Filing Taxes With An Escrow In Play
Hello BiggerPockets!!! I'm newer to the real estate investing game and seeking out some additional advice about taxes. I recently bought a fourplex that I'm holding (I'm even starting to look into another acquisition). With this new venture comes a lot (more like endless amounts) of new experiences, education, and of course questions.
Either way, I was looking into the details behind my taxes a little more closely. From my perspective, I've been filing my mortgage & escrow payment as an expense on my balance sheet. The escrow account pays insurance and property taxes on my behalf just as the mortgage payment includes interest as well as principle.
When it comes to filing taxes I want to make sure it's being done correctly. If I'm showing the mortgage & escrow payments as monthly expenses am I doing that right?
If I'm doing that right, then would I just not include the mortgage interest and the property taxes paid on my behalf when filing my taxes? Or do I include it as well? I feel like that's showing as a double expense if you will.
Let's use an example. Let's say I pay $1500 per month. $700 of that goes to interest, $300 of that goes to principle, and $500 of that goes to the escrow account. So at the end of the year I'm showing $18,000 in my expenses. Let's say I get a report back from my mortgage company that $8,400 of interest was paid on the year. I also get a report back that the escrow account paid $3000 property taxes (the other $3000 went to insurance throughout the year). What do I file for in my tax categories?