Property tax on Form 1098 shows up in Box 10 when the lender chooses to report it there, but that box is optional and often left blank. The number you can rely on comes from the Annual Escrow Account Statement your mortgage servicer sends around the same time as the 1098. That statement lists the exact amount paid from escrow to each taxing authority, which is the figure you actually need for your return.
What Box 10 Shows and Why It’s Often Blank
Form 1098 exists to report mortgage interest. Lenders must file it when you pay at least $600 in interest for the year. Box 1 is the total interest, Box 4 is any refund of overpaid interest, and Box 5 is mortgage insurance premiums.1Internal Revenue Service. Instructions for Form 1098
Box 10 is labeled “Other.” The IRS instructions say lenders “may use this box to give you other information, such as real estate taxes or insurance paid from escrow.”2Internal Revenue Service. Form 1098 (Rev. April 2025) “May” is the operative word. Nothing forces your lender to fill it in, and many don’t. Some lenders use the space for insurance figures instead of taxes. If Box 10 does list a property tax amount, treat it as a starting reference and confirm it against your escrow statement before entering anything on your return.
Getting the Real Number from Your Escrow Statement
Your servicer sends an Annual Escrow Account Statement, usually in late January. It accounts for every dollar that flowed through the escrow account during the prior calendar year, including disbursements for property taxes and homeowner’s insurance.
Look for a line labeled “Real Estate Taxes” or “Property Taxes” showing the total your servicer actually paid to the local taxing authority. That is your deduction figure. It is not the total you paid into escrow during the year, which will differ because escrow accounts carry a cushion balance.3Internal Revenue Service. Publication 530 – Tax Information for Homeowners
The statement usually lists each disbursement with its payment date and the specific municipality that received the funds. Keep it with your tax records. It is your primary documentation if the IRS asks how you arrived at the number.
If You Pay Property Tax Directly
Homeowners without escrow accounts won’t get this statement. Your documentation is the payment itself: canceled checks, bank statements showing the withdrawal, or official receipts from the county or city tax office.
Watch the timing. The deduction belongs to the year you paid the tax, not the year you were billed. If your county bills in December and you pay in January, that payment goes on the following year’s return.
Where the Amount Goes on Your Return
Property taxes are an itemized deduction, so you have to itemize on Schedule A to use them. The amount goes on Line 5b under “Taxes You Paid.”4Internal Revenue Service. Instructions for Schedule A (Form 1040) – Section: Line 5b It combines with your state and local income or sales taxes into the SALT deduction, which is capped.
For 2026, the combined SALT cap is $40,400, or $20,200 if married filing separately.5Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 A phase-down reduces that cap for high earners with modified adjusted gross income above $505,000 ($252,500 if married filing separately), but it never drops below the old $10,000 floor. The expanded cap is scheduled to expire after 2029.
Charges That Look Like Property Tax but Aren’t Deductible
Deductible real estate taxes are state or local taxes levied against the assessed value of your property for the general public welfare, charged at a uniform rate across the jurisdiction.6Internal Revenue Service. Topic No. 503, Deductible Taxes Several charges that ride alongside property taxes on bills or escrow statements do not qualify:
- Service charges for water, sewer, or trash collection, even when billed on the same statement.
- Local benefit assessments for improvements like new sidewalks, street paving, or sewer lines that raise your property’s value. The portion covering maintenance, repair, or interest on those benefits can be deductible.
- Transfer or stamp taxes imposed when property changes hands.
- Homeowners’ association fees.
If your escrow account paid any of these, subtract them before entering the property tax figure on Schedule A.3Internal Revenue Service. Publication 530 – Tax Information for Homeowners
If You Bought or Sold the Home During the Year
When ownership changes mid-year, the property tax deduction splits between buyer and seller based on the number of days each one owned the home, regardless of who actually wrote the check.7Internal Revenue Service. Publication 523 – Selling Your Home
Divide your days of ownership by the total days in the year, then multiply by the annual real estate tax. If you sold on June 15 after 165 days of ownership and the full-year tax was $6,000, your deductible share is about $2,712 (165 ÷ 365 × $6,000). The buyer deducts the remaining $3,288. Your Closing Disclosure documents how the taxes were prorated at settlement, so keep it with your tax records.
What Records to Keep
The IRS generally has three years from the date you filed to assess additional tax.8Internal Revenue Service. Topic No. 305, Recordkeeping Hold your escrow statements, payment receipts, Closing Disclosure, and property tax bills for at least that long. The burden of proving a deduction is on you, and the IRS expects documentary evidence like receipts and canceled checks.9Internal Revenue Service. Burden of Proof