You can deduct real estate taxes that aren’t reported on Form 1098 by claiming them on Schedule A using your own property tax bill and proof of payment. Form 1098 is just a convenience for lenders reporting escrow disbursements, and Box 10 (property taxes) is optional for them to complete.1Internal Revenue Service. Instructions for Form 1098 – Mortgage Interest Statement The deduction itself belongs to you regardless of whether a lender reported the amount to the IRS. When no 1098 shows the number, you become the recordkeeper.
Why Your Property Taxes May Not Be on a 1098
Several common situations leave homeowners without a Form 1098 that shows property taxes:
- You own the home outright. No mortgage means no lender and no 1098. You pay the county or city directly.
- Your loan has no escrow account. Borrowers with significant equity often pay taxes and insurance themselves.
- You bought or sold during the year. Taxes are prorated at closing and handled through settlement, not through a lender’s escrow.
- You paid off the mortgage mid-year. Escrow disbursements stop, and any taxes you pay after that are on you.
- Your lender simply didn’t fill in Box 10. Even with an escrow account, the reporting is optional.
In every one of these cases, the deduction is still available. What shifts is who has to prove the payment happened.
Which Charges Actually Qualify
A property tax bill often bundles several kinds of charges, and not all of them are deductible. The IRS allows a deduction only for real property taxes that are levied uniformly on all property in the jurisdiction based on assessed value.2Internal Revenue Service. Topic No. 503, Deductible Taxes These are ad valorem taxes, and they fund broad public services.
What doesn’t qualify:
- Special assessments for new sidewalks, street paving, sewer lines, or other local improvements that add value to your property. These get added to your cost basis instead.3Internal Revenue Service. Publication 530 – Tax Information for Homeowners
- Service fees for trash collection, water, or sewer usage. These pay for specific services, not taxes.2Internal Revenue Service. Topic No. 503, Deductible Taxes
One narrow exception: if a special assessment covers maintenance or repair of existing infrastructure, or interest charges on the assessment itself, that portion is deductible. You need to be able to point to it as a separate line on the bill.
Getting the Amount and the Year Right
Two timing rules trip up homeowners more than anything else.
First, you deduct property taxes in the year you actually paid them, not the year they were billed or assessed. If your county bills you in November 2025 for taxes due January 2026 and you pay in January, that payment belongs on your 2026 return. The same applies to escrow: you can only deduct what your lender actually disbursed to the taxing authority during the year, not what you deposited into the escrow account.3Internal Revenue Service. Publication 530 – Tax Information for Homeowners Your annual escrow statement shows the disbursements.
Second, if you bought or sold the home during the year, you deduct only your prorated share. Federal law treats the seller as paying taxes through the day before the sale, and the buyer as paying from the sale date forward.4Office of the Law Revision Counsel. 26 U.S. Code 164 – Taxes This holds even if one party wrote the check for the full bill at closing.
An example: you close on a purchase September 1 and the annual tax is $6,000, which works out to about $16.44 per day. The seller’s share covers 243 days (January 1 through August 31); yours covers 122 days (September 1 through December 31). Your deductible portion is roughly $2,005. The Closing Disclosure shows this split in the adjustments section.3Internal Revenue Service. Publication 530 – Tax Information for Homeowners
The Documents You Need in Place of a 1098
The IRS expects you to show three things: the tax was assessed, it was imposed on you, and you paid it. That takes two documents at minimum, sometimes three.
The Property Tax Bill
Your local taxing authority’s official bill or statement is the foundation. It shows the assessed value, the tax rate, the total owed, and, critically, lets you separate the ad valorem tax from any non-deductible assessments or service fees on the same bill. If you don’t have your copy, most county tax offices will issue a duplicate for a small fee or free.
Proof of Payment
The bill shows what was owed. You still need to show you paid it. Any of the following works:
- Canceled checks
- Bank statements showing the withdrawal
- Electronic payment confirmations from the taxing authority’s portal
- Paper receipts from the tax office
The record needs to identify the payee as the taxing authority and show the date and amount.
Closing Disclosure or HUD-1
If you bought or sold during the year, the Closing Disclosure itemizes the tax proration in the adjustments section. The dollar amount allocated to you on that form is your deductible share. Older transactions may have a HUD-1 Settlement Statement instead, which does the same job.
Escrow Statement
If your lender paid the taxes from escrow but left Box 10 blank on the 1098, your annual escrow account statement fills the gap. It lists the exact dates and amounts sent to the taxing authority. Add those disbursements together, and that total is what you report.
Reporting It on Schedule A
Real estate taxes go on Line 5b of Schedule A, as part of the state and local tax (SALT) deduction.5Internal Revenue Service. Schedule A (Form 1040) – Itemized Deductions Line 5a captures state and local income taxes (or sales taxes, if you elect that instead), and the two combine on Line 5e up to the SALT cap.
For the 2026 tax year, the SALT cap is $40,400 for single filers and married couples filing jointly, or $20,200 for married filing separately.6Office 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. The full $40,400 is effectively available only below that income threshold.
If state income taxes alone already push you to the cap, adding property taxes won’t produce any additional federal benefit. Worth checking before spending an afternoon on documentation.
Does Itemizing Even Pay Off?
The property tax deduction is only available if you itemize, and itemizing only helps if your total itemized deductions exceed the standard deduction. For 2026, the standard deduction is $32,200 for married filing jointly, $16,100 for single filers and married filing separately, and $24,150 for heads of household.7Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Add up your mortgage interest, property taxes, charitable contributions, and other itemized items before committing to itemize. If the total falls short of the standard deduction, the standard deduction wins.
Hold On to Your Records
Keep your tax bills, payment records, closing documents, and escrow statements for at least three years after filing the return that claims the deduction.8Internal Revenue Service. How Long Should I Keep Records The IRS’s normal assessment window is three years, but it stretches to six if income was underreported by more than 25%.
The IRS applies a 20% accuracy-related penalty on underpayments caused by negligence, which includes claiming a deduction you can’t substantiate.9Internal Revenue Service. Accuracy-Related Penalty Rounding your property tax figure because it feels about right is the kind of thing that turns a routine verification letter into a bill. The actual paperwork is your protection.