How Do You Calculate Illinois State Income Tax?
The state of Illinois does not assign income tax brackets. Instead, it uses a flat-rate system that charges a percentage of U.S. federal income tax liability. Watch for your W-2 earnings statement to arrive from your employer as tax season approaches. This statement will contain a summary of your yearly wage earnings, detailing any federal and state taxes that have been withheld from your salary. Business owners and self-employed individuals do not receive W-2 forms and are required to report income independently. Remember to include all income sources, not just what you earned at your job. You will have to pay taxes on any cash profits realized through investments, though exceptions apply in cases where you still hold the investment instead of selling it for its cash value. If you’ve been remembered in someone’s will, won money in the lottery, received a cash award, or accepted non-repayable student funding, you will have to include such amounts as part of your total income. Total the
