If chicago property tax doubles, affect on suburbs?

[Lookout Kid]

I did find a breakdown of 2011 Chicago property taxes as well:

52.70% Board of Education
18.31% City of Chicago
8.47% Cook County
6.34% Chicago Park District
5.87% Metropolitan Water Reclamation District
3.02% City Colleges
2.18% Chicago School Bldg & Improvement Fund
2.03% Chicago Library Fund
1.06% Forest Preserve District

[gelert]

Originally Posted by Lookout Kid

However, ALL of your property tax bill is tax deductible

Don't forget that property taxes are not at all deductible if you are subject to AMT...

[pvande55]

Originally Posted by Lookout Kid

I did find a breakdown of 2011 Chicago property taxes as well:

52.70% Board of Education
18.31% City of Chicago
8.47% Cook County
6.34% Chicago Park District
5.87% Metropolitan Water Reclamation District
3.02% City Colleges
2.18% Chicago School Bldg & Improvement Fund
2.03% Chicago Library Fund
1.06% Forest Preserve District

I didn't realize the City's proportion of property tax was so high. Most suburban City or Village taxes take up less than 10%. For many years Vernon Hills and Schaumburg had no Village property tax at all.

[Lookout Kid]

Originally Posted by gelert

Don't forget that property taxes are not at all deductible if you are subject to AMT...

Yeah, that AMT... Scary stuff, since it's so mysterious about how it strikes.

[nikitakolata]

Originally Posted by Lookout Kid

Yeah, that AMT... Scary stuff, since it's so mysterious about how it strikes.

So true...

I'm not a tax expert by any means, but I was subject to AMT for last year, yet our property tax still seemed to lower our total taxes owed. It may not have impacted the AMT amount, but it seemed to lower our taxable income so that we had less excess subject to AMT. Of course, maybe that's just how it looks in Turbo Tax, I'm definitely not a CPA.

[oakparkdude]

Originally Posted by nikitakolata

So true...

I'm not a tax expert by any means, but I was subject to AMT for last year, yet our property tax still seemed to lower our total taxes owed. It may not have impacted the AMT amount, but it seemed to lower our taxable income so that we had less excess subject to AMT. Of course, maybe that's just how it looks in Turbo Tax, I'm definitely not a CPA.

You get a credit on your state (IL) taxes for your property tax.

[wjj]

Originally Posted by nikitakolata

So true...

I'm not a tax expert by any means, but I was subject to AMT for last year, yet our property tax still seemed to lower our total taxes owed. It may not have impacted the AMT amount, but it seemed to lower our taxable income so that we had less excess subject to AMT. Of course, maybe that's just how it looks in Turbo Tax, I'm definitely not a CPA.

You are correct in that all state and local taxes deducted on Schedule A (not just property taxes) are added back to your income when calculating the AMT. So are a lot of other items. So your AMT taxable income can be considerably higher than your regular taxable income. You pay the higher of the regular tax on lower taxable income or the AMT on higher taxable income. It really is not too mysterious. AMT is similar to a flat tax in that income is taxed while many deductions are simply not allowed or are significantly restricted.

[Lookout Kid]

Originally Posted by wjj

It really is not too mysterious.

It's mysterious in that most people are unaware they are going to have to pay it for the first time until they actually do their taxes.

[middle-aged mom]

Originally Posted by Lookout Kid

Property taxes in a lot of the "nicer" DuPage and Lake County suburbs are higher than what they would be in Cook County. A lot of this is because these types of suburbs WANT to spend a lot on their schools, and they are more likely to have $100k Kindergarten teachers with Masters Degrees. Additionally, a lot of suburbs have no other source of taxes other than homeowners, unless they have a large shopping mall or lots of office parks. I'm not sure you get much of a break by leaving Cook County, even with the tax increases that could occur.

My sub division spans 2 counties, Cook and Lake. There's a $2000 a year difference in property taxes on my model between Cook and Lake with Lake being the higher of the two. Both feed into the same schools, park district, library, police/ fire and village.

The difference is the township and county mil rates.