$LevyIO

Worthless Securities Deduction in Chicago, IL 2026

Calculate your worthless securities deduction tax savings in Chicago, Illinois. With Illinois's 4.95% state tax rate, your combined savings are higher.

Illinois Tax Context

State Income Tax
4.95%
Local Income Tax
None
Property Tax Rate
2.1%
Tax Burden
Very High

Very high combined sales tax (10.25%); high property taxes; flat 4.95% state income tax

$1,348
Est. Total Savings
No Limit
Max Deduction
Both Methods
Deduction Type
26.9%
Combined Tax Rate

Worthless Securities Deduction Savings Calculator for Chicago

$
$

Federal Savings

$1,100

22% bracket

Illinois State

$248

4.95% rate

Local Tax

$0

0% rate

Total Savings

$1,348

26.9% combined

At a 26.9% combined tax rate in Chicago, every $1,000 in deductions saves you $270 in taxes.

Savings by Tax Bracket in Chicago

10%
$748
12%
$848
22%
$1,348
24%
$1,448
32%
$1,848
35%
$1,998
37%
$2,098

Includes 4.95% Illinois state tax on top of federal savings.

Eligibility Requirements

Investors holding securities that became completely worthless during the tax year

  • 1Security must be completely worthless
  • 2Treated as sold on last day of tax year
  • 37-year statute of limitations applies
  • 4Can be capital or ordinary loss depending on holding

Illinois residents should verify that this deduction is also recognized on their state tax return for additional savings of up to 4.95%.

Common Mistakes to Avoid

  • !Not claiming in the correct year of worthlessness
  • !Missing the extended 7-year refund claim period
  • !Confusing partial decline with total worthlessness
  • !Forgetting to claim the deduction on your Illinois state return (missing 4.95% additional savings)

Required Tax Forms

Form 8949Schedule D

File these forms with your federal tax return to claim the worthless securities deduction. Illinois may require additional state-specific forms.

Other Tax Deductions in Chicago, IL

Capital Loss Deduction

Investment

~$808
est. savings

Tax-Loss Harvesting

Investment

~$6,125
est. savings

Investment Interest Expense

Investment

~$1,837
est. savings

Qualified Dividend Tax Rate

Investment

~$3,675
est. savings

Opportunity Zone Investment

Investment

~$12,250
est. savings

1031 Like-Kind Exchange

Investment

~$36,750
est. savings

QSBS Exclusion (Section 1202)

Investment

~$122,500
est. savings

Installment Sale

Investment

~$9,800
est. savings

Worthless Securities Deduction in Other Illinois Cities

Aurora, IL

4.95% state tax

~$3,675
+2,327 vs Chicago

Joliet, IL

4.95% state tax

~$3,675
+2,327 vs Chicago

Naperville, IL

4.95% state tax

~$3,675
+2,327 vs Chicago

Rockford, IL

4.95% state tax

~$3,675
+2,327 vs Chicago

Elgin, IL

4.95% state tax

~$3,675
+2,327 vs Chicago

Springfield, IL

4.95% state tax

~$3,675
+2,327 vs Chicago

Peoria, IL

4.95% state tax

~$3,675
+2,327 vs Chicago

Waukegan, IL

4.95% state tax

~$3,675
+2,327 vs Chicago

Calculate Your Full Tax Savings in Chicago

Use our free tax calculators to optimize your entire tax return for Illinois.

Income Tax CalculatorTaxes in ChicagoFull Worthless Securities Deduction Guide

Frequently Asked Questions

How much can I save with the Worthless Securities Deduction in Chicago, IL?

In Chicago, Illinois, the worthless securities deduction can save you an estimated $1,348 per year. This includes $1,100 in federal tax savings and $248 in Illinois state tax savings. The national average savings is $3,000/year.

What is the Illinois state income tax rate for Chicago residents?

Illinois has a 4.95% state income tax rate. Chicago residents have no additional local income tax. Very high combined sales tax (10.25%); high property taxes; flat 4.95% state income tax

Who qualifies for the Worthless Securities Deduction in Chicago?

Investors holding securities that became completely worthless during the tax year. The eligibility requirements are the same whether you live in Chicago or elsewhere in the U.S., as this is a federal tax deduction. However, your savings amount will vary based on Illinois's 4.95% state tax rate.

What tax forms do I need to claim the Worthless Securities Deduction in Illinois?

To claim the worthless securities deduction, you need to file Form 8949 and Schedule D with your federal return. Illinois residents should also check if the state allows this deduction on their state return, which could provide an additional 4.95% savings. Filing status affects your deduction limits and tax bracket.

Is the Worthless Securities Deduction better in Chicago than in states without income tax?

Yes, Chicago residents benefit more because Illinois's 4.95% state income tax means the deduction reduces both your federal AND state tax liability. In states with no income tax (like Texas, Florida, or Nevada), this deduction only reduces federal taxes. Your combined rate of 26.9% means more savings per dollar deducted.

Related Calculators

Capital Loss Deduction in Chicago

Avg savings: $660/year

Tax-Loss Harvesting in Chicago

Avg savings: $5,000/year

Investment Interest Expense in Chicago

Avg savings: $1,500/year

Qualified Dividend Tax Rate in Chicago

Avg savings: $3,000/year

Opportunity Zone Investment in Chicago

Avg savings: $10,000/year

1031 Like-Kind Exchange in Chicago

Avg savings: $30,000/year