TurboTax / Tax Calculators & Tips / All Tax Guides / General Tax Tips / Paying Property Taxes Online

Paying Property Taxes Online

Updated for Tax Year 2015


OVERVIEW

Many local agencies are set up to accept property tax payments online. When paying property taxes online, it is important to note some considerations that can affect your federal income tax return.


Though government agencies tend to be a bit slower adapting to technology than the private sector, many local agencies are set up to accept property tax payments online through their own websites or sometimes through an authorized third-party site. When paying property taxes online, it is important to note some considerations that can affect your federal income tax return.

Online payment methods

It should come as no surprise that most local governments accepting online payment of property taxes accept major credit and debit cards. Some jurisdictions, such as Dallas County, Texas, utilize the Automated Clearing House network, usually referred to as an ACH payment. ACH payments are like electronic checks that allow the government agency to deduct the payment from your bank account.

Credit card advantages

The timing of your property tax payments can be extremely important when taking a deduction on your federal tax return. To claim a property tax deduction, the Internal Revenue Service requires that you actually make the payment during the same year you report the deduction. When filing your 2015 tax return in 2016, for example, you can only deduct the property taxes you paid on or between January 1, 2015 and December 31, 2015.

If you find yourself short on funds to pay your property taxes at the end of the year, you can always use a credit card and make the payment online. This way, you don’t have to wait until next year to take the property tax deduction, and in most cases you may make your credit card payments over time. However, high interest rates charged by credit card companies can wipe out any benefit you received by taking the deduction if you don’t pay off the card promptly.

Property tax deductions

If the sole reason you’re making the payment online is to take the property tax deduction, it’s a good idea to first ensure you’re eligible for the deduction. To take the deduction, you must be personally liable for the property tax. This means you can’t make the online property tax payment for someone else’s home and take the deduction yourself.

Moreover, your deduction may not include any amount that your local government charges for special improvements it makes to your property that the IRS refers to as a nondeductible assessment for local benefits. For example, if your county government requires payment for special improvements it makes to your property, such as for the construction of a sidewalk, but doesn’t require similar payments from most other residents in the jurisdiction, you may not include the payment in your property tax deduction.

Report on Schedule A

The other issue you should consider before paying your property taxes online is that you must itemize your deductions in order to take the property tax deduction. Sometimes taking the standard deduction is more beneficial than itemizing your deductions. To illustrate, suppose you’re eligible for an $8,500 standard deduction, and an estimate of your itemized deductions (including property taxes) is less than $8,500. In this case, it makes sense to take the standard deduction in lieu of itemizing and deducting your online property tax payments. Therefore, there would be no tax benefit to paying your property taxes early.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • Filing Deadline: IRS filing deadline for tax year 2015 is April 18, 2016 (except for residents of Massachusetts or Maine, where the IRS filing deadline for tax year 2015 is April 19, 2016).
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/A + Free State offer only available with TurboTax Federal Free Edition; Offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected 3/18/16. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected 3/18/16. Prices subject to change without notice.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except the TurboTax Home & Business/QuickBooks Self-Employed bundle offers.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice service is available via phone for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2014 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.