Image Source: Getty Images.
Continue Reading Below
The phrase "Florida tax breaks" may sound silly to any resident of the state. After all, Florida doesn't have a state income tax, so how can Florida residents get tax breaks? Keep in mind that Florida residents also pay 6% state sales tax, with possibly higher local sales tax, and there are three big tax breaks related to Florida's sales tax you might be able to take advantage of.
Tax-free back-to-school shopping
Florida is one of the 17 states that offer a tax-free weekend during back-to-school shopping season. 2017's tax-free weekend will be held Aug. 4 to Aug. 6, and items including school supplies, clothing, and shoes will be exempt from sales tax.
For clothing and shoes, the tax exemption is good for items that cost up to $60. School supplies such as pens, pencils, erasers, rulers, and glue are tax-free, provided they cost $15 or less per item. You can also get the tax break for items you order online, even if the items are physically delivered after the tax holiday ends.
It's important to mention that books are still taxable, as are any purchases made in theme parks, entertainment complexes, hotels, and airports, even if the items fall into one of the tax-free categories.
Save money and protect your home and family
In addition to the more well-known back-to-school tax holiday, Florida also has a sales tax holiday designed to encourage residents to stock up on hurricane preparedness supplies. This usually takes place in late spring, and the 2017 tax holiday is projected to take place from May 29 through June 6, according to Freetaxweekend.com.That would make sense, as hurricane season begins on June 1.
Specific items included in the tax holiday include batteries, flashlights, weather radios, and portable generators. While the exact dollar limitations haven't been announced for 2017 yet, in recent years the tax break has included:
- Portable light sources selling for $20 or less.
- Portable self-powered radios $50 or less.
- First-aid kits $30 or less.
- Packages of batteries $30 or less.
- Portable generators $750 or less.
According to Florida's government website, this tax holiday saved taxpayers more than $20 million in a recent year, so be sure to take advantage of this. In a hurricane-prone area, these are things you should keep around your house anyway, so you may as well get a nice tax break for buying them.
A big Federal write-off for your state sales taxes
If you itemize deductions on your Federal tax return, you have the choice of deducting either your state income taxes or your state sales taxes, whichever is greater. For most U.S. taxpayers, state income taxes are the more lucrative deduction, but for states without an income tax like Florida, the choice is obvious.
Unlike many other tax breaks, you don't need to save each and every receipt to be able to deduct your state sales taxes. The IRS provides a calculator that you can use to estimate your deduction based on your income level, number of exemptions, and specific location. If you paid sales tax on large items, like a boat for instance, then you can add those to the estimate. Of course, if you actually saved all your receipts and paid more sales tax than the calculator says, then you're free to use the higher amount.
Just as an example, I entered an income range of $90,000-$100,000 into the calculator with two exemptions, and I was given a deduction amount of $1,146. So it's fair to say that this can be a pretty substantial deduction, especially if you paid sales tax on a few large items throughout the year.
How much could you save?
The amount you can save depends on how much you spend. To be clear, I'm not saying you should buy more than you need just to take advantage of a sales tax holiday or a deduction. However, both Florida sales tax holidays offer a break on items that most people need anyway, so make use of them. Make sure your family is fully prepared for a hurricane (trust me, you'll be glad you did) and plan on doing your clothes shopping during the August tax holiday when you can save at least 6%.
For your purchases throughout the rest of the year, you'll have a nice deduction that could potentially save you hundreds of dollars in taxes when you file your return.
The $15,834 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $15,834 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after.Simply click here to discover how to learn more about these strategies..
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.