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Illinois Estate Tax Exemption and Calculation

Planning your estate is a necessary step in making sure your heirs get the property they are entitled to. In Illinois, like the federal government, there is a tax placed on the estates of individuals that must be paid before any money can be dispersed to their heirs. This tax, known as the estate tax, only goes into effect if the estate is worth more than an established amount of money. Estate planning can be a stressful, complex, and time-consuming process, but the Lawyers at Johnston Tomei Lenczycki & Goldberg LLC are here to help you.

Illinois Estate Tax Exemption

A person whose estate is not greater than the established number is exempt from having to pay taxes on his or her estate when he or she dies. In Illinois, the estate tax threshold is $4 million. This means that if your estate is worth more than $4 million when you die, you will owe money to the state before your heirs can receive any money from your estate.

Unlike some other states, the Illinois exemption is not portable between spouses. This means that if your spouse dies, and his estate is worth $2 million, you are not entitled to his extra $2 million exemption on top of your $4 million exemption, i.e., you cannot make your exemption $6 million. In other words, the living spouse’s exemption is always $4 million.

Illinois Estate Tax Rate

The Illinois estate tax rate is graduated, with a top rate of 16 percent. Illinois provides a chart that establishes base taxes to be paid, a marginal tax rate, and a rate threshold for taxable estates. The chart, show below, can be used to find out just how much taxes would be owed on a particular estate.

Taxable Estate ($) Base Taxes Paid ($) Marginal Rate (%) Rate Threshold ($)
1 – 40,000 0 0 0
40, 000 – 90,000 0 0.8 40,000
90,000 – 140,000 400 1.6 90,000
140,000 – 240,000 1,200 2.4 140,000
240,000 – 440,000 3,600 3.2 240,000
440,000 – 640,000 10,000 4.0 440,000
640,000 – 840,000 18,000 4.8 640,000
840,000 – 1.04 MM 27,600 5.6 840,000
1.04 MM – 1.54 MM 38,800 6.4 1.04 MM
1.54 MM – 2.04 MM 70,800 7.2 1.54 MM
2.04 MM – 2.54 MM 106,800 8.0 2.04 MM
2.54 MM – 3.04 MM 146,800 8.8 2.54 MM
3.04 MM – 3.54 MM 190,800 9.6 3.04 MM
3.54 MM – 4.04 MM 238,800 10.4 3.54 MM
4.04 MM – 5.04 MM 290,800 11.2 4.04 MM
5.04 MM – 6.04 MM 402,800 12.0 5.04 MM
6.04 MM – 7.04 MM 522,800 12.8 6.04 MM
7.04 MM – 8.04 MM 650,800 13.6 7.04 MM
8.04 MM – 9.04 MM 786,800 14.4 8.04 MM
9.04 MM – 10.04 MM 938,800 15.2 9.04 MM
10.04 MM and up 1,082,800 16.0 10.04 MM

 

Sample Calculation

$6 million (taxable estate)

$402,8000 (base taxes paid)

$6 million (taxable estate) – $5.04 million (bottom threshold amount) = $0.96 million

$0.96 million x 0.12 (marginal rate) = $115,200

$115,200 + $402,800 = $518,000 (total estate tax burden)

$518,000 – $60,000 (universal adjustment) = $458,000 (total estate tax due)

Here is an example of how much money would be owed on an estate totaling $6 million. First, using the chart, find the base taxes to be paid for a $6 million taxable estate. Now, subtract the bottom threshold amount from the taxable estate. Multiply the calculated number by the marginal rate for that bracket (found using the chart). Finally, add the newly calculated number to the base taxes to be paid less a universal adjustment of $60,000, and you will have your total estate tax burden. So, on a $6 million estate, an individual would pay $458,000 in Illinois estate taxes.

Call a Libertyville Estate Planning Attorney Today

If you need assistance planning an estate, call the attorneys at Johnston Tomei Lenczycki & Goldberg LLC in Libertyville. Our estate tax attorneys can help save your heirs money, while also streamlining the estate planning process. At Johnston Tomei Lenczycki & Goldberg LLC, we’ll discuss options to decrease your estate tax burden such as legal trusts and gifts to help establish what the best plan of action is for you and your family. Whatever your needs are, we will be sure to fulfill them. Don’t lose your hard-earned money, call the Libertyville estate attorneys at Johnston Tomei Lenczycki & Goldberg LLC today, or visit us at our Libertyville office, located at 350 N. Milwaukee Ave.

 

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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Johnston Tomei Lenczycki & Goldberg LLC

Phone Number: (847) 549-0600
Fax Number: (847) 589-2263

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350 N. Milwaukee Ave., Ste. 202
Libertyville, IL 60048

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