In this edition;

• Announcing BIK's Valuation Website
• 2004-2010 Illinois Indivdual Use Tax Amnesty

Our firm offers traditional accounting, tax advisory and audit services, but we also have a strong emphasis on Business Lifecycle Planning. Visit us at www.bikcpa.com or contact any of our professionals at 847.358.1170

Announcing BIK's Valuation Website

BIK & CO has had the ability to provide valuation services for some time now. We have formalized this service at www.BIKvaluation.com

Valuations are used for a variety of reasons. Some reasons are compliance driven, while others need a valuation to help with strategic planning to assess values in the case of a dispute. We have listed a few reasons to consider having a valuation conducted or to update a prior valuation.

• Life insurance
• Estate planning
• Litigation support
• Divorce settlements
• Disputes

Example of some reasons to have a valuation conducted:

• Co-owners/partners of a business often purchase life insurance to compensate the family members of each owner in the event of an accident or death. This helps the remaining owner(s)/partner(s) keep the business running. If the business is valued at more than the purchased life insurance then it is possible the remaining owner(s)/partner(s) may have to go into debt or possibly sell the business. A valuation every few years keeps the company value current, which allows the life insurance to be purchased at the proper levels.
  
  
• When creating an estate plan asset values ultimately determine the total estate value. Depending on the state you are in and the current Federal regulations in place the tax rate can vary significantly. A valuation can help develop a gifting strategy, determine if life insurance needs to be purchased to pay the estate tax, and help plan retirement income needs.

The website provides a more detailed overview of our valuation services. Part of a comprehensive financial strategy is ensuring business and personal financial asset values are properly measured. Valuations help achieve this goal. For more information, please contact Mr. Scot Campbell at his direct line 847.281.3163 or email him at scampbell@bikcpa.com or contact Jim Giese, Partner-in-Charge of Tax at 847.358.1170 or jgiese@bikcpa.com

2004-2010 Illinois Indivdual Use Tax Amnesty

Illinois Use Tax is a sales tax that you, as the purchaser, owe on items that you buy for use in Illinois. If the seller does not collect this tax, you must pay the tax to the Illinois Department of Revenue. The most common purchases on which the seller does not collect Illinois Use Tax are those made via the internet, from a mail order catalog, or made when traveling outside Illinois. For example, you buy a computer over a website for use in your home located in Illinois where the site only charges you the cost plus shipping.  Illinois law requires you to remit use tax to the state as we will describe below. (Use tax will most likely not apply to online vehicle purchases since sales or use tax is collected upon registration with the respective state).

Individual Use Tax Amnesty covers purchases you made from July 1, 2004 through December 31, 2010. To avoid penalty and interest you must file and pay your Use Tax for this period from January 1, 2011 through October 15, 2011. Form ST-44 is required for each year that you have a Use Tax liability and the word “Amnesty” must be written in red on the top of the form.

As you already may be aware from filing your 2010 Illinois tax return, a Use Tax line was put on the tax return for the first time. You were able to report your Use Tax on purchases you made in 2010 on line 22. In future years, you will be able to report your Use Tax on purchases the same way on your Individual tax return.

To compute the Use Tax, the amount of purchases must be figured one of the following ways:

If you know the amount of your purchases, multiply that amount by .0625

If you do not know the amount of your purchases, you may estimate the amount using the chart below.  Note:  Use the corresponding Adjusted Gross Income (AGI) for each year that you owe Use Tax. As an example, if you owe Use Tax for 2005, use your 2005 AGI. Please keep in mind that if the state finds your estimate was low and you owe additional tax, they may assess additional tax plus penalties and interest.     

If you know the amount of some of your purchases but not all, add the known amount of purchases to the estimated amount from column A below for Form ST-44, line 1a, and multiply that amount by .0625 for Form ST-44, line 1b.