Property Tax question

[Sam_2.0]

I mailed the check for our property taxes on 12/22 through my bank's online bill pay. For some reason, the check was not cashed until 1/9. Will I be able to count that for 2014 taxes, or will it be a deduction for 2015? Not a big deal either way, just wanted to make sure I got the right documents.

[Bonny]

Jan 20, 2015 16:39:44 GMT -5 Sam_2.0 said:

I mailed the check for our property taxes on 12/22 through my bank's online bill pay. For some reason, the check was not cashed until 1/9. Will I be able to count that for 2014 taxes, or will it be a deduction for 2015? Not a big deal either way, just wanted to make sure I got the right documents.

Did you print out the order confirmation on your bank's website? Usually they give an estimated time of arrival.

While I doubt this is something that you would actually get audited for at least you would have some back up documentation to support the deduction in 2014.

[The Captain]

Jan 20, 2015 16:39:44 GMT -5 Sam_2.0 said:

I mailed the check for our property taxes on 12/22 through my bank's online bill pay. For some reason, the check was not cashed until 1/9. Will I be able to count that for 2014 taxes, or will it be a deduction for 2015? Not a big deal either way, just wanted to make sure I got the right documents.

In general for cash basis taxpayers the deduction is associated with the year in which the payment is initiated (as long as that is the same year in which the expense is incurred - in other words you can't pre-pay an expense).


Tax Research Consultant,INDIV: 48,252,Cash-Basis Taxpayers Take Deduction in Year of Payment
"If payment is made by check, the date of payment is the day the taxpayer mails or delivers the check. If the taxpayer uses a pay-by-phone account, the date reported on the statement of the financial institution showing when payment was made is the date of payment. The taxpayer must be prepared to prove that interest payments were made for interest, 8 and that they occurred in the year claimed. 9"

There's consistent case law out there which supports this, but unless you have access to the tax research software I use the links won't work.

Guess you'll just have to take my word for it .

[rangerj]

As long as the check is good the expense is considered paid on the delivery date, in this case the day you put it in the mail. When the recipient cashed or deposited the check does not matter. Some expenses can be prepaid and deducted, but there are limitations.

[Sam_2.0]

I just printed out my copy of the check after it came through. The date on the check is showing as 12/22/14 so I will stick that with the receipt showing it was paid and that should be sufficient support for using it for a 2014 deduction, correct?

[TheOtherMe]

Correct!

[mwcpa]

Sam you should be fine.