Each quarter, millions of business owners all over the country face their taxes. It can be a stressful task, especially since tax codes are always changing. Different regulations, tax breaks, incentives and other items are always taken in and out of tax laws, and Illinois is no different. There are plenty of incentives available to small businesses under Illinois law, but there are also areas of the tax code that could affect your business. Listed below are some aspects of Illinois tax laws of which to be aware.
What’s working for you
Illinois has a number of tax credits and incentive programs to help small businesses thrive. Such credits are available for businesses located in the River Edge Redevelopment Zone for a variety of factors, including environmental remediation and property taxes. Check out the state’s website for more information. The City of Chicago also has some of its own small business credits available, which may help you offset your state liabilities. Find resources on the City’s website.
What’s working against you
Many of these small business tax incentive programs are reaching their sunset, or they are quickly exhausted. With limited funds, you need to apply early in order to have a higher chance of receiving the incentives. Before applying for any statewide incentive programs, it’s important to check in with the state to ensure that funding is still available.
What’s blocking you
Illinois potentially faces one of the highest small business tax rates in the country. According to the Illinois Department of Revenue, the tax rate for 2015 and beyond is 5.25 percent of a company’s income. However, in April 2016, state legislators considered a bill that would eventually increase the tax rate for small businesses to 11.25%, as detailed by the Tax Foundation. The best way to ensure that you are in compliance with all tax laws, and taking advantage of incentives and deductions, is to consult a tax professional at least twice a year. It is one of the best ways in which to be proactive about meeting all of your tax obligations.
This article was written by Alaina Brandenburger for CBS Small Business Pulse.