Illinois Tax Calculator 2023-2024: Estimate Your Taxes

Taxpayers over 65 (or legally blind) who file tax returns jointly are allowed an additional $1,000. Illinois’ maximum marginal income tax rate is the 1st highest in the United States, ranking directly below Illinois’ %. You can learn more about how the Illinois income tax compares to other states’ income taxes by visiting our map of income taxes by state.

Public Funding for Sports Stadiums Just Doesn’t Pay off for Taxpayers

Nonresidents who work in Illinois also must pay income tax to the state, unless they live in Wisconsin, Iowa, Kentucky or Michigan. The only exception is railroad unemployment.More information is on the Illinois Department of Revenue’s website. Watch the video below to learn how to identify your 2023 federal income tax brackets. Illinois also has a 6.25 percent state sales tax rate and an average combined state and local sales tax rate of 8.86 percent. Illinois has a 1.95 percent effective property tax rate on owner-occupied housing value. New Jersey finished phasing out its estate tax at the same time, and now only imposes an inheritance tax.

Federal Married (separate) Filer Tax Tables

The EITC rates and thresholds are adjusted annually to reflect changes in the economy and cost of living. For the tax year 2024, these adjustments ensure that the credit remains aligned with the current economic conditions, providing targeted support to eligible taxpayers. Understanding the latest EITC rates and thresholds is crucial for taxpayers who wish to maximize their potential credit and accurately plan their finances. The EITC can have a significant impact on a unearned revenue family’s annual budget, offering relief and financial stability to millions of Americans each year including those in Illinois.

Illinois Married (Joint) Filer Tax Tables

If you have a lot of income that comes from non-work sources, like investments, the amount your employer withholds from your paychecks might not be enough to avoid ending illinois tax rate up with a big tax bill. In this scenario, you may wish to fill out a new W-4 form and request that your employer withhold an additional amount from each of your paychecks. You can also pay estimated taxes every quarter to cover your bases with the IRS. Illinois has a flat income tax of 4.95%, which means everyone’s income in Illinois is taxed at the same rate by the state. No Illinois cities charge a local income tax on top of the state income tax, though. Illinois also has high property taxes when compared with the rest of the country, but there is no personal property tax in the Prairie State.

How is income taxed in Illinois?

Other forms of supplemental wages you can seek include bonuses, commission, stock options and prizes. Supplemental wages are taxed at the same rate as regular income in Illinois. If you file your taxes as single, any earnings you make in excess of $200,000 will be subject to an additional 0.9% Medicare tax, which is not https://www.bookstime.com/ matched by your employer. Joint filers making over $250,000, and married individuals with more than $125,000 filing separately, also pay the Medicare surtax.

Iowa is in its final year of phasing out its inheritance tax, and its rates currently range from 1 percent to 2 percent on inheritances valued between $12,500 and $150,000. This is a significant decrease since its top marginal rate was capped at 6 percent in 2023. Illinois offers at least three credits in addition to the one that offsets taxes paid to other states. Localities can add as much as 4.75%, and the average combined rate is 8.855%, according to the Tax Foundation. Illinois applies per-gallon alcohol excise taxes based on the alcohol content of the beverage being sold. Beer will generally be subject to a rate of 23.1 cents per gallon while wine and liquor are subject rates of $1.39 and $8.55 per gallon, respectively.

• Currently, it is plagued by high rates, a wage base that is nearly double the federal wage base, a solvency tax, and a long experience rating qualifying period, among other shortcomings.
• SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you.
• Available tax credits can reduce the amount of tax owed, however.
• Now, he might say it costs $300 to trim the tree but that he expects a $200 tip — knowing he won’t be taxed on it.
• A tax credit is available for income taxes paid to another state if you live in Illinois but work in a state other than one of those with reciprocity.
• Your employer will withhold money from each of your paychecks to go toward your Illinois state income taxes.

View how much tax you may pay in other states based on the filing status and state entered above. But eliminating tax on tips could probably lead to some squirrelly effects. For example, say a tree trimmer usually charges $500 for his services. Now, he might say it costs $300 to trim the tree but that he expects a $200 tip — knowing he won’t be taxed on it. Tipping might proliferate into services where it hasn’t been common before.

Illinois also has higher-than-average sales taxes and property taxes. Under the Tax Cuts and Jobs Act (TCJA) of 2017, the federal estate tax exemptionA tax exemption excludes certain income, revenue, or even taxpayers from tax altogether. For example, nonprofits that fulfill certain requirements are granted tax-exempt status by the Internal Revenue Service (IRS), preventing them from having to pay income tax. Was raised from $5.49 million to $11.18 million per person, with inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets.

You can’t claim this credit if your federal AGI exceeds $250,000, or $500,000 if you’re married and file a joint return. Complete Schedule ICR with your Illinois tax return to claim it. Some accounts, like a 401(k), FSA or HSA, allow you to make pre-tax contributions. That means the money comes out of your paycheck before income taxes do. So while making those contributions will decrease your take-home pay, stashing cash in one of these tax-advantaged accounts means the money will grow tax-free.