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Author: SrGuapo Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121100  
Subject: Escrow/property tax deductibilty Date: 10/29/2008 2:57 PM
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I'm closing on a house next week, and am a first time homeowner. Given this change in my finances and that my wife and I are expecting a baby in December, and my wife is now on indefinite maternity leave, I'm trying to think through my tax situation and specifically my W4 allowances.

After we close, I'm paying property taxes into escrow at the estimated fully assessed rate, which is in excess of the actual tax bill until the property is reassessed. Depending when this new assessment happens, I will be significantly overpaying my property taxes. Which is the deductible expense, the property tax payment, or the escrow payment?

My guess is only the actual property tax payment is deductible, but it isn't like I can access the cash in escrow so I don't know.

Thanks
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