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.
CK Principal
Many small businesses have received refunds by claiming the Employee Retention Credit (ERC) which had expanded opportunities under the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021. If you have not yet claimed the ERC, time will be running out soon and you will want to check the availability for this payroll credit before it is too late. To qualify for the ERC, you will want to review our blog.
As a reminder, the ERC is claimed by filing an amended payroll tax return for the quarter in which you qualified. The IRS regulations require amended payroll tax forms to be filed by the later of the following:
However, the IRS considers Form 941 for a calendar year as filed on April 15 of the succeeding year as long as the original 941 was filed by this date. This consideration by the IRS is allowing you to still claim the ERC for calendar quarters in 2020 up to April 15, 2024 and for calendar quarters in 2021 up to April 15, 2025.
While the ERC offers an opportunity for significant refunds, it is important for you to confirm your eligibility before claiming the credit. There is increased scrutiny on companies trying to fraudulently solicit claims related to ERC. In response to rising concerns of fraudulent claims for ERC, the IRS recently ordered an immediate moratorium on processing new ERC claims through at least December 31, 2023. The IRS will continue to process ERC claims received prior to the moratorium however processing times are expanding due to the fraud concerns and the increased review time needed for the claims.
We are available to assist you in determining your qualifications and the preparation of the associated amended payroll tax returns. Please contact Cray Kaiser at (630) 953-4900 for additional information.
In-Charge Tax Accountant
When I was beginning my journey to become an accountant, I had the opportunity to intern at Cray Kaiser and KPMG. These internship experiences allowed me multiple opportunities when deciding on my post-graduation employment. In the first semester of my senior year, I signed and accepted an offer to join the CK team where I currently work full-time. It is essential to take the initiative to take as many internships as possible. Taking a proactive approach allows you ample time to secure a spot, as many firms tend to fill up a year in advance.
Working full-time at Cray Kaiser was a smooth transition. I was getting exposed to so much as an intern that I felt prepared to advance into the next step. What was an adjustment for me was not going to school while working. Now with my extra time, I use it to focus on my career goals. One career goal for me is studying for the CPA exam.
If you plan to pursue the CPA exam, I recommend the Becker program. The software is easy to use, provides printed material, and is always on sale (there is usually a better sale around the holidays). They also have a fantastic planning system. You enter when you want to take the exam, and it will tell you how many hours you need to study, or you can tell Becker how many hours you can study, and it will give you a custom plan for what days to study, what to study, etc. The program makes you feel less overwhelmed when you are deciding when, what, and how long you should study.
In any career, I think it’s important to make sure you enjoy what you are doing. In the accounting profession, everyone always asks if you are interested in audit or tax. Without experience in both fields, how does one know? Two solutions I found to this are to have internships in both areas or work at a smaller firm where you can assist in both areas.
I love working on complex tax returns and was thrilled to join the tax department. However, I still am allotted the opportunity to work with the assurance team and build on those skills too.
One skill I have built is being a self-advocate and letting management know what areas interest me and where I would like to see my skills grow. Remember that no one can read your mind. You will need to speak up to management to tell them the areas you find most interesting to work in. My goal is to enjoy what I do and make a difference to the organization I work for and the clients we serve. I have found at Cray Kaiser, we aren’t just tax preparers and auditors we are trusted business advisors who are going to help all the family-owned businesses we serve.
In this audio blog, CK Tax Principal, Karen Snodgrass shares insights from the Russell Bedford International Tax Conference she attended in 2023. This includes:
If you have any questions pertaining to our learnings at the Russell Bedford International Tax Conference, please contact us or call our office at 630-953-4900.
In this audio blog, CK Principal Karen Snodgrass addresses some common questions surrounding the Employee Retention Credit (ERC), including:
If you have questions about the Employee Retention Credit, don’t hesitate to contact Cray Kaiser today.
At Cray Kaiser, we believe in a simple yet powerful philosophy: that behind every number is a person. Our dedication to melding numbers with our clients’ narratives has been a central pillar of our ethos. And guess what? This commitment has once again been validated by our latest NPS score for 2023.
For anyone unfamiliar with it, Net Promoter Score, or NPS, is a standardized metric used across industries to gauge customer loyalty and satisfaction. How does it work? Customers are asked one straightforward question: “On a scale from 1 to 10, how likely are you to recommend our business to a friend or colleague?”
From the responses, customers fall into one of three groups:
The formula to derive the NPS is as straightforward as the question itself—subtract the percentage of detractors from the percentage of promoters.
To give some context: A score above zero is already good, surpassing 50 is deemed excellent, and anything beyond 80 is simply incredible.
Comparing against industry standards and rivals provides a clear view of where a business stands. With an astounding NPS of 89 this year, Cray Kaiser has once more surged past the accounting industry’s average.
But that’s not the end of our story. Cray Kaiser’s NPS still shines when juxtaposed against market leaders across different sectors. We’re talking scores higher than industry titans like Target, Amazon, and Apple.
It’s more than just a number for us. It’s an affirmation that our clientele trusts and values the service we provide.
Your success stories are ours, too. In 2023 and the years ahead, our focus remains unwavering: to be impeccable with our numbers and unparalleled in our people skills. Cheers to another year of achieving together!
Illinois lawmakers passed a new bill (HB1197) this summer which increases the threshold requirements for obtaining an “Audited” financial statement by an independent accountant for nonprofit organizations (NFPs). The bill also sets new requirements for NFPs that sit between the old threshold and the new threshold to get “Reviewed” financial statements. The new law becomes effective for tax years beginning January 1, 2024 and currently set to expire after tax years ending December 31, 2028.
Previously, most NFPs soliciting for contributions to the general public were required to get “Audited” financial statements if their total contributions for an annual period were above $300,000. The new bill increases the Audit threshold to $500,000.
However, the bill sets a new requirement for those NFPs with total contributions between the old threshold of $300,000 and the new threshold of $500,000 to get “Reviewed” financial statements. This means that the NFPs resting in this window are not completely off the hook for getting an independent sign off on their financials. However, the accounting and administrative burden should be less expensive and less time consuming since a Review does not require as much validation or substantiation by an independent accountant as an Audit.
The new law was enacted in May of 2023 and Illinois is still ironing out the kinks. There may be additional guidance to follow as forms are reworked for the 2023/2024 filing season. CK will make sure to update you on any amendments or guidance related to the bill as it becomes finalized by Illinois lawmakers and the Attorney General’s Office.
Reminder:
For the purposes of the reviewed and audited financial statement thresholds “Contributions” include all funds raised by solicitation activities to the general public. This includes donations, pledges, program service revenue, fundraising events, etc. However, there is an exception in the law to exclude admission/ticket revenue for music or theatrical performances by nonprofits organized under 501(c)(3) with the mission/purpose of providing live public performances on a regular basis.
For more information on the increase in the Audit threshold, the new Review requirements, or understanding on what constitutes “Contributions” for the purpose of these thresholds, please contact the CK nonprofit team by calling (630) 953-4900.
If you’ve been thinking about ways to save on medical expenses, now may be the perfect time to open a Health Savings Account (HSA). Thanks to persistent inflation, the IRS recently announced historic bumps to contribution limits for HSAs, making planning for health savings more beneficial than ever.
Established in 2003 as part of the Medicare Prescription Drug, Improvement, and Modernization Act, Health Savings Accounts (HSAs) are a type of medical savings account with tax advantages. Individuals contribute pre-tax income to savings accounts that may be used to pay for qualified medical expenses. Funds in an HSA roll over from year to year, meaning it is possible to establish significant reserves for future medical costs while saving money by lowering your taxable income.
HSA funds can be used for a variety of qualified medical expenses, including office visits, dental care, eyeglasses, over-the-counter medications, and more. Funds may even be used for costs related to healthcare, like transportation expenses.
HSAs are available to those enrolled in High-Deductible Health Plans (HDHP). HDHPs are defined as a plan where the deductible is higher than the average, as determined by the IRS. For 2024, an HDHP includes any plan “with an annual deductible that is not less than $1,600 for self-only coverage or $3,200 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $8,050 for self-only coverage or $16,100 for family coverage.”
In addition to being enrolled in an HDHP, you may not be enrolled in Medicare and must not be claimed as dependent on someone else’s tax return.
For 2024, the IRS has raised the contribution limit for an individual to $4,150, an increase of $300 from the previous year, and $8,300 for family coverage, an increase of $550 from 2023. These amounts represent the largest yearly adjustments since the accounts’ inception and reflect rising healthcare-related expenses due to ongoing inflation.
HSAs can provide advantages in both the short term, by lowering your taxable income, and in the long term, by helping establish a cushion for future medical expenses. Increased contribution limits make HSAs more beneficial than ever. If you have any questions about HSAs or tax-advantaged medical savings accounts, please call Cray Kaiser at (630) 953-4900 or contact us here.
We’ve talked previously about opportunities to reduce the tax bite from capital gains. For example, the 2017 Tax Act brought us opportunity zones; by investing in these programs, the capital gains tax exposure can be minimized or even eliminated. You are also likely familiar with tax-deferred exchanges, commonly referred to as 1031 exchanges. But there are other provisions that are sometimes overlooked by investors.
Internal Revenue Code Section 1244 benefits investors that take the risk of starting a small business that fails. Section 1244 provides special tax treatment to the disposition of certain qualifying stocks of small businesses. It essentially allows losses up to $50,000 ($100,000 for married taxpayers filing jointly) to be subject to the more favorable ordinary loss treatment. Why is this beneficial? The loss is all deductible in the year of the loss rather than being treated as a capital loss limited to a per-year loss of $3,000 ($1,500 for married taxpayers filing separately). In addition, Sec 1244 stock losses are allowed for net operating loss purposes without being limited by non-business income.
Congress originally created this benefit to encourage investment in small business enterprises. It may also be a factor in determining the choice of entity when originally initiating a business. In addition to the benefits provided by Sec 1244, another part of the Internal Revenue Code, Sec 1202, allows gain from C corporation stock to be excluded from income where the aggregate gross assets of the corporation immediately after the issuance (determined by considering amounts received in the issuance) does not exceed $50 Million, the corporation meets an active business requirement, and the stock is held more than 5 years. The maximum excludable gain under Sec 1202 can’t exceed $10 million ($5 million, if married filing separately).
Section 1202 stock has been a hot topic in the tax planning world. In particular, start-up companies have been keen to organize the entity in such a way that investors will qualify for the Section 1202 gain exclusion.
1244 Stock – In general the term 1244 stock means stock in a domestic corporation if at the time such stock is issued:
Taxpayers taking advantage of the Section 1244 stock rules should document the factors that allow them to qualify. This could include corporate minutes and resolutions, accounting and bank records, and even operational records.
1202 Small Business Corporation Stock Defined – A corporation is treated as a small business corporation if the aggregate amount of money and other property received by the corporation for stock, as a contribution to capital, and as paid-in surplus, does not exceed $1,000,000. The determination under the preceding sentence is made as of the time of the issuance of the stock in question but also includes amounts received for such stock and for all stock previously issued.
The losses are reported by the individual stockholder; however, individual stockholders do not include trusts or estates.
If you would like to discuss the benefits of either the Section 1244 or Section 1202 stock provisions, call Cray Kaiser at (630) 953-4900 or contact us here.
Illinois shoppers can expect their grocery bill to increase a bit in July. The sales tax holiday on groceries, implemented in July 2022, is set to expire on June 30, 2023. The sales tax holiday was part of a state budget plan to provide residents relief from the rising costs of groceries. The sales tax rate for groceries in Illinois was already low, at 1%, but the State suspended the 1% sales tax rate from July 1, 2022, to June 30, 2023.
What does this mean for your business? Effective July 1, 2023, retailers should resume collection of the 1% grocery tax. Certain products, such as alcohol, candy, and soda, remain subject to the general sales tax rate of 6.25%. Note that the 1% is a state rate and local tax rates may also apply.
According to the U.S. Department of Agriculture, grocery prices are expected to grow more slowly in 2023 than in 2022. However, the increases are still substantial, and consumers are feeling the effect. The Consumer Price Index for food purchases was 7.1% higher in April 2023 compared to April 2022.
Cray Kaiser can assist in ensuring that your business is charging the appropriate sales tax on groceries. Please contact us here or call us at (630) 953-4900 if you have questions.
The most recent Illinois informational bulletin on the grocery tax suspension may be found here.
In Cray Kaiser’s Employee Spotlight series, we highlight a member of the CK team. We couldn’t be prouder of the team we’ve grown and we’re excited for you to get to know them. This month we’re shining our spotlight on Raychel Korn.
Raychel is a staff accountant at Cray Kaiser. Her day is mostly filled with corporate and not-for profit audits, reviews, compilations, and employee benefit plan (401k) audits. When tax season begins, she works on preparing individual tax returns.
During her time at Aurora University, Raychel interned for the winter tax season at CK. Once she graduated, she joined the team as a full-time staff accountant in May 2022.
Raychel was drawn to CK because of the learning environment. She appreciates how all members of the staff, managers, and partners value continuing education and take the time to educate others when needed. It’s no surprise that the two core values that mean the most to her are Education and Care. “At CK, we all care for each other and the clients,” says Raychel. “We are always there for each other even if it is personal or work related.
“To those who are just getting started in the accounting industry, your light bulb moment will come,” says Raychel. She says every project will have its own nuances. But each engagement or project will help you gain more and more knowledge until everything just clicks.
When asked about some of her favorite times with the CK group, Raychel says Saturday games during tax season are always a blast. “We all laugh, have fun, and have team bonding! My favorite games are when it’s Team Tax vs. Team Assurance. Go, Team Assurance!”
I would want to be an expert scuba diver. I think it would be cool to travel and see the different marine life around the world.
I enjoy going to concerts and music festivals with my friends. I enjoy dancing and singing to my favorite artists.
I try to always be positive. My motto is, “Don’t worry, be happy.”
