I have a small pension is that taxed and if so how is it taxed I live in Illinois

[hr6628bulls]

my pension is from a annuity

[xmasbaby0]

IL does not tax retirement income.

[xmasbaby0]

Are you only asking about IL?  Or do you have Social Security income in addition to the pension?  There is a chance you would have to file a federal return.

[hr6628bulls]

NO I wanted to find out if Illinois taxes and also the feds and if so how is it taxed I wanted to set aside whatever the tax on my pension checks is going to be

[xmasbaby0]

Are you single or married?  If you are single your standard deduction is $12,000 for 2018--so anything over that could be taxed on your federal return.  If you are married filing jointly the standard deduction is $24,000.
Any other income besides the pension?

[hr6628bulls]

the only other income would be my salary and my wifes I can safely say that combined will be under $100,000.00

[Anonymous · Accepted solution]

federally the pension will be taxed and will be tax exempt in illinois

[xmasbaby0]

You will receive a 1099R for your pension in January.  You must enter that 1099R on your federal tax return.  If you have other income--you say you are still working and receive a salary, and your wife receives income--the software will calculate how much of your pension is taxable for your federal return, along with your other income.  Information flows from the federal return to your state return.  The state of IL will not tax your retirement income, but as you must be well aware, your other income is subject to IL state tax.

For your federal return you can try the tax caster tool to get an idea of what your 2018 return results may look like:

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

https://ttlc.intuit.com/questions/4482394-how-will-tax-reform-affect-my-2018-federal-tax-return

[hr6628bulls]

Thank you very much

[xmasbaby0]

You are welcome.