When Can I Deduct Supplemental Property Tax Bill on My Taxes?
So we bought a house back in 2021 and I received this supplemental property tax bill. I already paid the first installment in December of 2023. The next installment is due in April 2024. I'm trying to figure out my tax situation and wondering - if I pay the second installment now (before filing my 2023 taxes), can I deduct both payments on my 2023 taxes? Or is the deduction strictly based on when the payment was actually made? I'm aware of the $10,000 SALT cap and with both of these payments combined I'll be just slightly over that limit. Just trying to maximize my deductions if possible! Any advice on the timing of property tax deductions would be super helpful.
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Oliver Becker
The property tax deduction is based on when you actually make the payment, not when it was billed or when it's due. So if you paid the first installment in December 2023, that payment is deductible on your 2023 tax return. If you pay the second installment in 2024 (even if it's January or February 2024), that payment would be deductible on your 2024 tax return, not 2023. The IRS follows a "cash basis" for these deductions - meaning you deduct them in the year you actually pay them. This is true regardless of when the tax was assessed or what tax period it covers. Many people don't realize this and try to deduct based on the tax year the bill covers, which isn't correct.
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Amina Bah
•Thanks for clarifying! So even though the bill is for my 2021 purchase, it's all about when I physically make the payment. Does this mean I could potentially "bunch" my property tax payments into a single year to maximize deductions if I'm close to the SALT cap?
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Oliver Becker
•Yes, that's exactly right. The year of purchase doesn't matter for the deduction timing - only when you physically make the payment. Regarding bunching payments, that's a legitimate tax planning strategy many people use. For example, if you're close to the SALT cap in one year but expect to be well under it the next year, you could pay your property taxes in the year where you'd get more benefit. Just keep in mind you can only prepay taxes that have actually been assessed, not estimated future taxes.
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CosmicCowboy
Been there with supplemental property taxes! I was so confused trying to figure everything out. I tried using TurboTax but it kept giving me conflicting info about property tax deductions. I eventually discovered https://taxr.ai which totally saved me time and stress. You upload your property tax bills and it analyzes exactly what's deductible when. I was in almost your exact situation with a supplemental bill from buying a new house, and their analysis clarified that I could only deduct what I actually paid in the calendar year - but they also identified that some charges on my bill weren't technically property taxes and shouldn't count toward my SALT cap! Might be worth checking out if you're close to that $10k limit.
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Natasha Orlova
•How exactly does this work? Do I need to give them my actual tax returns or just the property tax bills? I'm always nervous about sharing financial docs online.
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Javier Cruz
•Wait, what do you mean some charges might not count toward the SALT cap? My property tax bill has all these random fees and assessments bundled in. Are you saying those might be handled differently?
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CosmicCowboy
•You only need to upload the property tax bills themselves - no need to share full tax returns. They use document analysis tech to identify what's deductible. The system is encrypted and secure, I was nervous too but it was actually really straightforward. Some charges on property tax bills aren't technically "taxes" even though they're collected with your property taxes. Things like special assessments for water districts, garbage collection fees, or certain improvement bonds might be deductible as something other than taxes. This means they potentially wouldn't count toward your $10k SALT cap. In my case, I had about $1,200 in special assessments that their system identified as separate from my base property taxes.
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Javier Cruz
Just wanted to follow up - I tried that taxr.ai site after seeing this thread. Definitely worth it! Uploaded my supplemental property tax bill from our home purchase and it broke everything down. Turns out about $950 of my bill was actually for sewer system charges that don't count toward the SALT limit. The analysis explained exactly what part was deductible as property tax vs. other categories. Saved me from miscategorizing a bunch of stuff and possibly leaving money on the table. Glad I saw this recommendation!
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Emma Thompson
If you're trying to contact the IRS to confirm how to handle your supplemental property taxes, good luck getting through! I spent 3 HOURS on hold last week trying to get clarification about SALT deductions. Finally gave up and tried https://claimyr.com instead - you can see how it works at https://youtu.be/_kiP6q8DX5c. They got me a callback from the IRS in about 45 minutes instead of waiting on hold forever. The IRS agent confirmed what others here are saying - supplemental property tax payments are deductible in the year you pay them, not the year they're for. She also gave me specific guidance about my situation with multiple properties and SALT limitations. Definitely recommend this service if you need to talk to someone official about your specific situation.
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Malik Jackson
•How does this even work? The IRS phone system is a nightmare... are you saying this somehow gets you to the front of the line? That seems too good to be true.
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Isabella Costa
•This sounds like a scam. Why would I pay a third party when I can just call the IRS directly for free? And how would they possibly have access to the IRS phone system to get you a "callback"?
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Emma Thompson
•It doesn't put you at the "front of the line" - it basically automates the hold process. Their system navigates through the IRS phone tree and waits on hold for you, then calls you when an agent is available. You don't have to sit there listening to the hold music and "your call is important to us" for hours. It's definitely not a scam - they're not claiming to BE the IRS or have special access. They're just using technology to wait on hold so you don't have to. Think of it like having someone wait in a physical line for you. You still talk directly to the IRS, they just handle the waiting part. I was skeptical too but it worked exactly as advertised - saved me hours of frustration and I got my property tax question answered officially.
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Isabella Costa
Just coming back to admit I was wrong about Claimyr. After seeing the responses here and still needing answers about my SALT deductions, I tried it. The service connected me with an actual IRS agent who confirmed how to handle my supplemental property taxes (cash basis, deduct in year paid) AND reviewed my situation with multiple tax parcels. Got the callback in about 35 minutes versus the 2+ hours I waited last time I tried calling directly. Honestly worth it just for the peace of mind of having official guidance. Apologies for being so skeptical!
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StarSurfer
Dont forget to check if your state follows the same rules as federal! In California for example, supplemental property tax bills are weird because they're often for a period that spans multiple calendar years. I learned this the hard way last year and ended up amending my state return.
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Amina Bah
•Good point - I'm in Illinois. Does anyone know if Illinois has different rules for supplemental property tax deductions than the federal government?
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StarSurfer
•Illinois generally follows the federal rules for property tax deductions, so you'll use the same cash basis (deduct when paid) approach for both federal and Illinois state taxes. But always good practice to double-check with a tax professional who knows Illinois-specific rules, especially if you have a unique situation. Illinois does have its own property tax credit that's separate from the federal deduction, so make sure you're taking advantage of that on your state return too!
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Ravi Malhotra
Has anyone here actually gone over the $10k SALT cap? I'm wondering if it's even worth the effort to time my payments since I'm probably only going to hit about $9,700 with both property tax payments. Would the extra few hundred in deductions even make a significant difference?
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Freya Christensen
•Depends on your tax bracket. If you're in the 22% bracket, every $100 over the SALT cap you can deduct saves you $22. Not life-changing but why leave money on the table? Plus if you have other deductions that might push you over the standard deduction threshold, every bit helps.
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Kelsey Hawkins
Great question about the SALT cap timing! I was in a similar situation last year with my supplemental property tax bill. One thing I learned is that even if you're close to the $10k limit, it's worth doing the math on your total itemized deductions vs. the standard deduction. In my case, I was at about $9,800 in SALT taxes, but when I added mortgage interest, charitable donations, and some medical expenses, my total itemized deductions were still higher than the standard deduction. So that extra $200 in property tax deductions actually did save me money. Also, don't forget that the SALT cap includes both property taxes AND state income taxes (or sales tax if you choose that). So if you paid estimated state taxes or had withholding, those count toward your $10k limit too. I almost missed that and would have been over the cap without realizing it!
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Luca Bianchi
•This is such a helpful breakdown! I hadn't considered that state income tax withholding counts toward the SALT cap too. I've been so focused on just the property taxes that I forgot about the bigger picture. Do you know if there's an easy way to estimate what my state tax withholding will be for the year so I can plan my property tax payment timing better? I'm worried I might accidentally go over the $10k without realizing it.
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