"I'm a new business owner -- how many different types of taxes do I need to pay?"

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Today, our friend, D Zorea of DDZ Accounting Group, submits the following article:


If you're a new business owner and are feeling overwhelmed by the prospects of paying too many taxes, it might be because there are so many different types of taxes for which to account.  Depending on your type of business, an Illinois business owner will be liable for different taxes including (but not limited to):

• Sales: Does your business sell widgets, or food products? You are responsible for collecting the state (and sometimes local municipality's) Sales and Use Tax and remitting these back to the appropriate taxing agencies. Sales tax rates can range around 7.5% to 10%.
• Payroll: Do you have employees?  You will be matching your employee's payroll withholding taxes, as well as contributing to federal and state unemployment insurance premiums based on your employees' earned wages.
• Franchise: The state of Illinois charges a Franchise tax of 1.5% for corporate business owners. This includes LLC, C-corporations and S-corporations, but not sole-proprietors or unincorporated partnerships.
• Income: Similar to sole-propietorships, S-corporations and LLC's are considered "pass-through" entities.  In other words the net profits of those businesses "pass-through" to their owners and are taxed at the business-owners' individual tax rates.  The income tax returns for S-corps and LLC's generate a K-1 form for each shareholder or LLC member; these are the business owner's equivalents to an employee's W-2 form.  However, different from a W-2 which typically already includes income tax withholding, a business owner with net-income from his/her business can either file and pay quarterly estimated taxes throughout the year or pay the lump-sum with the year-end income-tax return.

For the above taxes, the IRS and Illinois state agencies may apply late file or late-pay penalties; so work with your tax-professional to calculate the correct taxes due, maximize your tax return, file on time, pay on time, and save all that time and headache of doing it alone. For other questions, please contact D Zorea at DDZ Accounting -- e: d@ddzgroup.com, p: 630-368-0183, other client-testimonials at www.facebook.com/ddzaccounting.



O'Flaherty Law is based in Downers Grove and Chicago, Illinois. Our attorneys have expertise in Corporate Representation, Commercial Litigation, Divorce, Bankruptcy, Estate Planning, and DUI defense. Please visit our website at www.oflaherty-law.com for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

Tenants' Rights 101

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Most apartment tenants have a horror story or two: busted pipes, leaks, mold, infestation, horrible neighbors, etc.--and many of these apartment tenants probably did nothing about these horror stories, believing that their only remedy was moving out.  Historically this was the case, but today tenants have a variety of rights to ensure that they live in peace and comfort.
Implied in every lease is an implied warranty of habitability, which requires that the apartment be maintained in a livable condition by the landlord.  Working pipes, plumbing, heat, removal of insects and rodents, and keeping the premises within the housing code are the some of the basic requirements of this warranty.  
If a breach of the implied warranty of habitability arises and the landlord fails to remedy the problem within a reasonable time, the tenant has several remedies.  The tenant may (1) move out and terminate the lease, (2) repair the problem and deduct that cost from the rent, (3) reduce the rent by the damage done, or (4) sue for damages.  If the tenant does not wish to take advantage of these remedies, he or she should document all of the damage to ensure that the security deposit is not reduced due to the landlord’s negligence.  
Additionally, If the tenant entered into a nice, clean apartment with relatively high rent, only to see the place fall into disrepair, the tenant can sue to have rent reduced by the lowered property value of the premises.
Tenants may not own their apartment, but they do own the possessory right to that apartment: they are entitled to exclusive possession of their entire apartment for the term of the lease.  Unless the law of the city provides otherwise, even landlords are not allowed to enter a leased apartment without permission. If the landlord does so he or she is committing a trespass. 
Further, Landlords cannot evict tenants without good cause.  Good cause generally requires nonpayment of rent for no reason, illegal activities, or severe damage to the building.  Historically a landlord could personally enter into your apartment and evict tenants, but today only police are allowed to evict tenants, and they need a court order to do so.
Every city has different rules regarding landlord-tenant relations.  Therefore, you should consult with an attorney to determine your rights and remedies before taking action against your landlord. 
                                                                                         --Submitted by Eric Turner

O'Flaherty Law is based in Downers Grove and Chicago, Illinois. Our attorneys have expertise in Corporate Representation, Commercial Litigation, Divorce, Bankruptcy, Estate Planning, and DUI defense. Please visit our website at www.oflaherty-law.com for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.
  

Acting as Your Own Contractor

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Carl:

We are planning an addition to our home, and I am at the point of deciding whether or not to take on the project myself rather then hire a contractor, after receiving bids from various contractors which were frighteningly higher then I expected.

So I stumbled upon your site which gave me some hope at first, but now I am again concerned. When I viewed your step-by-step building I could not find at what point the roof trusses were installed!

There is mention of the roofing and covering, but no mention of installing the trusses. Then I said to myself "He will probably say: "You should know that and if you don't then you should not be considering doing this yourself".

Am I getting in over my head or did I miss something in the step-by-step instructions?

Oh, I don't think I am a complete idiot, and I have built buildings before (as owner not self-contractor) and of course many many projects around the house so I know which end of a hammer is which, but not sure the order of doing things in this project.

Thanks, John

Time for roof framing and/or trusses 

Hi John,

 The roof trusses are installed right after the walls are framed and braced plumb and square.

Your carpentry contractor should keep you abreast of building materials needed to complete the job on time. Remember, delays cost him money. That’s why I always recommend contracting by the job, not by the hour.

You don’t need to know various home building skills, but you do need to know how to hire the contractors and subcontractors who do.

Your role as the general contractor is to be an organizer and a manager, not a tradesman. Your responsibility is to get the job done — by other people.

If you can estimate your costs, control those costs, and deal with people in a fair manner, you can build your own home or home addition!

Suggested reading:
How to be a General Contractor
Building a House Step by Step
Carpentry Contractor - House Framing
Cost Estimating
Cost Estimating Software

Good luck,

Carl Heldmann, byoh.com

House Plan Copyright

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Hi Carl,

Is there any way to avoid paying astronomical fees to an architect if I know exactly what I want in my home?

I have the floor plan and know the dimensions of all the rooms. I slightly tweaked an existing plan from a builders website.

I just don't want to pay the fees if I don't absolutely have to.

 I'd appreciate any advice you could give me. Travis

 Hi Travis, As an alternative to an architect or buying home plans from a web site or magazine, you can have a home designer who is a drafts-person draw up most new homes.

However, most home designs are copyrighted even if it doesn't say so on the plans. You must purchase copies of copyrighted designs from the original designer. Hiring someone else to copy a design, even if it's not an exact copy, is a violation of copyright laws.

Read House Plan Copyright Basics on the American Institute of Building Design's (AIBD) website.

Carl Heldmann, byoh.com

Sample Construction Contracts

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Hi Carl,

I recently bought your book and am excited to get started.

Would you be able to refer me to a good source of agreement templates I can use for the necessary contracts with subs, etc, including the basic waiver of liability, etc…Thanks,Lynn

Hi Lynn,

I have a few sample contracts and forms on my Getting Started page.

Here they are: 3 Contracts to Build, Carpentry Labor Contract, Subcontractor Contract, Checklist for Buying Land, Description of Materials (Building Specifications), Full Waiver of lien, & Partial Waiver of lien.

I've used them, but you may (should) want to run them by your Real Estate/Construction Attorney.

I'm not familiar with what a waiver of liability is.

Perhaps you meant waiver of lien.

If so, there are samples of those provided too.

Thanks for buying my book!

Carl Heldmann, byoh.com

Carl, Awesome, this is great.

Thanks for writing the book. The information is great to have, even if we end up going with a GC. God bless you!

Videoblog: O'Flaherty Law Small Business Seminar

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Please enjoy part 1 of the Small Business Primer seminar presented by O'Flaherty Law and DDZ accounting.  Parts 2 and 3 of this seminar can be found on our youtube channel along with our previous seminar on wills and trusts and all of our informational videoblogs.  

The topics discussed in our Small Business Primer seminar include:

I. Entity Selection - how to choose between S Corps, LLCs, C Corps, and Partnerships

II.  How to get your business up and running

• Incorporation and maintenance of your corporate book
• Quickbooks
• The initial meeting with your accountant
• Insurance
• How to obtain an EIN (Employer Identification Number)
• Contacting the Illinois Department of Revenue for a Tax Identification Number 
• Dealing with special licenses and regulations that are necessary for your particular business

III.  How to make the transition to being an employer

• Hiring a payroll service
• Dealing with benefits - steering clear of ERISA problems
• Obtaining Department of Labor posters
• Registering with the Illinois Department of Employment Security & Dealing with Unemployment Insurance
• Worker's Compensation insurance
• The elements of an employment agreement
• Non-compete clause
• Confidentiality of trade secrets and other info
• Enforcement clause
• Probationary period
• Creating an employee handbook for systematized and documented expectations and discipline
• The importance of termination letters 
• Considering independent contractors as an alternative

IV.  Finding space for your growing enterprise.
If you are a small business owner, please do not hesitate to contact us with any questions you may have, or to set up a free consultation.  

O'Flaherty Law is based in Downers Grove and Chicago, Illinois. Our attorneys have expertise in Corporate Representation, Commercial Litigation, Divorce, Bankruptcy, Estate Planning, and DUI defense. Please visit our website at www.oflaherty-law.com for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

"I'm a new business owner -- how many different types of taxes do I need to pay?"

To contact us Click HERE
Today, our friend, D Zorea of DDZ Accounting Group, submits the following article:


If you're a new business owner and are feeling overwhelmed by the prospects of paying too many taxes, it might be because there are so many different types of taxes for which to account.  Depending on your type of business, an Illinois business owner will be liable for different taxes including (but not limited to):

• Sales: Does your business sell widgets, or food products? You are responsible for collecting the state (and sometimes local municipality's) Sales and Use Tax and remitting these back to the appropriate taxing agencies. Sales tax rates can range around 7.5% to 10%.
• Payroll: Do you have employees?  You will be matching your employee's payroll withholding taxes, as well as contributing to federal and state unemployment insurance premiums based on your employees' earned wages.
• Franchise: The state of Illinois charges a Franchise tax of 1.5% for corporate business owners. This includes LLC, C-corporations and S-corporations, but not sole-proprietors or unincorporated partnerships.
• Income: Similar to sole-propietorships, S-corporations and LLC's are considered "pass-through" entities.  In other words the net profits of those businesses "pass-through" to their owners and are taxed at the business-owners' individual tax rates.  The income tax returns for S-corps and LLC's generate a K-1 form for each shareholder or LLC member; these are the business owner's equivalents to an employee's W-2 form.  However, different from a W-2 which typically already includes income tax withholding, a business owner with net-income from his/her business can either file and pay quarterly estimated taxes throughout the year or pay the lump-sum with the year-end income-tax return.

For the above taxes, the IRS and Illinois state agencies may apply late file or late-pay penalties; so work with your tax-professional to calculate the correct taxes due, maximize your tax return, file on time, pay on time, and save all that time and headache of doing it alone. For other questions, please contact D Zorea at DDZ Accounting -- e: d@ddzgroup.com, p: 630-368-0183, other client-testimonials at www.facebook.com/ddzaccounting.



O'Flaherty Law is based in Downers Grove and Chicago, Illinois. Our attorneys have expertise in Corporate Representation, Commercial Litigation, Divorce, Bankruptcy, Estate Planning, and DUI defense. Please visit our website at www.oflaherty-law.com for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.