Little-Known Property Tax Deductions Can Help Seniors Save
As you grow older, there are many things to look forward to — traveling, watching your grandchildren grow, and making more time for hobbies like gardening and crocheting. Not only will you have more moments to count your blessings, but you will also be able to take advantage of discounts on things like groceries, movie tickets, and even property taxes. Every state offers senior citizens breaks on property taxes as it can be challenging to make a fixed income yet have certain taxes on the rise.
Eligibility requirements will change from state to state and even within some counties. Still, generally, it is based on meeting the age requirement of 65 or older and falling into a specific income range. Property tax deductions are often targeted toward those with lower household incomes. However, certain states offer exemptions for higher incomes as well. Many also provide additional benefits in tax rebates and freezes, which can be combined with other exemptions. So if you're approaching your mid-60s or realize you should be taking advantage of these bonuses, here is a breakdown of what some states offer their senior citizens.
Property tax deductions
While every state has different policies, many have similar benefits and eligibility requirements. Out of the 50 states in the U.S., 48 of which offer homestead exemption on a taxpayer's primary residence, some highlights of property tax deductions for seniors include the following. Arizona offers a senior freeze program that protects property by freezing a residence's value for three years with the possibility of renewing at the end of that timeline. Florida has two homestead options; folks can qualify for both if applicable. The first exemption is up to $50,000, and the other is an equal relief of the property's value up to $250,000. These benefits are unavailable for vacation homes or rentals and have income requirements. New York can give elders up to 50% off on property value, lowering one's yearly tax bill.
Texas has programs that allow property taxes to be deferred until the homeowner passes or sells the residence. School district taxes can't be raised while someone owns the property, and a $10,000 homestead exemption is an option. Washington's age limit is lower than other states, at 61 years or 57 if you're a spouse of someone with an exemption at their time of death. Seniors within income requirements can qualify for up to $60,000 in relief. It's also essential to look at cities, considering Philadelphia, P.A., has a new tax break program that reduces the taxable portion of one's property by $80,000. This is available for all age groups, not just seniors.
Other tax breaks for seniors
Property tax breaks are just one aid for elders to take advantage of. Seniors 65 and older qualify for a standard deduction increase on their taxes, meaning their taxable income is lower and reduces what they owe. In 2023, the IRS's standard for seniors filing single is $13,850 and $27,000 for those filing jointly or widowed. Social security benefits are often exempt from federal income taxes. As a single filer, earnings up to $25,000 a year won't see federal taxes, which raises to $32,000 for anyone filing jointly. As many older people pick up new hobbies or businesses after retirement, it's great to know that you can deduct expenses on your taxes, such as advertising fees, supplies and home office equipment, employee costs, and business necessities like books and conferences.
Medical expenses are another vast area for seniors to pay attention to and leverage. Those who meet the age requirement can deduct medical expenses exceeding 7.5% of their gross income, prescription costs, health insurance premiums, and senior out-of-pocket care. Anyone permanently disabled or above 65 is also eligible for a tax credit to deduct money from their total owed to the IRS or increase their refund. There is, however, an income threshold on this credit.