I'm lucky enough to live in the great state of Texas. With no State income tax, Texans already get a tax break and a reduced cost of living compared to other states across the country. I recently became aware of a tax break that many other people may benefit from. As it is in my nature to share good information - here it is:
The Homestead Exemption
You may be thinking - "yeah I've heard of it - what good is it?" or "I don't want to go through all that paperwork for nothing". For those of you who have not heard of the Homestead Exemption, it is a way to protect your home from creditors and prevents them from taking your residence. What you may not know is that you may receive a tax break for filing one (I didn't!). Amounts and procedures vary by state, so check with your local county office for details.
Now, your state may be different, but I found that in Texas all I had to do was mail in the form or drop it off at the County Appraisal District's office. It was a one page form and I chose to drop it off - took 30 minutes out of my time.
The Benefit
Texas allows for a $15,000 reduction in the tax appraisal for your home. What that means is if your home is worth $100,000, you would pay taxes on $85,000. In addition, your overpaid taxes for that tax year will be automatically refunded. I did the math and my tax bill is reduced by $380 with a homestead exception. This is money that I've overpaid and will be receiving back from the appraisal district. Many Appraisal districts have websites, if not check your state website for how to file the Homestead Exception in your state.
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