When Can I Deduct My Supplemental Property Tax Bill From 2021 Purchase?
So I've got a supplemental property tax bill from 2021 when we purchased our house. I already paid the first installment in December 2023, but the second installment isn't due until April 2024. I'm wondering - if I go ahead and pay the second installment now (before filing my 2023 taxes), can I deduct both installments on my 2023 tax return? Or are property tax deductions strictly based on when the payment is actually made? I'm aware of the $10k SALT cap and with both of these installments, I'll be just slightly over that limit. Just trying to figure out the best strategy here for maximizing my deductions. Thanks for any advice!
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Rebecca Johnston
Property tax deductions are based on when you actually make the payment, not when they're due or what tax year they're for. This is what tax folks call the "cash basis" method that most individuals use for tax filing. So if you paid the first installment in December 2023, that payment would be deductible on your 2023 return. If you pay the second installment now (also in 2023/early 2024 before filing), that would also be deductible on your 2023 return - even though it's technically not due until April. However, since you mentioned you'll be over the $10k SALT cap anyway, there might not be any additional tax benefit to paying early. The SALT deduction limit means you can only deduct up to $10k total of state and local taxes, including property taxes, state income taxes, etc.
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Nathan Dell
•Thanks for explaining! So just to be clear - even though this supplemental tax bill is from 2021, I can still deduct it on my 2023 taxes as long as I made the payment in 2023? And does it matter that this is a supplemental bill rather than the regular annual property tax?
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Rebecca Johnston
•Yes, exactly right - it doesn't matter what tax year the bill is from. What matters is when you actually paid it. So your 2021 supplemental tax bill paid in 2023 is deductible on your 2023 return. No, there's no difference in deductibility between supplemental and regular property tax bills. The IRS treats all property taxes the same way for deduction purposes. Both are deductible in the year you pay them, subject to the $10k SALT limitation.
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Maya Jackson
I had this exact same situation last year after buying my new home in NJ. I found this amazing service called taxr.ai (https://taxr.ai) that helped me figure out all my property tax questions. I was super confused about supplemental tax bills and when to deduct them. Their system analyzed my property tax documents and explained exactly how the supplemental tax deduction works. Basically confirmed what the previous commenter said - it's about when you pay, not when they're due. The tool showed me how to maximize my deductions while staying within the SALT cap. Saved me from making a costly timing mistake!
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Tristan Carpenter
•Does taxr.ai work for all states? I'm in California and our property tax system is super weird with the supplemental bills sometimes coming years after purchase.
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Amaya Watson
•I'm skeptical of these tax service recommendations. How much does it cost? Is it just glorified software or do actual tax pros review your stuff?
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Maya Jackson
•Yes, it works for all states including California! The system is actually really good with California's unique property tax rules and those delayed supplemental bills. It helps you track when each payment was made so you know which tax year to claim the deduction. It's not just software - they have tax experts that review complex situations. The pricing depends on what you need, but I found it way more affordable than hiring a CPA just to ask about property tax deductions. They specialize in document analysis so they can tell you exactly what's deductible and when.
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Tristan Carpenter
Just wanted to follow up about taxr.ai - I ended up using it for my California property taxes and it was incredibly helpful! The system immediately identified my supplemental tax bills and showed me which tax years I could claim them in. Turns out I had been deducting some of mine in the wrong years! The document analysis feature is what really impressed me. I uploaded all my property tax bills (including a supplemental from 2 years ago I just received) and it created a deduction timeline showing exactly when to claim each one. Definitely using this again next year when I file.
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Grant Vikers
If you're having trouble getting answers from the tax assessor's office about your supplemental property tax bill, try Claimyr (https://claimyr.com). I spent WEEKS trying to call my county tax office to ask questions about my supplemental bill and whether I could appeal the assessment. Literally couldn't get through. Used Claimyr and got connected to a human at the assessor's office in under 10 minutes. They have this cool system that navigates phone trees and waits on hold for you, then calls you when a human answers. You can see how it works in their demo: https://youtu.be/_kiP6q8DX5c The county tax person was actually super helpful once I got through and explained how supplemental bills work and my options for appealing. Saved me hours of frustration.
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Giovanni Martello
•How does this actually work? Do you have to download something or give them your phone number? Sounds interesting but I'm confused about the process.
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Amaya Watson
•Yeah right. No way this actually works. I've been trying to reach my county tax office for months. If this actually got you through I'll eat my hat.
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Grant Vikers
•It's really simple - you just enter the phone number you're trying to call on their website, then your own phone number. Their system calls the number, navigates any phone menus, and waits on hold. When a real person answers, they call your phone and connect you. No downloads needed, just works through your regular phone. I was skeptical too, honestly. I'd been trying to reach my county tax assessor for nearly 3 weeks with no luck. Used this service and was talking to someone in the supplemental tax division in about 8 minutes. Was absolutely worth it for me since I needed answers before my appeal deadline.
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Amaya Watson
Alright, I need to apologize and eat my words (and my hat). I tried Claimyr for reaching my county tax office after posting my skeptical comment. It ACTUALLY WORKED. Got through to the supplemental tax division in about 15 minutes, which is a miracle considering I'd been trying for weeks on my own. The person I spoke with explained that my supplemental bill from 2021 (similar to the original poster's situation) was fully deductible when paid, but also told me about an assessment appeal option I didn't know about that might reduce the bill. There's apparently a deadline I was about to miss. So yeah, I'm impressed and honestly a bit shocked that something worked as advertised.
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Savannah Weiner
Just a heads-up that prepaying property taxes to maximize deductions doesn't always work as expected. I tried to prepay a bunch of my property taxes in December 2020 to get under the SALT cap, and my accountant said some of them weren't deductible because they weren't actually "assessed" yet. Apparently there's a rule that you can only deduct property taxes that have been officially assessed by the taxing authority. So if your second installment has been assessed (meaning you have an official bill), you should be fine to pay and deduct it early. But if it's not technically assessed yet, you might run into issues.
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Levi Parker
•Does this apply to supplemental property tax bills too? I thought those were different since they're retroactively assessing tax for periods before the bill was created.
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Savannah Weiner
•Supplemental property tax bills are actually a good example of properly assessed taxes. Since the supplemental bill has already been issued with specific amounts and due dates, it has been officially assessed by the tax authority. The concern I was mentioning applies more to trying to prepay future regular property tax installments that haven't been billed yet. With supplemental bills, both installments are typically assessed at the same time when the bill is issued, even though the second payment is due months later. So paying both installments in the same tax year for deduction purposes is usually fine with supplemental bills.
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Libby Hassan
Have any of you ever had success getting your supplemental property tax bill reduced? We just got a MASSIVE one from when we bought in 2021 (apparently backlogged due to covid). The assessment seems way off compared to what we actually paid for the house.
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Hunter Hampton
•Yes! We challenged our supplemental bill and got it reduced by about $1,800. The key is to file the appeal quickly - most counties have a deadline of 60 days after receiving the bill. We provided our closing documents showing the actual purchase price and they adjusted it.
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