generation of CPAs from career day presentations at his former high school through his position as an adjunct professor. Joe has been an adjunct professor at the DePaul University School of Accountancy and MIS since 2010. He teaches the [Forensic Accounting](https://waradydavis.com/service/forensic-services/) and Valuation course in the Master of Science in Audit and Advisory Services program as well as undergraduate accounting courses. Joe began his career at the accounting firm Topel Forman, LLC. He then went into industry where he gained experience working in and managing various corporate accounting functions including internal audit, internal management reporting, and SEC reporting. This diverse set of accounting experiences led to him managing various accounting functions as an Assistant Controller. He eventually used that set of corporate experiences to start his accounting practice. ### Education - Master of Science in Taxation, DePaul University - Master of Business Administration in Finance, DePaul University - Bachelor of Arts in Political Science, DePaul University - Licensed CPA in the State of Illinois ### Professional Affiliations - Illinois CPA Society - National Society of Accountants --- ### [Ronald Zweig, CPA](https://waradydavis.com/staff/ronald-s-zweig-cpa-partner/) **Published:** April 18, 2016 **Author:** WaradyDavis **Content:** ## Background [Ronald S. Zweig, CPA, is a Partner with Warady & Davis LLP](https://waradydavis.com/wd-spotlight-ronald-s-zweig-cpa-ria-rsz-financial-advisors/) and formerly a principal of Rosenfeld Zweig & Donenberg Ltd. In addition, Ron is an Investment Advisor Representative with [Project Wealth Advisors](https://www.projectwealthadvisors.com/). Ron brings forty years of experience in a broad range of tax, accounting and financial services. His process is goal driven by providing financial services including wealth accumulation, preservation of capital, portfolio management, financial planning – retirement income, and estate planning. Ron is an investment advisor representative with LPL Financial. LPL Financial is one of the largest and most respected independent broker dealers in the country. By focusing on overall financial goals and needs, Ron helps his clients meet today’s opportunities and challenges. As a Warady & Davis Partner, Ron provides a broad range of accounting and tax services including consulting, financial reporting and tax planning with respect to individuals, partnerships, corporations, proprietorships, trusts, and estates. His industry expertise includes professional services, wholesale distribution, investment partnerships, financial service companies, real estate ventures and retail operations. Ron has extended his expertise to community service as the City Treasurer of Highland Park, Illinois for a term of eight years and as a member of the Business and Economics Development Commission of Highland Park, Illinois. Ron also served, for eight years, on both the Highland Park Police Pension Fund and the Highland Park Fire Pension Fund. He brought to Highland Park a source of knowledge regarding local business development, investment advisory expertise and related issues. ### Professional and Civic Affiliations - Financial Services Institute - American Institute of Certified Public Accountants - Illinois CPA Society - Served on the Highland Park Police Pension Fund and the Highland Park Fire Pension Fund - City Treasurer, Highland Park, IL - Member of the Business and Economics Development Commission of Highland Park, IL - MSI Global Alliance ### Education - Bachelor of Science in Accountancy, Roosevelt University, IL - C.P.A. license in the state of Illinois ### Investment Advisory Licensed In **AZ, CA, CT, FL, IL, IN, MD, ME, MI, MO, NC. NM, NY, OH, OR, TX, WA** ### Insurance Licensed In **AZ, IL, WA** > “By developing long-term relationships with my clients, I am able to integrate their business and financial needs with their personal objectives.” --- ### [James Donenberg, CPA](https://waradydavis.com/staff/james-donenberg-cpa-mba-partner/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Jim Donenberg, CPA, MBA, Partner with Warady & Davis LLP and formerly a principal of Rosenfeld Zweig & Donenberg Ltd., draws on thirty four years of accounting experience, both private and public, in manufacturing, retail, not-for-profit accounting and professional practices, bringing a fresh outlook to analysis of company operations, financial analysis, income tax, and estate planning. In the private sector, Mr. Donenberg has assisted healthcare providers and organizations in planning issues relative to their practices and institutions. In the past, he has served as chief financial officer of a retail health care distribution company and provided computer consulting, business valuation and planning services. He has participated in business succession issues and has extensive experience working through the problems of generational and shareholder and board of director transitions. In public practice, he has assisted clients in entity and tax planning, financial projections, bank loan negotiations, divorce negotiations, general financial analysis and tax research relative to various complex issues that present themselves to clients in particular situations. He has assisted clients in analyzing and implementing wealth preservation plans, including family limited partnerships and family limited liability companies and other asset protection structures. He has advised not-for-profit entities on indirect cost allocation, various compliance, and long range planning issues unique to these entities. Mr. Donenberg approaches client concerns by first listening and trying not to pre-judge a client’s situation before understanding the owners’ perceptions and perspective. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society – Member of the Litigation Services and Healthcare Committees - Greater North Shore Estate Planning Council - MSI Global Alliance ### Community Involvement - Executive board member and President of the Men’s Club of synagogue Congregation Beth Shalom - Long record of dedication to various causes for the needy ### Education - M.B.A. from the University of Michigan, Ann Arbor - B.S.A. from the University of Illinois at Urbana-Champaign - Professional Accounting Program at Northwestern’s Kellogg School of Management - C.P.A. license in the state of Illinois - C.E.A. in business valuation from the Illinois CPA Society > “I pride myself in taking a personal interest in those I assist. It’s not easy to manage a business as I personally know, and as such, understand the difficulties. I use my experience in the private sector to make constructive, practical suggestions to solve problems. Oftentimes, the accounting issues are secondary to larger business or personal strategic issues. In these situations, I try to put my accounting expertise in the background and use my knowledge to identify and make constructive suggestions to resolve the entire issue at hand.” --- ### [Sharon Frydman, CPA](https://waradydavis.com/staff/sharon-frydman-cpa-partner-executive-committee-member/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Sharon is a Tax Partner in the certified public accounting and consulting firm of Warady & Davis LLP and the firm’s expert on real estate taxation issues. She has more than 25 years of public accounting experience, serving clients in the area of taxation and estate and gift and succession planning. This experience includes tax research and planning and the preparation and review of tax returns. She also participates in teaching in-house tax seminars for the firm. Sharon works with clients from a wide range of industries, including real estate, construction, manufacturing, distribution, hospitality, retail & wholesale and professional services, among others. ### Areas of Specialization Sharon’s tax expertise covers such diverse areas as individuals, estates and trusts, partnerships and LLCs and closely-held corporations. Areas of special interest within these categories include, but are not limited to, alternative minimum tax; partnership allocations pursuant to Sections 704(b) & 704(c) of the Internal Revenue Code; basis and at-risk limitations and multi-state issues. In addition to significant tax planning and compliance services expertise, Sharon provides counsel for high net worth individuals, fiduciary organizations, S corporations and partnerships. She has been involved in the planning and use of many kinds of entities for the benefit of clients, including family partnerships and trusts (both testamentary and intervivos), spray and discretionary distribution trusts, mandatory income distribution trusts, gift trusts for minors, and charitable remainder and charitable lead trusts. Sharon also advises attorneys as to the tax consequences of will and trust documents. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Arts in Psychology, University of Illinois - Master of Science in Accountancy, DePaul University of Chicago - Licensed CPA in the State of Illinois > “Try, try, try, and keep on trying is the rule that must be followed to become an expert in anything.” > – W.C. Stone --- ### [Richard M. Franklin, CPA](https://waradydavis.com/staff/richard-m-franklin-cpa-co-managing-partner-executive-committee-member/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background For over 30 years, Rick has provided audit, accounting, tax and consulting services to a wide variety of industries, including real estate, construction, manufacturing, finance, not-for-profit and numerous service industries. As former Co-Managing Partner and Executive Committee Member, Rick led strategic initiatives across the firm including focusing on implementing, monitoring, and modifying the firm’s strategic plan. In addition, he actively manages his significant tax, accounting and audit client practice and is involved in W&D’s growth strategies including determining how to best position existing and new services offered by the firm. He is the immediate past Chairman of the Illinois CPA Society’s Ethics Committee. As part of the AICPA’s Peer Review program, Rick has conducted many reviews of other certified public accounting firms. ### Areas of Specialization Mergers and acquisitions, entity formation, estate planning, overall tax planning, benefit planning, buy/sell agreements, analysis and control of costs and gross profits, budgeting, short and long range strategic planning, as well as general business and tax consulting services. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance - Real Estate Investment Association - Illinois CPA Society – Ethics Committee – Immediate former Chairman - The Standard Club of Chicago – Treasurer - Board of Directors of Camp Independence - Board of Directors of Deerfield Bannockburn Riverwoods Chamber of Commerce, former President ### Education - Bachelor of Science in Accountancy, Northern Illinois University - Licensed CPA in the State of Illinois > “The way you live your life is truly the way you will be remembered; how do you want to be remembered?” --- ### [Richard A. Breseman, CPA](https://waradydavis.com/staff/richard-a-breseman-cpa-partner-director-of-litigation-services/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Richard Breseman is a Partner in the Audit Department of Warady & Davis LLP. His experience is primarily in representation of closely-held operating businesses. For over 20 years, Rick has provided audit, accounting, tax and consulting services to a wide variety of industries, including manufacturing, distribution, real estate construction, homebuilding, not-for-profit, oil and gas and numerous service industries. His consulting activities include litigation support and expert witness testimony, forensic investigation and analysis, acquisition and disposition due diligence, entity formation, buy/sell agreements, estate and overall tax planning, benefit planning, analysis and control of costs and gross profits, budgeting, short and long range strategic planning as well as general business and tax consulting. ### Areas of Specialization - Perform and direct numerous audits, reviews and compilations of closely-held businesses, including tax planning and preparation and consulting to owners. - Testify as an expert witness in civic litigation matters. - Perform numerous collateral audits for several lenders with asset based loans and high-risk credits. - Assist clients and their representatives in arbitration/litigation matters generally related to real estate common area maintenance calculations and billing disputes. - Performed numerous acquisition and disposition due diligence engagements for clients in a wide variety of industries. - Performed numerous fraud investigations for investors and business owners. - Serve as an accounting firm Peer Reviewer and assist the firm’s Director of Quality Control in maintaining high standards in firm practice and peer review. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science in Accountancy, Drake University, Iowa - Bachelor of Science in Computer Information Systems, Drake University, Iowa - Licensed CPA in the State of Illinois > “We’re in business first and foremost to serve the needs and desires of our clients.” --- ### [Mark Thomas, CPA, CFE](https://waradydavis.com/staff/mark-thomas-cpa-cfe-partner-managing-director-of-operations-director-of-employee-benefit-plan-and-forensic-services-executive-committee-member/) **Published:** April 18, 2016 **Author:** WaradyDavis **Content:** ## Background Since 1985, Mark Thomas, CPA, CFE, Co-Managing Partner, has specialized in providing privately-held and family-owned businesses with accounting, tax, consulting and forensic services. Serving a wide variety of clients, large and small, in many industries – including manufacturers and distributors, employee benefit plans and construction contractors – Mark’s strengths lie in his creative ability to objectively analyze and assess client needs and situations. Mark offers suggestions and ideas that make his clients’ businesses and lives more profitable and efficient. Mark’s consultations center on his client’s business needs and include discussions on tax planning, strategic planning, management challenges, due diligence, internal controls, forensic services, and business succession, retirement, estate and financial planning. Mark also served on the firm’s Executive Committee, which is responsible for the strategic direction of the firm and the Business Development team where he takes a leadership role in the firm’s growth and marketing initiatives for his area(s) of specialty including forensic and litigation services, employee benefit plans and manufacturers and distributors. ### Areas of Specialization Audit and accounting, mergers and acquisitions, due diligence, entity formation, estate planning, overall tax planning, benefit planning, short and long range strategic planning, financial planning, as well as general business and tax consulting services. **Areas of forensic expertise include** - Investigation of fraud claims on behalf of clients - Audit and review of financial documents for the purpose of determining sources of monetary loss - Provide detailed reports and evidentiary support to law enforcement and affiliated parties - Development of internal control structure, processes and procedures - Agreed upon procedures and specialized engagements ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance - Association of Certified Fraud Examiners ### Education - Bachelor of Science in Accountancy, DePaul University of Chicago - C.P.A. license in the state of Illinois - Certified Fraud Examiner (CFE) > “Efforts and courage are not enough without purpose and direction.”- J.F. Kennedy --- ### [Martin Albert, Jr., CPA](https://waradydavis.com/staff/martin-albert/) **Published:** January 1, 2019 **Author:** WaradyDavis **Content:** ## Background Martin Albert, Jr., CPA, Partner (Marty) has more than 30 years of corporate, partnership and individual audit, accounting and tax knowledge, general business and specialized real estate expertise. Prior to merging his practice with Warady & Davis LLP, Marty was a shareholder of [Albert & Goodman CPA’s](https://waradydavis.com/albert-goodman-merges-with-waradydavisllp/), PC and a Partner of Vladem, Lerman, Albert & Company. Marty serves as a trusted adviser to his diverse client base which includes real estate, employee benefit plans, professional services, manufacturing, wholesale and other clients. His many years of experience coupled with his technical expertise, enable Marty to guide a wide range of closely-held business clients not only in their day-to-day operations, but also as they expand their businesses, streamline operations or plan their exit strategies. ### Areas of Specialization In addition to running his own practice for 23 years, Marty specializes in serving the audit, accounting, tax and consulting needs of closely-held corporations, employee benefit plans, business owners and other high-net worth individuals including tax planning and preparation and consulting. His consulting activities include mergers and acquisitions, litigation support, entity formation, family limited partnerships, estate planning, overall tax planning, benefit planning, buy/sell agreements, analysis and control of costs and gross profits, budgeting, short and long range strategic planning, as well as general business and tax consulting services. ### Professional Affiliations: - American Institute of Certified Public Accountants - Illinois CPA Society ### Community & Business Involvement: - Treasurer of the Glenbrook North Booster Club - Board of Directors of Delaware Place Bank - Board of Directors of the Northbrook Chamber of Commerce—Past Treasurer ### Education: - Bachelor of Science in Accountancy, University of Illinois at Chicago (UIC) - Licensed CPA in the State of Illinois --- ### [David M. Dickman, CPA](https://waradydavis.com/staff/david-m-dickman-cpa-partner/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background For over 35 years, David has provided a variety of audit, accounting, tax and consulting services to a diversified client base, which includes privately held manufacturing, distribution, construction, service organizations and employee benefit plans. He has in-depth knowledge of the distribution and manufacturing industries. As an Audit and Accounting client service Partner, David is responsible for supervising all audit, accounting, tax and consulting work performed including managing staff. He acts as part of a business owners’ management team and offers expertise in accounting, consulting, tax and other related business matters. David’s strengths lie in his creative ability to objectively analyze and assess client needs and situations. He offers suggestions and ideas that make his clients’ businesses and lives more profitable and efficient. ### Areas of Specialization David’s technical and business background includes auditing, tax consulting, general business consulting, mergers and acquisitions and business succession. In addition, he has in-depth expertise in the management of engagements, consultation with business owners and individuals regarding company operations and strategic planning, overall tax planning including individuals and their closely-held corporations, family tax planning, entity formation, analysis and control of costs and gross profits and budgeting. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science Degree in Accounting from the University of Illinois - C.P.A. license in the state of Illinois > “Quality in a service is not what you put into it. It is what the client gets out of it.” > – P. Drucker --- ### [Joseph M. Tamburello, CPA](https://waradydavis.com/staff/joe-tamburello-cpa/) **Published:** November 16, 2021 **Author:** Leslie Flinn **Content:** ## Background Joseph M. Tamburello, CPA is a Partner with Warady & Davis LLP where he provides tax compliance and planning services. Joe is an Illinois licensed CPA with over 25 years of experience helping clients with tax planning and compliance as well as with the administration of trusts and estates. Joe works with individuals, closely-held businesses and the firm’s trusts and estates clients on all issues of tax and [estate planning](https://waradydavis.com/service/estate-gift-tax-planning/), administration and compliance. Having worked at several of the major law firms in Chicago and on matters of varying complexity with an emphasis in the area involving trusts and estates, Joe is able to provide forward thinking and practical advice to clients. ### Professional Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society ### Community & Business Involvement - AICPA – Professional Financial Planning Section, Member ### Education - DePaul University, B.A. in Political Science - William Rainey Harper College, AA and ABA Approved Paralegal Certificate --- ### [Joseph A. Izen, CPA](https://waradydavis.com/staff/jospeph-a-izen-cpa/) **Published:** November 23, 2021 **Author:** Leslie Flinn **Content:** ## Background Joseph A. Izen, CPA has 36 years of corporate, partnership and individual tax and general business expertise. Prior to merging with Warady & Davis LLP (W&D), Joe was the owner and principal of Josepah A. Izen, Associates, CPAs. ### Areas of Specialization Joe’s areas of specialization include tax compliance, tax research and tax planning projects for both companies and individuals. His background encompasses both personal and privately-held companies. Additional areas of expertise include multi-state tax issues and the successful representation of clients before the IRS and various State authorities with respect to income and sales tax audits. ### Professional Affiliations - Illinois CPA Society ### Professional Credentials - Licensed CPA in the State of Illinois --- ### [Christopher Straub, CPA](https://waradydavis.com/staff/christopher-straub-cpa-msa-partner/) **Published:** April 18, 2016 **Author:** WaradyDavis **Content:** ## Background Chris Straub is a Partner in Warady & Davis LLP’s [Audit and Accounting](https://waradydavis.com/service/audit-and-accounting-services/) practice. Chris has spent his entire 10 year professional career with Warady & Davis LLP. Chris plays an integral role in our[ not-for-profit](https://waradydavis.com/industry/not-for-profit/) practice and has considerable not-for-profit industry experience including knowledge of the Single Audit Act and 403(B) plans. Additionally, Chris serves clients in the real estate, manufacturing and distribution industries and investment clients. ### Areas of Specialization Chris’ technical and business background includes audit, accounting and tax issues specific to not-for-profits and various other industries. In addition, he has in-depth expertise in the management of engagements, consultation with management, boards of directors, business owners and individuals regarding organization operations and strategic planning. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - B.S. and M.A.S. degrees in accountancy from Northern Illinois University - Licensed C.P.A. in the state of Illinois > “Only those who have learned the power of sincere and selfless contribution experience life’s deepest joy: true fulfillment.” > – Anthony Robbins --- ### [Barry Edelstein, CPA](https://waradydavis.com/staff/barry-edelstein-cpa-partner/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Barry Edelstein is a Partner with Warady & Davis LLP. He is the firm’s specialist in [multi-state taxation](https://waradydavis.com/service/state-and-local-tax/), state and local taxation and sales and use taxes. Among his duties is representation of clients being examined by Federal and State tax authorities. In addition, Barry is involved in the areas of income and corporate tax planning for privately owned businesses and individuals. Barry also acted for nine years as a Field Agent for the Internal Revenue Service. Barry also served on the firm’s Executive Committee, which is responsible for the strategic direction of the firm, and the Recruiting Committee. ### Areas of Specialization Multi-state income tax, state and local taxes, sales and use taxes, tax planning for individuals and their closely-held corporations; federal and Illinois corporate, individual, partnership and fiduciary income tax planning, choice of entity for new business formations, state and IRS representation. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science in Accountancy, University of Illinois – Chicago - C.P.A. license in the state of Illinois > “If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the client first, success will be yours.” > – R. Krock --- ### [Seth Appel, EA](https://waradydavis.com/staff/seth-appel/) **Published:** February 8, 2018 **Author:** WaradyDavis **Content:** ### Background Seth is a Partner with Warady & Davis LLP and the Director of the firm’s Tax Operations and Financial Accounting Services and [Tax practice](https://waradydavis.com/service/tax-services/). He has over 20 years of experience serving clients in the areas of professional services, construction, real estate, manufacturing and distribution and a wide range of other types of privately-held businesses, family-owned businesses and high net worth individuals. Seth also assists in litigation and forensic investigations including calculation and analysis of damages in patent infringement, loan defaults, contracts and other commercial matters. Seth has experience in divorce arbitration/litigation matters. Prior to his current role, Seth served as a staff accountant for Steinberger & Silverman & Co., LLP, a certified public accounting firm which merged with Warady & Davis. ### Areas of Specialization - Preparation of complex tax returns including many multi-state, corporate, partnership, individual and trust returns. - Serve as team leader on audit, review, and compilation engagements working on most difficult parts of job, and reviewing staff’s workpapers primarily in the manufacturing, construction and real estate industries. - Work directly with interns and new staff to train and teach them preparation of year-end workpapers, financial statements and tax returns. - Serve as lead of team on agreed-upon-procedures engagements for banks and due diligence/financial forecasts for manufacturing and real estate clients. - Assisted on a fraud case for a real estate client that resulted in a guilty plea, as well as assists on numerous litigation and forensic investigations. ### Education: - Bachelor of Science Degree in Accounting from Northeastern Illinois University ### Professional & Civic Affiliations: - IRS Enrolled Agent - MSI Legal & Accounting Network Worldwide --- ### [Rocco Losch, CPA](https://waradydavis.com/staff/rocco-losch-cpa-partner-managing-director-of-technology/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Rocco is an audit and accounting Partner in the certified public accounting and consulting firm of Warady & Davis LLP. He has over 20 years of public accounting experience serving the firm’s diverse clientele including businesses ranging from start-up phase companies to organizations with revenues in excess of $500MM. Rocco acts as the Engagement Partner for many of the firm’s largest clients in the distribution & wholesale, manufacturing, real estate and construction industries. He specializes in privately-held, family-owned businesses and related business owners. Rocco provides in-depth expertise in engagement management. He is responsible for supervising all audit, accounting, tax and consulting work performed including managing staff. He also participates in teaching in-house seminars for the firm. In addition, Rocco is a member of the firm’s Employee Benefit Plan Practice. Rocco has spent his entire career with W&D. ### Areas of Specialization Audit and accounting, employee benefit plan audits, mergers and acquisitions, due diligence, entity formation, overall tax planning, as well as general business and tax consulting services. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science in Accountancy, University of Illinois at Chicago - C.P.A. license in the state of Illinois > “The only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”- Steve Jobs --- ### [Jo Ann Porter, CPA](https://waradydavis.com/staff/jo-ann-porter-cpa-partner/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## **Background** For over 30 years, Jo Ann has provided audit, accounting, tax and consulting services to a wide variety of industries including real estate, construction, manufacturing, distribution and numerous service industries. She serves as a Partner in the Audit & Accounting Department of Warady & Davis LLP. Jo Ann has in-depth expertise in audit, accounting and tax issues of all phases of real estate projects. She currently is involved with a number of significant builders and developers and their projects including land development of home and retail sites in the Southwest suburbs, development and construction of custom home sites in the North Shore and other geographic areas, acquisition and development of commercial builders in multi-states and property management in downtown Chicago. Jo Ann also served on the firm’s Executive Committee, which is responsible for the strategic direction of the firm, and the Recruiting Committee. ## **Areas of Specialization** Jo Ann’s technical and business background includes auditing, tax structuring, and general business and tax consulting. In addition, she has in-depth expertise in the management of engagements, consultation with business owners and individuals regarding company operations and strategic planning, overall tax planning including individuals and their closely-held corporations, family tax planning, entity formation, analysis and control of costs and gross profits and budgeting. ## **Professional and Civic Affiliations** - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ## **Education** - Bachelor of Science in Accountancy, Loyola University of Chicago - C.P.A. license in the state of Illinois > “The road to happiness is not hard to find, it’s what we do for others that brings us peace of mind.” > – Unknown Source --- ### [Alison Goodridge, CPA](https://waradydavis.com/staff/alison-goodridge-cpa-partner-managing-director-of-human-capital/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Alison is an audit and accounting Partner in the certified public accounting and consulting firm of Warady & Davis LLP. She has over 25 years of public accounting experience serving the firm’s diverse clientele. Alison acts as the Engagement Partner for many of the firm’s largest clients. Alison provides in-depth expertise in engagement management. She is responsible for supervising all audit, accounting, tax and consulting work performed including managing staff. She also participates in teaching in-house seminars for the firm. ### Areas of Specialization Alison has experience across a wide range of companies, ranging from national organizations to small businesses. Alison has provided services including preparation of audited and unaudited financial statements, tax returns, projections and budgets. Additionally, consulting projects have included mergers and acquisitions, accounting software and agreed upon procedures. Alison works with clients from a wide range of industries, including real estate, hospitality, construction, manufacturing, distribution, retail & wholesale, professional services and governmental. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Community and Business Involvement - Hospitality Financial & Technical Professionals - The American Cancer Society Relay For Life ### Education - Bachelor of Science in Accountancy, DePaul University of Chicago - C.P.A. license in the state of Illinois > “Your client doesn’t care how much you know until they know how much you care.” > – D. Richards --- ### [Burton R. Kaplan, CPA](https://waradydavis.com/staff/burton-kaplan/) **Published:** December 21, 2019 **Author:** WaradyDavis **Content:** ## Background Burt Kaplan has 50+ years of corporate, partnership and individual tax, business accounting and management expertise. Prior to merging with Warady & Davis LLP (W&D), Burt was the Principal of Burton R. Kaplan LLC. Early in his career, Burt was a field agent for the Internal revenue Service. He was promoted to Field Audit Leader and was responsible for compliance oversight for one of the U.S.’ wealthiest families and its related interests. He was also selected as an instructor and taught the basic individual and partnership courses to new incoming agents. Subsequently, Burt joined the firm Siegel, DeGraff & Kaplan and in 1978 he formed his own practice, Burton R. Kaplan LLC. In 1980, Burt acquired a seat on the Chicago Mercantile Exchange. In addition to serving his tax and accounting clients in his own practice, he acted as an options and futures trader for many years. ### Areas of Specialization Burt’s areas of industry specialization include commodities and options traders, professional service organizations including law firms, and other closely-held businesses and high net-worth individuals. Burt has in-depth expertise in business accounting and management, tax compliance, tax research and tax planning projects for both companies and individuals. He has successfully represented clients before the IRS and various State authorities with respect to income and sales tax audits. ### Professional Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society ### Community & Business Involvement - Member of the Chicago Mercantile Exchange ### Education - Bachelor of Science Degree in Accounting from the University of Illinois Champaign-Urbana - Licensed CPA in the State of Illinois --- ### [Atarah Mayer, CPA](https://waradydavis.com/staff/atarah-mayer-cpa/) **Published:** January 2, 2023 **Author:** WaradyDavis **Content:** ## Background Atarah is a Partner with extensive experience in public accounting [tax,](https://waradydavis.com/service/tax-services/) statement reconciliation, client management, and financial consultation. She has 15+ years of experience in the preparation and review of individual, partnership, and corporate tax returns in various industries, focusing in construction, real estate, and wholesale. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society ### Education - M.S. Accounting: Northeastern Illinois University - B.S. Accounting: Northeastern Illinois University - CPA license in the State of Illinois --- ### [Daniel Rohowsky, CPA](https://waradydavis.com/staff/daniel-rohowsky-cpa-partner/) **Published:** January 6, 2021 **Author:** WaradyDavis **Content:** ## Background Dan is an audit and accounting Partner in the certified public accounting and consulting firm of Warady & Davis LLP. For 13 years, he has provided audit, accounting, tax and consulting services to a wide variety of industries including real estate, construction, manufacturing and distribution, as well as other types of privately-held businesses and high net worth individuals. Dan has spent his entire career with W&D. Dan has extensive experience in multi-family housing projects, including LLC’s and partnerships financed by mortgages from the Department of Housing and Urban Development (HUD) and various state housing authorities and is Yellow Book certified. ### Areas of Specialization Dan’s technical and business background includes audit and accounting, HUD audits, mergers and acquisitions, due diligence, entity formation overall tax planning, as well as general business and tax consulting services. As an engagement Partner, he is responsible for supervising all audit, accounting, tax and consulting work performed including managing staff. Dan also has expertise in consultation with business owners and individuals regarding company operations and strategic planning, overall tax planning including individuals and their closely-held corporations, entity formation, analysis and control of costs and gross profits, and budgeting. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science Degree in Accounting from Northern Illinois University - C.P.A. license in the state of Illinois --- ### [Matthew Zindell, CPA, MST](https://waradydavis.com/staff/matthew-zindell-cpa/) **Published:** January 29, 2025 **Author:** Leslie Flinn **Content:** ## Background Matthew is a Partner in Warady & Davis LLP’s [tax practice](https://waradydavis.com/service/tax-services/). He has 15 years of public accounting experience providing tax planning and consulting for high net worth individuals and closely-held businesses. He has expertise with planning and compliance issues related to partnership, S-corporation and multi-state income taxation in a wide range of industries with special emphasis in commercial and residential real estate, manufacturing, and service businesses. ### Areas of Specialization - Business entity structure - Partnership allocation issues - Tiered partnerships - 754 basis adjustments - Real estate like-kind exchange transactions under Sec. 1031 - Nexus state income tax issues - Nonresident state income tax withholding requirements - Passive activity loss rules ### Professional Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Master of Science Taxation from Northern Illinois University - Bachelor of Science Accounting from Indiana University - C.P.A. license in the state of Illinois --- ### [Ronald Radtke, CPA](https://waradydavis.com/staff/ronald-radtke/) **Published:** December 21, 2019 **Author:** WaradyDavis **Content:** ## Background Ron has 40 years of public accounting experience with expertise in audit, accounting and tax issues for closely-held businesses. Prior to joining Warady & Davis LLP, Ron was a Partner with Goettsche, Tranen, Winter & Russo. He is a graduate of the University of Illinois, Champaign-Urbana and a member of our state and national societies of Certified Public Accountants. ### Areas of Specialization Ron’s extensive experience with a variety of family owned businesses makes him very familiar with their accounting and tax issues. As an audit partner with W&D, he is responsible for keeping current with the latest developments in financial reporting and accounting, leading and assuring the quality of audit, review and compilation engagements. ### Professional Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society ### Education - Bachelor of Science in Accounting, University of Illinois, Champaign- Urbana - Licensed CPA in the State of Illinois --- ### [David Faje](https://waradydavis.com/staff/david-faje/) **Published:** October 29, 2018 **Author:** WaradyDavis **Content:** ## Background David Faje is a Partner in Warady & Davis LLP’s Tax practice. For more than 25 years, David has managed tax engagements, examinations, and performed high-level research and tax planning. He is a specialist in tax compliance, planning and related issues for service companies, not-for-profit organizations and high net-worth individuals. Prior to joining Warady & Davis LLP, David was a Director-Tax with McGladrey LLP, a Senior Manager-Tax with American Express Tax and Business Services, Inc. and, a Senior Manager-Tax with Altschuler, Melvoin, and Glasser LLP. In addition to presenting to Audit Committees, some of David’s speaking activities include: The Lake County Estate Planning Council, Chicago-Kent College of Law’s Annual Conference on Not-for-Profit Organizations, Illinois CPA Society’s Nonprofit Special Interest Group, Jewish Federation of Metropolitan Chicago and the CPAs for the Public Interest. He has also written tax articles on a variety of topics. ### Education: - Masters of Science in Taxation from DePaul University - Bachelors of Science in Accounting from Northern Illinois University - C.P.A. license in the State of Illinois ### Professional & Civic Affiliations: - Member of the American Institute of Certified Public Accountants - Member of the Illinois CPA Society - MSI Legal & Accounting Network Worldwide --- ### [Alvin I. Siegel, CPA](https://waradydavis.com/staff/alvin-i-siegel-cpa-partner/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## In Memoriam Alvin I. Siegel was a Partner in the certified public accounting and consulting firm of Warady & Davis LLP. In this capacity, he directed and managed accounting, tax and consulting services for his clients. With 50+ years of experience, Mr. Siegel had in-depth expertise primarily in representation of closely-held operating businesses and professional practices including health care practitioners, attorneys, insurance agencies, motor carriers and similar businesses. He also had expertise with general contractors, manufacturers, distributors, not-for-profit companies, personal holding companies and in real estate. In addition, Mr. Siegel’s clients included high net worth individuals. **Former positions included:** - Owner & President in the certified public accounting firm of Alvin I. Siegel & Associates, Ltd. - Accounting and Audit Partner with Strauss, Snider, Siegel & White - Staff auditor and tax senior with George L. Weisbard & Co. in Chicago, Illinois ### Areas of Specialization Al’s areas of technical expertise included tax planning and consulting to owners of closely held businesses and high net worth individuals. He has also worked extensively in Internal Revenue Service examinations and negotiations as well as state examinations. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Business Administration, Roosevelt University - C.P.A. license in the state of Illinois > “We are what we repeatedly do. Excellence, then, is not an act, but a habit.”- Aristotle --- ### [Steven Masur, CPA](https://waradydavis.com/staff/steven-masur-cpa-former-partner-and-currently-of-counsel/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Steven Masur is currently a Partner with Warady & Davis LLP and formerly a Vice President with the Accounting and Consulting firm of Friedman & Masur, Ltd. Prior to his current position and since 1972, he was with three similar sized firms. From 1966 to 1971 Steve was with Price Waterhouse & Co. as a senior accountant and auditor. ### Areas of Specialization Steve specializes in serving the audit, accounting and tax needs of closely-held corporations, owners and high-net worth individuals including tax planning and preparation and consulting. His consulting activities include mergers and acquisitions, entity formation, estate planning, overall tax planning, benefit planning, buy/sell agreements, analysis and control of costs and gross profits, budgeting, short and long range strategic planning, as well as general business and tax consulting services. In addition, Steve acts as an educator for a variety of outside Certified Public Accountant continuing professional education courses and also serves as an instructor for the firm’s professional development curriculum, “W&D University.” ### Teaching - A.H.I. & Associates – Teaching seminars all over the country - American Institute of Certified Public Accountants - Illinois C.P.A. Foundation: Received 1990-1991 and 1993-1994 Instructor Excellence Award for Accounting and Auditing ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society – Offices Held: – General Chairman of Membership Committee – Chairman of Managing an Accounting Practice – Small Practice Unit - MSI Global Alliance ### Education - Bachelor of Science in Accountancy from the University of Illinois, graduated with honors - Masters of Accounting Science from the University of Illinois - C.P.A. license in the state of Illinois --- ### [Marc Heller, CPA, JD](https://waradydavis.com/staff/marc-heller-cpa-jd-partner-director-of-technical-tax-services/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Marc Heller is a Partner with Warady & Davis LLP. Marc serves as a technical tax expert and conducts in-depth research on client related tax issues. In addition, he monitors new accounting developments and tax regulations and keeps the firm abreast of any changes that may impact client operations. His practice is concentrated in the areas of income and corporate tax planning for privately owned businesses, not-for-profit organizations and individuals. In addition, Marc served for four years as a Field Agent for the Internal Revenue Service. Marc also served on the firm’s Executive Committee, which is responsible for the strategic direction of the firm and on the Business Development team. ### Areas of Specialization Estate, succession and family tax planning; tax planning for individuals and their closely-held corporations; federal and Illinois corporate, individual, partnership and fiduciary income tax planning; corporate formations, reorganizations and liquidations; choice of entity for new business formations; not-for-profit taxation and IRS representation including 501(c)(3) organizations. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science in Accountancy, University of Illinois - Juris Doctorate Degree, DePaul University of Chicago – School of Law - C.P.A. license in the state of Illinois --- ### [Kosta Tchobanov, CPA, MSA](https://waradydavis.com/staff/kosta-tchobanov-cpa-msa-partner/) **Published:** January 7, 2021 **Author:** WaradyDavis **Content:** ## Background Kosta Tchobanov is a Partner in Warady & Davis LLP’s Audit and Accounting practice with specialized experience in not-for-profit organizations including associations and foundations, health and welfare organizations, park districts, library and school district audits. Prior to joining Warady & Davis LLP, Kosta was an Audit Manager with Knutte & Associates, P.C. where he acted as the lead auditor for many private postsecondary schools, not-for-profit and governmental clients. Before his career in public accounting, Kosta also served as an internal auditor for Village Resorts, Inc. Kosta works on many of our not-for-profit audits as the Engagement Partner and has considerable experience in grant reporting including Single Audits. Kosta has achieved an advanced Single Audit Certification by the American Institute of Certified Public Accountants. He also has performed numerous audits of educational institutions and school districts. Additionally, Kosta has also served national and multi-national organizations. He is knowledgeable in all aspects of the financial reporting preparation and auditing process and has conducted Sarbanes-Oxley (SOX) compliance audits, as well as compliance audits for the Environmental Protection Agency, U.S. Department of Labor, Department of Education, Department of Health and Human Services, Department of Child and Family Services, Department of Housing and Urban Development and the Illinois State Board of Education. In addition, Kosta serves many for-profit clients in the real estate and healthcare industries by performing audits, reviews, compilations, consulting, tax return preparation and planning. Kosta’s extensive experience includes the preparation of Form 990 returns for organizations exempt from income tax, individual, corporate and partnership returns for various entities and helping clients establish their tax-exempt status with the IRS and the State Attorney General’s office. ### Education Kosta received his Masters of Science in Accounting degree from the University of Illinois at Chicago, his BA in Liberal Arts from Northeastern Illinois University and his BS in Accounting and Auditing from the University of National and World Economy. He is a licensed Certified Public Accountant in the State of Illinois. ### Professional and Civic Affiliations - Member of the American Institute of Certified Public Accountants - Member of the Illinois CPA Society - Member of University of Illinois Alumni Association - Northeastern Illinois University Alumni Association - Mensa --- ### [Alan J. Russo, CPA](https://waradydavis.com/staff/alan-russo/) **Published:** January 1, 2020 **Author:** WaradyDavis **Content:** ## Background Alan Russo has 37 years of corporate, partnership and individual tax and general business expertise. Prior to merging with Warady & Davis LLP (W&D), Alan was the Managing Partner of Goettsche, Tranen, Winter & Russo (GTW&R). Alan joined Goettsche, Tranen, Winter & Russo in 1987 as a tax manager, and became tax partner of the Firm in 1991. Upon graduation from business school, Alan worked at Arthur Andersen & Co. on their tax staff and was promoted on a fast track to tax manager in 1985. ### Areas of Specialization Alan’s areas of specialization include tax compliance, tax research and tax planning projects for both companies and individuals. His background encompasses both publicly traded and privately held companies and domestic as well as foreign tax matters and tax research. Additional areas of expertise include multi-state tax issues and the successful representation of clients before the IRS and various State authorities with respect to income and sales tax audits. ### Professional Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society ### Community & Business Involvement - Past Treasurer of North Suburban Synagogue Beth El ### Education - Masters of Management in Finance and Accounting from J.L. Kellogg Graduate School of Management - Bachelor of Arts Degree in Mathematics from Colgate University - Licensed CPA in the State of Illinois --- ### [Gary Rudenberg, CPA](https://waradydavis.com/staff/gary-rudenberg-cpa-co-managing-partner-executive-committee-member/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background For over 35 years, Gary has provided audit, accounting, tax and consulting services to a wide variety of industries, including real estate, manufacturing, hospitality, construction, distribution and numerous service industries. As Managing Partner, he leads strategic initiatives across the firm including focusing on implementing, monitoring, and modifying the firm’s strategic plan; provides strategic oversight on firm wide initiatives, the delivery of the highest level of service excellence to clients and the successful administration of the W&D practice. ### Areas of Specialization Estate, succession and family tax planning; overall tax planning for individuals and their closely-held corporations; entity formation, benefit planning, buy/sell agreements, analysis and control of costs and gross profits, budgeting, short and long range strategic planning, as well as general business and tax consulting services. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance - Board of Directors for the Foundation for Jackson Park Hospital - Serves on Numerous Committees Related to Children and Adults with Special Needs ### Education - Bachelor of Science in Accountancy, the University of Illinois at Urbana-Champaign - Licensed CPA in the State of Illinois > “To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.”– D. Adams --- ### [Henry R. Nutkevitch, CPA](https://waradydavis.com/staff/henry-nutkevitch/) **Published:** January 1, 2020 **Author:** WaradyDavis **Content:** ### Background Henry Nutkevitch has more than 25 years of public accounting experience. Henry prides himself on his corporate, partnership and individual client relationships. Originally from Montreal, Canada, he received a Bachelor of Commerce from Concordia University in Montreal, Quebec and went on to obtain a graduate diploma in public accountancy from McGill University. He subsequently moved to Chicago in 1996. ### Areas of Specialization Henry’s experience includes planning, performing and supervising audits, reviews and compilations for a wide range of clients including professional and electrical services, manufacturers and wholesalers. As part of these services, Henry prepares corporate, partnership, and individual tax returns in multiple jurisdictions throughout the U.S. His many years of experience, coupled with his technical expertise, enable Henry to guide a wide range of closely-held business clients not only in their day-to-day operations, but also as they expand and streamline operations, plan for future generations of ownership and their own exit strategies. His consulting activities include mergers and acquisitions, litigation support, entity formation, benefit planning, analysis and control of costs and gross profits, budgeting, short and long range strategic planning, as well as general business and tax consulting services. ### Professional Affiliations: - American Institute of Certified Public Accountants - Illinois CPA Society ### Community & Business Involvement: - Board of Directors, Jewish Reconstructionist Congregation – Past Treasurer - In his spare time, Henry enjoys playing ice hockey ### Education: - Bachelor of Commerce, Concordia University, Montreal, Canada. - Graduate Diploma in Public Accountancy. McGill University, Montreal, Canada - Licensed CPA in the State of Illinois - Chartered Professional Accountant in Canada, Inactive status --- ### [Scott Nathan, CPA, MST](https://waradydavis.com/staff/scott-nathan/) **Published:** January 1, 2020 **Author:** WaradyDavis **Content:** ## Background Scott Nathan is a Partner and Director of Tax Compliance for Warady & Davis LLP’s Tax practice. For more than 20 years, Scott has provided tax advisory and consulting services to privately-owned businesses and individuals, with a particular emphasis on the real estate and service industries. His experience includes tax planning and consulting on tax technical matters as well as representing clients in both Federal and State examinations. Prior to joining Warady & Davis LLP, Scott was a Tax Supervisor in RSM US LLP’s Chicago real estate practice. ### Areas of Specialization - Corporate Taxation - Fiduciary Taxation - Individual Taxation - Partnership Taxation - Multi-State Taxation - State and Local Taxation ### Professional Affiliations - Certified Public Accountant, State of Illinois - American Institute of Certified Public Accountants - Illinois CPA Society - Member of the State & Local Taxation Committee - MSI Global Alliance ### Education University of Illinois Urbana-Champaign - Master of Science, Taxation - Bachelor of Science, Accountancy --- ### [Susan Greggo, CPA, MS](https://waradydavis.com/staff/susan-greggo-cpa-partner-director-of-not-for-profit-services/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## Background Susan has 30 years of experience serving not-for-profit clients including charitable and social service organizations, membership organizations and associations, foundations, higher education, health care and state and local government entities. For the last 20 years, Susan has been with Warady & Davis LLP where she heads our not-for-profit services team and is a Partner in our audit and accounting practice. Previously, Susan was a Business Assurance Senior Manager with a Big Four Accounting firm where she specialized in not-for-profit clients. Many of these years were spent in Albany, New York prior to relocating to Chicago in 1996. Susan has taught professional education courses to firm personnel and has also been involved in training and recruiting efforts. Outside of her firm responsibilities, Susan also has taught as an adjunct or part-time faculty member at various colleges and universities in the Chicagoland area. While in New York, she was on several Albany college adjunct faculty listings including the State University of New York. ### Areas of Specialization Not only does Susan specialize in not-for-profit clients, she is a recognized leader in the industry. Sue is often called upon as a consultant on issues specific to not-for-profits by both clients and non-clients alike. She has made numerous presentations to Boards, Audit and Finance Committees. In addition, she has in-depth expertise in specialized not-for-profit issues including the Single Audit Act for those that receive federal awards. Her technical and business background also includes auditing, tax and consulting services and the management of engagements for a few other industries, including real estate. ### Professional and Civic Affiliations Susan serves on the Illinois CPA Society’s Not-for-Profit Committee and is the Chairperson of the Audit & Accounting subcommittee and the committee that puts together and plans the Society’s annual NFP Conference. While in Albany she was a Board member of the Northeast Chapter of the New York Society of CPAs; the manager responsible for the Albany office’s Supporting Youth Education Program; and a member of the Accountant’s VIP Committee for the Center for the Disabled. Additional memberships include: - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - B.S. Degree from Metropolitan State College in Denver, Colorado - M.S. degree in Accounting from the State University of New York at Albany - C.P.A. license in the State of Illinois and has held licenses in New York and Missouri > “One of the deep secrets of life is that all that is really worth doing is what we do for others.” > – L. Carol --- ### [Gerald Frishman, CPA](https://waradydavis.com/staff/gerald-frishman-cpa-former-managing-partner-and-currently-of-counsel/) **Published:** April 17, 2016 **Author:** WaradyDavis **Content:** ## In Memoriam It is with deepest regret that we inform you of the passing of Gerald (Jerry) Frishman, CPA, former Managing Partner of Warady & Davis LLP. Jerry was a talented accountant and Partner, but more importantly a mentor to many of us, great friend and colleague. Jerry’s influence and direction guided Warady & Davis to where we are today and we owe Jerry a great deal of gratitude. There truly are not enough words for us to express how we feel and what he meant to us all! Jerry was a tremendous advisor and confidant to many clients and contributed significantly to their success. Jerry was with the firm for 63 years, starting in 1959. With 60+ years of experience, he had a depth of expertise primarily in representation of closely-held operating businesses including real estate, construction, general contractors, manufacturers, distributors, family-owned businesses, wholesale and retail companies and professionals. In addition, Mr. Frishman’s clients included high net worth individuals. Jerry’s consultations centered on his client’s business needs and included discussions on tax planning, strategic planning, management challenges, due diligence, mergers & acquisitions and business succession, retirement, estate and financial planning among other key issues. ### Areas of Specialization Additional areas of expertise included: accounting, mergers and acquisitions, due diligence, entity formation, estate planning, overall tax planning, benefit planning, buy/sell agreements, short and long range strategic planning, financial planning as well as general business and tax consulting services. ### Professional and Civic Affiliations - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Arts in Business Administration, Roosevelt University - C.P.A. license in the state of Illinois > “What is success? I think it is a mixture of having a flair for the thing that you are doing; knowing that it is not enough, that you have got to have hard work and a certain sense of purpose.”- M. Thatcher --- ### [Ervin Rabor](https://waradydavis.com/staff/ervin-rabor/) **Published:** August 27, 2026 **Author:** Samantha Reyes **Content:** ## Background Ervin Rabor is a Manager with Warady & Davis LLP and has experience providing [audit](https://waradydavis.com/service/audit-and-accounting-services/), accounting, and tax services to a variety of organizations. He specializes in audit, review, and compilation engagements, with a focus on the nonprofit, construction, and real estate industries. Ervin also has experience serving multifamily housing projects, including those financed through HUD, [IHDA](https://www.ihda.org/), and other state-regulated housing programs. Prior to joining Warady & Davis LLP, Ervin was a member of CohnReznick’s audit and accounting team. ### Areas of Specialization - Audit and Advisory Services - Accounting Services - Financial Statement Reviews and Compilations - Agreed-Upon Procedures - Not-for-Profit Audits - Real Estate Audits - HUD and IHDA Compliance ### Professional Affiliations - Member of the American Institute of Certified Public Accountants - Member of the Illinois CPA Society - Toastmasters – Lakeview Chapter ### Education - Bachelor of Science in Accounting, Eastern Illinois University --- ### [Genalyn Francisco, CPA](https://waradydavis.com/staff/genalyn-francisco-cpa/) **Published:** July 24, 2026 **Author:** Samantha Reyes **Content:** ## Background Genalyn Francisco, CPA, is a Manager with Warady & Davis LLP and has more than 20 years of public accounting experience providing[ audit and advisory](https://waradydavis.com/service/audit-and-accounting-services/) services to privately held businesses and nonprofit organizations. She specializes in risk-based audits, financial reporting, and audit, review, and compilation engagements for nonprofit organizations, manufacturers, distributors, retailers, state agencies, and higher education institutions. Prior to joining Warady & Davis LLP, Genalyn provided audit and advisory services with BDO USA, P.C., and E. C. Ortiz & Co., LLP. ### Areas of Specialization - Audit and Advisory Services - Financial Statement Audits - Financial Reporting - Accounting Standards Implementation - Form 990 Compliance - Not-for-Profit Accounting and Auditing - Technical Accounting Research ### Professional Affiliations - Certified Public Accountant, State of Illinois and the Philippines - American Institute of Certified Public Accountants - Illinois CPA Society ### Education - Bachelor of Science in Accountancy, Polytechnic University of the Philippines, Manila, Philippines --- ### [Katherine Christiansen, CPA](https://waradydavis.com/staff/katherine-christiansen-cpa/) **Published:** February 23, 2026 **Author:** Samantha Reyes **Content:** ## Background Katherine Christiansen, CPA, is the Director of Employee Benefit Plan Services with Warady & Davis LLP and has more than 35 years of experience providing audit, accounting, and tax services to private companies, foundations, and their owners. She specializes in performing and supervising audit, review, and compilation engagements, as well as preparing and reviewing a variety of income tax returns. Kathy is also a leader of the firm’s Employee Benefit Plan Audit Team and has experience advising clients across industries including wholesale, real estate, and manufacturing. ### Areas of Specialization - Audit and Assurance - Financial Statement Preparation and Reporting - Employee Benefit Plan Audits - Corporate Taxation - Individual Taxation - Trust and Estate Taxation - Private Foundation Taxation ### Professional Affiliations - Certified Public Accountant, State of Illinois - American Institute of Certified Public Accountants - Illinois CPA Society ### Education - Bachelor of Science in Accounting, Valparaiso University --- ### [Izabela Puskarz, CPA](https://waradydavis.com/staff/izabela-puskarz-cpa/) **Published:** January 26, 2026 **Author:** Samantha Reyes **Content:** ## Background Izabela Puskarz, CPA, is a Tax Partner with Warady & Davis LLP and has more than 20 years of experience providing accounting, [tax, and consulting services](https://waradydavis.com/service/tax-services/) to domestic and international clients. She specializes in preparing and reviewing individual, partnership, and corporate tax returns across a wide range of industries. Izabela also has extensive experience representing clients in both federal and state audits and advising on complex tax compliance and planning matters. ### Areas of Specialization - Corporate Taxation - Individual Taxation - Partnership Taxation - Multistate Taxation - State and Local Taxation - Foreign Tax Reporting - IRS Audits and Correspondence ### Professional Affiliations - Certified Public Accountant, State of Illinois - Enrolled Agent, IRS - American Institute of Certified Public Accountants - MSI Global Alliance ### Education - Master of Science, Economics, University of Economics, Katowice, Poland --- ### [Amy Guerra, CPA](https://waradydavis.com/staff/amy-guerra-cpa-director-of-not-for-profit-services/) **Published:** April 2, 2025 **Author:** Leslie Flinn **Content:** ## Background Amy has more than 20 years of experience providing assurance services to [not-for-profit](https://waradydavis.com/industry/not-for-profit/) and [healthcare entities](https://waradydavis.com/industry/healthcare-accounting/). Specifically, Amy has extensive experience with audits of human service organizations, trade associations, private and operating foundations, and other not-for-profit organizations. Amy also has significant experience with audits subject to [Government Auditing Standards and the Uniform Guidance](https://www.aicpa-cima.com/resources/download/gaqc-firm-and-state-audit-organization-members). Clients served range from $20M to $300M in annual revenues. Prior to joining Warady & Davis LLP, Amy acted as the Assurance Technical Director, Nonprofit and Healthcare Industries with BDO USA, P.C.. ### Areas of Specialization - Serves as team leader on not-for-profit engagements, working on most difficult parts of job, and conducts engagement and quality control reviews. - Supports audit engagement teams in navigating complex auditing, accounting matters, reporting issues, and compliance issues. - Researches and disseminates information to the engagement teams related to recent pronouncements issued by the FASB and others that set standards for the nonprofit sector. - Applies technical knowledge to develop, administer, and deliver both internal and external webinars and training courses. - Presents and discusses financial information, misstatements, and other communications with the organization’s management, senior executives and board. - Authors comprehensive, research-driven not-for-profit technical articles. - Possesses knowledge in the preparation, review, and analysis of the Form 990. ### Professional Affiliations - American Institute of Certified Public Accountants - Member of the Illinois CPA Society Not-for-Profit Organizations Committee - Member of Healthcare Financial Managers Association - MSI Global Alliance ### Education - B.S., Accounting, University of Illinois at Urbana-Champaign - C.P.A. license in the State of Illinois --- ### [Nicholas DeMarco, CPA](https://waradydavis.com/staff/nicholas-demarco-cpa/) **Published:** January 14, 2026 **Author:** Leslie Flinn **Content:** ## Background Nick is a Manager in Warady & Davis LLP’s [tax practice](https://waradydavis.com/service/tax-services/) and has more than 20 years of public accounting experience providing tax, accounting and consulting services. His experience includes tax planning and preparation of individual and business returns across a wide range of industries including wholesale-distribution and manufacturing entities, real estate, and professional services. His primary focus is working with privately-held businesses and individuals. Prior to joining Warady & Davis LLP, Nick acted in a similar capacity with the public accounting firms Miller Cooper & Co Ltd, Dowell Group LLP, and DeMarco, Kinnaman, Lewis & Co. ### Areas of Specialization - Individual Taxation and Planning - Corporate Taxation and Entity Structure - Partnership Taxation including tiered partnerships and allocation issues - Multi-State Taxation and Nexus - Tax Research ### Professional Affiliations - Certified Public Accountant, State of Illinois - American Institute of Certified Public Accountants - Illinois CPA Society - MSI Global Alliance ### Education - Bachelor of Science Accounting University of Illinois, Urbana-Champaign, IL --- ## Categories ### [Uncategorized](https://waradydavis.com/category/uncategorized/) --- ### [Tax Scams](https://waradydavis.com/category/tax-scams/) --- ### [Managing Partner](https://waradydavis.com/category/managing-partner/) --- ### [Perspectives on Employee Benefits](https://waradydavis.com/category/perspectives-on-employee-benefits/) --- ### [Profitable Solutions for Nonprofits](https://waradydavis.com/category/profitable-solutions-for-nonprofits/) --- ### [Estate Planning](https://waradydavis.com/category/estate-planning/) --- ### [Manufacturing](https://waradydavis.com/category/manufacturing/) --- ### [Business Valuation](https://waradydavis.com/category/business-valuation/) --- ## Categories ### [Chicago accounting](https://waradydavis.com/service_categories/chicago-accounting/) --- ### [Chicago bookkeeping](https://waradydavis.com/service_categories/chicago-bookkeeping/) --- ### [Chicago outsource accounting](https://waradydavis.com/service_categories/chicago-outsource-accounting/) --- ### [Accounting](https://waradydavis.com/service_categories/accounting/) --- ### [bookkeeping](https://waradydavis.com/service_categories/bookkeeping/) --- ### [outsource accounting](https://waradydavis.com/service_categories/outsource-accounting/) --- ### [Chicago CPA firm](https://waradydavis.com/service_categories/chicago-cpa-firm/) --- ### [Top Chicago CPA firm](https://waradydavis.com/service_categories/top-chicago-cpa-firm/) --- ### [Chicago CPA firm accounting](https://waradydavis.com/service_categories/chicago-cpa-firm-accounting/) --- ### [Chicago CPA firm bookkeeping](https://waradydavis.com/service_categories/chicago-cpa-firm-bookkeeping/) --- ### [Chicago audit](https://waradydavis.com/service_categories/chicago-audit/) --- ### [Chicago business audit](https://waradydavis.com/service_categories/chicago-business-audit/) --- ### [audit](https://waradydavis.com/service_categories/audit/) --- ### [nonprofit audit](https://waradydavis.com/service_categories/nonprofit-audit/) --- ### [Chicago nonprofit audit](https://waradydavis.com/service_categories/chicago-nonprofit-audit/) --- ### [Chicago CPA audit](https://waradydavis.com/service_categories/chicago-cpa-audit/) --- ### [employee benefit plan audit](https://waradydavis.com/service_categories/employee-benefit-plan-audit/) --- ### [benefit plan audit](https://waradydavis.com/service_categories/benefit-plan-audit/) --- ### [EBP audit](https://waradydavis.com/service_categories/ebp-audit/) --- ### [Top Chicago audit firm](https://waradydavis.com/service_categories/top-chicago-audit-firm/) ---