Illinois residents may soon feel the dual pinch of the increasing property assessments in Cook County combined with the federal tax reform bill that recently passed since it limits the ability of homeowners to deduct more than $10,000 in property tax payments and state taxes combined. Beginning in 2018, homeowners in Chicago and in all of Illinois will not be able to deduct more than $10,000 in the amounts that they are taxed for their properties. This means that tax planning will have an added importance when people are considering buying a home or other property. A Cook County property tax appeal lawyer might assist homeowners who believe that their properties have been assessed at excessive values with challenging the assessments so that the taxes are more affordable.
Effects of the New Tax law
The bill, which was signed into law by the President in December, will be effective from 2018 onward. It will create particular hardships for homeowners. Cook County has raised its property tax assessments several times over the past few years, causing them to skyrocket for many people in the city. In the past, property owners could deduct the property tax amounts that they paid in full on their federal returns by itemizing their deductions. Now, the ability to deduct the property taxes that are paid will be limited to $10,000. As a result, many people will not be able to deduct the taxes that they pay for their property taxes, and the doubling of the standard deduction may make it less attractive for people to itemize.
An estimated 13.8 million people are expected to experience a tax increase as a result of the new law. Homeowners in Illinois already pay some of the highest property taxes by value in the U.S. The potential impact of this law is not limited to the wealthiest areas of Chicago. Less-affluent areas throughout the county that have high tax rates can also expect a significant impact.
What Can Be Done?
In light of the new tax law, Illinois homeowners might benefit from challenging the assessments of the values of their properties. They can do so by comparing their assessment to all similar properties in their assessment neighborhood, by reviewing the average sales prices of similar homes in their areas, as well as other things affecting assessments and home values. They might then appeal the assessments to try to reduce their assessments below the deductible level.