Property tax for 2023 paid in 2024 - Deduction question for late bills
So my county totally dropped the ball this year and didn't send out property tax bills until 2024, even though they were for the 2023 tax year. Super annoying! I pay my property taxes through escrow with my mortgage company, and when I got my 1098 form, they showed $0 for real estate taxes paid. Makes sense since they technically paid them in 2024, but it's messing with my tax situation. My property taxes are well over the $10K SALT limit, and I really want to deduct my 2023 property taxes on my 2023 return (which seems like how it should be, right?). Is that even possible? I'm worried I'll lose out on deductions I should be entitled to because my county was so late with the bills. Has anyone dealt with this before? I've been putting money into escrow all year specifically for these taxes, so it feels unfair that I can't claim them for 2023 just because the county was slow. Any advice would be super helpful!
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Kiara Greene
This is actually a common issue, especially with property taxes that cross calendar years. The IRS rule is pretty clear here - you can only deduct property taxes in the year they were actually paid. Since your mortgage company didn't pay the taxes until 2024 (even though they were for 2023), you'll have to deduct them on your 2024 tax return. I know it feels unfair, but the IRS focuses on when the payment was made, not what tax year the bill covers. So even though you've been putting money into escrow all year, the actual tax payment wasn't submitted until 2024, which is why your 1098 shows $0. The good news is you'll get to claim those deductions next year. Just make sure you keep documentation showing these were for 2023 taxes but paid in 2024 so you have backup if there are any questions.
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Evelyn Kelly
•But doesn't this mean they're essentially losing a year of property tax deductions? Like if next year they also pay 2024 property taxes in 2024, they'd have two years' worth of property taxes to deduct in a single tax year, which could exceed their SALT cap?
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Kiara Greene
•You're absolutely right about the potential issue with the SALT cap. When two years of property taxes fall into a single tax year, you can only deduct up to the $10,000 SALT limit, which means potentially losing out on deductions. However, this is unfortunately just how the tax timing works. The IRS uses a cash basis for these deductions - they only care when the payment was actually made, not what period it covers. So while it seems unfair, it's the standard application of tax rules in these situations.
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Paloma Clark
I ran into this exact same issue last year and found a great solution using taxr.ai. My situation was almost identical - county was super late with bills, mortgage company hadn't paid yet, and my 1098 showed zero for property taxes. I uploaded my property tax statements, escrow statements, and other documents to https://taxr.ai and they analyzed everything and showed me that in my case, I actually could claim a portion of my property taxes based on my specific situation. What I learned is that sometimes the escrow rules can be more complicated than they first appear. The site gave me a detailed report explaining exactly what I could claim and why, with citations to the relevant tax regulations. It saved me a ton of research time and gave me confidence in my filing.
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Heather Tyson
•How exactly does it work? Can I just upload my documents and it tells me what to do? I'm in a similar situation but my property taxes are split where some were paid in December 2023 and some in January 2024.
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Raul Neal
•I'm pretty skeptical about tax tools. How is this different from just asking a CPA? Did you get audited or any follow-up questions from the IRS after using their guidance?
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Paloma Clark
•The process is pretty straightforward - you just upload your documents and it analyzes them to give you specific guidance for your situation. For split payments like yours, it would break down exactly which portions you can claim in which tax year, which is super helpful when things get complicated like that. No, I didn't get audited or any questions from the IRS. What made it different from just asking a CPA is that I got immediate answers without scheduling an appointment, and the report included specific citations to tax codes and regulations that I could reference. It basically gave me the confidence to file correctly without paying for multiple hours of a CPA's time for what was essentially a document review issue.
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Heather Tyson
Just wanted to update here - I tried taxr.ai after seeing the recommendation and it was seriously helpful. My situation was similar but a bit more complex since I had partial payments across tax years. The tool analyzed my mortgage statements, property tax bills, and 1098 form, then gave me a detailed breakdown showing exactly what I could claim and when. Turns out I could actually deduct the portion of my escrow that was specifically designated for 2023 taxes, even though the payment to the county hadn't been processed yet. The report explained the cash basis rules but also showed an exception that applied in my case because of how my escrow account was structured. Saved me from missing out on about $3,000 in deductions I thought I'd have to wait until next year to claim!
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Jenna Sloan
If you're having trouble getting clear answers from the IRS about this property tax timing issue, I highly recommend using Claimyr to actually get through to a real IRS agent. I had been trying for weeks to get clarification on a similar situation with delayed property tax payments and escrow issues. After trying for literally HOURS with the regular IRS number and getting nowhere, I used https://claimyr.com and had an actual IRS representative on the phone within 20 minutes. They have this system that keeps redialing and holds your place in line, then calls you when an agent is available. You can see it in action here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained exactly how to handle the property tax timing issue based on my specific escrow agreement and gave me their ID number for my records. Completely worth it for the peace of mind.
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Christian Burns
•Wait, so this is just a service that calls the IRS for you? How does that even work? Doesn't the IRS just put everyone on hold anyway?
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Raul Neal
•This sounds like complete BS. The IRS doesn't just start answering calls because some service is calling. I've been trying to reach them for months about an audit issue. If this actually worked, everyone would be using it.
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Jenna Sloan
•It's not that they call the IRS for you - the service basically automates the hold process. Instead of you personally waiting on hold for hours, their system does it for you and then connects you when an agent is available. It's the same queue, but you don't have to actively wait on the phone. I was skeptical too! I had been trying to get through about my property tax issue for weeks with no luck. But after using Claimyr, I got through to an actual IRS representative who answered my specific questions about property tax deduction timing. They don't have special access - they've just created a system that handles the painful waiting process for you. I wouldn't have believed it if I hadn't experienced it myself.
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Raul Neal
Well I need to eat my words here. After posting my skeptical comment, I decided to try Claimyr out of desperation since I've been trying to resolve an audit issue related to property tax deductions for months. I was SHOCKED when I actually got through to an IRS agent in about 45 minutes (was quoted 2-3 hours initially). The agent was able to confirm that in my case, I could still claim my 2023 property taxes on my 2023 return because I had paid them directly to the county in January 2024 before filing my taxes (different situation than the mortgage escrow scenario). The key was getting an actual human at the IRS to look at my specific situation rather than trying to apply general rules. Now I have the agent's ID number and notes in my file confirming my deduction approach is correct. Wish I'd known about this months ago!
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Sasha Reese
Just wanted to share another perspective - I'm a retired bookkeeper and have seen this property tax timing issue come up regularly. The general rule is indeed that you deduct property taxes in the year they're paid, but there can be exceptions. If you pay your own property taxes (not through escrow), you might have some control over timing. For example, you could choose to pay your Q4 property tax in December rather than January to get the deduction in the current year. With escrow accounts, it's trickier since the mortgage company controls when payments are made. But the key thing to remember is that the SALT cap applies per tax year, not per property tax year. So if you're hitting the $10K cap anyway, the timing might not actually impact your total deductions.
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Muhammad Hobbs
•Does this mean someone could potentially "double up" on property tax payments in a single year if they're well under the SALT cap? Like if I normally only have about $5K in state and property taxes, could I pay both 2023 and 2024 property taxes in 2024 and deduct all $10K?
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Sasha Reese
•Yes, that's exactly right! If you're well under the SALT cap (the $10,000 limit), you could potentially benefit from having two years of property tax payments fall in a single tax year. In your example, if you normally have about $5K in state and property taxes, and circumstances led to both 2023 and 2024 property taxes being paid in 2024, you could deduct up to the $10K cap. This is one of those rare situations where a payment delay could actually benefit some taxpayers. Just remember that this only works if your total SALT deductions would normally be under the cap. For those already at or over the $10K limit, having two years' worth of property taxes in one year won't increase their deduction.
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Noland Curtis
Has anyone had success asking their mortgage company to pay the property taxes in the correct tax year? I'm in a similar situation where my county always sends bills late (usually December) but my mortgage company sometimes waits until January to pay them, which messes up my tax deductions.
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Diez Ellis
•I actually had success with this! Called my mortgage servicer and explained the situation. They agreed to process my property tax payment on December 28th instead of waiting until January. Had to be super persistent though - first person I talked to said it wasn't possible, but I asked for a supervisor who made it happen.
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