How should i file my taxes if i live in Indiana and work in Illinois?

Answer 1

You need to file Form IT-40 as an Indiana resident. You would need to fill out "Schedule 2-Indiana Credits" to calculate the tax credit for the taxes you paid to Illinois. You will also need to attach the IL tax return to claim the credit (not just W-2s). If you do not attach the IL tax return you will not receive the credit. For this reason you should mail your tax return, instead of e-filing.

http://www.state.in.us/dor/taxforms/06pdfs/06-it40bk.pdf

http://www.state.in.us/dor/taxforms/06pdfs/06-it40sch1-2.pdf

For Illinois you need to file Form IL-1040 and check "non-resident." You will also need to fill out Schedule NR and attach it to your IL-1040. You should prepare the IL tax return first, as you will need this information to prepare the IN Schedule 2.

http://www.revenue.state.il.us/TaxForms/Incm2006/ind/IL-1040.pdf

http://www.revenue.state.il.us/TaxForms/Incm2006/ind/IL-1040-NR.pdf

Answer 2

IL and IN no longer have a reciprocity agreement. You must file an IL non-resident income tax return listing only the income earned in IL and pay any tax due. You then file an IN resident tax return lising all income from all sources and take a credit on your IN return for the taxes paid to IL.

Answer 3

You have to file as an Indiana resident working out-of-state. Contact Homer Financial at 7088731200 in Orland Park, Il they do tax returns at a reasonable price and what you need to do requires tax knowledge of Il and In. It will pay to have a pro do this.