As we move into spring, business owners have a golden opportunity to clean up their books, fine-tune their financial strategies, and set the stage for success in the months ahead. Whether you’ve just wrapped up tax season or are gearing up for the next quarter, now is the perfect time to refresh your business finances.

1. Review Your Financial Statements
Start with a deep dive into your profit and loss statement, balance sheet, and cash flow statement. Understanding where your business stands financially will help you make informed decisions for the rest of the year. Look for trends, identify areas for improvement, and ensure your numbers align with your business goals.

2. Clean Up Outstanding Invoices & Payables
Unpaid invoices and late payments can disrupt your cash flow. Now is the time to follow up with clients on outstanding payments and reconcile your accounts payable. If late payments are a recurring issue, consider setting up automated reminders or offering small discounts for early payments.

3. Evaluate Your Budget & Adjust for the Year Ahead
Your business goals may have evolved since the start of the year, and your budget should reflect that. Take a fresh look at your expenses, revenue projections, and upcoming investments. Adjust your budget to optimize spending and ensure you’re on track to meet your financial objectives.

4. Maximize Tax Deductions & Plan for Next Year
While tax season may be behind you, now is the best time to plan for next year’s tax filing. Review your expenses to ensure you’re maximizing deductions and consider strategies like increasing retirement contributions, investing in business improvements, or adjusting your estimated tax payments.

5. Assess Your Business Growth Strategy
Are you planning to expand your team, invest in new technology, or explore new markets this year? Take a financial pulse check to see if your business can support these growth initiatives. If funding is needed, now is a great time to explore financing options like SBA loans, business lines of credit, or grants.

6. Refresh Your Payroll & Employee Benefits
Spring is also a great time to evaluate your payroll processes and employee benefits. Are you offering competitive salaries? Do you need to adjust for upcoming wage changes? Take this opportunity to ensure compliance and employee satisfaction.

7. Streamline Your Accounting Systems
If you’re still managing your books manually, consider switching to cloud-based accounting software that integrates with your business banking and payroll systems. Automating repetitive accounting tasks can save time and reduce errors.

8. Get Professional Guidance
​Business finances can be complex, and a second set of eyes can make all the difference. Consider working with an accountant or financial advisor to fine-tune your strategies and ensure you’re making the best financial decisions for your business.

Spring is all about renewal, and your business finances should be no exception. Take the time to clean up, plan ahead, and set yourself up for a strong and profitable year!

As of January 1, 2025, several legislative changes in Illinois have introduced new accounting and financial reporting requirements for businesses in the Chicagoland area. To ensure compliance and maintain accurate financial records, consider the following key updates:

1. Destination-Based Retailers' Occupation Tax (ROT)
Illinois has shifted to a destination-based ROT system, affecting how sales taxes are collected and remitted:

• Previous System: Retailers collected tax based on the location of the seller.
• New System: Taxes are now based on the location where the purchaser takes possession of the goods.
  
  

Action Steps: Update your accounting systems to calculate sales tax based on the customer's location. Ensure that your invoicing and point-of-sale systems reflect the correct tax rates for each jurisdiction.

2. Vendor's Discount Cap and Interchange Fee Prohibition
Changes affecting cash flow and transaction processing include:

• Vendor's Discount Cap: The discount for timely filing sales and use tax returns is now capped at $1,000 per month.
• Interchange Fee Prohibition: Effective July 1, 2025, interchange fees on the tax and gratuity portions of credit card transactions are prohibited, provided merchants inform banks of these amounts.

Action Steps: Adjust your financial projections to account for the capped vendor's discount. Coordinate with your payment processors to comply with the new interchange fee regulations, ensuring your systems can communicate tax and gratuity details appropriately.

3. Pay Transparency Requirements
The Illinois Equal Pay Act mandates that employers with 15 or more employees include pay scales and benefits in all job postings.

Action Steps: Review and update your job posting templates to incorporate salary and benefits information. Ensure that your payroll systems are aligned with the advertised compensation to maintain consistency and compliance.

4. Personnel Record Disclosure Obligations
Amendments to the Personnel Record Review Act require employers to provide employees access to various employment-related documents upon request, including benefits-related records, employment contracts, handbooks, and policies affecting employment qualifications.

Action Steps: Implement a process to handle personnel record requests efficiently. Maintain organized and up-to-date records to facilitate timely compliance.

5. Minimum Wage Increase
The state minimum wage has increased to $15 per hour as of January 1, 2025.

Action Steps: Update your payroll systems to reflect the new wage rates. Review your budgeting and financial planning to accommodate the increased labor costs.

Staying informed about these legislative changes is crucial for maintaining compliance and ensuring accurate financial reporting. Regularly consult with accounting professionals to adapt your practices to the evolving regulatory landscape.

Read more: www.dailyherald.com/20250222/business/new-year-new-laws-affecting-businesses-in-2025/

As the 2025 tax season kicks off, the Better Business Bureau (BBB) reminds us that it's not just the time to file taxes—it’s also scam season. Fraudsters use this opportunity to prey on taxpayers, aiming to steal money, sensitive personal information, and peace of mind. Staying informed and vigilant can help protect you from falling victim to these schemes.

Why Tax Season Is Prime Time for Scammers
According to the Internal Revenue Service (IRS), taxpayers lost a staggering $5.5 billion to tax-related fraud in 2023. With the 2025 tax filing deadline set for April 15, scammers are already targeting individuals with impersonation calls, fake emails, and fraudulent tax preparer schemes.

Steve J. Bernas, president of the BBB, emphasizes the challenge: “Because of the intricacies of filing your taxes, falling victim to a tax scammer is not inconceivable.” Scammers manipulate emotions like fear and urgency to deceive people, making it critical to stay alert.

Top Scams to Watch Out For

1. IRS Impersonation Scams:
   • Scammers may call or email pretending to be IRS agents, often claiming you owe back taxes.
   • They may demand immediate payment via gift cards, prepaid debit cards, wire transfers, or cryptocurrencies.
2. Fake Tax Preparers:
   • Fraudulent tax professionals may falsify your return to inflate refunds or steal your refund entirely.
   • Be cautious of preparers who refuse to sign your return or do not have a Preparer Tax Identification Number (PTIN).
3. Phishing Emails:
   • Emails designed to look like official IRS correspondence might direct you to fake websites to steal your information.

Protecting Yourself During Tax SeasonTo safeguard yourself, follow these practical tips:

• Verify Tax Preparers: Research tax preparers and verify their credentials with the IRS or BBB. Never sign a blank tax return.
• Avoid Urgent Payment Requests: The IRS will never call to demand immediate payment or threaten you with jail time. Payments should always be made directly to the IRS using official methods.
• Check Your Refund Status Securely: Visit the official IRS website at IRS.gov to track your refund. Avoid clicking links in emails or text messages.
• Be Wary of Caller ID: Scammers can spoof IRS numbers to look legitimate. Hang up if you're unsure and call the IRS directly at their official contact number.

Additional Steps for Security

• Secure Your Personal Information: Shred sensitive documents, avoid sharing your Social Security number unnecessarily, and ensure your devices are protected with strong passwords.
• Report Suspicious Activity: If you suspect fraud, report it to the IRS and BBB immediately. Quick reporting can prevent further financial damage.

The Importance of AwarenessTax season can feel overwhelming, but staying informed is your best defense against scams. Fraudsters thrive on confusion and fear, but you can outsmart them by staying vigilant and proactive. If in doubt, consult a trusted professional or visit the official IRS and BBB websites for accurate information.
​
Let’s make 2025 a year of safe and stress-free tax filing!

​https://www.dailyherald.com/20250126/business/its-tax-season-bbb-warns-to-watch-out-for-scammers-ready-to-siphon-returns/

​As the calendar year comes to a close, December is the perfect time for businesses to evaluate their financial health and lay the groundwork for a prosperous new year. Strategic financial planning now can help you maximize savings, minimize liabilities, and set clear goals for the future.
Here are three critical areas to focus on as you prepare for year-end financial planning.

1. Tax Strategies: Maximize Deductions and Credits
Tax planning is a vital part of year-end financial preparation. Taking proactive steps now can reduce your tax burden and boost your bottom line.

• Review Deductions: Ensure you’ve accounted for all eligible business expenses, such as office supplies, travel costs, and employee benefits.
• Accelerate Expenses: Consider making additional purchases or paying upcoming expenses before year-end to increase deductible costs for the current fiscal year.
• Defer Income: If feasible, delay income receipt until January to shift tax liability to the next year, especially if you anticipate a lower tax rate then.
• Leverage Tax Credits: Research credits you may qualify for, such as those for hiring employees, investing in clean energy, or conducting research and development.

Collaborate with a tax professional to ensure you’re maximizing your deductions and credits while staying compliant with regulations.

2. Budget Planning: Set Realistic Goals for 2025
A well-structured budget is the cornerstone of financial success. Use this time to evaluate your 2024 performance and refine your strategy for the upcoming year.

• Analyze Past Performance: Review this year’s financial data to identify trends in revenue, expenses, and profit margins. Determine areas where you over- or under-spent.
• Set Priorities: Establish clear financial goals for 2025, whether it’s increasing revenue, reducing expenses, or investing in growth initiatives.
• Build a Contingency Fund: Allocate funds for unexpected expenses to ensure your business remains resilient in the face of challenges.
• Engage Your Team: Involve key stakeholders in the budgeting process to ensure alignment with organizational goals and realistic expectations.

By planning your budget thoughtfully, you’ll set your business up for success and avoid financial surprises.

3. Investment Opportunities: Plan for Growth
Year-end is also a great time to explore new opportunities to grow and strengthen your business in the upcoming year.

• Upgrade Technology: Invest in software, equipment, or systems that will improve efficiency or enhance customer experiences.
• Expand Your Offerings: Explore launching new products or services to diversify revenue streams.
• Professional Development: Allocate funds for employee training or leadership development to enhance team capabilities.
• Explore Tax-Advantaged Investments: Consider investments like retirement plans or energy-efficient upgrades that provide both growth potential and tax benefits.

Carefully evaluate each opportunity to ensure it aligns with your business goals and offers a strong return on investment.

Get Started TodayYear-end financial planning doesn’t have to be overwhelming. By focusing on tax strategies, budget planning, and investment opportunities, you’ll create a solid foundation for a successful 2025. To ensure your efforts are effective, consult with financial advisors, accountants, or tax professionals who can provide tailored guidance for your business.
​
With thoughtful planning, you can finish the year strong and step into the new year with confidence.
Here’s to your financial success in 2025! 🎉💼

Corporate Transparency Act
If you own an interest in a legal entity, you will likely need to comply with new reporting requirements, in some cases as early as January 1, 2024. In 2021, Congress enacted the Corporate Transparency Act (“CTA”), which tasked the U.S. Treasury Department with developing a system of standardized reporting for companies (including LLCs and partnerships) being formed in the U.S. and the disclosure of their beneficial ownership information. Failure to comply with these new obligations brings potential civil and criminal penalties to individual business owners.

Who Needs to Report?
The CTA requires privately owned corporations, LLCs, partnerships, and other legal entities formed by a filing with a Secretary of State (“Reporting Companies”) to disclose information about their beneficial owners and/or controlling members. Reporting is required for individuals who have “substantial control” over the company or control at least 25% of the entity. All reporting must occur through an online portal established on the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) website.

What Information Needs to Be Reported?
Reporting companies must disclose:

• (a) the name of the reporting company,
• (b) any trade name or “doing business as” name,
• (c) the business street address,
• (d) the state of formation, and
• (e) the Taxpayer Identification Number (TIN) under which the reporting company reports to the IRS.

Each beneficial owner must report the individual’s:

• (i) full legal name,
• (ii) date of birth,
• (iii) business (or residential) address, and
• (iv) either passport or state driver’s license number (including a scanned copy of the document).

As ownership of the entity changes, the beneficial ownership information must be updated, creating an ongoing CTA reporting requirement.

When to Report?

• Companies formed or registered to do business in the U.S. after January 1, 2024, must report the identities of their beneficial owners within 90 days of formation.
• Companies formed before January 1, 2024, have until January 1, 2025, to report their current beneficial owners.
• Any changes to beneficial ownership after January 1, 2025, must be reported within 30 days of the change.

Reporting Violations
The CTA establishes penalties for failing to provide accurate and up-to-date information to FinCEN. Violators may face:
(a) civil penalties of up to $500 per day for each violation, or
(b) criminal penalties of up to $10,000 and imprisonment for up to two years.

NEXT STEPS
​GLM has created and is offering a service package to complete your Beneficial Ownership information filings with the appropriate agency. Our fee for this service begins at a base price of $195.00 (including one shareholder or member) and an extra $100.00 per additional shareholder or member.
If you would like GLM to complete CTA compliance filings, please sign and date this page and send it back to us. You will also need to include:

• A current copy (PDF, not expired) of a government-issued identification form for each shareholder/member that owns 25% or more of the company.

Our deadline to complete the filings is June 30, 2024.

Should Business Owners Itemize or Take the Standard Deduction on Their Tax Returns?

Introduction:
Tax season can be daunting for business owners, with various decisions to make regarding deductions and credits. One crucial decision is whether to itemize deductions or take the standard deduction. This choice can significantly impact your tax liability and financial well-being. In this blog post, we'll explore the factors business owners should consider when deciding between itemizing and taking the standard deduction.

Understanding Itemized Deductions and the Standard Deduction:
Before delving into the decision-making process, let's clarify the difference between itemized deductions and the standard deduction:

1. Itemized Deductions: These are individual expenses that you can claim on your tax return to reduce your taxable income. Common itemized deductions for business owners may include mortgage interest, property taxes, medical expenses, charitable contributions, and certain business expenses.

2. Standard Deduction: This is a fixed dollar amount that reduces the amount of income on which you're taxed. The standard deduction is available to all taxpayers, regardless of their expenses. The amount varies depending on your filing status.

Factors to Consider for Business Owners:

1. Total Deductible Expenses:
   - Evaluate your deductible expenses for the tax year. Calculate the sum of your potential itemized deductions, including both personal and business-related expenses. Consider expenses such as mortgage interest, property taxes, state and local taxes, medical expenses, charitable donations, and allowable business expenses.

2. Documentation and Record-Keeping:
   - Itemizing deductions requires meticulous record-keeping and documentation of expenses. Ensure that you have accurate records to substantiate each deductible expense. Maintaining organized records throughout the year can streamline the tax-filing process and minimize the risk of audits.

3. Time and Complexity:
   - Itemizing deductions typically involves more time and effort compared to taking the standard deduction. You'll need to gather supporting documents, compute each deduction category, and complete additional forms. Consider whether the potential tax savings outweigh the additional time and complexity involved in itemizing.

4. Tax Savings:
   - Compare the tax savings generated by itemizing deductions versus taking the standard deduction. Use tax preparation software or consult with a tax professional to estimate your tax liability under both scenarios. Opt for the option that minimizes your tax burden while adhering to IRS regulations.

5. Changes in Tax Laws:
   - Stay informed about changes in tax laws that may affect deductible expenses and the standard deduction amount. Tax laws are subject to revision, and certain deductions or credits may be phased out or modified over time. Consider consulting with a tax advisor to navigate recent legislative changes and optimize your tax strategy.

Conclusion:
Deciding whether to itemize deductions or take the standard deduction is a significant choice for business owners. It requires careful consideration of various factors, including deductible expenses, documentation requirements, time constraints, potential tax savings, and changes in tax laws. By evaluating these factors thoughtfully and seeking professional guidance when necessary, business owners can make informed decisions that optimize their tax outcomes and financial well-being.

In a world where financial crimes and money laundering pose significant threats to the integrity of global economies, transparency emerges as a formidable weapon. The Corporate Transparency Act, enacted in 2021, stands as a testament to this principle. By requiring most businesses to register with the Financial Crimes Enforcement Network (FinCEN) by January 1, 2024, the act aims to unveil beneficial ownership structures, fortifying the defenses against illicit financial activities.

The essence of the Corporate Transparency Act lies in its ability to pierce the opaque veils that shroud the ownership of businesses. By mandating businesses to disclose their beneficial owners—individuals who directly or indirectly wield significant control over the company—the act empowers regulatory bodies to track and mitigate the risks associated with financial crimes.

For many businesses, the prospect of registering with FinCEN might seem daunting, fraught with complexities and uncertainties. However, amidst the challenges, there exists a plethora of resources and guides designed to streamline the registration process and alleviate any apprehensions.

One indispensable resource is FinCEN's own website https://www.fincen.gov/, a treasure trove of information and tools tailored to facilitate compliance with the Corporate Transparency Act. Here, businesses can find detailed explanations of regulatory requirements, step-by-step guides for registration, and answers to frequently asked questions. Navigating FinCEN's website is akin to embarking on a guided journey towards transparency and compliance.

Moreover, local business associations stand as pillars of support for businesses endeavoring to navigate the intricacies of the Corporate Transparency Act. These associations often offer seminars, workshops, and one-on-one consultations aimed at demystifying the registration process and addressing specific concerns. By tapping into the collective knowledge and experience of these associations, businesses can gain invaluable insights and guidance.

Embracing transparency under the Corporate Transparency Act not only aligns businesses with regulatory mandates but also cultivates trust and credibility within the financial ecosystem. By shedding light on beneficial ownership, businesses demonstrate their commitment to integrity and accountability, fostering a climate where financial crimes find no sanctuary.

As the deadline for registration with FinCEN approaches, businesses must seize the opportunity to equip themselves with the necessary knowledge and resources. Through proactive engagement with FinCEN's website and local business associations, businesses can navigate the registration process with confidence and ensure compliance with the Corporate Transparency Act.

In the pursuit of a more transparent and resilient financial landscape, every business plays a pivotal role. By embracing the principles embodied in the Corporate Transparency Act, businesses pave the way for a future where financial crimes are met with unwavering scrutiny and accountability. Together, let us illuminate the path towards a safer and more transparent business environment.

Read the Daily Herald Article here: 
New law requires transparency in company ownership (dailyherald.com)

In today's dynamic economy, the concept of a "side gig" has gained significant traction. Whether it's pursuing a hobby, a creative pursuit, or leveraging professional skills, many individuals are opting to supplement their income through side ventures. However, the transition from a casual hobby to a thriving business requires a strategic shift in mindset and approach. Treating your side gig like a business is not just about making a few extra bucks; it's about maximizing potential, fostering growth, and achieving long-term success. Here are some essential strategies to elevate your side gig to the next level:

1. Define Your Goals:
Just like any successful business, clarity of purpose is fundamental. Ask yourself: What do I aim to achieve with my side gig? Is it financial independence, creative fulfillment, or something else? Establish specific, measurable, achievable, relevant, and time-bound (SMART) goals to guide your efforts.

2. Develop a Business Plan:
A well-thought-out business plan serves as a roadmap for your side gig. Define your target market, articulate your value proposition, outline revenue streams, and set a budget. While it doesn't need to be as elaborate as a corporate plan, it should provide a clear direction and help you stay focused on your objectives.

3. Prioritize Time Management:
Balancing a side gig alongside other commitments demands effective time management. Treat your side gig with the same level of respect as your primary job. Set aside dedicated blocks of time for tasks such as product development, marketing, and customer service. Tools like calendars, to-do lists, and productivity apps can be invaluable in maximizing productivity.

4. Invest in Professional Development:
Continuous learning is essential for personal and business growth. Invest time and resources in acquiring new skills relevant to your side gig. Whether it's attending workshops, online courses, or seeking mentorship, honing your expertise will enhance the quality of your offerings and differentiate you from competitors.

5. Build a Strong Brand Identity:
Your side gig is not just about what you offer but how you present it to the world. Develop a compelling brand identity that reflects your values, resonates with your target audience, and sets you apart in the marketplace. Consistency in branding across your website, social media profiles, and marketing materials will enhance recognition and trust.

6. Focus on Customer Experience:
Happy customers are the lifeblood of any successful business. Prioritize delivering exceptional customer service and building meaningful relationships with your clientele. Solicit feedback, address concerns promptly, and go the extra mile to exceed expectations. A satisfied customer is not just a one-time sale but a potential advocate for your brand.

7. Monitor Finances Closely:
Effective financial management is crucial for the sustainability of your side gig. Keep meticulous records of income and expenses, set aside funds for taxes, and regularly assess your financial performance against your goals. Consider consulting with a financial advisor or using accounting software to ensure accuracy and compliance.

8. Scale Strategically:
As your side gig grows, resist the temptation to overextend yourself prematurely. Scale your operations gradually, reinvesting profits into areas such as marketing, product development, or hiring assistance. Maintain a keen focus on maintaining quality and customer satisfaction throughout periods of expansion.

9. Stay Flexible and Adapt:
The business landscape is constantly evolving, and agility is key to survival. Remain open to feedback, market trends, and emerging opportunities. Be willing to pivot your strategy or explore new avenues if it aligns with your long-term vision and enhances the viability of your side gig.

10. Celebrate Milestones:
Amidst the hustle and bustle of entrepreneurship, it's essential to pause and celebrate your achievements. Whether it's reaching a sales milestone, launching a new product, or securing a significant partnership, take the time to acknowledge your progress and express gratitude for the support of your customers and supporters.

In conclusion, treating your side gig like a business is not just a mindset shift; it's a commitment to excellence, resilience, and growth. By applying strategic planning, dedication, and a customer-centric approach, you can transform your passion project into a thriving and sustainable venture. Remember, every successful business started as a small idea—yours could be the next success story.

The Daily Herald had an article on Sunday February 18th 2024 that gets into the finances of it all:
https://www.dailyherald.com/20240218/small-business/how-and-why-to-treat-your-side-gigs-like-businesses/