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10 Ways to Pay Less in Tax Evanston IL

Small business owners face unique tax issues. Here are some ideas to help you get the most from your business deductions, avoid problems that can affect small business owners, and plan for the future.

Local Companies

Esp Tax Service
(773) 276-6393
3421 W North Ave
Chicago, IL

Certified Tax Service Inc.
(312) 337-3702
55 E Erie St
Chicago, IL

Checks & Balances Incorporated
(312) 329-9244
160 E Illinois St
Chicago, IL

Benjamin Joseph A
(312) 692-8300
200 W Monroe St
Chicago, IL

C Biz Accounting Tax & Advisory of Chicago Inc.
(312) 602-6800
1 S Wacker Dr
Chicago, IL

Crowe Chizek and Company LLC
(312) 899-7000
70 W Madison St
Chicago, IL

Accounting and Tax Network Inc.
(312) 432-0000
913 W Van Buren St
Chicago, IL

Jackson Hewitt
(847) 424-0322
830 Davis St
Evanston, IL

H & R Block
(847) 328-1958
635 Chicago Ave
Evanston, IL

Nadroj Operating
(847) 869-8170
805 Greenwood St
Evanston, IL

Keep good books and records for your business. Keep these records separate from records of your personal expenses.

Keep your business records as long as necessary. Generally, this is three years after the date you filed your income tax return. However, in some cases, it's a good idea to keep records even longer. Keep detailed depreciation records for as long as you own business property. You'll need them not only to figure your current-year depreciation deduction but also to figure your basis when you sell or otherwise dispose of the property.
If you need to hire employees for your business, consider employing family members.

This will allow you to shift income to members in lower tax brackets as long as they provide bona fide services to the business. (Depending on earnings, there may be no tax at all on wages paid to the child.) You also avoid the employer share of FICA on wages to your child under age 18. And you can set up a fully deductible health insurance plan if your spouse is your employee (since the plan will cover employees and their spouses -- that's you).
If you need to hire employees for your business and don't have any suitable family members, consider hiring workers who will give you a special tax benefit. Hiring certain workers entitles you to claim a tax credit (work opportunity credit, empowerment zone credit, or Indian employment credit). Before advertising for help, check with your state employment agency on whether it can assist you in getting workers who will entitle you to a tax credit.
Use the standard mileage rate to deduct your car expenses as a way of simplifying your record keeping if you are eligible to use this rate.

But if you have all receipts to show your car expenses, figure your deduction using the standard mileage rate and the actual expense method; then choose the method that gives you the greater deduction. In either case, be sure to keep track of the dates, mileage, and purpose of your automobile use.
Keep records to substantiate your travel and entertainment expenses.

While you don't have to keep receipts for expenses (other than lodging) of $75 or less, you must still note in a log or diary the business purpose for the expense, the date it was incurred, and the amount you spent.
Plan equipment purchases carefully to get the most from your depreciation deductions.

Because of conventions, the timing of your purchase can affect the amount of depreciation you can deduct. Or you may be able to expense up to $24,000 ($25,000 in 2003) of the cost of equipment as long as you begin to use it by the last day of the year.
Use retirement plans not only to save for your retirement needs but also to reduce current taxes.

If you have not yet set up a retirement plan, consider a Keogh, SEP or SIMPLE plan to put more away on a tax-deductible basis than you can under an IRA. But if the tax year has closed and you haven't set up a Keogh, then look to the other plans, which allow you to set them up and make contributions until the due date of your return (including extensions) that will be deductible for the prior year. For example, if you receive a four-month filing extension, you can set up a SEP and fund it for 2001 as late as August 15, 2002.
If you have a sideline business that shows a loss, make sure you run it in a businesslike way, in order to prove your profit motive (so your loss will be deductible).

Keep separate books and records, and business bank accounts, and change business operations with an eye toward making a profit.
File your income tax return on time or obtain a filing extension.

If you don't, you risk interest and penalties for late filing. You also lose the opportunity to make certain tax elections required to be made on a timely filed return.
If your business suffered a loss, get the most benefit from a net operating loss.

Carry back the loss to generate an immediate tax refund. Or, if you anticipate greater profits in the future that will put you into a higher tax bracket, consider waiving the net operating loss carryback and carrying your loss forward to 2002. Be sure to keep track of NOLs arising before 1998 separately from those in 1998 and later years because of different carryforward periods.

Featured Local Company

Esp Tax Service

(773) 276-6393
3421 W North Ave
Chicago, IL

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