Ah, tax season. That sacred time of year when the thought of deciphering page after page (or page click after page click) of confusing government forms induces much anxiety and paralysis. Luckily, all that work pays off – it can, anyway – and if you're a Chicago homeowner and know the right places to look, it can pay off even more in the form of exemptions, credits, deductions, and other savings:
· The mere fact that you're a homeowner at all can save you $250 to $2,000 a year thanks to the Cook County Assessor's Office's Homeowner Exemption. Taxpayers whose "single-family home, townhouse, condominium, co-op or apartment building (up to six units) is their primary residence" are eligible for this deal and the Assessor's office now automatically renews the offer for properties that were not sold to new owners in the last year. If you're applying for the exemption for the first time, you need to have been an occupant of the property as of January 1st of the tax year.
· For the most part, as a homeowner your biggest tax break comes from that deductible interest in your monthly mortgage payments. As long as your loan is less than $1 million and your home equity debt stays under $100,000, you're covered even if you refinance or own a second home. If you paid "points" to reduce your monthly interest rate, those offer a tax break too — the IRS will let you deduct points in the year they are paid if your loan meets the requirements or, if you paid points on a refinanced loan, those deductions typically must be made over the life of the loan.
· Illinois residents can make use of the Illinois Property Tax Credit on their individual income tax return. The credit is equal to 5 % of the real estate tax you paid on your residence and you must own the residence to take advantage of it.
· If you're a senior citizen, a veteran, or a member of another special group, you may qualify for property tax-saving exemptions among other perks. According to the Cook County Treasurer's Office, seniors 65 and over who owned and occupied a property as of January 1st, 2012 can save $250 in property taxes through the Senior Citizen Homestead Exemption. Savings can also accumulate when qualified seniors utilize the Senior Citizen Assessment Freeze Exemption, keeping their property's assessed value at the same level while surrounding properties' assessed values continue to rise thereby resulting in reduced taxes for the senior. Qualifying disabled persons, disabled or returning veterans, and others are eligible for a variety of other property tax exemptions as well.
· Sprucing up your home comes with its own roster of rewards tax-wise. For instance, the Cook County Home Improvement Exemption gives homeowners a chance to get up to $75,000 worth of property improvements, depending on the property's assessed value and tax rate, without raising their property taxes for at least four years. Similarly, residents who invest in energy-efficient updates to their property are rewarded with a tax credit, though that credit has changed significantly—and gotten much smaller—since it was introduced a few years ago. When that spruced up property is a historic one, residents may be eligible for a Historic Preservation Tax Credits, property tax freezes, and even rebates from the city.
These aren't the only channels homeowners can utilize on their 1040s and Schedule A's (and consulting with a tax professional about which breaks you qualify for is always a good bet), but maybe during this tax season the traditional flailing frustration can be assuaged by life preservers floating nearby.
·Curbed University [Curbed Chicago]