Dec 29, 2014
Tax season is right around the corner!
If you have a mortgage with an escrow account to pay your property taxes and insurance, you probably expect the company servicing your loan to pay 2014 taxes this year so that you can deduct them on your 2014 income tax return. After all, your monthly payment includes 1/12 the annual amount so there will be money available for them to be paid on time.
The IRS requires expenses to be paid in the year that a deduction is to be taken.
A problem may occur if you’ve made your payments but the mortgage company hasn’t paid the taxing authority in the tax year they were due. If they paid your 2014 taxes in January of 2015, they wouldn’t be deductible for you until you file your income tax return for 2015.
After you make your December payment, verify with your lender and make sure they paid your property taxes. Contact your lender’s customer service and ask them, “Have you paid the 2014 property taxes this year so I can deduct them on my 2014 income tax return?” If their answer is “No” or “Not Yet,” ask them when you can expect them to be paid, or if they plan on paying the property taxes before 2015.
For more information on mortgage lending in Hilton Head, contact the knowledgeable real estate agents at Hilton Head Island Real Estate Brokers.
If you want to make a little piece of The Island your own, you need more than just a road map and a REALTOR. You need a partner who can make things happen.
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