July 7, 2017
Illinois legislature has increased the income tax rates for residents and corporations. The Personal Income Tax Rate will increase from 3.75% to 4.95% (an 32% increase). The Corporate Income Tax Rate will increase from 5.25% to 7%. We are trying to compile all the details when it is in effect. One article shows July 1st, while others suggest retroactive to January 1st, 2017. We believe the personal rate will be retroactive since it is a simple calculation on the return when filed—your income multiplied by the rate. There is no way to split out the income for 6 months at 2 different rates.
What this means to you?
Assuming retroactive, your paycheck will change soon—more IL tax will be taken out. However, it may not be enough to cover the entire increase since we are already 6 months into the year. You may owe more when filing your return next year for 2017. Last time this happened there were also penalties charged for under payment. We have reached out to our Representatives to make them aware and hopefully fix this issue.
Stay tuned for more details as they become available.
Your success is our main priority, which is why we work to identify the right blend of services for each client. With Rickhoff & Associates, you will also enjoy our personal approach to doing business. We know that every client has different goals and changing needs, so we work with you throughout the year to offer advice, review your financial status, and ensure there are no surprises at year-end. Professional, personalized, client-focused…Rickhoff & Associates is the new breed of accounting firm.
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