The state does not allow itemized deductions but provides targeted tax benefits for individuals with dependents, education expenses, or retirement income. 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. Your employer will also withhold money from each of your paychecks to put adjusting entries toward your federal income taxes. The percentage that’s withheld will depend on things such as your income, your filing status (single, married filing jointly, etc.) and any tax credits you indicate on your W-4 form.
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- Property tax is a significant component of Illinois state taxes, affecting homeowners across the state.
- A bigger paycheck may seem enticing, but smaller, more frequent paychecks can make it easier to budget without coming up short by the end of the month.
- Various deductions will be taken out before you see your final take-home pay.
- Common additions include federally tax-exempt interest from municipal bonds issued outside Illinois.
- Part-year residents—those who moved into or out of Illinois during the tax year—must report all income earned while residing in the state and any Illinois-sourced income received while living elsewhere.
- Illinois residents, part-year residents, and nonresidents with income from the state may need to file a return.
Read the Illinois Department of Revenue’s filing requirements for more. In general, the rate ranges from 6.25% to over 8.50%, depending on where the vehicle is purchased. Owner-to-owner sales, however, are subject to a lower rate, which depends on the price of the vehicle and, in some situations, the model year.
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- Taxpayers use the IL-1040 form, which requires documentation such as W-2s and 1099s.
- We consider you a farmer if at least two-thirds of your total federal gross income is from farming.
- The exemption for tax year 2024 is a maximum of $5,550 for married couples filing jointly ($2,775 for single filers).
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As of July 2025, there have been no changes to the Illinois flat income tax rate or the lack of tax brackets. However, tax policy is always a topic of discussion in the state legislature. Some lawmakers and advocacy groups have called for a move to a progressive tax system, which would introduce tax brackets and higher rates for higher earners. This means that no matter how much money you make, you pay that same rate.
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- 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.
- With the standard deduction, generally speaking, you have to choose whether to take it or add up your itemized deductions and claim those instead.
- If you want to check the status of your Illinois tax refund, you can visit the Illinois Income Tax Refund page.
- To qualify, the taxpayer must own the home and have paid property taxes during the tax year.
- A six-month extension is available, but taxes owed must still be paid by the original deadline to avoid interest.
Some localities in Illinois may have additional local income taxes that would need to be considered separately. Input your income, deductions, credits, and filing status into the calculator to receive an estimate of your Illinois state tax. This tool is invaluable for tax How to Invoice as a Freelancer planning and ensuring that you set aside sufficient funds to cover your tax obligations.
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There are three types of residency statuses when it comes to Illinois state tax. Illinois also has reciprocity with the neighboring states of Iowa, Kentucky, Michigan and Wisconsin, which means those states don’t tax Illinois residents who work within their borders. So if you live in illinois income tax rate Illinois and work in Iowa, Kentucky, Michigan or Wisconsin, you’ll pay tax to your home state. However, Illinois has a handful of tax-saving programs that may affect your final tax bill, and these can apply differently based on income or other life circumstances. Maximize Your Foreign Earned Income Exclusion with Form 2555 Dealing with U.S. tax laws can…
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We consider you a farmer if at least two-thirds of your total federal gross income is from farming. For the 2024 tax year, Illinois offers a personal exemption allowance of $2,775 per individual, totaling $5,550 for married couples filing jointly. Please remember, filing your return electronically and requesting direct deposit is still the fastest way to receive your refund. You can file for free using MyTax Illinois, our online account management program for taxpayers. We strive to update our tax rates annually or whenever significant tax law changes occur in Illinois or at the federal level.
There is also no state personal property tax, so you will not be paying annual taxes on things like your car. To claim these benefits, taxpayers must maintain records of eligible expenses and contributions. The K-12 credit requires receipts or invoices, while 529 plan deductions must be supported by account statements. Additional exemptions are available for taxpayers aged 65 or older and those who are legally blind, with each qualifying individual receiving an extra $1,000 exemption. Unlike federal exemptions, which were eliminated under the Tax Cuts and Jobs Act of 2017, Illinois continues to offer these deductions.