In California, taxes are a necessary evil. People will generally understand that taxes are vital for various reasons, but they still want to mitigate their exposure and how much they are obligated to pay. This is perfectly legal under tax law. Still, it is common for mistakes to be made and these can cause problems with the state and federal government. Property taxes are a frequent issue and understanding what properties can be exempted is the first step to getting applicable tax breaks. Having legal assistance with determining what property exemptions are available is imperative.
Exemptions for personal property, business property and more
People do not need to pay taxes on their personal effects such as furniture, items used for hobbies and more. However, that does not mean people can own luxury items like boats, planes and autos and not be obligated to pay taxes on it. If it is worth more than $400, it is taxable. Also, properties that are used to ply a trade or as part of a business are not exempt. Intangible property is also exempt. That includes a mortgage, a bank account and cash.
Regarding real estate, there is a homeowners’ exemption in the state. If it is the main residence, taxable value can be reduced by $7,000. People who own a business might not be aware that their business inventory is exempt. That encompasses merchandise, supplies for customers and animals that are used for various purposes as part of the business.
Having assistance with tax law a primary concern
Whether it is personal or business property, shielding oneself from onerous taxes is a positive. People are frequently unaware of how they can be protected by the law and are either free of tax obligations for certain items or can have a reduction in what they would owe. A law firm that has a history of helping people with their taxes should be consulted with to maximize the deductions and keep as much money as possible by using legal exemptions under state tax law. Calling for advice can be beneficial.