How do I file taxes if I live in WI, but work in IL??

Question

I heard that I have to take out an estimated tax amount in every paycheck so that I have money for WI taxes since I live there and IL can't take any taxes out of my check. I'm not exactly sure how this works...can anyone help me to understand!?!?!?

Answer 1

Check again, (on your paystub), most likely the company is taking out Ill taxes, not Wisconsin taxes. What happens when you file, is your Illinois state tax payment is fully deductible against what your Wisconsin liability would be. In most cases, the amount taken by Illinois will exceed what you would have owed in Wisconsin. (Sorry, you dont get the difference back). You may have a small liability in Wisconsin,.
First you fill out your Illinois non resident return. Then you fill out your Wi return. The Wis return will ask you for payments to other jurisdictions. Thats when your Wi tax due will either disappear, or be greatly reduced.

Answer 2

I live in northern Illinois, so I can answer this. Apparently your Illinois employer isn't a Wisconsin withholding agent. Some Illinois employers do have out of state withholding capabilities, particularly employers who are near the borders of Iowa, Wisconsin, Indiana and Missouri. If you have several WI residents at your company, it would be nice if your employer would consider being a WI withholding agent.

That said, that doesn't help you right now. Yes, you'll need to file estimates with the state of Illinois to cover your Illinois liability. If you owe less than $500, Illinois won't assess a penalty, but you'd better be sure that you're right about that number. You'll file an Illinois non-resident tax return, which you can get off of the Illinois Department of Revenue website. Then, when you file your WI income tax return, you'll be allowed to take a credit against your tax liability for the income you earned and paid tax on in Illinois. Kind of a pain-do you have a tax preparer or do you handle your taxes yourself? If you're doing this on your own, TurboTax can handle a multi-state return, but you will have to spring for the additional $29.95 (plus tax) to download the Illinois return.

Good luck!

Answer 3

look on your W-2 and make effective which state took out taxes. because of the fact of reciprocity agreements between Illinois and adjacent states together with Wisconsin, information which you're an Illinois resident, your organization ought to have already withheld Illinois taxes. That got here about years interior the previous on a similar time as i grew to alter into an Illinois resident working for the summer time in Madison, WI. My company deducted Illinois taxes, so i finished up basically submitting an Illinois tax bypass returned. besides the certainty that, in the journey that your organization withheld WI taxes, then you definately truly'd ought to checklist your WI earnings on your Illinois resident IL-1040 (and be taxes for that reason), then checklist a WI-1040 to get an finished refund of your WI withholding.