Can You Deduct Two Years of Property Taxes in One Year?

by Mark Kennan ; Updated July 27, 2017
A property tax notice with a pen on a table.

The Internal Revenue Service lets you deduct property taxes from your taxable income if you itemize your deductions. When calculating your deduction, you're allowed to write off the amount of real estate taxes you actually paid to the taxing authority during the calendar year, regardless of what year the tax is actually charged for. For example, if you pay your 2015 property tax bill on Jan. 2, 2015, and then pay your 2016 bill on Dec. 15, 2015, both of those payments are deductible on your 2016 return.

Paying Through an Escrow Account

If you have a mortgage, you can make your property tax payments to your bank as part of your mortgage payment. If so, the bank will hold the property tax portion in an escrow account and later, when the property tax bill is due, pay the property taxes from the escrow account. If this is how you pay your property taxes, you're only allowed to deduct the amount paid out of the escrow account to the taxing government. For example, if you pay money into the escrow account in December 2015, but the bank doesn't pay the property taxes until January 2016, you must deduct that amount on your 2016 tax return.

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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