Tax season can feel overwhelming, but for South Florida residents, there are unique opportunities to save money and avoid pitfalls. From leveraging the state’s tax advantages to maximizing federal deductions, these tips will help you get the most out of your return.

1. Leverage the Absence of State Income Tax

  • What It Means: Florida doesn’t impose a state income tax, which means more of your income stays in your pocket.
  • How to Benefit: Consider reinvesting these savings in tax-advantaged accounts like IRAs or 529 education plans.
  • Example: A Plantation resident earning $75,000 saved approximately $3,000 compared to a similar earner in Georgia. They invested the savings in a Roth IRA for long-term growth.

2. Maximize Property Tax Deductions

  • What Qualifies: You can deduct property taxes up to $10,000 if you itemize on your federal return.
  • Pro Tip: Apply for Florida’s homestead exemption to reduce your taxable property value.
  • Example: A Plantation homeowner reduced their federal taxable income by $8,000 after claiming property taxes and the homestead exemption.

3. Take Advantage of Hurricane-Related Deductions

  • Eligible Expenses: Repairs for property damage caused by hurricanes may qualify as casualty losses if they exceed 10% of your AGI.
  • Documentation Needed: Photos of damage, repair invoices, and insurance claim statements.
  • Example: After Hurricane Ian, a Plantation resident claimed a $12,000 deduction for roof repairs not covered by insurance.

4. Review Energy-Efficient Tax Credits

  • Federal Credits Available: The Inflation Reduction Act expanded credits for solar panels, energy-efficient windows, and heat pumps.
  • Pro Tip: Combine these credits with Florida’s lack of sales tax on renewable energy equipment.
  • Example: A homeowner installed solar panels in 2023 and claimed a 30% federal tax credit, saving $6,000.

5. Track Charitable Contributions

  • What Qualifies: Donations to local organizations, like Feeding South Florida, count as tax-deductible contributions.
  • How to Maximize: Donate appreciated stocks instead of cash to avoid capital gains taxes.
  • Example: A Plantation couple donated $5,000 in appreciated stock to a charity and saved $1,000 on capital gains taxes.

FAQs:

  1. What is the homestead exemption in Florida?
  2. Can I claim casualty losses for minor storm damage?
  3. How do I itemize my deductions on a federal return?

 

Ready to Maximize Your Tax Savings?
Contact Polaris Tax & Accounting at our Plantation office to schedule a consultation.