If you work for an employer in Illinois that deducts tax money from your paycheck each week, you may have noticed that more deductions are being applied to your salary. Since last July, human resources departments throughout the state have been notified of the increased state income tax obligations that Illinois workers must pay.
How much more are you paying exactly? The actual dollar amount you must pay in taxes will be different depending on the level of your salary. Percentage-wise, you will be paying 1.2 percent more in taxes on every paycheck. Formerly, the state income tax was 3.75 percent and now it is 4.95 percent. This increase applies to all pay retroactively beginning on July 1, 2017.
Illinois state lawmakers say that the extra tax revenue will be going to pay for the state budget. Since mid-July, employers throughout the state have been in possession of state-provided rate tables that they can use to determine withholding amounts for their workers.
The fact that Illinois workers are now paying more taxes than ever makes tax planning essential. This would be a good time for workers to review the taxes they are paying to ensure that they’re using all the tax breaks and tax advantages available to them. One way to review your income and assets to ensure you’re paying the right amount of taxes is to have an Illinois tax preparation lawyer analyze your financial information. If you’ve paid too much in taxes, or if your employer has withheld too much in taxes, your tax lawyer will be able to maximize the amount of your annual tax return.
Source: US News, “Illinois Employers to Start Withholding for New Income Tax,” accessed Sep. 01, 2017