It's Tax Time

Tax season is here!  Owning a home can offer numerous tax benefits.  So in the state of Missouri, are there ways for homeowners to save money on their property taxes? Below are a few ideas that might help lower your property tax bill!

According to the National Taxpayers Union Federation,  experts estimate that between 30-60% of taxable property in the United States is over-assessed and this leads to higher property tax bills. Middle to lower income taxpayers are among the most often over-assessed. But less than 5% of taxpayers challenge their assessment, even though a majority of those who do win a partial victory.   The NTU offers a fantastic homeowner’s checklist to help you decide a property tax assessment appeal is the right choice for you.

The Home Mortgage Interest Deduction (HMID) is one of the most popular American tax breaks. This allows you to deduct up to $750,000 in home loans on your federal taxes, including the mortgage on your primary residence and a home equity loan or a line of credit used to buy, build or improve your primary residence or a second home.While it is not unheard of for taxpayers to look into the HMID, most taxpayers forgo the use of this deduction due to the Tax Cuts and Jobs Act.

A lot of people started working from home during 2020. As things have opened back up, some businesses have opted to continue to let their employees to let their home office be their home base. Does this qualify you for a home office deduction?  There are 2 basic requirements for your home to qualify for this deduction, regular and exclusive use and principal place of business.  The IRS goes more into how you could potentially qualify for this deduction.  You can read more HERE.

Most states offer a homestead exemption as one of the biggest benefits to owning a home. What is a homestead exemption? Homestead exemptions help you save on your property taxes by reducing the value of your home subject to tax.  Forty-five states offer some sort of Homestead Exemption and many states offer multiple exemption programs.  Unfortunately, Missouri is one of five states that does not have a homestead exemption available to help you save on your property tax.

*** With these options to explore, please research and talk to a financial professional about your property tax and tax deduction options for your taxes before you file.