5 Property Tax Exemptions that You Might Not Be Aware Of
We all know that every dollar counts, especially when saving up for a home security system. Use this tax season to maximize your tax credits, deductions, and exemptions to increase your savings. We listed a few property tax rules that may help lower this year’s tax bill.
Senior Tax Exemption
Please note that all tax rules vary by state and county, so check your county’s assessor’s office for specific property tax rules. In many states, seniors who own the home and live in it can save up to $675, no matter what their current yearly income.
Seniors who make less than $55,000 a year also qualify for many other senior tax exemptions, such as the senior deferral and freeze programs. You must apply for these senior exemptions before their individual deadlines.
Home Office Exemption
There are very strict rules about what the IRS considers a home office. The home office exemption is only available to individuals who primarily run their business from their home. You cannot claim a room as a home office if you also use it for multiple purposes, such as a guest or play room.
The home office exemption allows you to claim indirect and direct exemptions that relate to the operation of your business. For example, you may claim the remodeling of your home office as a direct business expense. However, you can only claim adding a home security system as an indirect home office expense. Both qualify as tax deductions, but indirect expenses only count as partial ones because they don't directly relate to your home office.
Casualty Loss Deduction
The casualty loss deduction applies to various personal and financial losses. Natural disasters is one of the main casualty loss sections that handles property tax deductions.
If your home was damaged or destroyed during a federally declared disaster, then you qualify for this deduction. This deduction usually lowers the tax bill for that disaster year. You also receive a bigger and faster tax return. Use the 1040X form to report this loss.
Solar Energy Credits
If you have had construction done on your home to add a solar energy system, then you qualify for a federal solar tax credit. This credit allows you to deduct 30 percent of the installation cost until December 31, 2019. In 2020, the credit decreases to 26 percent, and 22 percent by December 31, 2021. Now that you know a few more tax exemptions available to you, use H&R Block to file your taxes. Save on H&R Block’s tax software with coupons provided through Groupon. Then invest your tax refund on a efficient security system.