If there is one thing that we value at Accounting Solutions Ltd., it is feedback from our clients. Some of the most positive comments that we have received revolve around our commitment to keeping our customers up to date with the newest sets of tax rules and regulations. By keeping up with these new rules, and consulting with a CPA when the time comes, you can help avoid any of the pitfalls associated with following dated taxation protocols. With tax season looming around the corner, we decided that it is time to provide yet another update of the changes that will be affecting the people of Illinois in the New Year.
Income Tax: Income tax rates were adjusted on July 1st, 2017, with increases being imposed upon individuals, trusts, estates, and corporations. The income tax for those first three groups was increased from 3.75 percent to 4.95 percent, while corporate income tax has shifted from 5.25 percent to 7 percent. In addition, tax years beginning on or after January 1st, 2018 will be offered an earned income credit increase to 18 percent of the federal earned income tax credit.
Education: Starting in the New Year, the K-12 Education Expense Credit has been increased to $750.00 per family. This credit is not granted if the taxpayer’s annual income exceeds $500,000. In addition, as of January 1st 2017, those that fall within this income bracket are no longer eligible for the Illinois Property Tax Credit. A new credit has also been implemented known as the Instructional Materials and Supplies Credit. This credit offers exemptions up to-or equal to- $250.00 for funds allocated towards items needed to supply any classroom setting. The main clause here is that the taxpayer must be a qualified teacher, counsellor, principal, or instructor for at least 900 hours during the school year.
R & D: The Research and Development Credit, which was not included in the 2016-2017 tax year, has been reinstated. Now organizations that are eligible to make claims based off of their commitment towards advancements in science and technology are able to do so. Claims can be made for years where it was not in effect from 2016 onwards.
Unitary Businesses: Noncombination rules have been eliminated for unitary business groups as of December 31st, 2017. These businesses are also no longer able to exclude members which are formerly required to apportion business income under subsections of Section 304. Another big change here revolves around how this clause defines ‘United States’. Now, unitary businesses are recognized under any area where the US has asserted jurisdiction or claimed in the name of exploring and exploiting natural resources.
Sales and Use Tax Changes: There have been various exemptions that have been altered or expanded for the upcoming tax season. These include the manufacturing and assembling machinery and equipment exemption, which has been expanded so as to encompass devices used in the production and distribution of graphic arts. There has also been an extension made to the 100 percent exemption for majority blended ethanol fuel, biodiesel blends with 10-99 perecent biodiesel, and 100 percent biodiesel, with exemptions being offered up until December 31st, 2023.
The world of taxation is a complicated one, and we continue to work around the clock in order to maintain a coherent understanding of how alterations to current rules impact our clients and local business in general. For the sake of being concise, we have omitted some of the more specific details and definitions that may be needed in order to have a full understanding of some of these changes. Since this is the case, feel free to reach out to us, we would love to offer a free consultation or provide any clarification regarding how these rules may influence you in the upcoming tax season.
773-267-7500
chris@accountingsolutionsltd.com
