In box 5 for Real Estate Taxes, it only shows the county taxes. I'm paying a full 1.5% for MUD taxes so it's a significant omission and a big hit on my tax deduction.

My mortgage company, based out of New Jersey (Freedom Mortgage) is completely incompetent and I called them today for the fourth time about this. I knew it was coming because they improperly were showing my current property taxes paid to date for the year in my account dashboard. They argued that it would all be correct, but today when I looked at my freshly posted 1098, of course it wasn't.

I just called them and they were arguing that these are water taxes and not deductible - that's why they were not reported to the IRS. I told them that was completely incorrect and they are property taxes and are deductible. They said they are forwarding to their "research department" but in dealing with this company, I'm pretty sure they will come back and say again that they are water taxes and not reported to the IRS.

I'm completely correct, right? Anybody dealt with this before? It seems like MUD taxes are unique to Texas so they have no idea what I'm talking about.

Form 1098 is mortgage interest paid and has nothing to do with your property taxes.

Whether you escrow or not, you should be able to show what county taxes you paid with either a canceled check (you paid) or just go to the county web site and DL your tax bill that shows it was paid. You only need documentation for audit purposes anyway unless your one of the last people on earth who mails in their federal taxes).

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Form 1098 is mortgage interest paid and has nothing to do with your property taxes.

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It showed my property taxes on there so I don't know. It was my understanding that this is where the IRS validates what I claim but I'm new to this.

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Whether you escrow or not, you should be able to show what county taxes you paid with either a canceled check (you paid) or just go to the county web site and DL your tax bill that shows it was paid. You only need documentation for audit purposes anyway unless your one of the last people on earth who mails in their federal taxes).

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I thought of this too. I can claim what I know is correct and if audited I can show the receipt from the MUD (which I already called them and found online). My concern was it wouldn't go through initially when I e-file. I figured they'd compare against the 1098 from the mortgage co. and reject my tax return.

Your 1098 has nothing to do with your property/MUD taxes. I don't understand your concern about this document and your unrelated MUD taxes.

They indicated in box 5 the amount for my real estate taxes. That's why I'm concerned.

I stand corrected. I just asked our servicing manager and that can be included in box 5. Where I came from it wasn't.

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I stand corrected. I just asked our servicing manager and that can be included in box 5. Where I came from it wasn't.

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First off, MUD taxes are tax deductible.

The purpose of form 1098 is for the mortgage servicer to report mortgage interest to the IRS. Boxes 4 and 5 on the 1098 are for miscellanous information your servicer wishes to deliver to you. I work for a mortgage servicer and we do not report taxes or insurance on the 1098 form. We send a separate summary of escrow disbursements from the prior year for informational purposes. The IRS does not verify taxes through the servicer. This is likely done directly through the taxing entity.

http://www.irs.gov/pub/irs-pdf/i1098.pdf
Box 4/5: Enter any other item you wish to report to the payer, such as the address of the property that secures the debt, real estate taxes, insurance, or if you are a collection agent, the name of the person for whom you collected the interest. You do not have to report to the IRS any information provided in this box.

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I stand corrected. I just asked our servicing manager and that can be included in box 5. Where I came from it wasn't.

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First off, MUD taxes are tax deductible.

The purpose of form 1098 is for the mortgage servicer to report mortgage interest to the IRS. Boxes 4 and 5 on the 1098 are for miscellanous information your servicer wishes to deliver to you. I work for a mortgage servicer and we do not report taxes or insurance on the 1098 form. We send a separate summary of escrow disbursements from the prior year for informational purposes. The IRS does not verify taxes through the servicer. This is likely done directly through the taxing entity.

http://www.irs.gov/pub/irs-pdf/i1098.pdf
Box 4/5: Enter any other item you wish to report to the payer, such as the address of the property that secures the debt, real estate taxes, insurance, or if you are a collection agent, the name of the person for whom you collected the interest. You do not have to report to the IRS any information provided in this box.

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Thank you. That is extremely helpful.

So just to summarize, I need to make sure to itemize my MUD taxes this year if it's not specifically called out on my year end tax document from the mortgage company?

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So just to summarize, I need to make sure to itemize my MUD taxes this year if it's not specifically called out on my year end tax document from the mortgage company?

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Just make sure they are included in what you claim for property taxes