Indiana offers tax break for Hoosier homeowners, renters
March 3, 2014 – TaxTalk Blog
In these tough financial times all of us are looking for ways to reduce our state tax burden. Every penny has value, and any opportunity to save one, including its relatives (the dime, nickel, quarter, dollar) is at the top of our To Do list.
This is especially important to keep in mind when filing your state taxes. Here are a couple of deductions Indiana offers to help keep some of your hard-earned money in your pocket.
- Hoosier homeowners (buying or own outright) are eligible to take off the amount of property tax paid on their Indiana home. You can deduct the amount of property tax paid or $2,500, whichever is less; this can result in a tax savings of up to $85.
- Most renters also get a tax break. Rent paid on your Indiana residence (up to $3,000) can be taken off your state income tax return. This deduction can bag up to a $102 state tax savings.
One note – your residence has to be subject to Indiana property tax for you to benefit from these deductions. For instance, college students living on campus probably aren’t eligible for the renter’s deduction because their dorm may not be subject to Indiana property tax.
Did you know that, while the homeowners and renters deductions are the two most commonly claimed ones, Indiana also offers around 20 other deductions, too? Maybe that caulk you replaced around your doors and windows last fall can be written off your taxes (it can – see insulation deduction); likewise, maybe some of the unemployment compensation you drew last year can come off, too. For information about these and all of Indiana’s deductions, click here.
Reducing your state tax liability and keeping a few extra bucks in your pocket – now that sounds like a good plan to me.
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