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.
CPA | CK Principal
Please note that this blog is based on laws effective in June 2025 and may not contain later amendments. Please contact Cray Kaiser for the most recent information.
If you’ve mailed a paper check to the IRS and noticed that it hasn’t been cashed, you’re not alone. There are several different reasons that this may be happening to you. Here are some short-term reasons and long-term changes that might be affecting your situation.
If it’s been at least two weeks since you sent the payment to the IRS and your financial institution verifies that the check hasn’t cleared your account, here’s what you can do:
If you choose this option, the IRS won’t charge a dishonored check penalty and you may be reimbursed for bank charges related to stopping payment. Form 8546 will allow you to file a claim for reimbursement of bank charges.
If you’re expecting a paper refund check from the IRS and it hasn’t arrived:
If the tool shows that the IRS issued your refund, but you haven’t received it, your refund may have been lost, stolen or misplaced. You should:
Depending on the status:
In an effort to modernize and reduce fraud, President Trump signed an executive order on March 25, 2025 requiring all federal agencies, including the IRS, to end their use of paper checks and switch to electronic payments by September 30, 2025.
What does this mean for you?
The US Secretary of the Treasury has been tasked with delivering a detailed implementation plan within 180 days, along with exceptions. Exceptions may include:
There are already many payment methods available for making electronic tax payments. Some current options available are:
The executive order cited that the use of paper-based payments by the federal government imposes unnecessary costs, delays, risk of fraud, lost payments, theft and inefficiencies. By switching to electronic payments, the IRS aims to improve accuracy, speed and security for taxpayers.
As these changes happen be assured that the experts at Cray Kaiser will continue to provide guidance on your electronic options for both refunds and tax payments. If you have concerns about a check that hasn’t cleared or want help transitioning to an electronic payment method, contact us today at (630) 953-4900 or fill out this form.
Important changes to Illinois sales tax rates are coming your way. Effective July 1, 2025, several taxing jurisdictions in Illinois will impose new local sales taxes or update their existing rates on general merchandise sales.
What’s Changing?
The following local sales taxes will be affected:
These updates will be collectively referred to as “locally imposed sales taxes.”
What’s Being Taxed?
This locally imposed sales tax will 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:
What Steps Should I Take Before July 1, 2025?
Make sure any cash registers and computer programs are updated to reflect the new tax rates beginning July 1, 2025. 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).
If a prior sale was subject to a sales tax rate different from the current sales tax rate, this should be reported on Line 8a of Forms ST-1 and ST-2.
What About Business District Sales Taxes?
Your business address determines whether business district sales tax applies to your sales. Remote retailers and marketplace facilitators who meet the tax remittance threshold should pay extra attention. If property is shipped or delivered to an address within a business district, the tax likely applies.
For more information, refer to the MyTax Illinois Tax Rate Finder, which provides a detailed list of business district addresses and corresponding rates.
Don’t Get Caught Off Guard
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, 2025, rollout.
CPA | CK Principal
As we await possible significant changes to the 2026 tax law, the IRS has provided guidance on Health Savings Accounts (HSA). Specifically, they’ve recently released the inflation-adjusted contribution limits for 2026 related to HSAs and high-deductible health plans (HDHPs). While there are modest increases in the contribution limits, the HSA catch-up contribution amount remains unchanged.
Important Reminder: You can only contribute to an HSA account if you are enrolled in a High Deductible Health Plan (HDHP). The IRS sets specific criteria for what qualifies as an HDHP, including minimum deductibles and maximum out-of-pocket expenses.
One key tax benefit of HSAs that stands out is that contributions are tax-deductible even if you don’t itemize deductions. Additionally, these funds grow tax-free over time.
When HSA funds are used for qualified medical expenses, such as doctor visits, prescriptions, and certain medical procedures, withdrawals from an HSA are tax-free. However, if you use HSA funds for non-medical purposes, you will owe income tax plus a 20% penalty (10% after age 65).
To read more about the benefits of an HSA, click here. If you’d like to explore how an HSA could fit into your financial planning, please contact our office at 630.953.4900 or fill out this form.
CPA | CK Principal
Illinois taxpayers looking to give back while receiving a tax benefit now have a new opportunity with the Illinois Gives Tax Credit Act. Effective January 1, 2025, the act allows donors to receive a 25% state tax credit for qualified charitable contributions made to permanent endowments at approved community foundations.
However, the State has capped the program at $5 million in total tax credits per calendar year through 2029. Additionally, the credits are distributed based on the order in which the donations are received. Because of these limitations, we recommend that you act early if interested in the credit.
Only permanent endowment funds held by Qualified Community Foundations are eligible to receive donations that generate the credit.
Donations can support or establish funds that:
Qualified Community Foundations are specifically designated as such by the State. Additionally, each Qualified Community Foundation can issue up to $750,000 in credits per year (15% of the $5 million available in total annual credits).
Be sure to inquire on eligibility before starting the contribution process.
The Illinois Gives Tax Credit offers a limited amount of State tax credits no matter if donors itemize or take the standard federal deduction.
The credit can only offset your state income tax liability each year. Any excess credit is carried forward and applied to your tax liability in the subsequent five taxable years.
Donors should apply online at MyTax.Illinois.gov and request a Contribution Authorization Certificate (CAC). Once the CAC is received, you have 10 business days to make your gift to a Qualified Community Foundation.
If you have questions about the Illinois Gives Tax Credit or are ready to take advantage of the new credit but need assistance, contact Cray Kaiser at 630-935-4900 or visit here.
Senior Tax Accountant
Is your business fully leveraging available tax credits? The Returning Citizens Credit is a valuable incentive that could reduce your tax liability while supporting workforce reintegration for formerly incarcerated individuals.
The Returning Citizens Credit, initially introduced in Illinois in 2006, as the “ex-felon tax credit” is a tax benefit designed to encourage businesses to hire formerly incarcerated individuals. Originally businesses were eligible for a 5% tax credit on wages paid to eligible employees, with a cap of $1,500 per individual.
Beginning in 2025, the program was renamed the “Returning Citizens Credit” and expanded to provide a more substantial benefit: businesses can now receive a tax credit equal to 15% of wages paid to eligible employees, up to a maximum of $7,500 per individual per year. This adjustment aims to further incentivize employers to provide opportunities to those reentering society.
To qualify for the Returning Citizens Credit, an individual must meet the following criteria outlined in the Illinois credit code 5380.
The process of claiming the Returning Citizens Credit varies depending on your business’s structure. The credit is reported on the following forms:
When claiming the credit, a business will need to provide the following information for each qualifying returning citizen:
Once the credit is correctly calculated and the respective form is completed, it will be reflected on schedule K-1p for partners or shareholders, IL-1120 for C- Corporations and IL-1040 for individual tax returns.
Qualifying wages for the credit are those subject to unemployment tax under IRC Section 3306. Additionally, wages must be paid within one year of the employee’s hire date to qualify for the credit.
It’s important to note that you can only claim the wages paid during the tax year in which you are filing for the credit. If you claim the credit for multiple years, you’ll need to include the amount of the credit claimed in the previous years, as the maximum credit per returning citizen is capped.
The Returning Citizens Credit is a tool for businesses looking to reduce their tax burden while offering a second chance to those who have been incarcerated. By understanding the eligibility criteria, qualifying wages and the necessary steps to claim the credit, you can ensure that your business can take advantage of this opportunity. The qualified tax professionals at CK can help you navigate the process and optimize your business’s tax benefits. You can call us at 630-953-4900 or contact us here.
CPA | CK Principal
The death of a spouse is a profoundly challenging time, both emotionally and financially. Amidst the grieving process, surviving spouses must also navigate a complex array of tax issues. Understanding these tax implications is crucial to ensuring compliance and optimizing financial outcomes. This article explores the key tax considerations for surviving spouses, including filing status, inherited basis adjustments, home sale exclusions, notifications to relevant agencies, estate tax considerations, and trust issues.
If you have a team of trusted advisors – accountants, attorneys, insurance, and/or financial professionals – these individuals are adept at advising clients during this trying time. They have experience in dealing with these difficult issues and can advise in a non-partial way. Let them help you as you grieve your loss.
Ideally, determining the key advisors should not be a difficult process. In some cases, prepared individuals may have created a crash card to assist their families upon their passing. The crash card may help you identify advisors and to know where important documents are stored.
It is imperative for the surviving spouse to notify the Social Security Administration (SSA) of the spouse’s death to adjust benefits accordingly. Usually, the funeral home will notify SSA, but to be safe, the surviving spouse should also contact SSA. Similarly, any payers of pensions or retirement plans must be informed to ensure the proper distribution of benefits and to avoid potential overpayments that would have to be repaid.
To prevent future complications, it is essential to change the title of jointly held assets to the survivor’s name alone. This includes real estate, vehicles, and financial accounts. It is also an opportunity to determine whether ownership should be held individually or in trust. Properly updating titles ensures clear ownership and facilitates future transactions.
Surviving spouses should also review and update their own beneficiary designations on life insurance policies, retirement accounts, and wills.
Many couples establish living trusts to manage their assets. Upon the death of one spouse, the trust may split into two separate trusts: one revocable and one irrevocable. The irrevocable trust typically requires a separate tax return. Understanding the terms of the trust and its tax implications is crucial for compliance and effective estate planning.
In the year of a spouse’s death, and provided the surviving spouse has not remarried, the surviving spouse has several filing status options. The option most often used is to file a joint tax return with the deceased spouse. This option is generally more favorable than filing as a single individual, as it allows for higher income thresholds and deductions. If the surviving spouse chooses not to file jointly, they may file as married filing separately or, if they qualify, as head of household.
If the surviving spouse has not remarried and has a dependent child, they may qualify as a “Qualifying Surviving Spouse” for up to two years after the year of the spouse’s death. This status offers benefits similar to those of filing jointly.
When a spouse passes away, the surviving spouse may receive an adjustment in basis for the inherited assets, which can significantly affect future capital gains taxes. The extent of this basis adjustment depends on how the title to the assets was held:
The rationale behind these basis adjustments is to align the tax basis of inherited assets with their current market value, thereby reducing the potential capital gains tax burden on the surviving spouse. This adjustment reflects the change in ownership and the economic reality that the surviving spouse is now the sole owner of the asset.
To establish the inherited basis, obtaining a qualified appraisal of the assets as of the date of death is often necessary. This appraisal serves as documentation for the basis and is crucial for accurately calculating capital gains or losses upon the future sale of the assets.
Surviving spouses may benefit from the home gain exclusion, which allows for the exclusion of up to $500,000 of gain from the sale of a primary residence, provided the sale occurs within two years of the spouse’s death, and the requirements for the exclusion were met prior to the death. This exclusion can be a valuable tool for minimizing taxes on the sale of a home, although in most cases, any gain within the two years is likely to be minimal because of the basis step-up provision. After the two-year period has elapsed, the exclusion drops to $250,000.
If the deceased spouse’s estate exceeds the federal estate tax exemption, an estate tax return may be required. Even if the estate is below the exemption threshold, filing an estate tax return can be beneficial to elect portability. Portability allows the surviving spouse to utilize the deceased spouse’s unused estate tax exemption, potentially reducing estate taxes upon the surviving spouse’s death. Not only federal estate tax laws should be considered, but state estate tax laws as well.
In addition to the primary tax considerations, surviving spouses must also be aware of how tax attributes are treated following the death of a spouse. Tax attributes include various tax-related characteristics such as net operating losses, capital loss carryovers, and passive activity losses. This can be complicated based on whether the attributes are related to a specific spouse or jointly.
The tax issues facing surviving spouses are multifaceted and require careful consideration. By understanding filing status options, inherited basis adjustments, home sale exclusions, and other critical tax matters, surviving spouses can navigate this challenging period with greater confidence and financial security.
Contact CK’s office at 630.953.4900 for professional tax assistance to ensure compliance and optimize financial outcomes during this difficult time. Our trusted team of advisors will be there to guide you every step of the way.
Senior Tax Accountant
If you’re running a small or medium-sized business, you know that cash flow is everything. Keeping up with payroll, replenishing inventory, and funding growth can feel like a never-ending balancing act. But what if there was a hidden way to free up cash?
Enter tax credits. These aren’t just numbers on a financial statement; they’re tools that can give your cash flow the boost it needs. Let’s explore how you can unlock these hidden advantages and give your cash flow a much-needed boost.
Unlike tax deductions, which only reduce taxable income, tax credits directly cut down your tax bill. That means more money stays in your business, strengthening your financial position and fueling growth. Here are some key credits to consider:
Why It’s a Win: Hiring new employees doesn’t just build your team, it can also boost your cash flow. The WOTC rewards businesses for hiring individuals from specific target groups, such as veterans, individuals from low-income areas, and long-term unemployment recipients.
How It Works: You may be able to claim a tax credit for a percentage of an employee’s wages during their first year on the job. This can help offset hiring costs while reducing your tax liability.
How to Qualify: Hire employees who meet WOTC eligibility, submit a certification request during the hiring process, and maintain precise hiring and detailed payroll records.
Why It’s a Win: Innovation pays off, literally. If your business is developing new products, improving processes, or advancing technology, you may qualify for the R&D tax credit.
How It Works: You can claim a percentage of qualifying R&D expenses, including any wages and supplies involved with the research. This directly reduces your tax bill, making it a valuable incentive for businesses pushing the envelope in their industry.
How to Qualify: Keep detailed records of your R&D activities, including project descriptions, expenses, and outcomes to support your claim.
Why It’s a Win: Startups and smaller businesses don’t have enough income to benefit from the R&D tax credit, but there’s a workaround. The payroll tax credit allows eligible businesses apply up to $250,000 of their R&D credit toward their payroll taxes instead.
How It Works: This option provides cash flow relief right away rather than waiting to offset future tax liability.
How to Qualify: Meet startup eligibility criteria (typically having less than $5 million in gross receipts) and ensure your R&D activities meet the requirements. Accurate documentation of expenses is key.
Why It’s a Win: Certain industries, such as renewable energy, manufacturing, and tech—benefit from specialized tax credits to encourage innovation and sustainability. These credits reward activities like energy efficiency improvements, eco-friendly initiatives, and technological advancements.
How They Work: Whether you are upgrading to energy-efficient equipment or investing in new technologies or adopting eco-friendly practices, these incentives help cut your tax bill and boost your cash flow.
How to Qualify: Research the credits available in your industry and ensure compliance with all relevant requirements to make the most of these opportunities.
Claiming tax credits is just the beginning. Once you secure them, they can be a powerful tool in your financial strategy. Use the extra cash inflow to invest in growth opportunities, pay down debt, or build a financial cushion for the future. By incorporating tax credits into your planning, you are setting your business up for stability and success.
Tax credits could be the key to unlocking new financial opportunities for your business. If you’re ready to explore which credits apply to you, Cray Kaiser is here to help. As experienced advisors, we specialize in helping businesses navigate the complexities of tax credits.
CPA | Tax Supervisor -SALT
Beginning January 1, 2025, Illinois legislation requires lessors of tangible personal property (TPP) to charge Illinois sales tax on rental charges. Previously, TPP acquired for leasing purposes in Illinois was taxed to the purchaser, and leases of TPP were not taxed to the rental customer. Under the new law, lessors must apply Illinois sales tax to rental charges based on the sourcing rules outlined in the Illinois Retailer’s Occupation Tax (ROT).
Determining the Appropriate Tax Rate
For leases requiring recurring periodic payments for TPP delivered by the lessor to the customer, each periodic payment is sourced to the primary property location as provided by the lessee. For all other leases, including leases that do not require regular periodic payments, and any lease in which the customer takes possession at the lessor’s place of business, the sales tax rate is determined as provided under the Retailers’ Occupation Tax Act for sales at retail (86 Ill. Adm. Code 270.115). For additional details, see Illinois Informational Bulletin FY 2025-15 (FY 2025-15, Illinois Sales and Use Tax Applies to Leased or Rented Tangible Personal Property).
Exceptions to the New Law
Several exceptions to this legislation remain unchanged :
City of Chicago Exception
The City of Chicago already imposes its own local tax on non-titled use of TPP – the Personal Property Lease Transaction Tax, which increased from 9% to 11% as of January 1, 2025. To prevent double taxation, the state has excluded the City of Chicago from the ROT on leases of TPP. Notably:
Sales Tax Impact on TPP Purchases
Effective January 1, 2025:
Need Assistance
Navigating the complexities of sales and use tax can be challenging. Cray Kaiser is here to help. If you have any questions or need guidance, please contact us or call us at 630-953-4900.
CPA | Tax Supervisor – SALT
Beginning January 1, 2025, all out-of-state shipments into Illinois will be subject to the Retailer’s Occupation Tax (ROT). This tax includes state and local sales taxes and is determined based on the destination of the sale.
Key Changes
Previously, Illinois retailers with a physical presence in the state who sold tangible personal property from locations outside Illinois were only required to charge Illinois Use Tax (state, not local tax) on such sales. Under the new regulations, such sales will be subject to ROT, including local taxes.
Who Is Affected
This change only applies to retailers with a physical presence in Illinois who make sales into Illinois from an out-of-state location. The change does not impact remote retailers with no physical presence in the state.
Further Guidance
The State of Illinois provides Bulletin FY 2025-10 to assist sellers in navigating these changes including what actions to take in response to this change.
ROT Rules by Seller Type
1. Illinois Retailers
Sellers with a physical presence in Illinois shipping from locations within the State must collect and remit ROT based on the origin of the shipment.
2. Out-of-State Sellers
Retailers with a physical presence in Illinois and shipping from both in-state and out-of-state locations follow these rules:
3. Remote Sellers
Retailers with no physical presence in Illinois who meet a threshold of $100,000 or more in gross receipts or 200 or more separate transactions must collect ROT based on the destination of the shipment.
Need Assistance
Cray Kaiser can answer your questions on the changing landscape of sales and use taxes. Please contact us here or call us at 630-953-4900 if you have any questions.
On December 12, 2024, President Biden signed the Federal Disaster Tax Relief Act of 2023 into law. This provision was long awaited by victims of hurricanes and wildfires in the past few years, and affects disasters declared between January 1, 2020 and February 9, 2025. This includes Hurricanes Idalia, Nicole, Fiona, Helene, Milton, Ian, and the California and Hawaii wildfires, and other specific disasters during this period.
Before this Act was passed, individuals could only deduct personal casualty losses as an itemized deduction to the extent the loss exceeded 10% of their adjusted gross income. The limitation on the deductible loss meant that many victims of disasters received no tax benefit from their casualty loss.
Under the new law, the loss is deductible whether the taxpayer itemizes or not. Additionally, the adjusted gross income limitation has been replaced. The deduction is now only reduced by $500 per casualty loss.
In addition to the relief for losses, the act also provides that individual taxpayers can exclude from gross income compensation resulting from certain wildfires. Qualified wildfire relief payments received during taxable years beginning after December 31, 2019, and before January 1, 2026, are eligible for this provision. The same exclusion will apply to individual taxpayers receiving disaster relief payments due to the East Palestine, Ohio train derailment.
If you were a victim of a disaster as noted above, please contact Cray Kaiser at 630-953-4900 or by filling out this form. We will review your tax situation to determine if an amended return should be filed to claim the benefits provided under this Act.
