You can deduct real estate taxes that aren’t on Form 1098 by reporting them on Schedule A using your own records. Form 1098 is simply a reporting convenience lenders use when they pay your property taxes from escrow and choose to list the amount in Box 10. The deduction itself depends on whether the tax qualifies and whether you can prove you paid it, not on whether a lender reported it. When no 1098 covers your property taxes, you take over the documentation and claim the deduction the same way on your return.
Why Your Property Taxes May Not Appear on Form 1098
Box 10 reporting is optional for lenders.1Internal Revenue Service. Instructions for Form 1098 – Mortgage Interest Statement Even homeowners with a mortgage and an escrow account sometimes receive a 1098 with the property tax line blank. Other situations guarantee the form won’t carry that figure at all:
- You own the home outright or have paid off the mortgage, so no lender is involved.
- Your loan doesn’t require an escrow account for taxes, and you pay the county or city directly.
- You bought or sold a home during the year, and the taxes were prorated at closing rather than paid through escrow.
- You paid off your mortgage mid-year, so escrow disbursements stopped and any later payments came out of your own pocket.
None of these situations disqualifies the deduction. They just shift the burden of proof to you.
The Documents You Need
Without a 1098, the IRS expects you to show three things: the tax was assessed on your property, it was imposed on you, and you paid it. That takes two or three documents depending on your situation.
Your Property Tax Bill
The official bill or statement from your local taxing authority is the foundation. It shows the assessed value, the rate, and the total owed, and it lets you separate the deductible ad valorem tax from any assessments or service fees bundled in. Most county tax offices will send a duplicate if you don’t have the original.
Proof You Paid It
A canceled check, a bank statement showing the withdrawal, an electronic payment confirmation, or a receipt from the county’s online portal all work. What matters is that the record names the taxing authority as payee and shows the date and amount.
Your Closing Disclosure
If you bought or sold the home during the tax year, the Closing Disclosure itemizes the proration between buyer and seller in the adjustments section. The amount allocated to you there is your deductible share. Older transactions used the HUD-1 Settlement Statement, which serves the same role.
Your Annual Escrow Statement
If you have a mortgage with escrow and the lender paid your taxes but didn’t list them in Box 10, the year-end escrow statement shows the exact dates and amounts sent to the taxing authority. Total those disbursements, not what you deposited into escrow, and that figure is what you report.2Internal Revenue Service. Publication 530 – Tax Information for Homeowners
Which Charges on the Bill Actually Qualify
Only real property taxes levied uniformly across a jurisdiction based on assessed value are deductible.3Internal Revenue Service. Topic No. 503, Deductible Taxes These are the ad valorem taxes that fund general public services.
Several charges that often appear on the same bill don’t qualify. Special assessments for new sidewalks, street paving, sewer installation, or similar local improvements aren’t deductible; you add them to your property’s cost basis, which reduces your taxable gain when you sell.2Internal Revenue Service. Publication 530 – Tax Information for Homeowners If the assessment covers maintenance or repair of existing infrastructure, or interest on the assessment, that portion is deductible, but only if you can identify it on your bill. Monthly fees for trash collection, water, or sewer service are payments for services and aren’t deductible either.3Internal Revenue Service. Topic No. 503, Deductible Taxes Isolate the ad valorem line before you write any number on your return.
One boundary worth knowing: if you own a home outside the United States for personal use, you cannot deduct the foreign property taxes. Federal law excludes them for individual taxpayers through at least the 2029 tax year.4Office of the Law Revision Counsel. 26 USC 164 – Taxes Foreign property used in a rental or business follows different rules.
How Proration Works If You Bought or Sold the Home
When a home changes hands, federal law splits the property tax between buyer and seller by the closing date. The seller is treated as paying through the day before the sale, and the buyer is treated as paying from the sale date forward.5Office of the Law Revision Counsel. 26 U.S. Code 164 – Taxes Each side deducts only their allocated share, regardless of who actually wrote the check to the county.
A quick illustration. You close on a purchase September 1. The annual tax is $6,000, or roughly $16.44 per day. The seller’s share covers January 1 through August 31 (243 days). Your share covers September 1 through December 31 (122 days), about $2,005. The Closing Disclosure shows this allocation, and that number is your deductible amount even if the full year’s bill was paid at closing with the seller’s portion credited back.2Internal Revenue Service. Publication 530 – Tax Information for Homeowners
Deduct in the Year You Paid
Most homeowners file on a cash basis, which means the deduction belongs to the year the tax was actually paid, not the year it was assessed or billed. A bill issued in November 2025 for taxes due in January 2026 and paid in January 2026 goes on your 2026 return. The same rule governs escrow: you deduct what your lender disbursed to the taxing authority during the year, not what you deposited into the escrow account.2Internal Revenue Service. Publication 530 – Tax Information for Homeowners Confusing deposits with disbursements is one of the easier ways to overstate the deduction.
Reporting It on Schedule A
Real estate taxes go on Line 5b of Schedule A (Form 1040).6Internal Revenue Service. Schedule A (Form 1040) – Itemized Deductions That amount combines with any state and local income or sales taxes on Line 5a, and the total flows to Line 5e as your state and local tax (SALT) deduction.
The SALT Cap
Your combined SALT deduction is capped. For the 2026 tax year, the limit is $40,400 for single filers and married couples filing jointly, or $20,200 for married individuals filing separately.4Office of the Law Revision Counsel. 26 USC 164 – Taxes If your modified adjusted gross income exceeds $500,000 ($250,000 for married filing separately), the cap phases down and can drop as low as $10,000. If state income taxes alone already fill your cap, adding property taxes won’t change your federal result.
Itemizing Has to Beat the Standard Deduction
Property taxes only help if you itemize, and itemizing only pays off when your total itemized deductions exceed the standard deduction for your filing status. For 2026, the standard deduction is $32,200 for married couples filing jointly, $16,100 for single filers and married individuals filing separately, and $24,150 for heads of household.7Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Run the numbers before investing time in documentation.
Keep the Records
Hold on to your tax bills, payment proof, closing documents, and escrow statements for at least three years after filing the return that claims the deduction. That matches the general period during which the IRS can assess additional tax, and it stretches to six years if you underreported income by more than 25%.8Internal Revenue Service. How Long Should I Keep Records Claiming a rounded or estimated figure instead of the actual billed amount is the kind of shortcut that can trigger a 20% accuracy-related penalty on any resulting underpayment.9Internal Revenue Service. Accuracy-Related Penalty The actual bill plus a matching payment record is what turns a verification letter into a non-event.