No, you cannot deduct the real estate tax portion, of your monthly house payment, that you pay into your escrow account. The money that you are depositing into your escrow account is still your money. When your mortgage company disburses or pays, the escrow money, to the county or taxing authority, it is an expense and may be a tax deduction.
TurboTax FAQ Can I deduct property (real estate) taxes?: Deductible property (real estate) taxes include taxes paid at closing when buying or selling a home, as well as taxes paid to your county or town’s tax assessor (either directly or through a mortgage escrow account) on the assessed value of your property.
To enter the property or real estate taxes I paid:
If it's for rental property you own, your property/real estate taxes are entered along with your other rental expenses.
Otherwise, you'll enter them in the Deductions & Credits section:
- Open (continue) your tax return.
(To do this, sign in to TurboTax and click the orange Take me to my return button.)
- In the search box, search for the exact phrase real estate taxes and then click the "Jump to" link in the search results.
- Answer Yes to the question Did you pay property or real estate taxes in 2016?
- Enter your property/real estate taxes on the next screen.
When your property/real estate taxes are included on your 1098, you’ll enter them as part of your Mortgage Interest. But, if they aren’t listed on your 1098, you’ll enter them separately as property/real estate taxes.
Tip: If you own additional properties for personal use (for example, a cabin or timeshare), make sure to include the property/real estate payments for those as well.
