Tax Professional: New tax rates may cause confusion when filing
SPRINGFIELD, Ill. (WICS) —
Income tax rates are going to be calculated a bit differently in Illinois this year.
That’s because on July 1, the legislature passed a law raising the income tax rate for individuals from 3.75 percent up to 4.95 percent.
This year, there will be two ways to calculate income taxes.
The first option is that you can apply a blended rate, that would mean your rate for the entire year would be 4.35 percent.
Experts said this would be ideal for people earning a flat rate for the entire year.
The other option is to itemize your income and apply the appropriate rate.
Meaning you separate your income by what was earned prior to the tax hike, and what was earned after.
Seasonal workers or anyone with income that fluctuates throughout the year would be better off choosing this option.
"I just would advise not to hesitate to ask for assistance either from a tax professional or from the state themselves," said Patricia Rogers, office manager at Sterling Tax Services. "This year is going to be something that's different from years past."
The Illinois Department of Revenue estimates an additional $5 billion will be collected from Illinois taxpayers under the new tax rates.
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