Property taxes are collected by multiple local authorities: city governments, county governments, municipal transportation districts and even a collection of taxing authorities called “mosquito abatement districts,” which, as you might have guessed, kill mosquitoes. That means that homeowners in the Prairie State on average pay 2.07% of their home value in property taxes. The 2.07% average effective property tax rate in Illinois is second-highest in the nation, behind only New Jersey. The highest combined sales tax in Illinois is 10.75% which belongs to the cities of Berwyn and Cicero.īelow is a table of the general merchandise sales tax rates for all of the counties in Illinois and the largest cities. However most areas have additional local taxes between 1% and 4.75%. The general merchandise sales tax applies to almost all other products purchased for use in Illinois. 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. In general, the rate ranges from 6.25% to over 8.50%, depending on where the vehicle is purchased. For example, candy and soda are generally subject to the higher “general merchandise” rate, but any candy containing flour is not, for sales tax purposes, classified as candy. There are some food items that don’t count as a qualifying food. The three categories are qualifying food and drugs, vehicles and general merchandise.įood, drugs and medical appliances are all subject to a statewide tax rate of 1% of purchase price, in addition to local taxes of up to 1.25%, for a total tax of up to 2.25%. There are three rate structures depending on what you are buying. Illinois Sales TaxĪs simple as Illinois tries to make income tax, the state seems to take the opposite approach with sales taxes. The Education Expense Credit provides a credit to parents who spent over $250 on eligible K-12 education expenses. The Earned Income Tax Credit is currently 18% of the federal credit by the same name. If you paid $1,000 in property taxes in 2021, you could claim a credit of $50 on your income tax return, which equates to $50 less that you end up paying in taxes. For example, the Illinois Property Tax Credit is equal to 5% of Illinois property tax paid on a principal residence. These reduce a taxpayer’s total tax bill by some amount, which is in contrast to tax deductions, which only reduce a taxpayer’s taxable income. There are several important tax credits in Illinois. 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. From there, certain items may be added back in, and others may be subtracted. When filing an income tax return in Illinois, taxpayers begin with their federal adjusted gross income (AGI, or taxable income, is income minus certain deductions). On the other hand, the flat rate does have drawbacks: Low earners can expect to pay more in Illinois than in many other states that have a progressive income tax. Also, the system’s heavy reliance on the federal tax code means you won’t need to learn a new set of rules for filing your state return. The state’s flat rate of 4.95% means that you don’t need any tables to figure out what rate you will be paying. The income tax system in Illinois emphasizes simplicity. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. Illinois also has higher-than-average sales taxes and property taxes.Ī financial advisor can help you understand how taxes fit into your overall financial goals. The income tax rate in Illinois is 4.95%, after an increase from 3.75% in 2017. That makes it relatively easy to predict the income tax you will have to pay. The state of Illinois has a flat income tax, which means that everyone, regardless of income, is taxed at the same rate. Gas tax: 39.2 cents per gallon of regular gasoline, 46.7 cents per gallon of diesel.Property tax: 2.07% average effective rate.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |