City guides · Illinois
The crossroads of America — the birthplace of futures trading, the nation’s rail hub and one of its busiest airports, with the deepest pool of corporate headquarters in the Midwest. Illinois has a flat 4.95% income tax and does not tax retirement income, and companies are cheaper to form and keep than on either coast. YCL has long served families, business owners and overseas companies across Chicagoland — we work alongside local professionals, and local small businesses can start with one service on us.
YCL’s CPAs are licensed in multiple states. Many families and businesses in Chicago and its suburbs have trusted us with their taxes year after year — they build their lives here, and we walk with them, in English or Chinese, entirely online.
Part 1 · Local businesses and partners
Our clients buy homes, open shops and run companies in Chicago, and they need reliable local professionals and businesses. Sign up so we know you and what you do — and choose one of three free services as a welcome.
Once per business, scheduled after we review the sign-up; preparing or filing returns is not included.
We do not sell insurance, homes or loans — but our clients ask about them every day. Sign up as a partner and we refer clients who need you; when your clients need tax returns or a company, send them our way.
How we work together (mutual referrals, joint seminars, shared content) is agreed in writing when we talk; licensed professions, please add your license details.
Part 2 · Taxes and companies
Illinois taxes income at one flat rate and leaves retirement income alone, which makes it friendlier to retirees than most of its neighbors. The costs show up elsewhere — in sales tax and, above all, property tax.
Illinois taxes C corporations twice at the state level — income tax plus a replacement tax — and taxes pass-through businesses with a small replacement tax of their own.
Chicago has no city income tax and no gross receipts tax, but it does charge for licenses and taxes certain services. Its budget for 2027 is still being debated, so these may change on January 1.
A company is formed with the Secretary of State, then registers with the Department of Revenue (sales tax and withholding) and the Department of Employment Security (unemployment insurance), and with the city if it operates in Chicago.
Part 3 · YCL and this city
Everything online: upload documents in the client portal, sign electronically, pay online — in English or Chinese; the important conversations happen face to face on video.
Sales tax at several rates, payroll under Chicago’s minimum wage and paid leave, the city license, books months behind.
Bookkeeping, payroll, state and city filings and the annual return, as one monthly service.
About this serviceStock compensation, a medical practice as an S corporation, accounts and family in China.
Individual and practice returns, the PTE election, FBAR and Form 8938.
About this serviceRetirement income Illinois does not tax, Roth conversions, the $4 million estate tax.
Retirement and estate tax planning, with federal and Illinois numbers side by side.
About this serviceHigh property taxes, appeals after reassessment, rentals held in LLCs or a series LLC.
Clean rental books, depreciation, entity structure and 1031 exchanges.
About this serviceFirst-year residency after UIUC or Northwestern, OPT and H-1B, gifts from parents.
Pre-arrival planning, the first-year return, Forms 3520 and 8843.
About this serviceSetting up in the suburbs or the city, Illinois registrations, the first employees, pricing with the parent.
Entity set-up, state and city registrations, payroll, Forms 5472 and 1120 every year.
About this servicePart 4 · The city
Chicago grew where the Great Lakes meet the Mississippi watershed. A canal, then railroads, then airports made it the place where America’s goods, grain and money change hands — and after a fire destroyed it, it rebuilt itself taller than any city before.
Cook County alone produced about $546 billion in 2024. Chicago has more Fortune 500 headquarters than any U.S. metro except New York, and for years it has led the country in corporate relocation and expansion projects.
The world’s largest futures exchange, trading firms, banks and insurers — and the accountants, lawyers and consultants around them.
CME Group · Allstate · Northern Trust
From global restaurant chains to grain processing and packaged food, Chicago is the headquarters city of the American food business.
McDonald’s · ADM · Kraft Heinz · Mondelēz
Major drug and device makers in the northern suburbs, large hospital systems and medical schools in the city.
Abbott · AbbVie · Northwestern Medicine
The meeting point of America’s major railroads and one of its busiest airports — O’Hare led North America in flights in 2025. Warehouses ring the city.
O’Hare · United Airlines · intermodal yards
Machinery, metals, food processing and auto parts across Cook, DuPage and the collar counties — including Chinese-owned manufacturers.
Wanxiang America (Elgin)
One of the largest utility holding companies in the U.S., a growing software scene, and national labs in the western suburbs.
Exelon · Argonne · Fermilab
Illinois hosts about 66,600 international students, roughly a quarter of them from China. Many come for the University of Illinois at Urbana-Champaign and settle in Chicago after graduation.
Foreign-owned companies directly support about 371,000 jobs in Illinois (SelectUSA, August 2026). The largest sources of new projects are the United Kingdom, Germany, Switzerland, Canada and Japan, mostly in software, business services and industrial equipment.
For a company from abroad the usual first steps in Illinois are an LLC or corporation, an EIN, Illinois business registration for sales tax and withholding, a Chicago business license if the office is in the city, and, every year, Form 5472 and transfer pricing.
Chinese merchants opened shops on Clark Street in the Loop in the 1870s. Rising rents and discrimination pushed the community south around 1912 to Cermak Road and Wentworth Avenue, where Chinatown has stood ever since; Chinatown Square opened next to it in 1993. After 1975, ethnic-Chinese refugees from Vietnam built a second Asian neighborhood around Argyle Street on the North Side.
In 2017 Theresa Mah became the first Asian American in the Illinois General Assembly, and in 2022 Nicole Lee became the first Chinese American on the Chicago City Council. Many newer families live in the suburbs — Naperville is more than a fifth Asian. For tax purposes that means restaurants and family businesses, rental property, engineers and doctors with stock or practices, and parents and accounts in China.
Yes. YCL is a bilingual (English and Mandarin) CPA firm licensed in multiple states. We serve clients in Chicago, Naperville, Schaumburg and the rest of Chicagoland online: documents go through a secure client portal, returns are signed electronically, and meetings are by video.
A flat 4.95% on all taxable income, including capital gains, with a personal exemption of $2,925 per person in 2026. Retirement income — Social Security, 401(k) and pension payments and IRA distributions — is not taxed. Chicago has no city income tax.
10.50% on general merchandise since August 1, 2026, when the regional transit rate rose. Groceries are taxed at 1.50% in Chicago since the state grocery tax ended in 2026, and restaurant meals at about 11% — about 12% downtown.
The state filing fee is $150 and the annual report is $75 a year; there is no minimum tax for LLCs. A business in Chicago also needs a city license, and every LLC needs a registered agent with an Illinois address.
The business pays a 1.5% replacement tax, and the owners pay the 4.95% income tax on their share. The business can also elect to pay the 4.95% itself so that it becomes deductible on the federal return; Illinois has made that election permanent.
Yes. Illinois taxes estates above $4 million, at rates up to 16%, and the exemption cannot be passed to a surviving spouse. Bills to raise it have been introduced but not passed, so planning with trusts and gifts still matters for many families.
No. Federal returns are the same in every state, and YCL’s CPAs are licensed in multiple states. We prepare Illinois individual and business returns, sales tax and payroll filings, and everything — documents, signatures, payment, meetings — is handled online.
Sign up on this page. Local businesses receive one free service of their choice — a tax-saving review, a set of monthly financial statements, or a rental-property clean-up — and insurance, real estate, lending and legal professionals can become referral partners.
Start with a free 15-minute call about your situation; if we are a fit, a written quote follows.
