The Sunshine State has been a retirement attraction for many senior citizens over the years for a variety of reasons. From the sun and sand to the many retirement communities available, Florida has become a mecca for retirees. But did you know that Florida is also known for its tax-friendly environment?
There are several tax breaks in Florida that are available to senior citizens, which makes the state a great place to retire. With the various retirement tax benefits as well as property tax exemptions, seniors can enjoy their time without having to worry about which taxes they need to pay.
How Do You Find Tax Breaks That Are for Seniors?
A tax break means that the amount owed in taxes is reduced for the taxpayer. This often happens as a result of various tax laws that come into play. Oftentimes, there is no action for the taxpayer to take to receive the break, especially when talking about tax breaks that apply to those who are a certain age.
Senior tax breaks are designed to stimulate the economy through increasing senior spending.There are several states in the US that have a large population of seniors that offer this benefit.
Finding out what breaks are available where you live takes just a little time researching on the appropriate government websites. Doing this can create quite a bit of saving for taxpayers, depending on which one you may qualify for.
There are some tax breaks that apply to everyone, and others that are more specific to certain people. For most senior tax breaks, you just have to be a certain age or on a fixed income to qualify.
What Tax Breaks Do Seniors Qualify For?
Tax breaks are categorized by what their purpose is and how they benefit the taxpayer. The important thing to remember is that they are all designed to help reduce the amount that is owed to the federal government.
Depending on the specific laws that are passed, a tax break can fall into many categories. Seniors typically qualify for the following tax breaks:
• A larger standard deduction
• A higher tax filing threshold
• Social security may be tax exempt
• Additional tax credits
• Health care deductions
• Deductions for certain health related purchases
• Property tax breaks
Do All Seniors Qualify for Tax Breaks?
Most of the aforementioned tax breaks are for all seniors, because they are based on age qualifications. There are some tax breaks however, that are income based.
The income based tax breaks are those that are based on social security. If you are on social security you will likely be informed of these tax breaks when you file your yearly taxes.
With most of the other tax breaks, these will be applied automatically if you use software or a tax preparing service to help you file taxes. But if you are unsure of certain tax breaks you may or may not be receiving, it is always worthwhile to bring it up and ask. You never know when you may be able to save some money.
Why Do Seniors Need Tax Breaks?
If you aren’t a senior just yet, and are researching this tax breaks pre-emptively, you may be wondering why seniors need tax breaks. The main reason seniors need a tax break is because they are on a fixed income.
Living on a fixed income is difficult, especially when there is inflation. Inflation raises the prices of goods and services, meaning you need to spend more, but you can’t make more money because you are on a fixed income.
The government understand this, which is why they offer tax breaks to seniors, to help offset the rising costs of goods and services without causing seniors to sacrifice their quality of life.
Common Taxes in Florida
Florida has long been known as a tax friendly state, because they offer many tax friendly laws. And many of these laws benefit seniors.
Property Taxes in Florida
Property taxes in Florida are assessed at the local level instead of the state level. This is how the local counties receive the bulk of their funding. Because of this, the property taxes in Florida tend to be extremely high.
There are, however, many exemptions that exist to help the aging population of Florida with their property taxes. These exemptions for senior citizens are an attempt to offset much of the burden felt by these groups.
Florida Sales Taxes
Sales Tax is another category that Floridians are responsible for paying. While this tax is assessed at the state level, many counties have the ability to stack additional tax on top of that.
Because of this, the amount of sales tax paid depends on the specific area within the state.
Unfortunately, there is no sales tax break for seniors. But many restaurants try to offset this by offering a special menu for senior citizens, or a special discount on their order.
Florida State Income Tax
Florida does not have a state income tax. This means that you get to take home what your employer pays you minus the federal income taxes. This is especially useful if you are planning to work a few years in Florida before retiring.
Ultimately, becoming familiar with the different types of taxes that exist in Florida, especially if you live there or are planning to relocate there, is always a great idea. Searching through the government websites that are based out of Florida is the best way to find the information you may be searching for.
Unique Tax Benefits of Living in Florida
While the cost of living in Florida is comparable to many other states in the United States, there are other reasons so many people choose to move there. Some do so for the sandy beaches and constant sunshine, while others enjoy the many tax benefits that Florida has to offer.
Although the state as a whole tends to have a higher property tax rating, there are tax incentives in Florida that can save you quite a bit of money. For example, the homestead exemption can be used for up to $50,000 which can save families a lot of money.
This means, that when you purchase a home in Florida for the purposes of living in it, $50,000 of the value of the house is tax exempt. So if you buy a property that is worth $250,000, you will only need to pay taxes on $200,000 of that.
This can be very helpful for those who are already on a fixed income when moving to the state of Florida.
Property Inheritance Tax
In addition to the homestead exemption, there are several other tax exemptions that apply to various special population groups within the state of Florida. This is the state’s way of making sure these citizens have the opportunity to own their homes and save money.
In many states when you inherit property, a tax is assessed on the estate. Within the state of Florida, however, this tax does not apply. Although it was once a part of the tax base, it was done away with in 2004.
What this means is that the tax liability is reduced substantially for those who have inherited property and/or estates within the state. This may not benefit you now, but if you have property that you would like to one day hand down to your son or daughter, this law means that they won’t have to pay taxes on the property after your death.
This can make things much easier on your family, and ensure that they won’t suffer financial strain as a result of your inheritance.
At the end of the day, although these were just a couple of the tax benefits that are available to Florida residents, there are many more reasons to relocate to the state. This is why those who are retiring flock to the Sunshine State.
Senior Specific Tax Breaks
When it comes to those who are retiring or already are retired, no other state has such a reputation as being tax-friendly as Florida does. This is why so many people from other states and countries end up in the Sunshine State when they retire from their careers.
Whether senior citizens choose to live in a retirement community or in a different type of community within the state of Florida, they can still reap the benefits the state has to offer. Many people move to the state to enjoy the laid-back lifestyle while others like the idea of the tax exemptions they can get.
Florida is one of few states that has several senior specific tax breaks. If you are looking for the perfect location to retire, Florida may be just the place for you.
While the benefit of no state income tax or inheritance/estate tax applies to all Floridians, senior citizens have some extra protection. This is because, in the state, retirement income is exempt from taxation. This also includes social security income received as well.
Additionally, retirees can choose to work part-time without having to worry about the various taxes that would normally apply. This makes it easier for seniors who want to continue working, at least on a part-time basis, to be able to keep that personal income.
For those Florida residents who are over the age of 65, and who own property, there areadditional tax exemptions that apply. As long as you meet the specific criteria, you are able to take advantage of these additional benefits. This can really save you money when it comes to buying property in the sunny state of Florida.
This benefit allows an additional exemption of about $50,000 to homeowners, in addition to the Homestead act mentioned above, as long as you can meet requirements of owning the real estate that you claim as their permanent residence, are over 65 years old, and meet specific income requirements.
How Do Seniors in Florida Find Out More About Tax Breaks
When it comes to taxes, many people find themselves drowning in the plethora of information that is available. For the layperson, many of the laws and regulations about taxes can get quite confusing.
There are many ways to find the information needed to ensure you have the appropriate information before filing taxes. If you do the taxes yourself, you have the internet to count on for the information. But how do you find the most accurate information?
One option for finding accurate information on the internet is to go to the source. The IRS website is a great resource when looking for the tax breaks that you might qualify for. Additionally, the Florida government websites can also guide you through which you can file.
If searching various websites to find which deductions, credits, or exemptions are too overwhelming, you may consider consulting a tax professional. They can typically help you sort through the many breaks and find the right ones for you.
When you begin to search out tax breaks, you may have to supply specific information that would prove you qualify for them. This is especially important if you have moved to Florida from another state or country.
Living in Florida can be an exciting experience, especially if you are retiring. From spending time on the sandy beaches to golfing within the retirement community you may choose to live in, there is something for everyone. Discovering that you may be able to apply for tax breaks can be icing on the cake.
Overall, knowing what tax breaks are available in Florida may require a bit of research, however, it can be worth it if you live there or are planning to move there. The tax breaks that are available to seniors can make their retirement much more enjoyable.