As tax season approaches, many individuals may begin feeling the stress that comes with getting one’s financial statements and other documentation in order in preparation to file one’s tax return. Tax matters can be complicated, especially for those who aren’t knowledgeable of the laws and commonly used terms. Taxable income, for example, may sound simple enough, but not all income is taxable. By understanding what income is taxable, individuals can prevent errors on their tax returns which can lead to processing delays and other issues.
Taxable income
Taxable income includes the adjusted gross income, also called AGI, amount featured on one’s federal income tax return. In some cases, individuals who earn additional income will be required to include that on their state income tax return. Some individuals are eligible for income subtractions based on specific circumstances.
Anyone who earned unemployment income during the tax year should be aware that the income earned will be included on the state tax return if it was included in the federal AGI. This applies to those who received unemployment benefits while residing in Illinois and those who received unemployment benefits from the Illinois Department of Employment Security as a resident of another state. Unemployment benefits related to railroad workers are not taxable.
Seek help when faced with tax questions
No one wants to make a mistake on their tax return. Errors can lead to delays in acceptance of a return and a delay in receiving one’s refund when applicable. Plus, some mistakes may lead to an audit, which can be a long and complicated process to complete. Illinois residents who have tax questions or concerns may wish to work with an attorney who knows the state’s tax laws.
