While retirement is something to look forward to for most North Carolina residents, not everyone properly prepares for their financial future as they grow older. Of course, not having to punch a time clock every day sounds wonderful. However, when you need to take care of your day-to-day needs on a fixed income, it can be tough to imagine truly enjoying your years over the age of 65. Luckily, the IRS is quite understanding to seniors and offers a few different breaks that can help you save big and look forward to your retirement.
Don’t Miss These Important Tax Breaks for Seniors in North Carolina
Larger Standard Deduction
One of the best financial perks of turning 65? A larger standard deduction! While it may sound silly to count tax breaks as a perk when you get older and your income changes, it’s important to look for breaks wherever you can get them. Even if you were able to save and put money into a retirement plan or 401k, tax deductions can be super helpful as you plan ahead for your future. Whether you are planning on aging in place at home or you’re moving into a continuing care retirement community like The Cypress of Charlotte, it’s always great to save when it comes to your annual taxes.
If you turn 65 by the last day of the year and you file single or as the head of household, the IRS will allow you to add an extra $1,600 to your standard deduction. If you are married or plan on filing a joint tax return, you will be able to add $1,300 for each spouse 65 and older. But don’t worry if you both haven’t reached 65 just yet. Even if just one spouse turned 65 in the previous year, you can at least claim one of the additional deductions.
North Carolina Property Tax Exemptions
This tax break can come in very handy for seniors who have yet to sell their family home and are looking for ways to save up before making the move to an independent living community. If you are aged 65 or over and have an annual income limit of $30,200 or below, you may be eligible to apply for this benefit. If you qualify, you will be exempt from property tax that is relative to half of your homes’ assessed value or up to $25,000 – whichever is greater.
Another helpful tax break program for seniors in North Carolina is known as the circuit breaker property tax deferment. With this program, seniors can limit the portion of their income that is spent on property tax. For example, if you make under $30,200 annually, your limit would be 4 percent of your overall income. However, the tax does not become erased entirely. The deferred taxes instead become a lien on the home and the most recent 3 years of deferred taxes that precede a disqualifying event will become due with interest. These qualifying events include:
– In the event of the owner’s death
– If the owner decides to transfer the residence
– If the owner ceases to use the home as their permanent residence
Additionally, if there are multiple owners of a permanent residence, each must qualify for the circuit breaker property tax deferment before any deferment will be allowed. Homeowners must apply for the tax break each year as well and must apply before June 1 to be considered.
Disabled Veterans Exclusion
Seniors in North Carolina may be able to advantage of the disabled veteran’s exclusion if they are an “Honorably Discharged Veteran” who has been given a 100% total and permanent service disconnected disability or an unmarried, surviving spouse. With this tax break, the state excludes property taxes up to $45,000 of the appraised value of a permanent home that is owned and occupied by the qualifying disabled veteran. If you qualify for this benefit, you only need to apply once and are not required to renew annually.
Tax Credit for the Elderly and Disabled
This is a significant tax break that is available to retirees across the US. To qualify you must be a US citizen or resident alien who:
– Is 65 or older by January 1.
– Retired on disability before the tax year ended and were deemed permanently and totally disabled when you retired.
– Is under the age of 65 at the end of the year and has yet to reach the mandatory retirement age as of January 1. But retired on permanent and total disability and has received taxable disability income.
There are several income limits that can affect your eligibility for this tax break as well. For example, if your filing status is single, your adjusted gross income must be equal to or less than $17,500. You can find more information on how to qualify on the IRS official page.
Taking Advantage of Important Tax Breaks and Deductions
If you’re considering a move to The Cypress of Charlotte, chances are you’ve been taking a very close look at your finances. Not only is this beneficial for a big move but it can help to make sure you are able to enjoy a comfortable life as you look forward to your golden years. Interested in learning more about our continuing care retirement community in Charlotte? Contact our friendly admissions specialists today.