Tax season is upon us, and as a homeowner in Rochester, NY, you have access to several tax incentives that can ease your financial load. While I'm a real estate professional, not a financial advisor, I want to share some insights that could help you this tax season.
1. Property Tax Deductions
Homeowners in Monroe County pay property taxes, which may be deductible on your federal tax return. The State and Local Tax (SALT) deduction allows you to deduct up to $10,000 of property and other state and local taxes. Review your property tax statements and consult a tax professional to determine your eligibility.
2. Mortgage Interest Deduction
If you have a mortgage on your home, the interest paid is often deductible. Your lender will provide a Form 1098, detailing the interest paid over the year. This deduction can significantly reduce your taxable income.
3. School Tax Relief (STAR) Program
New York's STAR program offers relief on school property taxes for eligible homeowners. There are two types: Basic STAR and Enhanced STAR.
Basic STAR: Available for owner-occupied, primary residences where the income of owners and their spouses is $500,000 or less.
Enhanced STAR: For homeowners aged 65 or older with incomes not exceeding $93,200.
For the 2024–2025 school year, the Basic STAR exemption in the City of Rochester is $25,560, and the Enhanced STAR exemption is $71,570. These amounts vary by municipality, so check the specific figures for your area.
4. Senior Citizens Property Tax Exemption
If you're 65 or older and meet certain income requirements, you may qualify for a partial property tax exemption. In the City of Rochester, this exemption applies to those with a household income of $58,400 or less. The exemption reduces the assessed value of your home before taxes are computed.
5. Veterans Property Tax Exemption
Veterans and their surviving spouses may be eligible for property tax exemptions on local taxes. Additional benefits may apply for combat veterans and those with disabilities. To determine eligibility, present a copy of your separation papers or DD214 to your local tax assessor.
6. Real Property Tax Credit
New York State offers a Real Property Tax Credit for homeowners with household gross incomes of $18,000 or less. If you qualify, you could receive a credit of up to $375. This credit is available even if you don't owe state income taxes.
7. Energy Efficiency Tax Credits
Making energy-efficient upgrades can qualify you for federal tax credits. Improvements like installing energy-efficient windows, doors, or solar panels can not only lower your utility bills but also provide credits on your tax return. Consult the IRS guidelines or a tax professional for specific details.
8. Rental Property Tax Benefits
If you own rental property, several deductions can offset your taxable rental income:
Depreciation: Deduct a portion of the property's value over time.
Mortgage Interest: Interest paid on loans for rental properties is deductible.
Property Taxes and Operating Expenses: Expenses like maintenance, repairs, and property management fees can be deducted.
These deductions can significantly impact your net rental income.
SHANE'S THOUGHTS
Navigating tax benefits as a homeowner can be complex, but the potential savings are substantial. Always consult with a qualified tax professional to maximize your benefits and ensure compliance with current tax laws. If you're considering buying or selling a home in Rochester, I'm here to help you navigate the real estate aspects seamlessly. Call me at (585)576-7904 or email me at ShaneAllen@KW.com
Disclaimer: This information is provided for general guidance and is not a substitute for professional tax advice. Consult with a tax professional to understand how these provisions apply to your specific situation.
