Mortgage Escrow Shortage

Is payment of a mortgage escrow shortage tax deductible?

My mortgage escrow account covers insurance and property taxes. Are these normally tax deductible expenses?

Sorry my friend, but payments toward escrow accounts are NOT tax deductible. What IS tax deductible is your property tax. The IRS and your state don’t care how much you paid for homeowner’s insurance — they’re only interested in how much you paid in property taxes. However, if you bought your home this year or refinanced your home, you may be able to write off the closing costs as well. And of course you can write off the total amount of interest you paid against your mortgage. You should get an IRS form from your mortgage company that tells exactly how much you paid in interest, and you should also get another IRS form from your state or city/township that tells exactly how much you paid in property tax.

P.S.: Did you know that your vehicle registration is usually tax deductible if you itemize your deductions? May not be much, but every little bit helps.

Distressed Property – Assigment of Mortgage Payments – We have solutions! Part 1