Tax Season Is In Full Swing!
As we move into our busiest time of year, we wanted to share some exciting news: E-Signatures have arrived.
Our firm has adopted E-Signatures for most tax returns and associated documents, making filing your taxes easier and more convenient than ever before.
With E-Signatures, you can sign and submit your tax documents without having to print, sign, scan, and upload them again. Such a time saver!
If you file your personal return with a spouse, both of you will need to E-Sign. Our tax software uses the email addresses on your tax organizer to deliver the packet, so make sure your contact information is up to date.
In even more exciting news…we are pleased to officially welcome Nikki Hansen, CPA, to the team. She joined us at the end of October 2022 and is working remotely from Virginia. Nikki comes to the firm with many years of accounting and tax experience, and we’re thrilled to have her on board.
As always, our team is here to answer any questions, and we’re committed to providing you with the highest level of service and expertise.
Susan Clarke & The CPA Team
In this issue:
  • Tax Corner: Mandatory Paid Leave, Illinois Secure Choice Retirement Plan
  • Featured Professional: McCulloch Communications
  • Tax Facts: IRS Document Upload Tool
  • New CPA Client: Hair Has No Gender
  • Check This Out: QBO updates
  • Important Tax Dates
Mandatory Paid Leave
Illinois is set to become the third U.S. state (after Maine and Nevada) to mandate earned paid leave for any reason after the Paid Leave for All Workers Act (PLFAW) was passed in the state legislature.
Starting on January 1, 2024, almost all covered Illinois employers will be required to provide covered employees with up to 40 hours of paid leave per year that can be used for any purpose.
Here’s a quick overview:
  • No reason needs to be given for taking leave, and employers cannot require documentation or certification for the need to take leave.
  • Employers can frontload the 40 hours of paid leave or offer an accrual option.
  • Leave accrues at the rate of 1 hour of paid leave for every 40 hours worked.
  • Unused accrued leave can be carried over annually, but the employer is not required to provide more than 40 hours of paid leave for an employee in a 12-month period.
  • Employers who frontload the 40 hours do not have to carry over unused paid leave to the next 12-month period.
  • Employers must post a notice and maintain records on employee accruals and use.
  • For foreseeable leave, employers may require up to 7 calendar days’ notice if there is a written policy outlining notice requirements and procedures.
  • For non-foreseeable leave, employees must provide notice as soon as possible.
Illinois Businesses with 5+ Employees Must Now Offer Retirement Benefits
A recent amendment to the Illinois Secure Choice Savings Act requires that businesses with 5 or more employees must offer a qualified retirement savings plan—such as a 401(k), 403(b), SEP-IRA, or Simple IRA—or enroll employees into the Secure Choice Program.
This program was created in 2018 with the aim of increasing retirement savings access for private-sector employees, as research shows that only 4 in 10 businesses with less than 100 employees offer retirement benefits. And we know that people are less likely to save on their own without a structured plan, leaving millions of people financially unprepared for their retirement years.
Eligible employers who are not offering a private-sector retirement plan must automatically enroll employees in Secure Choice.
Businesses are required to participate in Secure Choice if they:
  • Have been in operation for at least two years
  • Employed 5 or more people in every quarter of the previous year
  • Did not sponsor a qualified retirement savings plan in the last two years
In 2023, the standard Secure Choice plan for employees making up to $153,000 (or $228,00 for married filing jointly) is a target date Roth IRA with a default 5% payroll contribution. There is also a Traditional IRA plan available for employees who exceed the standard income limit.
Once enrolled, participants can change their contribution levels or fund options, or they can choose to opt out of the program within the 30-day grace period.
With this plan, employers are not allowed to match contributions. Employee contributions for 2023 are limited to $6,500 per year, plus an additional $1,000 per year if over age 50.
Qualified businesses that don’t offer a retirement plan and don’t enroll their employees into Secure Choice by the November 1, 2023 deadline will be subject to a fine of $250 per eligible employee for the first year and $500 per employee each following year.
Is it better to offer your own 401(k) for employees?
If you’d rather avoid the state-mandated plan and set up your own retirement plan for employees, such as a 401(k), you may be eligible for a tax credit of up to $5,000 for the first 3 years of the plan.
In addition, employer contributions to 401(k) plans are actually tax deductible (as long as they are under IRS limits).
Want to review the tax benefits of the various options? Send us a message!
Featured Professional:
McCulloch Communications
With all of the work that business owners have to do to RUN their businesses, “doing” marketing and posting on social media can easily slip to the bottom of their to-do lists. That’s where Amber from McCulloch Communications can help.
For the past 6 years, her boutique marketing agency has been helping small businesses and solopreneurs figure out how to show up online and how to best communicate with their ideal customers using email, newsletters, branding assets, website copy, publications, social media, and video.
Amber built McCulloch Communications with the philosophy that marketing is not one-size-fits-all. Every business is unique and what works for one won’t necessarily work for another. She gives practical, strategic advice and develops marketing plans that are customized for the needs, budget, preferences, and personality of the business owner.
Learn more about her services at mccullochcommunications.com or connect with her on Instagram @mccullochcomms.
Say Hello to CPA’s New Client:
Hair Has No Gender
Founded by Jamie DiGrazia, an award-winning hairstylist, educator & advocate for the LGBTQIA2S+ community, Hair Has No Gender is a training program that offers professional education and business tools that advocate, respect, and support the well-being of all genders and identities through a human-first approach to hairdressing.
Quickbooks Online is adding some cool new features!
  • Revenue Recognition on service items with straight line recognition over 5 years and forward-looking reporting.
  • Business Networking thru QBO – 3.8M members are in the network, you can search and invite contacts to connect. Invoices can be sent through the network and become bills once approved in the recipient’s QBO file. W9 exchange is coming too!
  • New Invoicing is being released to all QBO users over 2023.
Important Tax Dates & Deadlines
March 15, 2023
S-Corporation (1120S) and Partnership (1065) Returns for Calendar Year 2022 Due
**April 18, 2023**
Individual Tax (1040) Returns Due
C Corporation (1120) and Trust (1041) Tax Returns for Calendar Year 2022 Due
1st quarter 2023 Estimated Tax Payment Due
Deadline for Individual 2022 IRA Contributions
H.S.A. Funding Deadline for 2022
May 15, 2023
Exempt Organization (990) Returns for Calendar Year 2022 Due
June 15, 2023
2nd quarter 2023 Estimated Tax Payment Due
September 15, 2023
3rd quarter 2023 Estimated Tax Payment Due
Extended Returns for S-Corporations (1120S) and Partnerships (1065) for Calendar Year 2022 Due
Clarke Public Accounting | Website