Frankfort Legal Issues Blog

What are my chances of facing an IRS audit?

On behalf of Demetrius J. Karos, Ltd. posted in IRS on Friday, August 17, 2018.

As this blog has reported on previous occasions, several people and businesses in the greater Chicago area are going to face a tax audit from the IRS in the upcoming weeks and months, assuming they have not done so already. It may leave an Illinois resident wondering what their chances of getting audited really are.

The answer depends in large part on how much money they make. For someone reporting income of less than $200,000, the chances of being audited in a given year are about 1 in 100, meaning that it is possible, but not very likely.

Various types of business taxes

On behalf of Demetrius J. Karos, Ltd. on Friday, August 17, 2018.

Owning a business can be a satisfying experience. You may have had many goals throughout your life all leading up to the owning and operating of your company that you recently started. While you may have considered various aspects of the business from start-up costs to employment contracts, you also need to make sure you understand the tax implications.

Business taxes are much more complex than personal taxes. In fact, your company will have to contend with various types of taxes. Therefore, it will likely work in your best interests to understand the different types, which ones may apply to your business and where you can seek help with properly addressing your company's tax obligations.

How we can help our clients protect their legacy

On behalf of Demetrius J. Karos, Ltd. posted in Estate Planning on Friday, August 3, 2018.

Previous posts on this blog have discussed some of the many services our law office offers to those in the greater Chicago area who are trying to plan what will happen to their assets when they die.

The goal of many of these people is to pass as much of their wealth on to their loved ones as is possible, and our law office's goal when planning an estate is to help our clients do just this through a careful and strategic creation of various estate planning devices like wills, trusts of various sorts and even corporations that are designed to protect a persons' assets.

IRS audit appeal may begin at the Office of Appeals

On behalf of Demetrius J. Karos, Ltd. posted in IRS on Friday, July 20, 2018.

Facing an audit of one's federal tax returns is rarely a pleasant experience and is more often than not downright stressful.

To make matters worse, an Illinois resident may find at the end of an audit that the IRS believes he or she owes a lot of additional money in taxes, as well as interest and penalties on top of those back taxes.

Worker classification and payroll tax disputes

On behalf of Demetrius J. Karos, Ltd. posted in Tax Controversy on Thursday, July 5, 2018.

The distinction between and employee and an independent contractor is an important one for business owners to keep in mind, as it has all sorts of legal implications that cover a number of issues, including workers' compensation, employee benefits and the like.

This distinction also has important implications when it comes to payroll taxes, or those withholding such as income tax, Social Security and Medicare that are supposed to come out of an employee's paycheck. Unlike employees, an employer has no obligation to withhold these taxes on behalf of an independent contractor, as that person must see to it himself that the proper taxes get paid.

Let's look at the upcoming tax changes

On behalf of Demetrius J. Karos, Ltd. on Thursday, June 28, 2018.

Beginning on Jan. 1, 2019, many of the tax law changes passed in Dec. 2017 go into effect. Many people have heard some of what will happen, but it may still not be clear enough.

This article looks at those upcoming changes, but exactly what they will mean for a certain individual or entity remains to be seen. Whenever laws change, they end up tested in the courts. For this reason, next year could be an interesting one.

The benefits of a special needs trust

On behalf of Demetrius J. Karos, Ltd. posted in Estate Planning on Friday, June 22, 2018.

In in general, trusts can be a beneficial component of an estate plan. A trust is an arrangement wherein property is managed for the benefit of another party. The party managing the property is referred to as the trustee and the party receiving the benefit is referred to as the beneficiary.

Trusts can sometimes seem complex but that doesn't mean they are not important to understand. A special needs trust is a type of trust that can be helpful for those with mental disabilities or who otherwise lack the capacity to manage their own finances. A special needs trust can provide for the needs of a disabled beneficiary but it can also be important to construct the special needs trust so that the disabled individual does not lose any of the benefits they are receiving.

Understanding the importance of a will

On behalf of Demetrius J. Karos, Ltd. posted in Estate Planning on Friday, June 8, 2018.

Having a validly executed will is the basic foundation of a good estate plan. A will provides a cornerstone for the estate planner's overall estate plan and directs how property will be divided to beneficiaries. Personal property that may be distributed in a will can include real property such as a home, household items, bank accounts, jewelry, clothing, cars and books, as well as other items of personal property.

There are important legal requirements for a will to be valid, including that the estate planner making and executing the will must be of sound mind, so it is important for the estate planner to be familiar with and understand the rules in their state for a will to be considered valid. In addition, a will can also appoint a guardian to take care of a minor children in the estate planner's absence which can be a valuable resource for parents.

Payroll tax basics for employers

On behalf of Demetrius J. Karos, Ltd. posted in Tax Controversy on Friday, May 25, 2018.

Payroll taxes are taxes that are withheld and paid by an employer on behalf of an employee. Failure to properly handle payroll taxes can result in serious consequences and potential penalties which is why it is important to be familiar with the requirements associated with payroll taxes.

Payroll taxes include federal income tax withholding, state income tax withholding, Social Security taxes, Medicare taxes and federal and state unemployment taxes. Taxes that are withheld and paid are based on the employee's compensation. Employers only withhold and pay payroll taxes on behalf of employees and not independent contractors they may engage to perform work for them. Generally, the amount of control and supervision the employer has over how and when the work is done determines whether or not the worker is considered an employee or independent contractor.

The basics of estate planning

On behalf of Demetrius J. Karos, Ltd. posted in Estate Planning on Thursday, May 10, 2018.

Estate planning can be intimidating if the estate planner is not familiar with the process or what to expect but if they understand the process and know what to expect, they will also understand the benefits. The estate planning process can provide peace of mind for the estate planner and family members, among other benefits as well. Understanding the basics of estate planning is crucial to understanding how to set up an effective estate plan.

Drafting estate planning documents ahead of time can ensure that the estate planner's wishes related to property and health care are honored and that their loved ones are cared for according to their wishes. An estate plan can effectively account for the estate planner's assets including bank accounts; real estate; stocks and securities; life insurance policies; and personal property including cars, jewelry, artwork and other items as well. An estate plan can also account for the estate planner's wishes related to their health and financial affairs should they become incapacitated and unable to communicate those wishes themselves.