Tax Planning for Physicians in Chicago, IL (2026)
Physicians in Chicago pay federal tax at up to 37% plus Illinois income tax (a top rate of 4.95%). Here is how the 2026 rules apply to doctors, dentists and practice owners in Chicago, IL.
2026 at a glance for Chicago, IL physicians
| Illinois income tax | Top rate of 4.95% (2026) |
|---|---|
| State tax on $400,000 of state taxable income | $19,800 single / $19,800 married filing jointly |
| State tax on $1,000,000 (married filing jointly) | $49,500 |
| City income tax | None on wages |
| Pass-through entity tax | Available (elective) |
| Top federal rate | 37% (from $640,600 single / $768,700 joint) |
State tax figures apply Illinois's 2026 brackets to state taxable income and ignore credits, deductions and local taxes.
Local taxes in Chicago
Chicago does not levy a city income tax, and Illinois physicians generally do not face a separate city or county income tax on wages. Your tax picture is the federal rules plus Illinois, which has a top rate of 4.95%.
State rules that apply in Chicago
Yes. The state has an elective pass-through entity tax (PTET) that partnerships and S corporations can use to deduct state income tax at the entity level.
- Illinois taxes income at a flat 4.95% and, unusually, does not tax most retirement income, which matters for retirement-age physicians deciding where to live.
- Illinois partnerships and S corporations already pay a 1.5% replacement tax at the entity level, and the elective pass-through entity tax can be layered on to recover a federal deduction.
Where the savings usually come from
For most Chicago physicians, federal planning drives the largest results: W-2 strategies such as 401(k)/403(b), 457(b) and the backdoor Roth; 1099 and locum planning; entity and cash balance plan design for practice owners; and real estate strategies for physicians with time to participate.
More physician tax guides
- Other Illinois cities: Peoria, Rockford, Springfield.
- State rules: Illinois physician tax guide and all 50 state guides.
- By specialty: Neurosurgeons, Pain Management Physicians, Orthopedic Surgeons, Emergency Physicians and every specialty.
- Core strategy: tax planning for physicians, tax planning for medical practice owners, advanced strategies for high-income physicians and S corporation tax planning for physicians, plus the physician tax glossary.
Frequently asked questions
Does Chicago have a city income tax?
No. Chicago does not levy a city income tax on wages.
What state income tax do physicians in Chicago pay?
Illinois has a top rate of 4.95% for 2026. On $400,000 of state taxable income, the 2026 brackets produce about $19,800 for a married couple filing jointly, before credits.
Can GenWealth 360 work with physicians in Chicago?
Yes. GenWealth 360 works with physicians, dentists and practice owners nationwide, including Chicago, through virtual meetings. Our office is in Long Beach, California.
Get a tax plan built for your situation
GenWealth 360 builds proactive, tax-first plans for physicians, dentists and medical practice owners in all 50 states. Start with a conversation about your income, entity and goals.
Schedule a consultationBrowse the Resource CenterRelated guides
Sources
This article is for general educational purposes and is not tax, legal or investment advice. Tax law changes often and its application depends on your facts. Figures reflect 2026 rules as published by the sources listed above. Consult a qualified professional before acting. See our editorial policy.