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Old 01-07-2018, 10:22 PM
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Pre-Paid Property Mortgage Escrow Reimbursment

I live in a high tax state and prepaid my first 2 quarters of property tax for 2018. I called up my mortgage company who charges me monthly for those taxes and holds it in escrow. I asked what would happen, if my monthly payment would go down. They said they would get proof of my payment from the town and would then provide a refund at the end of the quarter. In essence they will hold and gain interest on my money until they refund it.

What would happen if I simply deducted it myself each month and shorted them the money "due" each month? Would there be any repercussion since they will owe me the money anyway?



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Old 01-08-2018, 12:49 AM
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I live in a high tax state and prepaid my first 2 quarters of property tax for 2018. I called up my mortgage company who charges me monthly for those taxes and holds it in escrow. I asked what would happen, if my monthly payment would go down. They said they would get proof of my payment from the town and would then provide a refund at the end of the quarter. In essence they will hold and gain interest on my money until they refund it.=====>Aslongas they provide a refund at the end of the quarter, then, you can not claim the refund on your return. However, when they pay you back the interest then you need to report the interest income on your return.

What would happen if I simply deducted it myself each month and shorted them the money "due" each month? =======>No problem at all even if you deducted it each ang shorted them the moneymonth ; as you can see , you can deduct the pty taxes you pay on property in the year you pay them not a monthly basis. For example, you received a bill in Jan 2016, but you prepaid it in Dec. 2015. This means you'll deduct the amount on your 2015 return,NOT on yoiur 2016 return. Your mortgage lender might pay your pty taxes from an escrow account

Would there be any repercussion since they will owe me the money anyway?========>as mentioned above;



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