Tax season can be stressful, but for Durham residents, it can also be an opportunity to uncover hidden savings in your real estate journey. Whether you’re a homeowner, renter, or investor, exploring tax benefits specific to Durham can put more money back in your pocket. Let’s delve into some unique strategies and resources available to you.
- Homestead Exemption: Claim this exemption (deadline: June 1st) if you’re a homeowner and your primary residence is in Durham. This can significantly reduce your property tax burden, especially if you’re a senior citizen or permanently disabled. Explore programs like the Circuit Breaker and Disabled Veteran Exclusion, which offer additional tax relief to qualifying individuals.
- Low-Income Homeowners Relief (LIHR): This program offers tax relief to Durham homeowners who meet income thresholds and have resided in their home for at least 5 years. Applications usually open in August, so stay tuned for announcements from Durham County DSS.
- Mortgage Interest Deduction: Claim the interest paid on your mortgage up to a certain limit on your federal income tax return. This can be a substantial deduction for homeowners, especially in the early years of their mortgage.
- Depreciation Deduction (Investors): If you own rental property in Durham, you can deduct a portion of the property’s value each year from your taxes. This “depreciation” accounts for the property’s wear and tear over time. And Do not forget about Bonus depreciation in your first year.
- Energy Efficient Upgrades: Consider home improvements that increase energy efficiency. These upgrades can qualify for federal tax credits, lowering your tax bill while making your home more comfortable and potentially increasing its value.
- Consider Charitable Contributions: Donating to qualified charitable organizations not only benefits the community but can also yield tax deductions. Keep track of your charitable contributions throughout the year and ensure they meet IRS guidelines for deductibility. My personal favorite is Dress for Success. Dress for Success is renowned for its support in assisting women in the area with attire for job interviews, current employment, as well as providing career training and job search assistance.
- Seek Professional Advice: Consulting a tax professional familiar with Durham’s real estate landscape can help you navigate complex tax laws and uncover opportunities you might have missed. Each taxpayer’s financial situation is unique, and navigating the complexities of tax laws can be daunting. A qualified tax professional or financial advisor can provide personalized advice tailored to your circumstances.
By implementing these strategies and staying informed about available tax incentives, Durham homeowners can potentially reduce their tax burdens and keep more of their hard-earned money. As the tax deadline approaches, take proactive steps to optimize your tax situation and secure financial peace of mind.