Do these exemptions require applying every year? My parents are seniors and I'm trying to help them figure this out for their property tax increase.

It varies by location. Some exemptions like the basic homestead exemption usually only require a one-time application that remains in effect as long as you own and occupy the home. Senior exemptions often need annual renewal because they're typically income-based, and they want to verify the person still qualifies. Some places have simplified renewal processes where you just confirm nothing has changed. Check your county assessor's website for specific requirements or call them directly - this is definitely worth looking into for your parents!

That approach alone probably won't work. Assessments are based on market value, not condition. If homes are selling for 40% more in your area (even with old roofs), that's what they'll use. You need to focus on: 1) comparable sales that support a lower value, 2) specific issues with your property they missed, or 3) errors in how they calculated the assessment.

Thanks for this info! Do you think it would be better for her to deposit it in smaller chunks over time to avoid the hold? She's planning to use some of it for textbooks next semester.

I wouldn't recommend breaking it into smaller deposits to avoid a hold, as that could actually look more suspicious. Banks are trained to watch for "structuring" which is when people deliberately break up deposits to stay under reporting thresholds. If she needs immediate access to some of the money, she could deposit most of it and keep what she needs for textbooks in cash. Otherwise, she can just explain to the bank teller that it's a graduation gift and ask if there will be a hold. Many times if you explain the situation upfront, the bank can make accommodations or tell you exactly when funds will be available.

Is this true for all states too? Some states have weird extra tax rules, right?

This is super helpful, thanks! Question - does the 500 hour requirement have to be exact? Like do I need to document every single hour I worked on my side business?

You don't need to document every minute, but you should have reasonable support for your hour claims if you ever get audited. The IRS doesn't require a specific format - you can keep logs, calendars, appointment books, or even create summaries based on your regular schedule. The key is having something contemporaneous (created around the time of the activity) rather than trying to reconstruct everything years later if you're audited. For a side business where you're close to the 500-hour threshold, I'd recommend at least tracking days worked and approximate hours per day. If you work a very regular schedule, you might be able to create a reasonable calculation (like "I work every Tuesday and Thursday evening for 4 hours, plus every other Saturday for 8 hours" = approx 520 hours per year).

This happened to me too! Turned out they were trying to determine if I qualified for a green jobs tax incentive since I work in environmental remediation. The form was poorly worded and looked like it was questioning my employment status, but really they were trying to give my employer a tax break for hiring people in my field.

I hadn't even thought about future capital gains implications! So you're saying if we sell the property later at say $500,000, our share of the gain would be based on the original $195,000 purchase price rather than the $410,000 value when we were added to the deed? That's a pretty big difference in potential tax. Is there any way around this, or would it be better tax-wise to inherit the property later instead of being added to the deed now?

That's exactly right. If you sell at $500,000 and your share of the original basis is based on the $195,000 purchase price, you're looking at a much larger capital gain than if you had a stepped-up basis from inheritance. From a pure tax perspective, inheriting property is often more advantageous than receiving it as a gift because of the stepped-up basis. However, there are non-tax reasons your parents might want to add you to the deed now - like avoiding probate or starting to transfer ownership during their lifetime. Another option worth exploring is whether your parents could sell you a partial interest in the property at its current fair market value. This would establish your basis at today's value. They could potentially do this as an installment sale or even forgive the payments as annual gifts under the exclusion amount. This gets complicated though, so definitely consult with a tax professional who specializes in real estate transactions.

This is super important! My family did something similar in California and got hit with a massive property tax increase because the transfer triggered a reassessment. We had no idea that would happen.

Thank you! This sounds very similar to what might have happened to me. Did your husband end up owing taxes on the distribution? And did he have any luck getting the money back after all that time?

Yes, he did owe some taxes because they processed it as a distribution rather than a direct rollover, which was super annoying. We had to pay about $1,600 in taxes on it. We probably could have fought it, but the amount wasn't worth hiring a tax pro for. He was able to claim the remaining money though! We contacted the company, verified his identity, and they sent a check for the remaining amount (after the withholding they'd already taken out). Took about 3 weeks to get the check. If your situation is similar, definitely call them ASAP to claim your money before it potentially gets sent to the state as unclaimed property.

That unclaimed benefits site is legit. I found an old pension I didn't even know I had from a summer job in college. Only about $3,200 but hey free money!