I recently received a question from a lady who was curious about whether her 87-year-old mother-in-law qualifies for a property tax exemption. Regrettably, this means her mother-in-law missed the chance to potentially save hundreds or even thousands of dollars over the past twenty-two years.
According to information available on the State of Alabama’s website, “If you are over 65 years of age, or permanent and totally disabled (regardless of age), or blind (regardless of age), you are exempt from the state portion of property tax. County taxes may still be due. Please contact your local taxing official to claim your homestead exemption”. To apply for this exemption, you must go through your county’s tax assessor’s office.
One of our partners, Michael Wagner, CPA, adds, “You have to proactively claim the deduction and every year return a postcard stating you are over 65 and still own the home”. These simple steps can lead to significant savings.
The unfortunate news is that you cannot retroactively claim credit for state property taxes paid in previous years when you were eligible for the exemption. In other words, it’s a ‘use it or lose it’ situation. If you know someone aged sixty-five or older, you could be their hero by reminding them of this opportunity.
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Stewart H. Welch, III, CFP®, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States. He is the author or co-author of six books, including 50 Rules of Success; J.K. Lasser’s New Rules for Estate, Retirement and Tax Planning- 6th Edition (John Wiley & Sons, Inc.); THINK Like a Self-Made Millionaire; and 100 Tips for Creating a Champagne Retirement on a Shoestring Budget. For more information, visit The Welch Group. Consult your financial advisor before acting on comments in this article.
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