SUBSCRIBE

How to prepay property taxes if your bank escrows those funds

Chip Somodevilla/Getty Images

Many people are prepaying their 2018 property taxes before the end of the calendar year in an attempt to blunt the effects of the new Republican tax law.

By Globe Staff 

It’s Dec. 28, just a few days before the new federal tax changes take effect that will limit how much in property taxes many of you will be able to deduct going forward. So you want to pay some of the property taxes due in 2018 now to maximize those deductions one last time.

But what to do if your bank, not you, pays the tax bill?

Advertisement

Go ahead and pay it yourself anyway — and keep the receipt. That’s the advice of three of the nation’s biggest mortgage servicers, who’ve been hearing from customers coast to coast who are eager to maximize those last tax benefits but unsure about the machinations when the bank escrows and pays their property taxes for them.

Spokespeople for JP Morgan Chase, Bank of America, and Wells Fargo Thursday said they will prepay escrowed property taxes for mortgage customers who request it. But it might be too late to put that in gear, with the year quickly drawing to a close. So the banks are encouraging customers who still want to prepay to do it themselves and then notify their lenders.

Chase said it will reimburse the cost, if provided a receipt. Bank of America said to notify its mortgage officers so the bank doesn’t make a duplicate payment. Wells Fargo said that after it receives the next round of bills from municipalities, it will scan for early payments from customers and refund the surplus from escrow accounts.

Of course, everyone’s situation is unique, and anyone considering prepayment should probably consult with a tax planner. But the message from the big banks at this point is: Get to Town Hall. Then call.


Tim Logan can be reached at tim.logan@globe.com
Follow him on Twitter at @bytimlogan.