Los Angeles is one of the most expensive cities in the world. A thriving manufacturing sector and a remarkable start-up scene contributed to the city’s high cost of living.
Thankfully, the City of Los Angeles provides a number of tax exemptions and programs that can eliminate or reduce your tax liability. Take note of the following before filing your returns.
Artist Exemption
This applies to “creative artists” who generate up to $300,000 in total gross income. The exemption only covers an individual, individual acting as a loan-out corporation, or individual acting through an LLC when performing activities that are for “entertainment or aesthetic purposes.” Keep in mind that this exemption is only for those receipts earned from those activities and not from any other source.
Lifeline Exemption
The Utility User’s Tax Exemption/Electric & Water Lifeline Rate Application Program was offered to exempt senior and disabled citizens from electric and other utility bills. If you’re a senior or a disabled citizen living in a residential address within the city, you can qualify for this exemption as long as the payment of utility is under your name.
Charitable Exemptions
This one applies to charitable, non-profit, or religious institutions. Your organization may qualify if it is recognized as a non-profit or charitable under IRS Section 501 or State Tax Section 23701d. You may also be qualified for a refund if you have been paying taxes and you meet the exemption’s criteria.
Small Business Exemption
This exemption applies to registered small businesses that have taxable and nontaxable gross receipts under $100,000 within and outside LA. Keep in mind that this is only for businesses registered in the city. The city also requires businesses to file a renewal statement on time to be qualified for the exemption.
Homeowner’s Exemption
You can apply for an exemption worth $7,000 from your assessed value for a home that is your principal residence on January 1. New homeowners will automatically receive a Claim for Homeowners’ Property Tax Exemption from the city. This exemption also applies to a supplemental assessment suppose the previous owner of the property failed to claim his or her exemption.
If you need professional help with tax exemptions and deductions in Los Angeles, our tax professionals can help guide you in the right direction. Contact us today at 818-452-2641 or fill out our contact form to schedule a free consultation.
