Illinois Gas Tax

[imoldernu]

We like Illinois and the town we live in.

Haven't had to pay State or Federal taxes in many, many years.
Since buying our home in here in 2004, between senior tax freeze and homestead exemption, taxes have gone from $2,300 to $2,500 on a (now) $180K home.
Virtually no driving anymore, so gas, next to nothing.
Very low traffic so few redlights... almost all 4 way stops.
All stores within a 2 1/2 mi. radius.
Best Hospitals in state, outside of Chicago.
Excellent schools, and a Community College.
Good county and city government.
Very, very low crime rate.
Nice people.

...and coming from New England, we still like the four seasons.

 

[Amethyst]

So, it sounds as if IL may be a good state for older retirees.

And $180K sure is an inexpensive home by our lights. (That's a compliment, coming from an ER member).

We like Illinois and the town we live in.

Haven't had to pay State or Federal taxes in many, many years.
Since buying our home in here in 2004, between senior tax freeze and homestead exemption, taxes have gone from $2,300 to $2,500 on a (now) $180K home.
Virtually no driving anymore, so gas, next to nothing.
Very low traffic so few redlights... almost all 4 way stops.
All stores within a 2 1/2 mi. radius.
Best Hospitals in state, outside of Chicago.
Excellent schools, and a Community College.
Good county and city government.
Very, very low crime rate.
Nice people.

...and coming from New England, we still like the four seasons.

 

[Chuckanut]

HR explained that since the bonus was based on my work in 2003, NJ had a claim on half of it. Infuriating, but nothing I could do.

I left California for another state mid-year. When it came to paying CA state income tax on what I earned in that state I found that the state of CA figures one's tax bracket based upon ones total earnings including earnings out of state. I paid, and did not resent it since the good people of CA had helped pay for my bachelor's degree at a fine state university.

Today, with things like the billions of dollars in cost overruns on that train through the Central Valley (36% more!!!) I might not be so happy to pay the tax.

 

[GenXguy]

We like Illinois and the town we live in.

Haven't had to pay State or Federal taxes in many, many years.
Since buying our home in here in 2004, between senior tax freeze and homestead exemption, taxes have gone from $2,300 to $2,500 on a (now) $180K home.

I'm in Illinois southwest of you. Most of your list would apply equally to me, but I'll have to pay federal taxes on taxable income (after $12000 deduction) on up to 85% of my SS, interest income, 457B distributions, capital gains distributions, and ordinary dividends, and I'll have to pay state tax on interest income, ordinary dividends, qualified dividends, capital gains distributions, and capital gains. Illinois has a low exemption of only $2000 on income, and only retirement income is excluded from being taxed by the state, which doesn't give me relief from state taxes from my taxable brokerage account. So in total, even after using tax optimization strategies, I'm looking at about about $2500/yr in taxes fed and state combined (in today's dollars) to provide about $50,000/yr spending.

The property taxes are way too high in this state. My house has a market value close to $120,000, and my property taxes are close to $4000. Taxes were $2300 back in 2001. Home appreciation has been minimal as well in this area. I get the homestead exemption but no senior exemption or freeze at this point.

 

[brucethebroker]

I'm guessing Hammond, IN will be thanking IL pols for all the additional gas purchases from here forward........

 

[Spanky]

The property taxes are way too high in this state. My house has a market value close to $120,000, and my property taxes are close to $4000.

Agreed - the rate is exorbitant. With heavy taxation, IL must have excellent services, such as education (schools), parks & recreations, police and fire protections, economic assistance and health-care for the poor, etc.?

 

[Rianne]

There are many complaints about Illinois, but C-U is the place to be. We are considered the "Prairie Silicon Valley" and keep growing. There's much to look forward to in this community. Yes, I miss "Chief" but we keep moving forward. We live approx. 6 blocks from research park. Every time I drive/walk by there, new start-ups or innovative companies are moving in.

https://researchpark.illinois.edu/news/champaign-urbana-ranked-top-startup-city-silicon-prairie-news

 

[youbet]

lots of good things about Illinois...weather, taxes, corruption, condition of roads, taxes, corruption...wait. I meant to list the good things. its like most people...our friends and family are here. we do try to spend the winters elsewhere.

There ya go......

DW and I were both raised in inner-city Chicago, attended college away, returned for jobs and have lived in the close-in 'burbs ever since. Until retirement, we just thought the "Illinois way" was the way life was. Now FIRE'd for well over a decade, we've had time to notice there is another world beyond the Illinois borders........

What keeps us here? Family (especially our special needs grandson), friends (some going back 60+ years) and those feelings about the devil you know vs the devil you don't know. If our anchors didn't exist, there are several places we'd head to in a heartbeat. But I should mention, there are a few places I think we'd like less than here.

We've been gettin' out of town for 7 - 8 weeks the past few winters too.......

 

[Ronstar]

Our Illinois real estate taxes are $8500. Works out to be around 1.7% of value. More than double the rate that we were paying for our real estate taxes in our Arizona townhouse.

The savings in Illinois comes from state tax free retirement income. But we’d have to have more than $100k in retirement income to generate enough state income tax savings to offset the extra real estate tax that we are paying.

 

[imoldernu]

Cursed

Had to mention that Illinois did not tax Social Security. Lasted one day.

Looks like that might change. See this:

https://www.fool.com/pwa/retirement/2019/02/25/will-this-state-be-the-14th-to-tax-social-security.aspx

Nice while it lasted.

 

[MichaelB]

Cursed

Had to mention that Illinois did not tax Social Security. Lasted one day.

Looks like that might change. See this:

https://www.fool.com/pwa/retirement/2019/02/25/will-this-state-be-the-14th-to-tax-social-security.aspx

Nice while it lasted.

This is just speculation. There’s no legislation under consideration.

 

[Spanky]

The savings in Illinois comes from state tax free retirement income. But we’d have to have more than $100k in retirement income to generate enough state income tax savings to offset the extra real estate tax that we are paying.

Does a withdrawal from tax-deferred accounts count as retirement income?

 

[youbet]

Does a withdrawal from tax-deferred accounts count as retirement income?

Yes, so those withdrawals are state income tax free today.

 

[VanWinkle]

OMG, Illinois might start taxing SS and pensions, I am shocked........ Everything south of Chicago needs to secede from the state and let them have their taxes.

 

[youbet]

OMG, Illinois might start taxing SS and pensions, I am shocked........ Everything south of Chicago needs to secede from the state and let them have their taxes.

Actually, for the sake of accuracy, any of the states now not taxing various forms of retirement income might sometime in the future begin taxing retirement income.

A likely scenario, IMHO, is that a progressive system, such as the feds use for taxing SS, would come into play. This as opposed to taxing every penny of retirement income from the first penny on.

But, who knows?

 

[Ronstar]

Does a withdrawal from tax-deferred accounts count as retirement income?

Yes, so state income tax free today.

Yep - It was great last year. A pension, a roth conversion, and an IRA withdrawal - 0$ state income tax. I may have to ramp up roth conversions.

 

[rk911]

two counties basically control the state...Cook and St. Clair (across fm St. Louis). not dissimilar from other states. best solution IMO...establish a state version of the electoral college based on counties.

balance the budget, eliminate waste and redundancy, reduce spending, jail for corrupt politicians, enact term limits...then we’ll discuss taxes.

 

[Turbo29]

California tried to do this with military retirees that were stationed in the state. Feds said NOPE!

I remember when this was going on. It's illegal now.


https://finance.zacks.com/pay-taxes-pensions-state-retired-state-living-in-8131.html


Prior to 1996, some states maintained statutes allowing for "source taxes." These statutes required people who earned pension income in a state to continue paying taxes to that state even if they no longer lived there. For example, a 1989 report in the Schenectady Gazette describes the plight of a retired woman who earned a pension from California. Though the woman had moved to Nevada more than nine years earlier, she still received a tax bill from the state of California for her pension income. Seniors across the United States faced similar scenarios, thanks to various incarnations of this source tax law.
Source Tax Law

On Jan. 10, 1996, Congress enacted the Pension Source Tax Act of 1996 (P.L. 104-94). This law specifically stipulates that, "No State may impose an income tax on any retirement income of an individual who is not a resident or domiciliary of such State." While the Source Tax law still allows individual states to define residency on their own terms, it prohibits any state from taxing non-residents for pensions earned within the state. If you earn a pension in Vermont, for instance, then retire to New York, Vermont may not tax your pension income.

 

[MichaelB]

Actually, for the sake of accuracy, any of the states now not taxing various forms of retirement income may sometime in the future begin taxing retirement income.

+1

OMG, Illinois might start taxing SS and pensions, I am shocked........ Everything south of Chicago needs to secede from the state and let them have their taxes.

Be careful what you wish for. It’s possible the southern part of the state benefits more than it taxes.

 

[Turbo29]

I recently drove from California to Memphis. Spent the night in Needles by the Arizona border. Granted Needles is in the middle of nowhere but was going to get gas and decided to compare prices. Can't remember exactly the prices but Page Arizona just across the border was about $1.50 cheaper than Needles California. Of course, Page is pretty far from everything also so I'm assuming a lot of the difference is because of California's high gas taxes.

It's well known here in Phoenix that if you drive to Los Angeles on I-10, your fill up in Ehrenberg, AZ (~$2.99/gal) instead of Blythe, CA (~$3.79/gal), which is just on the other side of the Colorado River.

 

[GenXguy]

Cursed

Had to mention that Illinois did not tax Social Security. Lasted one day.

Looks like that might change. See this:

https://www.fool.com/pwa/retirement...state-be-the-14th-to-tax-social-security.aspx

Nice while it lasted.

Well, that article is from February, and I don't think that ever gained much momentum with all of the other taxes and fees that are being increased. I also heard of possible thresholds for SS taxation if it were to be implemented. We have a little breathing room for now, but this is something we need to keep an eye on because it seems to be all about higher taxes and fees in Illinois these days. A state cannot tax its way to prosperity, and people are fleeing the state year after year, apparently the second most of any state last year. And it looks like it will only get worse this year.

 

[Ready-4-ER-at-14]

I have wondered if fresh water may be the ultimate taxable item that pays Chicago's bills.

Per what I have read in the Chicago trbune,I believe a number of the suburbs are now buying water from Chicago and paying 4-6x what city residents do. I think it had something to do with underground aquifers drying up to the level that the suburban wells were drilled down to or toxicity in ground water.

 

[VanWinkle]

+1


Be careful what you wish for. It’s possible the southern part of the state benefits more than it taxes.

I don't think we would be in trouble without Chicago, We have Madison county which is the largest nest of trial lawyers in the state. Even Chicago cases are sent here for larger settlements. We are taxed without representation so I doubt we benefit more than it taxes.

 

[MichaelB]

I don't think we would be in trouble without Chicago, We have Madison county which is the largest nest of trial lawyers in the state. Even Chicago cases are sent here for larger settlements. We are taxed without representation so I doubt we benefit more than it taxes.

Not sure what trial lawyers have to do with state tax revenue and spending, but this study reports Cook County and the Chicagoland Suburban área pay more in tax than they receive in state sponsored spending. That’s not unusual for a state or region with such a large and diverse geography and economy.

 

[VanWinkle]

Not sure what trial lawyers have to do with state tax revenue and spending, but this study reports Cook County and the Chicagoland Suburban área pay more in tax than they receive in state sponsored spending. That’s not unusual for a state or region with such a large and diverse geography and economy.

Generation of income and jobs is why it is related. I will just have to agree to disagree with your feelings, and we may both be biased by our geography or past employment.

VW