Hopp Accounting & Tax Service

Hopp Accounting & Tax Service It's not what you make...it's what you keep! Hopp Accounting & Tax Service is a family owned and operated business located in Elgin.

We have been in business since 1968. Hopp Accounting & Tax Service is committed to the success of our clients. We make it our business to know each business well enough to improve tax position, capital position, business structure and benefits packages, acquisition potential and much more.

Retirement planning can be especially critical for couples where one spouse doesn’t work outside the home. In such cases...
01/21/2026

Retirement planning can be especially critical for couples where one spouse doesn’t work outside the home. In such cases, a spousal IRA can be an effective tool. An IRA contribution is generally only allowed if you earn compensation. But an exception exists. A spousal IRA allows a contribution for a spouse who doesn’t work outside the home. For 2025, an eligible couple can contribute $7,000 to an IRA for each spouse ($8,000 if the spouse will be 50 by the end of the year). However, if the working spouse is an active participant in an employer retirement plan, a deductible contribution can be made to the nonparticipant spouse’s IRA only if the couple’s income is under a certain threshold.

12/28/2025

When planning your estate, one of the smartest strategies you can adopt is to minimize or avoid probate. Probate is a legal procedure in which a court establishes the validity of your will, determines the value of your estate, resolves creditors’ claims, provides for the payment of taxes and other debts, and transfers assets to your heirs.
While it may sound straightforward, probate can come with several drawbacks that make it worthwhile to avoid when possible. Here are four reasons why.
1. Probate can be time-consuming
Probate proceedings often take months — and sometimes over a year — to resolve. During this period, your beneficiaries may not have access to much-needed funds or property.
The timeline can be extended even further if disputes arise among heirs or if the estate includes complex assets. Avoiding probate allows your loved ones to receive their inheritances much more quickly.
2. Probate can be expensive
Court costs, executor’s and attorneys’ fees, appraisals, and other administrative expenses can consume a portion of your estate — sometimes 5% or more of its total value. By using probate-avoidance tools, for example, a living trust, more of your assets can go directly to your heirs instead of being eaten up by fees.
Indeed, for larger, more complicated estates, a living trust (also commonly called a “revocable” trust) generally is the most effective tool for avoiding probate. A living trust involves some setup costs, but it allows you to manage the disposition of all your wealth in one document while retaining control and reserving the right to modify your plan.
To avoid probate, it’s critical to transfer title to all your assets, now and in the future, to the trust. Assets outside the trust at your death will be subject to probate — unless you’ve otherwise titled them in such a way as to avoid it (or, in the case of life insurance, annuities and retirement plans, you’ve properly designated beneficiaries).
3. Probate is a public process
Bear in mind that anything filed in probate court becomes part of the public record. This means that anyone can discover the details of your estate, including the nature and value of your assets and who has inherited them. Avoiding probate can protect your family’s privacy and shield sensitive information from public view.
4. Probate may result in family disputes
Probate can sometimes create or exacerbate conflict among heirs. Disputes over asset distribution or the validity of a will can lead to lengthy and expensive litigation. Clear estate planning can prevent misunderstandings and ensure your wishes are carried out smoothly.
Not your estate plan’s sole focus
Dealing with the death of a loved one is hard enough without the added burden of navigating the legal complexities of probate. When you structure your estate to bypass the probate process, you ease the administrative burden on your family and give them peace of mind during a difficult time.
However, avoiding probate is just one part of a complete estate plan. Your estate planning advisor can help you develop a strategy that minimizes probate while reducing taxes and achieving your other goals.
© 2025

Are you age 50 or older? You’ve earned the right to supercharge your retirement savings with extra “catch-up” contributi...
12/27/2025

Are you age 50 or older? You’ve earned the right to supercharge your retirement savings with extra “catch-up” contributions to your tax-favored retirement account(s). An eligible taxpayer can make extra catch-up contributions of up to $1,000 annually to a traditional or Roth IRA. If you’ll be 50 or older as of Dec. 31, 2025, you can make catch-up contributions for 2025 by April 15, 2026. However, there are income limits to make contributions. You also must be age 50 or older to make catch-up contributions to an employer 401(k), 403(b), or 457 retirement plan (if the plan allows them). You can make extra contributions of up to $7,500 to these accounts for 2025. Questions? Contact us.

12/25/2025

Incorporating charitable giving into your estate plan can be a thoughtful and strategic way to support causes you care about while also achieving estate planning objectives. Whether you’re driven by philanthropic goals, legacy planning or financial considerations, planned giving can be an effective tool if you’re seeking to make a lasting impact.
You generally have two options for making charitable donations: lifetime gifts or charitable bequests at death. Be aware that each approach has its pros and cons.
Lifetime gifts vs. charitable bequests
Lifetime gifts allow you to enjoy the fruits of your philanthropic efforts while you’re alive. Charitable bequests, on the other hand, can be a great way to create a legacy. The latter may also be preferable if you’re not comfortable parting with too much of your wealth during your lifetime.
From a tax perspective, charitable bequests may have certain advantages over lifetime gifts. When you leave money or property to a qualified charity in your will, your estate may be eligible for an unlimited estate tax charitable deduction.
Lifetime gifts, on the other hand, offer both income tax and estate tax benefits. Not only are you entitled to an immediate income tax deduction (subject to applicable limits), but the value of the money or property (plus any future appreciation) is removed from your taxable estate.
Of course, estate tax liability is an issue only if the value of your estate will exceed the federal gift and estate tax exemption. For 2025, the exemption amount is $13.99 million. With the passage of the One, Big, Beautiful Bill Act, beginning in 2026, the amount is permanently set at $15 million and will be adjusted annually for inflation.
Factor in the estate tax charitable deduction
If you wish to make charitable bequests in your will, and estate tax liability is a concern, careful planning is needed to avoid pitfalls that can jeopardize the estate tax charitable deduction. Generally, the gifted assets must be:
Included in your gross estate,
Transferred by you through your will, and
Donated to a qualified charity.
If you give your executor or beneficiaries the discretion to distribute assets to charity, those gifts won’t qualify for the estate tax charitable deduction. However, beneficiaries may qualify for an income tax deduction.
The charitable bequest must be “ascertainable” at the time of your death; otherwise, the estate tax charitable deduction may be denied. Generally, that means a qualified charitable recipient must be specified in your will. Note: It may be possible to make a bequest to an unnamed charity depending on applicable state law.
The amount of the bequest must also be specified. That means your will must leave a certain dollar amount, a specific asset or a percentage of your estate to a charity. It’s also possible to leave the estate’s residue — that is, the amount left after all assets have been distributed to heirs and final expenses have been paid — to a charity.
A common pitfall in drafting charitable bequests is the failure to properly identify a qualified charitable recipient. Even if the bequest is correct at the time you draft your will, things can change over time. For example, a charity may change its name, merge with another organization, lose its tax-exempt status or cease to exist. For this reason, name one or more contingent charitable beneficiaries in the event the primary charitable beneficiary can’t accept the donation.
To ensure that charitable donations are effectively integrated into your estate plan, contact us. We can review your plan to determine that your intentions are clearly documented, tax-advantaged and legally sound. This not only protects your legacy but also maximizes the benefit to the organizations you care about.
© 2025

Are you charitably inclined and looking for a powerful year-end tax-saving strategy? Consider donating appreciated publi...
12/22/2025

Are you charitably inclined and looking for a powerful year-end tax-saving strategy? Consider donating appreciated publicly traded stock you’ve held more than one year to a qualified charity. You may be able to enjoy two tax benefits: First, if you itemize deductions, you can claim a charitable deduction equal to the stock’s fair market value. Second, you won’t be subject to the capital gains tax you’d owe if you sold the stock. Donating appreciated stock can be especially beneficial if you’re facing the 3.8% net investment income tax or the top 20% long-term capital gains rate this year. To learn more about minimizing capital gains tax or maximizing charitable deductions, contact us today.

12/19/2025

As a closely held business owner, a substantial amount of your wealth likely is tied to the business. Of course, you want to retain as much of that wealth as possible to pass on to your family after you exit the business. If your business is structured as a corporation, the answer may be an employee stock ownership plan (ESOP). It can enhance tax efficiency, support business succession goals and help preserve wealth for future generations.
An ESOP in action
An ESOP is a qualified retirement plan that invests primarily in your company’s stock. ESOPs must comply with the same rules and regulations as other qualified plans, and they’re subject to similar contribution limits and other requirements.
One requirement that’s unique to ESOPs is the need to have the stock valued annually by an independent appraiser. Also, by definition, ESOPs are available only to corporations. Both C corporations and S corporations are eligible.
In a typical ESOP arrangement, the company makes tax-deductible cash contributions to the plan, which uses those funds to acquire some or all of the current owners’ stock. Alternatively, with a “leveraged” ESOP, the plan borrows the money needed to buy the stock and the company makes tax-deductible contributions to cover the loan payments.
As with other qualified plans, ESOP participants enjoy tax-deferred earnings. They pay no tax until they receive benefits, in the form of cash or stock, when they retire or leave the company. Participants who receive closely held stock have a “put option” to sell it back to the company at fair market value during a limited time window.
ESOP benefits
ESOPs offer many benefits for owners, companies and employees alike. Benefits for owners include:
Liquidity and diversification. An ESOP creates a market for your stock. By selling some or all of your stock to the plan, you can achieve greater liquidity and diversification, enhancing your financial security and estate planning flexibility. Acquiring a wider variety of nonbusiness assets with the sale proceeds can make it easier to share your wealth with loved ones, especially those who aren’t interested in participating in the business.
Tax advantages. If your company is a C corporation and the ESOP acquires at least 30% of its stock, it’s possible to defer capital gains on the sale of your stock by reinvesting the proceeds in qualified replacement securities. You can even avoid capital gains tax permanently by holding the replacement securities for life.
Control. Unlike certain other exit strategies, an ESOP allows you to tap your equity in the company without immediately giving up management control. You can continue to act as a corporate officer and, if you serve as the ESOP’s trustee, you’ll retain the right to vote the trust’s shares on most corporate decisions.
The company can benefit because its contributions to the plan are tax deductible. With a leveraged ESOP, the company essentially deducts both interest and principal on the loan. And, of course, both the company and its employees gain from the creation of an attractive employee benefit, one that provides a powerful incentive for employees to stay with the company and contribute to its success.
Beware of an ESOP’s cost
An ESOP can be a powerful estate planning tool for closely held business owners, but it’s important to consider the costs. In addition to the usual costs associated with setting up and maintaining a qualified plan, there are also annual stock valuation costs. Contact us to learn more about pairing an ESOP with your estate plan.
© 2025

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804 Walnut Avenue
Elgin, IL
60123

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Monday 9am - 5pm
Tuesday 9am - 5pm
Wednesday 9am - 5pm
Thursday 9am - 5pm
Friday 9am - 5pm

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