Section 1031 of the Internal Revenue Code allows the deferral of gain on the sale and subsequent purchase of real property used for business use or investment. An exchange is much like a typical sale followed by an acquisition within 180 days but with a few rules attached.

BENEFITS OF AN EXCHANGE
This often overlooked tax strategy can help you accomplish many short and long-term real estate objectives:

• Immediate tax deferral
• Ability to acquire real estate with pre-tax dollars
• Long-term appreciation on tax deferral
• Estate preservation as deferred gain may be forgiven upon death
• Less management responsibility
• Consolidation of properties
• Greater selling and buying power
• Increased income potential
• Relocation or expansion of business facilities
• Diversification of assets or geographic locations
• Conversion to personal use property after a period of qualified use
• Exit strategy for business owners

Learn More:
COMPLIMENTS OF:
​Connie Custer, Business Development
1031 CORP.
100 Springhouse Drive, Suite 203
Collegeville, PA 19426

Office: 610.792.4880 ext. 230
Cell: 610.724.5195
Email: connie@1031CORP.com
Website: www.1031CORP.com

Taken from the Daily Herald on September 25th 2021. By KELSEY SHEEHY of NerdWallet

The pandemic isn't crushing the entrepreneurial spirit. It's fueling it.

People normally tied to a desk or working double shifts used lockdown to launch side hustles, often out of necessity. And some have turned those side gigs into full-fledged businesses.

These basic but essential steps can help you take things to the next level and give your new venture a shot at staying power.

1. CHOOSE A BUSINESS STRUCTURE
2. OPEN A BUSINESS BANK ACCOUNT
3. UPGRADE YOUR BOOKKEEPING
4. SPELL OUT YOUR BUSINESS PLAN
5. INVEST IN PROFESSIONAL HELP

Read the Whole Article here: 
​www.dailyherald.com/business/20210925/millennial-money-5-steps-to-level-up-your-side-hustle

Employers in Illinois with at least 5 employees must soon comply with the Illinois Secure Choice Savings Program Act (Secure Choice) or offer employees an employer-sponsored retirement plan.

​Background
Secure Choice requires employers to automatically withhold five percent of an employee’s compensation (up to the annual maximum allowed for IRA contributions each year as provided by the IRS), unless the employee elects a different amount or opts out of the program, and to remit those contributions to the Secure Choice program.
Under the original program, employers that satisfy these criteria are subject to the Secure Choice program:

1. Have at least 25 employees as reported to the Illinois Department of Employment Security (IDES) for unemployment insurance payments;
2. Have been operating in Illinois for at least two years; and
3. Do not offer a qualified retirement plan to any Illinois employees. (A qualified retirement plan under sections 401(a), 401(k), 403(a), 403(b), 408(k), 408(p), or 457(b).)

New Requirements
The newly enacted law makes several notable changes to Secure Choice, including:

• The 25-employee threshold is reduced to 5 employees. Now, the program will apply to employers with at least 5 employees in the state during every quarter of the previous calendar year. The employer determines the total employee count using the annual average from the employer-reported quarterly data.
• Secure Choice now includes annual, automatic increases to the contribution rates up to a maximum of 10% of an enrollee’s wages. The Illinois Department of Revenue will establish a schedule for the automatic increase.
• The changes clarify that the second year of non-compliance need not be consecutive for applying the $500 noncompliance penalty.
• Employers now have 120 days (rather than 90 days) after issuance of a notice of proposed penalty assessment for noncompliance to file a protest with the department or come into full compliance.
• The changes allow providing notices electronically rather than only by first class mail.

When Effective
The program will notify employers before their scheduled start time to allow them time to register. The schedule is:

Wave 1: The enrollment deadline for employers with fewer than 25 employees and more than 15 employees will be no sooner than September 1, 2022

Wave 2: The enrollment deadline for employers with at least 5 employees but not more than 15 employees will be no sooner than September 1, 2023.

The Illinois Secure Choice website provides additional information, including FAQs.
https://www.ilsecurechoice.com/home/faq.html

These tax tips can help new business owners find success
Starting a business can be very rewarding. It can also be a little overwhelming. From business plans to market strategies, and even tax responsibilities…there are many things to consider. Here’s what new business owners can do to help get off to a good start.

• Choose a business structure. The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are:
  • Sole proprietorship: An unincorporated business owned by an individual. There’s no distinction between the taxpayer and their business.
  • Partnership: An unincorporated business with ownership shared between two or more people.
  • Corporation: Also known as a C corporation. It’s a separate entity owned by shareholders.
  • S Corporation: A corporation that elects to pass corporate income, losses, deductions, and credits through to the shareholders.
  • Limited Liability Company: A business structure allowed by state statute.
• Choose a tax year. A tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:
  • Calendar year: 12 consecutive months beginning January 1 and ending December 31.
  • Fiscal year: 12 consecutive months ending on the last day of any month except December.
• Apply for an employer identification number. An EIN is also called a federal tax identification number. It’s used to identify a business. Most businesses need an EIN.
• Have all employees complete these forms:
  • Form I-9, Employment Eligibility Verification
  • Form W-4, Employee’s Withholding Allowance Certificate
• Pay business taxes. The form of business determines what taxes must be paid and how to pay them.

Taxpayers interested in starting a business can find information for some industries on the Industries/Professions Tax Centers webpage. Each state has additional requirements for starting and operating a business. Prospective business owners should visit their state's website for info about state requirements.

More information:

• Small Business Admiration’s 10 steps to start your business.

While the deadline to file and pay federal income taxes has passed for most people, some taxpayers may still be dealing with tax-related issues.

Here are some tips for taxpayers handling some of the most common after-tax-day issues.

Check refund status
Taxpayers can check on their refund using the Where's My Refund? tool. It is available on IRS.gov and the IRS2Go app. Taxpayers without access to a computer can call 800-829-1954. To use this tool, taxpayers need their Social Security number, tax filing status and the exact amount of the refund claimed on their tax return. The tool updates once daily, so there's no need to check more often.

Check withholding
All taxpayers are encouraged to check their withholding using the Tax Withholding Estimator on IRS.gov. This will help them make sure their employers are withholding the right amount of tax from their paychecks. Doing this now will help avoid an unexpected amount due and possibly a penalty when they prepare and file their taxes next year.

Taxpayers can use the results from the Estimator to help complete a new Form W-4 and adjust their income tax withholding with their employer. Taxpayers who receive pension income can use the results to complete a Form W-4P and submit to their payer.

Review payment options
Taxpayers who owe taxes can review all payment options online. These include:

• Paying their taxes owed or making a partial payment with IRS Direct Pay
• Paying by debit card, credit card or digital wallet  
• Applying online for a payment plan

Carefully consider if they need to amend a tax return
After filing their tax return, taxpayers may find they made an error or forgot to enter something on it. The IRS strongly recommends taxpayers use the Interactive Tax Assistant, Should I File an Amended Return? to help determine if they should correct an error or make other changes to the tax return they already filed.

Common errors taxpayers should fix are those made about filing status, income, deductions and credits. Taxpayers usually do not need to file an amended return to fix a math error or if they forgot to attach a form or schedule. Normally, the IRS will correct the math error and notify the taxpayer by mail. Similarly, the agency will send a letter requesting any missing forms or schedules.

Those expecting a refund from their original return should not file an amended return before the original return has been processed.

Currently, it is taking the IRS longer to process mailed documents including paper tax returns and all tax return related correspondence. It is taking the agency more than 21 days to issue refunds for some 2020 tax returns that require review including incorrect recovery rebate credit amounts or returns that used 2019 income to figure the earned income tax credit and additional child tax credit.

Good recordkeeping is an essential element of tax planning

Now is a good time for people to begin thinking about next year’s tax return. While it may seem early to be preparing for 2022, reviewing your recordkeeping now will pay off when it comes time to file again.
Here are some suggestions to help taxpayers keep good records.

Taxpayers should develop a system that keeps all their important information together. They can use a software program for electronic recordkeeping. They could also store paper documents in labeled folders.

Throughout the year, they should add tax records to their files as they receive them. Having records handy makes preparing a tax return next year easier.
​

• Taxpayers should notify the IRS if their address changes. Taxpayers should let the IRS know if they change their address. They should also notify the Social Security Administration of a legal name change to avoid a delay in processing their tax return.
  
  
• Review their tax return to make sure they didn’t overlook any credits or deductions. Double check credits and deductions.  Records that taxpayers should keep include receipts, canceled checks and other documents that support income, including any unemployment compensation.
  
  
• Taxpayers should also keep records relating to property they dispose of or sell. They must keep these records to figure their basis for figuring gains or losses.
• Taxpayers should keep records for three years from the date they filed the return. Taxpayers who have employees must keep all employment tax records for at least four years after the tax is due or paid, whichever is later.

Accounting:

• An information system that provides reports to stakeholders about the economic activities and condition of a business.
  • Financial accounting: The area of accounting that focuses on recording transactions and events so that general-purpose financial statements can be prepared.
  • Managerial accounting: The branch of accounting that aids management in making financing, investing, and operating decisions for the company.
  • The head of the accounting department in a company is called comptroller or chief financial officer (CFO).

 
Statement of stockholders’ equity: A financial statement that reports the change in financial condition due to the changes in stockholders’ equity items for a specific period of time.
 
Retained earnings: Net income retained in a corporation. (Beginning retained earnings + Net income – Dividends = Ending retained earnings)
 
Stockholders’ equity: The stockholders’ rights to the assets of a business.
Assets = Liabilities + stockholder’s Equity
 
Statement of cash flows: Provides a summary of the cash receipts and cash payments and reports the change in financial condition due to the change in cash during a specific period of time.
 
Financial Accounting Standards Board (FASB): The authoritative body that has the primary responsibility for developing accounting principles.
 
Financial accounting system: A system that includes:

• (1) a set of rules for determining what, when, and the amount that should be recorded for an economic event;
• (2) a framework for facilitating preparing financial statements; and
• (3) one or more controls to determine whether errors could have occurred in the recording process.

 
Cash basis of accounting: A system of accounting in which only transactions involving increases or decreases of the entity’s cash are recorded. (Practiced in Chapter 2)

• Under the cash basis of accounting, net income and net cash flows from operating activities are equal.

 
Accrual Basis of Accounting: A system of accounting in which revenue is recorded as it is earned, and expenses are recorded and matched against the revenue they generate.

• Under the accrual basis of accounting, net income and net cash flows from operating activities may be significantly different.
• Revenue is recorded when it is earned, expense when expense is incurred in generated revenue, and adjusting entries required in order to prepare financial statements.

​Causes to Check Out, With Local Ties

As you may know, I am a networker. I am involved in a few organizations (many of them with events highlighted above). I get to meet some great business people and many of them focus any spare time they have to a cause. I wanted to highlight a few of them today.
 
1. Rotary Club
Rotary's International goal is to rid the world of Polio. Local Clubs, support that cause and even more! I am a member of Rotary Club of Schaumburg/ Hoffman Estates (Meets on Fridays at Noon in Schaumburg.  

2. Walk to End Alzheimer's
I have known Kari-Ann Ryan for many years and in all that time, she has spearheaded a movement to End Alzheimer's. Her life has been affected personally. You can also be added to her email list for all the events she organizes, by emailing her: kari.ann.b.ryan@gmail.com

3. National Association of Parks Foundations
The NAPF's vision is to build effective, active, local park foundations, volunteers and other citizens that support their park systems to enhance the park experience in their communities. These Park Foundations usually provide funding for Park District Activities for people in the community that generally cannot afford them.
 
Please contact my longtime friend,  Donald Ortale, Executive Director of NAPF, to learn more about how you can help. Call him at 630-965-1000 or email dortale@ortaleassociates.com 
 
4. The Business Ledger- 2020 Guide to Business Philanthropy & Social Responsibility
This is a list of notable local nonprofits and charities. 

#GivingTuesday is a global day of giving fueled by the power of social media and collaboration.
 
The following is a summary of a full article at Charity Navigator:
 
A gift to a qualified charitable organization may entitle you to a charitable contribution deduction against your income tax if you itemize deductions.
If the gifts are deductible, the actual cost of the donation is reduced by your tax savings. 

• A contribution to a qualified charity is deductible in the year in which it is paid. 
• Most, but not all, charitable organizations qualify for a charitable contribution deduction.
• You can deduct contributions only if they are made to or for the use of a qualified recipient. 
• An organization could lose its charity status if it devotes a substantial part of its activities to formulating propaganda or otherwise trying to influence legislation. 
• There are limits to how much you can deduct, but they're very high.
• Rules exist for non-cash donations.
• Remember to document.
• Organizations to Which You Can Give and Deduct Your Donation:
  • Churches and other religious organizations;
  • Tax exempt educational organizations;
  • Tax exempt hospitals and certain medical research organizations;
  • A government unit, such as a state or a political subdivision of a state;
  • Publicly supported organizations such as a community chest;
  • Certain private foundations that distribute all contributions they receive to public charities within two-and-a-half months after the end of the foundation's fiscal year;
  • A private operating foundation which pools all of its donations in a common fund;
  • Certain membership organizations that rely on the general public for more than a third of their contributions.

Read Complete Article From Charity Navigator Here

​The IRS has published this flowchart to help determine if employee retention credits can be used by a company. 

​It also includes a table with some differences between the current credits available for COVID related leave.