3
Texas vs Illinois taxes?
I'm weighing a job offer in Austin against one in Chicago, and the biggest question mark is the tax burden. I know Texas has no state income tax, but property taxes seem high. Illinois has income tax but maybe lower property taxes? How do these really compare for someone making around $120k, single, renting, and not owning a car in either location? I'm also curious about sales tax differences and any other taxes I might not be considering.
2 Answers
9
28d ago
Illinois has a flat income tax, while Texas has none. However, Illinois property taxes are generally much higher, which could offset the income tax benefit of Texas, especially if you buy property. Sales tax rates are also different, with Illinois having a slightly higher base rate, but local rates vary widely in both states. You need to model different scenarios based on income, property value, and spending habits.
5
30d ago
Illinois' flat income tax is 4.95%, so on $120k, that's $5,940. Austin has no income tax, a clear win. Illinois property taxes are highly variable by county but can be significant, even for renters indirectly. Texas property taxes are indeed high, but you only directly pay them if you own. Sales tax in Chicago is higher than in Austin (10.25% vs 8.25%). Factoring in no car, the income tax difference likely outweighs the sales tax difference. Consider using online tax calculators for both states using your specific income and estimated spending to get a clearer picture.