Illinois Tax Tables 2025 Tax Rates and Thresholds in Illinois

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. Federal retirement plans in the United States, such as 401(k), 403(b), SARSEP, and 457 plans, illinois income tax rate along with SIMPLE plans, offer valuable opportunities for individuals to save for their post-working years while enjoying certain tax benefits. These plans are designed to encourage long-term savings by providing tax advantages.

Sales Taxes

We’ll help you get Illinois-specific deductions and credits you qualify for to keep more money in your pocket. From earned income tax credits to property tax credits, we’ll guide you every step of the way to maximize your refund. Connect with a TurboTax expert for personalized tax advice or to handle filing for you. Property taxes vary by municipality, but northeastern Illinois — including Chicago — has significantly higher property taxes than the rest of the state. Illinois has some of the highest average property and sales tax rates in the country.

Illinois Tax Deductions

If you want more money in your Illinois paycheck, aside from asking for a raise, you can also work overtime if your job allows it. 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. Illinois offers several tax deductions and credits that can reduce your taxable income or lower your tax liability. 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 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.

Have Questions About Your Taxes?

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 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. Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.

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. For example, the Illinois Property Tax Credit is equal to 5% of Illinois property tax paid on a principal residence for single filers with an AGI of $250,000 or less and joint filers with AGI of $500,000 or less. If you paid $1,000 in property taxes in 2024, you could claim a credit of $50 on your income tax return, which equates to $50 less that you end up paying Financial Forecasting For Startups in taxes.

State and Local Sales Tax Rates, Midyear 2025

You also may qualify for exemptions for each dependent, further lowering taxable income. The significant disparity in tax rates across states underscores the complex tax and regulatory environment governing distilled spirits. Forty-four states levy a corporate income net sales tax, with top rates ranging from a 2.25 percent flat rate in North Carolina to a 11.5 percent top marginal rate in New Jersey. The two most popular tax software packages are H&R Block At Home, sold by the H&R Block tax preparation company, and TurboTax Federal & State, sold by the Intuit software company.

• 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.
• While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.
• The mechanism of FICA taxation involves a dual contribution system where both the employer and the employee contribute a set percentage of the employee’s income towards these programs.
• As such, FICA represents a critical element of the United States’ approach to social welfare, providing foundational financial security and healthcare benefits that many Americans rely on.
• Here are some key tax reduction programs in Illinois, and how to qualify.
• Income from Illinois sources if your adjusted gross income is higher than your Illinois exemption allowance.
• For all of the tax forms we provide, visit our Illinois tax forms library or the ‘s tax forms page.

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.