- Schedule M lists the additions and subtractions taxpayers need to make to the federal taxable income, as defined in step 2 of the Illinois personal return. Step 3 of the Schedule M lists all of the deductions that an Illinois taxpayer can apply. Most of these deductions relate to contributions made to Illinois education savings plans and home ownership plans, as well as investments made by the taxpayer in state bonds and programs. If you have some excess income, investing in these state programs would be a suitable option as it would not only provide you with some current year state deductions but fiscal security for the future.
- Schedule 1299-C is necessary to complete Step 7 of the Illinois Individual tax return, and contains credits used to directly offset a person's taxes. This form contains credits limited to employers and business owners, so if you work as an employee this form will not contain any credits that could benefit you. If you are a business owner, this form does offer tax benefits for hiring certain types of people, such as veterans, or making certain types of investments, such as building businesses in state designated enterprise zones. While it is not recommended to make investment decisions solely for the tax benefit, these credits should be an important consideration. When hiring an employee or making an investment decision, you should review Schedule 1299-C for the total list of credits available and see if you could gain these benefits and still achieve your goals.
- Schedule ICR provides credits for homeowners and parents with school-aged children. The information from this schedules helps you fill out line 18 in Step 7 of your 1040 and directly offsets the taxpayer's liability. Section A of the schedule calculates your Illinois Property Tax Credit, which uses the amount you paid in Illinois property taxes during the tax year on your real property. Section B is the K-12 Education Expense Credit. This allows you to deduct the total tuition, books and lab fees you paid for your qualifying students. For the student to qualify, you need to be his parent or legal guardian and both be legal residents of Illinois; the student must be under 21; and the student enrolled in either a school -- public or nonpublic -- in Illinois. For the K-12 Education credit, you should have documented proof to support your claim, such as receipts.
- For complex returns, consult with a tax professional, such as a certified public accountant or a licensed attorney to adequately address your individual needs. Keep your tax records for at least seven years should the Internal Revenue Service administer an audit.
previous post
next post