October 2014 Archives

Avoiding tax penalties through voluntary disclosure

It is not uncommon for a business to have debts related to underpayment of taxes in previous years. The underpayment could have been caused by a tax return that was prepared incorrectly. It also could have been caused by a temporary cash crisis that left the business unable to pay some basic bills. Whatever the cause, Illinois businesses that have underpaid often face growing fees and penalties, especially if the taxes are long overdue.

What is needed to hire an independent contractor

Illinois businesses may be interested in hiring independent contractors. Doing that requires meeting certain requirements that are used to classify a worker as an independent contractor. Meeting these conditions is particularly important at tax time. A business is not required to provide benefits such as health care, unemployment and Social Security tax when a worker is hired as an independent contractor. The worker becomes responsible for paying state and federal taxes and must obtain health insurance and other benefits that are normally the employer's responsibility. Independent contractors must file their own taxes using the 1099 form provided by the business.

Capital and liability concerns in Illinois business formation

Prior to starting a business in Illinois, entrepreneurs must give some thought to what business structure best matches their goals and needs. The choice between several types of business entities can affect the ability to raise capital, costs of routine administration, the potential liability of the owners and the tax liabilities.

Understanding business taxes

Entrepreneurs in Illinois may benefit from learning about common types of business taxes identified by the Internal Revenue Service. The scope and structure of the business operation typically determines the type and amount of taxes that are owed. Annual income tax returns are required from of all businesses, excluding partnerships. The IRS requires partnerships to file information returns.

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