New 2025 Tax Rates and Threshold

With the standard deduction, generally speaking, you have to choose whether to take it or add up your itemized deductions and claim those instead. This was just an advisory question which will not change any laws. But lawmakers could use the results to pursue a constitutional amendment, opening Illinoisans and businesses up to higher taxes without guaranteeing any property tax relief despite the referendum’s promise. Supporters of the plan, including state Rep. Jay Hoffman, D-Collinsville, touted the vote as the first step toward addressing the public’s “hue and cry” toward reducing property taxes across the state. A call to impose higher taxes on the wealthiest class of Illinoisans to pay for statewide property tax relief was passed late Tuesday in one of three statewide advisory referendums that won voter support.

4 – Illinois Itemized Deductions

The state of Illinois has a flat income tax, which means that everyone, regardless of income, is taxed at the same rate. That makes it relatively easy to predict the income tax you will have to pay. The income tax rate in Illinois is 4.95%, after an increase from 3.75% in 2017. Illinois also has higher-than-average sales taxes and property taxes. Illinois has a flat 4.95 percent individual income tax rate.

Federal Married (separate) Filer Tax Tables

One option is contributing to saving plans, such as a 401(k) or a Health Savings Account (HSA). These contributions are typically made pre-tax, and you can lower your taxable income, save on taxes, and invest in your future at the same time. Income balance sheet from Illinois sources if your adjusted gross income is higher than your Illinois exemption allowance.

Credits & Deductions

• All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.
• From there, certain items may be added back in, and others may be subtracted.
• Illinois has $13,094 in state and local debt per capita and has a 51 percent funded ratio of public pension plans.
• These expenses include tuition, book rentals and lab fees.
• The diesel tax rate is also quite high at 46.7 cents per gallon.
• Once you’ve filed your tax return, all you have to do is wait for your refund to arrive.

Nearly two-thirds of voters on that question — 64% — backed the idea. New Hampshire continues to phase out its interest and dividends tax. 2, the tax rate will go down from 4 percent to 3 percent. Starting in 2025, the tax will be repealed, two years earlier than initially planned. While the 2024 tax filing season is shortly upon us, practitioners should be mindful of these updated and changed rates and thresholds to help navigate their clients in tax planning for the current year.

Calculate Your Income Taxes in These Other States

The problem is, millionaires would not be the only tax targets. You can use the income tax estimator to the left to calculate your approximate Illinois and Federal income tax based on the most recent tax brackets. Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections). Your deductions play a key part in filing your taxes, and while some people find it easier to not file their deductions and “just pay the extra tax”, it makes a difference in the long run.

Beer Taxes by State, 2024

Raising the combined US illinois income tax bracket corporate rate to the second highest in the OECD would encourage corporations to depart from the US, reducing economic output and worker wages across the income spectrum. States that tax GILTI increase filing complexity, drive up the cost of tax compliance, and introduce unnecessary economic uncertainty and legal risk. 21 states and DC continue to tax GILTI despite these challenges. Reviewing and updating your Form W-4 periodically is crucial, especially after significant life events like getting married, having a child, or buying a house. This will help you avoid under or over-withholding, which can lead to unpleasant surprises come tax time. The telecommunications tax is a tax on services including home phone lines, cell phones, television service and internet.

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. Several states try to keep things simple by applying the same tax rate to most income.

The Personal Exemption, which is supported by the Illinois income tax, is an additional deduction you can take if you (and not someone else) are primarily responsible for your own living expenses. Likewise, you can take an additional dependent exemption for each qualifying dependent (like a child or family member), who you financially support. Technically, you don’t have just one “tax bracket” – you pay all of the Illinois marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar. For comparison purposes, however, your Illinois tax bracket is the tax bracket in which your last earned dollar in any given tax period falls.

• This breakdown will include how much income tax you are paying, state taxes, federal taxes, and many other costs.
• Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
• Among the most important items that are taxable federally but not in Illinois are retirement and Social Security income, as well as distributions from a 529 college savings plan.
• Sales and property taxes in Illinois are among the highest in the nation.
• The Personal Exemption, which is supported by the Illinois income tax, is an additional deduction you can take if you (and not someone else) are primarily responsible for your own living expenses.

The EITC can have a significant impact on a family’s annual budget, offering relief and financial stability to millions of Americans each year including those in Illinois. Below is a table of the general merchandise sales tax rates for all of the counties in Illinois. The difference between the exemption allowance and the standard deduction is that you can still take it even if you have other subtractions from your income as discussed above.