Member of Russell Bedford International, a global network of independent professional service firms.
Member of Russell Bedford International, a global network of independent professional service firms.
Welcome to the first episode of Small Business Focus with CK, where we explore practical topics to help entrepreneurs and self-employed individuals navigate the financial side of running a small business. In this episode, Tax Manager, Eric Challenger discusses the essentials of estimated taxes, including what they are, who needs to pay them, how to calculate them and when they’re due. Whether you’re a freelancer or a business owner, understanding estimated taxes can help you avoid penalties and better manage your cash flow throughout the year.
Transcript
Hi everyone and welcome to another edition of Small Business Focus with CK. I’m Eric Challenger, a tax manager here at CK and today’s focus topic is estimated taxes. Estimated taxes are payments made throughout the year to the government for income that is not already subject to automatic withholding. These payments help taxpayers avoid a large tax bill when they go to file their return.
As an employee, estimated tax payments are normally not needed. That’s because employers are required to withhold and remit taxes to the IRS on behalf of employee wages. Normally, this automatic withholding fulfills the burden of paying in taxes and eliminating the need for estimated tax payments. However, individuals that earn income not subject to withholding such as freelancers, self-employed persons, business owners, or others with income from investments, rental properties, or other sources will need to make estimated tax payments.
Estimated taxes are calculated based on projected current year taxable income. This requires understanding of your estimated income, deductions, and then applying related IRS tax tables to the estimated amount. You can use online calculators, tax software, or a tax professional to assist you with determining your estimated tax liability.
The IRS is a pay-as-you-go system. For wages, this means every check you earn will have your share of taxes withheld and then remitted by your employer. For all other taxpayers, the IRS requires that you make quarterly estimated tax payments based on the following schedule. First quarter, April 15th, second quarter, June 15th, third quarter, September 15th, and fourth quarter, January 15th of the following year. Any remaining balance must be paid by the return filing deadline of April 15th of the following year. Although you may extend the filing date of your return, you cannot extend the payment due date.
Yes, as we stated before, the IRS is a pay-as-you-go system, and you must pay in taxes quarterly if you do not have any other withholding mechanism. Failure to pay your taxes timely will result in the IRS charging you underpayment penalties. This is really just another form of interest on the underpaid balance. This is applied at the current IRS interest rate multiplied by the number of days late. In addition, if you fail to make any payment by the filing deadline or fail to file your return timely, you may also be subject to late payment penalty and failure to file penalty. Each have a maximum penalty of an additional 25% of the unpaid balance due.
Yes. The IRS understands that tracking your current and your income in related taxes isn’t always easy or an exact science, especially for small taxpayers. To help ease this burden, the IRS has a safe harbor policy. Under the safe harbor, you have two ways to meet the exception for being assessed underpayment penalties. There are as follows. Number one, the current year safe harbor exception. If you pay in at least 90% of your current year tax and make the remaining 10% by the filing deadline of April 15th, then you will avoid underpayment penalty. However, this requires accurate tracking of your current year income and tax. This may be hard to do if you’re not a tax expert. Number two, the prior year safe harbor exception. The IRS will not assess underpayment penalties for taxpayers that paid 100% of their prior tax. For taxpayers with prior year adjusted gross income, AGI, greater than $150,000, this amount needs to be 110% of your prior tax.
Well, in years of rising income, it’s best to use the prior year rule to ensure that you at least meet the prior year test. Any remaining amount due will not be penalized if you pay by the filing deadline of April 15th. In years of declining income, it’s best to use the 90% of the current year income, although this requires additional planning and accurate calculations. In most cases, it is better than overpaying the government and reducing your working capital or cash flow.
In summary, estimated taxes are designed to spread out to tax burden over the year. They apply mainly to self-employed individuals or people with income not subject to withholding. By making quarterly estimated tax payments based on your income, you can avoid underpayment penalties and manage your taxes more effectively. This has been another edition of the CK Small business focus. We hope our discussion on estimated taxes has given you some guidance you can implement in your tax planning for next year. For additional knowledge and understanding please visit our website at www.craykaiser .com.
CPA | Senior Tax Accountant
As you know, the President signed the One Big Beautiful Bill Act on July 4, 2025. This brought significant changes in the areas of depreciation and related deductions that will impact your taxes in 2025 and beyond.
Below we’ll summarize the most important depreciation changes under OBBBA, including bonus depreciation, Section 179 expensing and a new 100% depreciation election for certain real property.
Note: For a more comprehensive overview of bonus depreciation and section 179, see our previous blog post on the topic here.
Bonus depreciation allows businesses to deduct a large portion or all of the cost of assets in the year they’re purchased.
Key Details:
The Section 179 deduction allows businesses to immediately expense the full cost of qualifying assets purchased, subject to annual limits.
OBBA Changes:
OBBBA introduces a new 100% deduction for qualifying real property used in production facilities that produce qualified tangible personal property (TPP).
Application of this provision will be complex and IRS guidance will need to be issued. In short, if a taxpayer produces tangible goods and begins building a new manufacturing facility after January 20, 2025, then 100% of the cost of the portion of that facility dedicated to manufacturing can be deducted in the first year.
Key Details:
The IRS is expected to issue guidance and clarifications on these provisions, which could take months. While we usually start looking at year-end tax planning in Q4, now is the time to talk with your advisor about the impact of the bill on your specific situation. In particular, you may be able to reduce planned tax payments for the remainder of 2025 given the benefits you’ll see in the bill. At Cray Kaiser we’re here to help you understand how these changes may affect your business and ensure you make the most of these new depreciation opportunities. Contact us here or call us at 630.953.4900.
In this video, Brian Kot, a Principal at CK, shares valuable insights into the most common questions clients ask about tax planning, document retention, business sales and financial reporting. From strategies to reduce your tax liability and organize your financial records to best practices when selling your business and improving accounting processes, Brian highlights the importance of proactive planning and collaboration with your CPA.
Transcript
My name is Brian Kot and I am a principal with Cray Kaiser Ltd. I’m often asked by my clients, “How can I reduce my tax liability?” The answer to this question comes with a lot of strategic planning between the client and your CPA. You want to at least minimally have an annual meeting with your CPA to discuss your tax situation and your financial planning on what’s going on with your business.
There are many suggestions typically that are offered such as contributing to an IRA or a sub-contribution or vehicle expenses might be missed or maximizing the depreciation deductions and purchasing certain assets within your business. In that conversation, it’s also very important to discuss the current tax rates and future tax planning. For example, you may want to try to defer income, or you might want to accelerate certain income to maximize current tax rates that are in effect today, for example, the capital gains tax rate. So having an effective meeting with your CPA in discussing these strategies is the optimal way of reducing your taxes, and it’s different between each individual and organization.
I’m often asked how long should I keep my documents for, especially in this age of digital world. The answer depends on the type of organization and also the type of documents that we’re discussing. Some documents you need to keep indefinitely, such as your corporate resolutions, your bylaws, your tax returns, your financial statements. We should always keep those forever and never destroy those and keep them in a digital format. There are other documents such as a lot of payroll documents need to be kept for a minimum of seven years and then there’s other documents especially on the individual side that you only need to keep for only three years and it also depends on the statute of limitations on how long you need to keep these documents for. I definitely recommend you check out our website if you click on the resource tab and search document retention. We have a guide that explains and gives an example of what documents you should keep either indefinitely or for seven years and remember that’s just a guide but it can be used as a rule of thumb.
You’re considering selling your business and often I’m asked how much do I owe in taxes? That’s a very challenging question to answer right off the bat, and a lot of planning needs to go involved. The first thing is to determine the market value of your business. And we recommend that you use an outside third party to assist you in determining the market value. Once the market value is determined, the way that the deal is structured and the sale is put together will significantly have an impact on how much you will pay in taxes, along with your personal tax situation. So we recommend before you, at any time, sign any agreement or sell your business. You consult with your tax advisor to go over that agreement in detail to determine if it is the most cost and tax efficient way for you to sell your business. Too often, we hear after the fact that our clients may have sold their business, or for that matter, entered into any type of a transaction. And if you would have consulted your tax advisor before entering that transaction, you may have saved a significant amount of taxes, as the transaction could have been structured differently.
Often, my clients will ask me, “How can I improve my financial reporting or get more timely reports, or I’ve lost my accountant, what do I do?” Here at Cray Kaiser, we have a dedicated team to assist you in your financial reporting. If you use a software such as QuickBooks or similar to QuickBooks, we can offer training on the program to ensure your employees properly know how to use the software. And we can also offer customization and create customized reports to help you understand your business. Having timely and accurate financial information available to you will enable you to make business decisions and help you grow your business.
Please consult a member of Cray Kaiser to understand the benefits that we can offer your organization to help you improve your financial reporting. Please review our website at craykaiser.com as we recently launched our Client Accounting Advisory Services webpage. You can find more information there and you can contact a member of our team at 630-953-4900.
CPA | Senior Tax Accountant
The One Big Beautiful Bill Act was signed into law on July 4th, introducing significant tax changes that could directly affect your 2025 tax return. Two key deductions that you will want to take advantage of starting in 2025 are the new interest deduction on auto loans, and the increased state and local tax (SALT) deduction. Below we break down exactly how each deduction works, who qualifies and how they may impact your overall tax strategy.
Beginning January 1, 2025, individual taxpayers may deduct up to $10,000 of interest paid on qualifying auto loans.
To be eligible for this deduction, autos must:
This deduction does not apply to:
The deduction phases out for taxpayers with:
Phaseout formula: The $10,000 maximum deduction is reduced by 20% of the amount your income exceeds the applicable modified AGI.
Example:
If you are single and have a modified AGI of $120,000, you exceed the threshold by $20,000.
For tax years beginning after December 31, 2024, the SALT deduction cap increases from $10,000 to $40,000 for individual taxpayers who itemize.
Full deduction applies if your modified AGI is below:
Beginning in 2026, the cap will increase by 1% annually through 2029. The $40,000 maximum deduction is reduced by 30% of the amount your income exceeds the applicable modified AGI.
Example:
A couple filing jointly with a modified AGI in 2025 of $510,000 exceeds the limit by $10,000.
This deduction will return to a $10,000 limitation in 2030.
Many states have introduced Passthrough Entity Tax (PTET) credits to bypass the old $10,000 SALT cap. With the cap now higher, states may reconsider their PTET policies, potentially impacting how your state taxes are calculated if you own a partnership or S-corporation.
If you have questions about these new deductions or any of the provisions in the OBBB Act, the team at Cray Kaiser is ready to help you understand the potential impact on your personal or business taxes. You can contact us here or call us at (630) 953-4900.
CPA | CK Principal
Corporate credit cards are a valuable tool for businesses. They simplify purchasing, make expense tracking easier, and give employees flexibility to do their jobs. However, with this convenience comes the responsibility to ensure that these cards are used wisely and ethically.
That’s where a clear credit card policy and the right technology come in. Together, they help protect company resources, reduce fraud and build trust across the organization.
A strong credit card policy serves as both a safeguard and a roadmap. It clearly sets expectations for appropriate usage and explains the reasons behind the rules. When paired with expense management platforms such as Bill.com, Expensify and Ramp, to name a few, it can provide solutions to track transactions in real time, flag suspicious activity automatically, and simplify reporting and receipt collection. This combination of policy and technology gives finance teams the ability to detect irregularities before they escalate into larger issues, along with fostering transparency, accountability, and trust, ensuring that employees understand not only how to use their cards, but also the rationale behind the guidelines.
To create an effective policy, organizations should begin by considering both the operational needs of their teams and the inherent risks associated with credit card programs. This thoughtful approach lays the foundation for a culture of fiscal responsibility.
Technology makes monitoring and enforcement easier. Sometimes, business applications may require specific credit cards, so app selection should align with company policies. The right tools give firms both flexibility and control over purchase and expense management.
A clear, well-communicated policy, supported by the right technology, protects companies while giving the employees the resources they need to succeed. For more information on strengthening your credit card policies and integrating technology into your accounting systems, please contact Cray Kaiser.
MSA | Senior of Accounting Services
As your business grows, financial decisions become more complex and more critical. Clear reporting, stronger internal controls and a plan for the future are essential. But hiring a full-time Chief Financial Officer (CFO) or Controller can be costly.
The good news? You don’t always need to add expensive executives to your payroll. Outsourced CFO and Controller services provide the expertise you need, when you need it, without the full-time expense.
Partnering with an outsourced accounting firm gives you access to executive-level financial leadership, tailored to your business’ needs. This flexible solution ensures you have the correct level of support.
With an outsourced CFO or Controller, your business can achieve:
Outsourcing doesn’t just reduce costs, it increases insight and efficiency. Businesses that leverage outsourced CFO and controller functions gain a competitive edge and the freedom to focus on what matters most: running your business.
If you want clarity, confidence and sustainable growth, outsourcing your CFO and controller functions may be the smartest financial decision you make this year.
Whether you’re a startup preparing to scale or an established business seeking better financial discipline, fractional CFO and outsourced controller services can provide the expertise you need without the full-time cost.
At CK, our mission is to help business owners move beyond the day-to-day challenges of managing their finances and step confidently toward growth. In this audio blog, Amy Langfelder and Eva Koziel discuss how our Client Accounting and Advisory Services (CAAS) provide the tools, insights and support needed to transform financial confusion into clarity.
Transcript
I am Amy Langfelder and I am one of the principals here at CK. In my role, I lead the client accounting and advisory services. We often call this CAAS. In our CAAS department, we want to help move clients from surviving to thriving. To do this, we come alongside them where they are at and provide them various services to help them along the way. Today we want to highlight some of those services. Today, I am joined by Eva Koziel, our manager of accounting and advisory services. She is going to provide some ways that she is helping our clients grow.
First things first, we start by assessing your current accounting state. Imagine you’re struggling to keep your financials organized. We conduct a thorough review of your existing systems, identifying strengths and weaknesses. For example, if you’re using outdated software or inefficient manual processes, we highlight these issues and help you understand where improvements can be made.
How can companies achieve more through outsourcing some of their accounting functions? Once we’ve assessed where you’re at, we move into providing recurring services. Whether it’s monthly or quarterly, we can prepare your day-to-day accounting or review the work your team has done. Think about it as your business having its own financial health checkup. We’re there to ensure everything looks good and even catch issues before they escalate. We can also assist with streamlining processes, particularly through AP and AR automation. Imagine you’re spending hours manually processing invoices. We can help you implement software that automates these tasks, drastically reducing the time spent and minimizing errors. For example, our clients have seen up to a 30% reduction in time spent on AP simply by switching to an automated solution.
As owners look to the future, how can CAAS come alongside them and help them on their journey to thriving? We know that many business owners find their financials confusing. Our team provides personalized explanations, breaking down your income statements, balance sheets, and cash flow statements. For example, one of our clients was unsure why their cash flow was fluctuating. We took the time to walk them through their statements, allowing them to make informed decisions for the future.
Finally, let’s focus on the future. We don’t just stop at the numbers. Our advisory services help you strategize for growth. Let’s say you’re looking to expand, whether that’s a new employee or opening a new location. We provide insightful analysis and recommendations tailored to your business goals.
Thank you for your time today. We look forward to ways we can help you on your journey to thriving. Visit our website, craykaiser.com for more information.
CPA | Tax Manager
As we highlighted in a previous blog, beginning September 30, 2025, the U.S. Treasury will stop issuing paper checks for most federal payments, including Social Security, Veterans Affairs benefits, and federal tax refunds. Instead, payments will be made electronically, usually by direct deposit into your bank account.
This change stems from Executive Order no. 14247, “Modernizing Payments to and From America’s Bank Account,” signed by President Trump in July, 2025. The government explained that the move is designed to reduce fraud, prevent lost or stolen checks, and deliver funds faster.
If you already receive payments electronically, no action is needed. However, if you still receive paper checks, you must switch to direct deposit before the deadline.
Here are 6 ways to enroll in direct deposit:
You can read the Treasury’s full announcement here.
Most taxpayers already use electronic payment methods, but if you haven’t transitioned, now is the time to act.
This change is part of a larger plan. In the future, the government will also require payments to the federal government, like income taxes, to be made electronically. For now, paper checks for payments such as the September 15, 2025, estimated tax payment are still accepted, however, expect changes in the near future.
At CK, we recommend using electronic methods whenever possible for both filings and payments. Benefits include:
If you’re not sure how to make the switch, reach out to your CK team for help with transitioning your tax payments, refunds, and estimates to secure electronic systems.
As accountants, we know that unresolved tax liabilities can lead to escalating penalties and interest but the Illinois Department of Revenue is offering a rare opportunity for a clean slate. Effective soon, the 2025 Illinois Tax Delinquency Amnesty Act provides a window for eligible taxpayers to settle outstanding state tax debts and wipe away associated penalties and interest.
Per bulletin FY 2026‑01, the Illinois Tax Delinquency Amnesty Act allows eligible taxpayers to pay overdue state tax liabilities without incurring penalties or interest, as long as they settle in full during the amnesty window.
Individuals and businesses with unpaid liabilities for state taxes administered by the Illinois Department of Revenue during the eligible period qualify for the amnesty program.
1. File any missing returns or amend incorrect filings for the eligible periods. Include any supporting documentation.
2. Pay the full tax amount due during the amnesty window (Oct. 1 – Nov. 17, 2025).
3. If your liability has already been referred to a private collection agency, you must pay through that agency, do not pay IDOR directly.
4. Use MyTax Illinois for convenient payment but if you need an account, request a Letter ID, which may take up to 10 days to receive. If your account isn’t ready by November 17, you’ll need an alternative payment method.
Tax liabilities can quietly compound. What might begin as a modest underpayment can balloon with added penalties, interest, and collection costs. This amnesty program offers relief: an opportunity to settle past issues cleanly and efficiently.
If you’re unsure whether you qualify or how to rectify your filings, now is a great time to reach out. At Cray Kaiser, we’re here to help guide you step by step. Contact us to discuss how the Illinois Announces Tax Amnesty Program may impact your tax situation.
In this video about not-for-profit organizations, Carl Thomas, a manager at Cray Kaiser, explores how federal and state funding can impact the regulatory compliance for nonprofits. He takes a close look at how uniform guidance audits can present valuable opportunities for growth and improvement.
Transcript
I’m Carl Thomas. I’m a manager at Cray Kaiser. Many not-for-profit organizations receive federal funding, even state funding, perhaps. Now, this can have certain implications for your regulatory compliance. One thing that can happen is over $750,000 of federal awards can qualify you for what we call a uniform guidance audit. This is an audit that requires the auditor to gain an understanding of the internal control over compliance with the federal grants. It also requires an actual compliance audit. So we would test the compliance with that grant. It definitely adds some time to the project. And it can also give you some insights into how you’re managing these grants and what can, you know, if there’s any room for improvement.
If there’s certain state awards as well. So when we talk about state awards, we mean state of Illinois, perhaps the Department of Commerce and Economic Opportunity, perhaps the Department of Human Services, even the State Board of Education is one that will provide state awards. And when I say state awards, I mean awards that are derived from state revenues. So a state agency may administer a federal award as a pass-through. So that’s important to understand as well. There is a distinction there. Now, when state awards are involved too, and federal awards, you may have what we call a GATA implication in the state of Illinois. Now, this is similar to a uniform guidance opinion and requires the submission of what we call a CYEFR, a consolidated year and financial report.
Now, as a result of potentially having a federal audit or certain implications of the GATA requirement in Illinois, your organization may find themselves in a position of receiving maybe an audit finding. However, it’s not really a negative thing. It’s really an opportunity for improvement, right? The auditors are looking at transactions in detail, they’re testing internal controls with grant compliance and things. And in an intensive audit, you’re bound to almost have some suggestions and value add things that come out of that. However, again, it shouldn’t be seen as a penalty. It should really be seen as an opportunity for growth. Because in the next year, it’s an opportunity to improve on that matter and take that finding away, quite frankly, with action on your part. And so there can be some value there.
Well, thank you for tuning in today. If anything we’ve talked about is resonating with you, or sounds like something you want to discuss further, please feel free to call the dedicated Cray Kaiser not-for-profit team. We’re always available. The number is listed on our website. You can ask for Carl or Amy to start, but anyone can point you in the right direction. Thank you.
