Its time to prepare to file taxes and as Illinois residents review the amount they pay in taxes, they may wonder if all Americans gasp at how much of their money goes to their state in taxes. While many Americans feel their overall tax responsibility is more than they would like, Illinois residents may have one of the best reasons to complain about the amount they pay.
Wallethub.com recently compiled a list of all 50 states and the District of Colombia and ranked them in order of state and local tax rates. Illinois ranked number 50 in that list. Meaning, Illinois came second to only New Jersey in the states with the highest tax rates. Taking into account real estate tax, vehicle property tax, income tax as well as sales tax, Illinois is the second highest in terms of state and local taxes.
In fact, according to an article published on abc7chicago.com, “…the Illinois tax rate is 38.51 percent higher than the national average of 10.76 percent.” Read the entire article and view the other 50 state rankings here.
Photo Credit: Roman Boed
As you prepare your taxes this year, you may or may not notice a re-designed form 1098, the form used to report the amount you paid in mortgage interest for the tax year. Although there have not been any changes made to the mortgage interest deduction regulations in several years, in 2015 the U.S. Congress did pass new rules with regard to how mortgage interest is reported. The form now requires more details to ensure homeowners’ properties and mortgages indeed qualify.
According to an article published by Kiplinger, titled Mortgage Interest Tax Deductions May Get Extra Scrutiny This Year, “The new form will include the mortgage origination date, the balance at the end of last year and the address of the property securing the loan, as well as other information useful to the IRS.” As a result, we could see the IRS perform more audits that specifically focus on mortgage interest.
Therefore, it is important for homeowners to have a clear understanding of what properties qualify for mortgage interest deductions as well as how much and what kind of debt falls within the IRS guidelines before filing your taxes this year.
The Kiplinger article provides specific details and helpful examples, click here to read the entire article.