How the federal tax bill will impact Illinois residents
SPRINGFIELD, Ill. (WICS) —
What could you do with $10,000 next year?
"I could definitely pay off some bills, you could definitely help some of your friends out," Springfield resident Ali Bortmess said.
Is that overall less money in your bank account than you have been receiving in previous years?
After the federal tax bill officially passed Congress early Wednesday afternoon, some changes for Illinois were made a little more clear.
One change is that $10,000 is the amount the new tax bill will cap the federal deduction in the state of Illinois.
This now means that local property tax payments will have a greater impact on Illinois resident's pocketbooks.
"You were not limited, so if you paid $50,000 in state income tax, you were allowed that deduction on the federal return," Tax Partner Paul Schafer of Eck, Schafer and Punke Accountants said.
Now, many in Illinois are trying to pay their 2018 property taxes before the year is done to try and get around that cap.
"So people that know they're going to be over that $10,000 next year, are trying to get those real estate taxes paid this year," Schafer said.
However, the tax reform bill will not allow for Illinois citizens to be able to do all types of early filings.
"There is a specific provision in the committee report that prohibits the payment of 2018's income taxes during '17," Schafer said.
This cap is leaving people who have property tax bills over $10,000 with questions about how they will make those payments when the cap officially goes into effect.
"I don't think it's really fair, I think that you should get what you put in," Bortmess said.
While there is nothing currently saying that state property taxes will go up, the cap will merely make the payments feel heavier for pocketbooks.
The cap will officially go into effect in Illinois in 2018.