Many taxpayers are unsure if personal exemptions are available for this year as tax season for 2021 draws near. Sadly, the response is no. As part of the 2017 Tax Cuts and Jobs Act (TCJA), the personal exemption was removed. As a result, there won’t be a personal exemptions deduction for tax year 2021.
The personal exemption amount for tax year 2020 was $4,050. Each taxpayer, spouse, and dependent who was named on the tax form had this amount subtracted from their taxable income. However, as was already indicated, this deduction is no longer valid for the 2021 tax year.
Taxpayers can still benefit from a few deductions and credits even when personal exemptions are not available for 2021. The standard deduction, which is $12,550 for single filers and $25,100 for married couples filing jointly, is one possibility for taxpayers. In addition, certain costs including mortgage payments, charitable contributions, and medical expenses might be eligible for deductions for taxpayers.
Boston residents who own homes have access to a residential exemption that might help them pay less in property taxes. By exempting a portion of the home’s assessed value from taxes, the residential exemption is a tax benefit that lowers a homeowner’s property tax burden. The city of Boston chooses the exemption’s dollar amount and bases it on the property’s assessed value.
Homeowners in Boston who own and occupy their principal dwelling are eligible for the residential exemption. Although the exemption amount varies every year, it is $315,000 for the fiscal year 2021. Accordingly, the taxable value of a homeowner’s property, which is assessed at $500,000, would be reduced to $185,000 ($500,000 – $315,000 = $185,000).
Property owners in Massachusetts are not exempt from paying property taxes at a certain age. To help seniors and low-income households lessen their property tax load, there are various programs available. For instance, seniors who meet the income and residency requirements can apply for the Senior Circuit Breaker Tax Credit. The credit is worth up to $1,130 and is based on how much a senior’s property taxes exceed 10% of their income.
In Massachusetts, property owners have several options for reducing their property taxes, including appealing their property tax assessment, making energy-efficient home improvements, or requesting tax exemptions or abatements. It’s crucial to do your homework, comprehend your options, and, if necessary, seek the advice of a tax expert or real estate lawyer.
In conclusion, even though personal exemptions are not available for the 2021 tax year, taxpayers can still benefit from deductions and credits. The residential exemption is available to Boston homeowners, who can use it to reduce their property taxes. Senior citizens and low-income homeowners may also be qualified for further tax breaks. To lessen your tax burden, it’s crucial to stay knowledgeable and utilize all of your alternatives.