Year-end To-Do’s

year end to dosMost homeowners pay an increased monthly mortgage payment because they are adding money into their escrow accounts. By doing this, you expect that your lender will pay them on time, in the year they are due. Once paid, you can then deduct them from your taxes.

The IRS stipulates that deductions can only be taken for actual expenses in the year they are made.

But what if your lender does not pay your 2014 taxes in 2014? Then you have to wait a whole year to take the tax deduction on your 2015 taxes.

Moral of the story, check with your Lender to make sure they are paying property taxes in the year they are due. An optimum time to check would be after you make that final December payment. You also don’t want any tax delinquency notices showing up in your county tax records either. Ask your Lender this, “Have you, or will you, pay the 2014 property taxes this year so I am eligible to deduct them on my 2014 income tax return?”

If your loan servicing activity is available online, another way to check would be to look at your loan activity in the month in which the property taxes are due. If a payment has been made, you are good to go. If not, then pick up the phone! This is also a good way to track when your home insurance payments are being made.

If you are interested in owning a home so you can get this nice tax deduction, let me send you a list of Fairfax homes for sale in your price range. It’s not too late to add some extra deductions for 2014.

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