Converting from a Schedule C Sole Proprietorship to an S-Corporation can result in several tax savings for business owners in Illinois. Here are some potential tax savings that may be realized:

1. Self-employment tax savings: As a sole proprietor, the business owner is responsible for paying self-employment taxes on their net income. As an S-Corporation, the business owner can take a portion of their income as a salary and the remainder as distributions, which are not subject to self-employment tax. This can result in significant tax savings for business owners.
2. Deduction of fringe benefits: As an S-Corporation, the business owner may be able to deduct the cost of certain fringe benefits, such as health insurance, retirement contributions, and other employee benefits. These deductions can result in tax savings for the business.
3. Reduced state income tax: Illinois has a flat rate for state income tax, which means that all income is taxed at the same rate. However, S-Corporation income is not subject to state income tax in Illinois, which can result in significant tax savings for business owners.
4. Ability to use a fiscal year: S-Corporations have more flexibility in choosing their fiscal year than sole proprietors. This can help business owners to better manage their income and expenses and potentially reduce their tax liability.
5. Lower audit risk: S-Corporations generally have a lower audit risk than sole proprietorships, as they are subject to different tax rules and regulations. This can help business owners to avoid costly audits and penalties.

It's important for business owners to consult with a qualified tax professional to determine if converting to an S-Corporation is the right choice for their business. While S-Corporations offer several potential tax benefits, they also require additional administrative and accounting work, and may not be the best fit for all businesses.

Business owners in the state of Illinois may use a variety of strategies to reduce their tax burden. Here are some common strategies that can help reduce taxes for Illinois-based businesses:

1. Take advantage of tax deductions: Business owners can reduce their taxable income by taking advantage of tax deductions for business expenses, such as rent, utilities, and supplies.
2. Consider bonus depreciation: Business owners can take advantage of bonus depreciation, which allows them to deduct a significant portion of the cost of certain business assets in the year they are acquired.
3. Utilize tax credits: Illinois offers a variety of tax credits for businesses, such as the Economic Development for a Growing Economy (EDGE) Tax Credit and the Research and Development (R&D) Tax Credit. Business owners can take advantage of these credits to reduce their tax liability.
4. Plan for retirement: Business owners can contribute to tax-advantaged retirement plans, such as a 401(k) or a Simplified Employee Pension (SEP) plan, to reduce their taxable income and save for retirement.
5. Consider restructuring the business: Business owners can consider restructuring their business to take advantage of different tax rates or tax exemptions. For example, incorporating the business as an S corporation or forming a limited liability company (LLC) can provide certain tax benefits.
6. Plan for state and local taxes: Illinois has a variety of state and local taxes that can impact businesses, such as sales tax, property tax, and city-specific taxes. Business owners should be aware of these taxes and plan accordingly to reduce their tax liability.

It's important for business owners to consult with a qualified tax professional to ensure that they are taking advantage of all available tax strategies and incentives, while also complying with all applicable tax laws and regulations.