- 30% of the qualified Illinois Production Spending.
- 30% credit on Illinois salaries up to $100,000 per worker.
- Tax credit can be carried forward 5 years from when originally issued by IFO.
- The Illinois Film Tax Credit will not sunset until May 2021, and is renewable in 5-year increments, thereafter.
- Applicants will receive an additional 15% tax credit on salaries of individuals (making at least $1,000 in total wages) that live in an economically disadvantaged area (at least 13.8% unemployment).
Catalano, Caboor & Co. frequently provides services beyond traditional accounting, auditing and tax responsibilities nationwide.
Adoption Tax Credit
Adoption can create new families or expand existing ones. The expenses of adopting a child may also lower your federal tax. If you recently adopted or attempted to adopt a child, you may be eligible for a tax credit. You may also be eligible to exclude some of your income from tax.
Here are ten things to know about adoption tax benefits:
1. The maximum adoption tax credit and exclusion for 2014 is $13,190 per eligible child.
2. To be eligible, a child must generally be under 18 years old. There is an exception to this rule for children who are physically or mentally unable to care for themselves.
3. For 2014, the tax credit is nonrefundable. This means that, while the credit may reduce your tax to zero, you cannot receive any additional amount in the form of a refund.
4. If your credit exceeds your tax, you may be able to carry forward the unused credit. This means that if you have an unused credit amount in 2014, you can use it to reduce your taxes for 2015. You can carry over an unused credit for up to five years or until you fully use the credit, whichever comes first.
5. Use Form 8839, Qualified Adoption Expenses, to claim the adoption credit and exclusion.
6. Adoption expenses must directly relate to the legal adoption of the child and they must be reasonable and necessary. Expenses that qualify include adoption fees, court costs, attorney fees and travel costs.
7. If you adopted an eligible U.S. child with special needs and the adoption is final, a special rule applies. You may be able to take the tax credit even if you did not pay any qualified adoption expenses. See the instructions for Form 8839 for more information about this rule.
8. If your employer has a written qualified adoption assistance program, you may be eligible to exclude some of your income from tax.
9. Depending on the adoption’s cost, you may be able to claim both the tax credit and the exclusion. However, you cannot claim both a credit and exclusion for the same expenses. This rule prevents you from claiming both tax benefits for the same expense.
10. The credit and exclusion are subject to income limitations. The limits may reduce or eliminate the amount you can claim depending on your income.
Form 10-Q/10-K Filing
Quarterly and Annual reports required by SEC for public company's. Ask Tony Ozzauto for more information.
Illinois Film Production Tax Credit
We assist Television and Movie professionals with their Illinois Film Production Tax Credit needs. Catalano, Caboor & Company is 1 of only 8 CPA firms listed on the Illinois Film Office website. Contact Christine Fitch or Jerry Catalano for assistance with Illinois Film Production Tax Credit.
Illinois Live Theater Production Tax Credit
- The Program provides for a transferrable credit of 20% of all qualified Illinois expenditures including Illinois resident salaries (non-talent) up to $100,000 per worker.
- The minimum Illinois spend for the production is $100,000 for Illinois labor and marketing expenditures.
- An eligible applicant includes: a theater producer, owner, licensee, operator or presenter.
- Eligible theaters must have a seating capacity of at least 1,200 seats.
- A production must either be Long-Run (runs longer than 8 weeks with at least 6 performances per week) or Pre-Broadway (scheduled for Broadway’s Theater District in New York City within 12 months after its Illinois presentation).
- Application must be submitted no sooner than 180 days prior to opening of ticket sales and no later than the last business day prior to the opening.
Credits will be shall be awarded on a first-come, first served basis, based on the date on which each properly completed application for an Accredited Theater Production Certificate is received by the Department. If more than one application is received on the same day, the credits will be awarded based on the time of submission of that particular day. Each Theater Tax Credit Award shall be limited to $500,000 per Accredited Theater Production per tax year. If an Accredited Theater Production receives only a portion of the Theater Tax Credit Award to which the Department has determined it is entitled due to the annual fiscal cap on the amount of credits that can be awarded, the Accredited Theater Production shall not be entitled to any Theater Tax Credit Award in the following Tax Years.
During our years of experience dealing with many taxing authorities, we have achieved a level of competence that can ensure our clients they are being properly represented before the various federal and state tax agencies.
As a business grows, it must hire more employees, which can result in increased payroll administration. We can assist you in implementing the controls necessary to ensure a reliable, efficient, and effective payroll system. Our firm can also help you develop a payroll system and prepare all necessary payroll tax returns in a timely manner.
Many of our clients are responsible for collecting and submitting sales taxes in many different vicinities. We can assist your company in the compilation of information and preparation of sales tax returns in an efficient and timely manner.
Tax Planning & Preparation
Tax planning and preparation form a winning combination for our successful individual and business clients. Whether you are an individual or a multi-tiered partnership, our experienced staff can develop tax strategies that take advantage of new tax laws and legislation.
Tax planning is an essential element of the tax preparation process. By making tax planning part of your overall business strategy, you can use our experience and access to the most current new developments in the tax laws to minimize both your current and future tax liabilities.
Our significant investment in computerized tax preparation and research software enables us to accurately and efficiently prepare returns for various types of entities including individuals, corporations, partnerships, trusts, estates, and not-for-profit organizations.
We prefer to take a proactive vs. reactive approach to tax services. By keeping current on new tax laws and legislation, we are in a position to identify key tax planning opportunities that minimize both your current and future tax liabilities. We provide our individual and business clients with the taxation expertise and knowledge that they deserve throughout the year. Tax services offered include but are not limited to:
- Tax planning & return preparation - Individuals - Corporations - Partnerships - LLCs/LLPs - Estates, trusts & gift - Not-for-profit organizations
- Taxing authority representation
- Divorce and support issues
- Tax effects of buying/selling a business
We take a proactive approach by identifying tax-planning opportunities to minimize current and future tax liabilities. Our services offered include, but are not limited to:
Tax Planning & Return Preparation. Our professionals use computerized systems and research software to accurately and efficiently prepare returns for individuals, corporations, partnerships, trusts, estates, and not-for-profit organizations.
Estates, Trusts & Gifting. Effective estate and gift planning orderly transfers assets to beneficiaries, provides security for surviving family members, and reduces tax liability. Our professionals can guide you through the process of getting your financial affairs in order.
International Taxation. We have experience with tax matters for businesses operating in, or doing business in, foreign countries.
Sales Tax Reporting. We keep businesses compliant with taxing authorities by compiling and preparing sales tax returns for clients responsible for collecting and submitting sales taxes.
IRS Representation. Federal, State and local representation on tax issues requiring representation or communication with taxing authorities.
Divorce Planning. Our professionals help identify the value of the assets, project the potential tax impact, and work to bring a quick closure.
Business Entity Selection. We evaluate the pros and cons of operating as an S or C corporation, sole proprietor, or partnership and help you select the entity that best fits your needs.
Multiple State Tax Returns
If you’ve lived or worked in more than one state, you may need to file multiple state tax returns. You may have to file part-year resident returns or nonresident returns in multiple states in these kinds of scenarios.
Estate & Trust Tax Preparation
Effective estate and gift planning facilitates the orderly transfer of assets to your beneficiaries, provides security for your surviving spouse, and can reduce or eliminate the tax due on the transfer of your business and other assets. For business owners, providing for business continuity and succession of ownership is essential. We can guide you through the complex process of getting your financial affairs in order.
Our experience with the taxation of U.S residents working abroad and foreign citizens working in the U.S. has provided us with an extensive base of knowledge in the area of international taxation.
Illinois Research and Development (R&D) Tax Credit
Illinois Research and Development (R&D) credit, which took effect in 1990, was modeled on the
federal R&D credit in place at that time.
It is a nonrefundable corporate income tax credit equal to 6.5 percent of the incremental increases in qualified R&D expenditures within the State. The credit can be carried forward, up to five years, after it is earned.
Qualifying R&D expenditures are defined under Internal Revenue Code, Section 41. Three general
conditions must be met for expenditures to qualify for the R&D credit. Qualifying expenditures
must help discover information that is technological in nature, be useful in the development of a
new or improved business component, and be considered experimental in its relation to improving
business component function, performance, or quality. Research is considered technological in
nature if the process of experimentation used to discover such information fundamentally relies
on principles of the physical or biological sciences, engineering, or computer science.
Illinois’ credit is calculated similar to how the federal R&D credit was calculated before 1990. The
R&D credit establishes a baseline level of expenditures that is the average of the previous three
years’ expenditures. The incremental increase is the level of current year R&D expenditures that
exceeds the three-year baseline. The credit is then the rate of 6.5 percent times the incremental
increase in R&D expenditures.
There are a small number of relatively large manufacturing or wholesale firms who earn
most of the R&D credit in Illinois. Between 2005 and 2007, a maximum of 252 firms earned
the credit. A majority (61.0 percent) of the R&D credits earned in 2007 were earned by the
manufacturing industry.9 Firms earning the R&D credit in 2007 had an average federally
taxable income of $181.5 million, compared with an average federally taxable income of under
$10.0 million for all corporate (1120) filers. The top 25 firms by R&D credit earned between
2005 and 2007 accounted for 89.7 percent of all credits earned during that period.
We have assisted many clients with their R&D Tax Credit needs. Please contact us with any questions.
Economic Development for a Growing Economy IL EDGE Tax Credit
The Economic Development for a Growing Economy (EDGE) Credit is a credit awarded by the
Department of Commerce and Economic Opportunity (DCEO) to firms in select industries that
are proposing new investment in Illinois to create or retain a certain number of jobs. The total
amount of credit awarded by DCEO is subject to negotiation, but cannot exceed the amount of
Individual Income Tax that would be generated during the taxable year through the compensation
of new employees created by the project. In order to be awarded the credit, firms must apply to
DCEO and their investment plan is scrutinized by a committee made up of representatives of
several state departments and a representative of the locality where the project will take place.
Although there are guidelines written into the law, DCEO has a certain amount of discretion in
determining who is awarded credits and under what conditions. The rate and duration of the
credit are negotiable, except that the rate may not exceed 100% of the increase in Individual
Income Tax as a result of the project, and the duration may not exceed 10 years. EDGE Credits
for firms initially certified by DCEO after 2003 are subject to disclosure under the Corporate
Please contact our CPA Jeff Hansen with all your IL Edge Tax Credits inquiries.
Historic Rehabilitation Tax Credit
Tax Credit Basics
The rehabilitation tax credit offers an incentive for owners to renovate and restore old or historic buildings. Tax reform legislation passed in December 2017 changed when the credit is claimed and provides a transition rule:
- The credit is 20 percent of the taxpayer’s qualifying costs for rehabilitating a building.
- The credit doesn’t apply to the money spent on buying the structure.
- The legislation now requires taxpayers take the 20 percent credit spread out over five years beginning in the year they placed the building into service.
- The law eliminates the 10 percent rehabilitation credit for pre-1936 buildings.
- A transition rule provides relief to owners of either a certified historic structure or a pre-1936 building by allowing owners to use the prior law if the project meets these conditions:
- The taxpayer owned or leased the building on January 1, 2018, and the taxpayer continues to own or lease the building after that date.
- The 24- or 60-month period selected by the taxpayer for the substantial rehabilitation test begins by June 20, 2018.
Taxpayers use Form 3468, Investment Credit, to claim the rehabilitation tax credit and a variety of other investment credits. Form 3468 instructions have detailed requirements for completing the form.
Please contact us today to see if this tax credit can be beneficial to you.