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Member of Russell Bedford International, a global network of independent professional service firms.
CPA | Tax Manager
Beginning August 1, 2026, local sales tax rates in some Illinois counties will increase by 0.25%. Retailers and servicepersons making taxable sales in Cook, DuPage, Kane, Lake, McHenry, or Will counties must increase their local sales tax rate by 0.25%. The increase is to the Northern Illinois Transit Authority (NITA) portion of sales tax collected in these counties.
The new rate will appear on your Illinois sales/use tax Form ST-1 when your business electronically files on MyTax Illinois. You may also find your updated rate using the MyTax Illinois Tax Rate Finder. Select “August 2026” rates to look up the exact rate for your business address.
To stay compliant and avoid under-collecting sales tax, businesses in the affected counties should complete these steps before the effective date:
If a sale was made prior to August 1, 2026, and was properly taxed at the prior (lower) rate, report it on Line 8a of Form ST-1 or ST-2. Note – line 8a may only be used for sales properly subject to a different rate.
Getting ahead of this update now ensures your business collects the correct sales tax from day one. The new tax will be in effect August 1, regardless of whether your business makes the change in your system. Cray Kaiser is here to help if you have any questions about how this change affects your business or need assistance updating your systems.
CPA | CK Principal
Illinois businesses, take note. Effective July 1, 2026, dozens of taxing jurisdictions across the state will impose new local sales taxes or update their existing rates on general merchandise sales. Whether you operate a storefront, sell remotely, or facilitate marketplace transactions, now is the time to review your obligations and update your systems.
The following local sales taxes will be affected by the July 1, 2026, changes:
Also note: The Illinois Department of Revenue (IDOR) will issue a separate bulletin covering changes to the Municipal and County Grocery Occupation Tax, effective July 1, 2026. Food items previously grouped under the general exemption language are addressed separately in this cycle.
Locally imposed sales taxes apply to the same items of general merchandise reported on Line 4a of Forms ST-1 and ST-2 that are subject to State sales tax.
Locally imposed sales taxes do not apply to:
Make sure any cash registers and computer programs are updated to reflect the new tax rates beginning July 1, 2026. If a software vendor manages these processes, contact them immediately to begin implementing the changes.
Use the MyTax Illinois Tax Rate Finder here to verify your new combined sales tax rate (State and local sales taxes). Be sure to select rates for July 2026.
If a prior sale was subject to a sales tax rate different from the current rate, report this on Line 8a of Forms ST-1 and ST-2. Note: Line 8a is used only for sales subject to a different tax rate; no other use is permitted.
Your business address determines whether business district sales tax applies to your sales. Remote retailers and marketplace facilitators who meet the $100,000 tax remittance threshold should pay extra attention to those taxes. Refer to the MyTax Illinois Tax Rate Finder for a full list of business district addresses and applicable rates.
Avoid headaches and prepare now for this sales tax rate update. If you have questions or need assistance navigating these changes, Cray Kaiser is here to help. Contact your trusted advisors at (630) 953-4900 to ensure you’re ready for the July 1, 2026, rollout.
CPA | Tax Manager
A recent federal court decision, Kwong v. United States, may create an opportunity for certain taxpayers to recover penalties and interest assessed during the COVID‑19 relief period. The law in this area continues to develop. The IRS is appealing the decision, so nothing has been settled yet. However, this ruling highlights potential refund and abatement opportunities related to IRS deadlines that were postponed under pandemic‑era disaster relief provisions. Affected taxpayers should review and act immediately to file a protective claim and secure any refunds if the IRS appeals fail.
During COVID‑19, the IRS gave everyone extra time to file federal taxes and make payments. The Kwong case ruled that the IRS may not have applied those extended deadlines correctly when it came to certain penalties and interest assessments. If that’s correct, some of those changes shouldn’t have been assessed in the first place. As a result, some taxpayers who paid penalties or interest during the pandemic period or continue to have outstanding assessed amounts may be eligible to claim relief.
If you (or your business) were charged any of the following between 2020 and 2023:
These penalties apply not only to individuals, but would also apply to businesses, trusts and estates. Please note that the failure-to-file penalty for partnerships and S-Corporations can be significant as the IRS charges these penalties per month per partner with a maximum of 12 months. During the period above, the amount ranged from $205 to $220 per month, per partner. That’s not a trivial amount.
A few things to keep in mind:
We are actively monitoring developments related to this case and can assist with:
If any of this sounds like it may apply to you, we encourage you to contact the trusted advisors at CK to discuss your specific situation. You can call us at (630) 953-4900 or fill out this form.
CPA | Tax Manager
As the ink dries on the One Big Beautiful Bill Act (OBBBA), many taxpayers are wondering: What does this mean for me, my business and my bottom line?
While much of the discussion focuses on federal tax changes, state tax laws are also affected. State legislators must decide whether to align to the new federal rules. It’s unknown how quickly state legislators will respond to the changes. Because of this, taxpayers could see difference in how their income, deductions and credits are treated from state to state.
Here’s a breakdown of the key areas where OBBBA could impact state taxes and what you should watch for.
The state tax deduction (SALT) cap, originally limited to $10,000 under the Tax Cuts and Jobs Act of 2017 (TCJA), has been increased under OBBBA to $40,000 for joint filers and $20,000 for certain individuals.
In response to the old cap, 36 states enacted a Pass-Through Entity Tax (PTET), where flow through entities were allowed to pay state tax on behalf of owners and deduct them as business expenses.
Now that the SALT limit has increased, some business owners may want to reconsider PTET elections. Additionally, some state PTET provisions are set to expire at the end of 2025, and it’s unclear which states will extend the PTET.
What this means for you: If you currently use or are considering a PTET election, it’s a good time to re-evaluate your strategy with your tax advisor.
Under TCJA, bonus depreciation, which allows businesses to deduct the full cost of qualifying assets, has been phasing out from 100% down to 40% in 2025, and ultimately to zero in 2027. The OBBBA reverses this trend by reinstating 100% bonus depreciation for assets acquired after January19, 2025.
However, many states do not allow this deduction. Businesses will need to continue to track state differences in depreciation rules to avoid surprises when filing state returns.
What this means for you: Be aware that even though you may get the full deduction at the federal level, your state may not conform.
Beginning in 2025, the limitation on business interest expense will be expanded to apply to EBITDA (earnings before interest, taxes, depreciation and amortization).
Because each state chooses whether to follow the federal rule (Section 163(j)), conformity varies widely. This means your allowable interest deductions may differ by state.
What this means for you: Businesses with multi-state operations should carefully review where and how these new limitations apply.
The OBBBA reinstitutes immediate expensing of R&E costs. It also allows for accelerated deductions for costs that were capitalized between 2022-2024.
Since each state handles R&E costs differently, you’ll need to identify which states plan to conform to the new rules beginning in 2025.
What this means for you: If your business invests in research or development, this change could offer significant tax savings, but only if your state follows the new federal approach.
Each state decides whether to adopt federal tax changes, ignore them or modify them. This can be overwhelming for business owners, especially those operating in multiple states.
Analyzing these differences can be complex and time-consuming, but it’s crucial to ensure accurate tax filings and avoid penalties.
Navigating federal and state tax changes under the One Big Beautiful Bil Act doesn’t have to be overwhelming. The team at Cray Kaiser can help you analyze the effect on your business. Although 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 state taxes. Contact Cray Kaiser and learn how these changes may impact your bottom line.
CPA | CK Principal
The One Big Beautiful Bill Act was signed into law on July 4th. The law significantly expands the Qualified Small Business Stock (QSBS) exclusion under Internal Revenue Code 1202 for stock acquired after July 4, 2025.
Below is a concise summary of the changes:
Stock acquired before July 4, 2025
Stock acquired on/after July 4, 2025
Tiered gain exclusion based on holding period:
Stock acquired before July 4, 2025
Stock acquired on/after July 4, 2025
Stock acquired before July 4, 2025
Stock acquired on/after July 4, 2025
Federal QSBS benefits don’t always apply at the state level. Cray Kaiser can provide guidance on state conformity regarding QSBS.
QSBS planning is time-sensitive and documentation-heavy. There are qualifications that must be met to qualify for this gain exclusion. Have QSBS questions? Contact Cray Kaiser today. We will help you navigate through these hurdles.
CPA | Tax Manager
The Qualified Opportunity Zone (QOZ) program was originally introduced as part of the Tax Cuts and Jobs Act (TCJA) of 2017 to encourage long-term investments in economically distressed communities. The One Big Beautiful Bill Act (OBBBA), is bringing major updates to this tax incentive program, giving investors and developers new benefits and rules.
Here’s a breakdown of what’s new, why it matters and how you can prepare for what’s next.
A Qualified Opportunity Zone is a designated economically distressed area in the U.S. The goal is to encourage private investments in these zones by offering tax breaks to investors to stimulate growth and development in these areas.
Under the original rules, investors could benefit from:
However, these benefits were set to expire on December 31, 2026, which limited long term planning.
The One Big Beautiful Bill Act gives the Opportunity Zone program new life by removing the expiration date and introducing a set of enhancements designed to focus investment in the areas that need it most.
Here are the key updates:
The Program is Permanently Extended
The QOZ program is no longer set to expire in 2026. Instead, it’s been extended indefinitely, providing long-term stability for investors and developers.
New Zones Every 10 Years
Stricter Eligibility Requirements for Zone Designation
To better target areas in need:
Updated Tax Incentive
There are a few important adjustments to how tax breaks work:
New Opportunities for Rural Investors
For the first time, there’s a special focus on rural America through the creation of Qualified Rural Opportunity Funds. These funds come with extra perks, including:
Unfortunately, these exciting changes do not take effect until January 1, 2027. This means all investments prior to then will fall under the old QOZ rules. Under the old rules gains are only deferred until 2026, at which point you must report and pay tax on them. A one-year deferral isn’t much of an incentive for investing prior to 2027. Because of this lag in policy, experts anticipate a slowdown in QOZ funds as investors wait for the new rules and longer deferral periods to kick in.
The Opportunity Zone program has entered a new era. With enhanced benefits, a focus on rural areas, and long-term stability, investors may find fresh reasons to explore these communities and investments. But until the new rules take effect, investors should consider holding off on QOZ opportunities until they can take full advantage of the new benefits starting in 2027.
If you’re wondering how these changes could affect your investment strategy, our tax experts can help you evaluate your options and prepare for the new Opportunity Zone landscape. Contact us to learn how to make the most of these upcoming opportunities.
MSA, MST | In-Charge Staff Accountant
On December 2, 2025, the Internal Revenue Service (IRS) released a draft of the new Form 4547, titled Trump Account Election(s). This form allows authorized individuals (typically parents or guardians) to elect to open a “Trump Account” for eligible minors. These accounts are part of a new federal initiative designed to help children build financial assets early in life. One of the most notable features of Form 4547 is the option to receive a $1,000 “Pilot Program Contribution” from the U.S. Treasury for children born between 2025 and 2028.
According to the IRS instructions, the the most efficient way to file Form 4547 is by submitting it with the authorized individual’s electronically filed current-year federal income tax return. For the initial rollout, this would likely coincide with the filing of the 2025 tax return.
If the form is not filed with the tax return, it may still be filed separately using paper filing.
The IRS has announced plans to launch an online portal at trumpaccounts.gov in mid-2026. This portal may eventually allow authorized individuals to make Trump Account elections online. However, it is important to note that contributions to Trump Accounts will not be allowed before July 4, 2026.
In early December, the Michael & Susan Dell Foundation announced a $6.25 billion philanthropic commitment to fund 25 million Trump Accounts. Through this initiative, the foundation plans to contribute $250 per account for children who:
This program is intended to support children who do not qualify for the $1,000 federal Pilot Program Contribution. Parents can assess potential eligibility by entering their zip code into Census Reporter which provides median income data from the U.S. Census Bureau. Additional details about the Dell Foundation contribution aren’t available yet but we will provide an update as soon as more substantive information becomes available.
To learn more about how Trump accounts, Form 4547 or related contribution programs may impact your family, please contact one of the trusted advisors at Cray Kaiser. We can help you navigate new developments and plan accordingly.
CPA | CK Principal
As it does every year, the Internal Revenue Service recently announced the inflation-adjusted 2026 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Additionally, tax professionals and their clients may use the optional standard mileage rate to calculate the deductible costs of operating vehicles for moving purposes for certain active-duty members of the Armed Forces, and now, under the One, Big, Beautiful Bill, certain members of the intelligence community.
Beginning on Jan. 1, 2026, the standard mileage rates for the use of a car (van, pickup or panel truck) are:
The business standard mileage rate is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. The rate for using an automobile while performing services for a charitable organization is statutorily set (it can only be changed by Congressional action) and has been 14 cents per mile for over 15 years.
Taxpayers always have the option of calculating the actual costs of using their vehicle for business rather than using the standard mileage rates. Notice 2026-10 contains additional information.
If you have questions about the standard mileage rate or calculating the actual cost of using your vehicle for business, please contact Cray Kaiser.
CPA | Tax Manager
Beginning January 1, 2026, the rate for the Chicago Personal Property Lease Transaction rate increased from 11% to 15%. This change applies to invoices for all leases, including non-possessory leases for computers to manipulate data supplied by customers. The tax impacts businesses and individuals within the City of Chicago who are leasing personal property used in Chicago.
Understanding how this tax works and whether or not it applies to you is important to avoid compliance issues and unexpected costs.
This tax rate increase may impact you if:
Unless your customer qualifies as an exempt lessee, you must ensure the tax is calculated, charged and remitted at the new rate beginning January 1, 2026.
As part of its 2026 budget the City of Chicago approved additional tax changes, including:
These changes may affect both businesses and consumers.
The City of Chicago has published more details about all 2026 tax rate changes, including the Personal Property Lease Transaction Tax on its website.
Chicago tax rules, especially those involving leased property and software, can be complex. If you are concerned about these tax increases, unsure how they impact your business or how to properly calculate them, the tax team at Cray Kaiser is here to help. Contact us to ensure your business remains compliant and is prepared for the 2026 Chicago tax changes.
CPA | CK Principal
The “One Big Beautiful Bill” signed into law over the July 4th weekend introduces major updates to estate and gift tax rules that could significantly affect your estate planning strategy. Prior to the Act, the gift and estate tax exemptions were slated to scale back to about $7 million per taxpayer in 2026.
The following are the highlights involving the estate and gift tax:
Beginning January 1, 2026, the federal estate and gift tax exemption will increase to:
This increased from $13.99 million per individual exemption available in 2025. This new amount will also be adjusted annually for inflation after 2026. This exemption is made “permanent” by the Act, but as history reminds us, a future change in control of the government means nothing is ever truly permanent.
The annual gift exclusion remains at $19,000 per recipient for 2025. This means you can give up to $19,000 per individual without reducing your lifetime estate tax exemption. The annual exclusion will continue to adjust for inflation each year.
This portability feature remains a powerful estate planning tool for married couples aiming to preserve wealth and minimize estate taxes.
Prior to OBBBA, the federal exemption was expected to drop to about $7 million per taxpayer in 2026. This pending “sunset” led many individuals to accelerate estate planning strategies before the deadline.
With the new, higher $15 million exemption, that state of urgency has eased. But strategic estate planning is still essential, especially for individuals or couples with estates near or above the new thresholds.
For taxpayers residing in Illinois, the federal exemption is not the only number that matters. Illinois imposes its own estate tax on estates over $4 million.
We recommend speaking to your advisors to make sure your trusts are structured to maximize federal and state tax benefits.
Even though OBBBA extends and expands the federal exemptions, estate planning remain crucial for individuals and families of all wealth levels. Laws can change, so the best way to protect your legacy is to keep your estate plan current, flexible and aligned with your goals.
If you have questions about the OBBBA affects your estate, gift or trust planning, contact the team at Cray Kaiser to help you evaluate your options and ensure your plan is up to dat
