How To Make Online Payments Benefit You

Everything is beginning to go digital, making life a little bit more convenient. However, there are sometimes charges for that convenience and paying your property tax online has some charges that can affect you later. If you chose to make online property tax payments, you will want to consider how it will affect your federal income tax return the following spring.

Paying with your Bank

Many governments are now accepting the ability to make ACH Payments for property tax. ACH Payments use the Automated Clearing House network and are literally just electronic checks. What this means is you will enter your bank's routing number and your account number, and the government will automatically deduct your money straight from your bank. If they do not offer this method, they should offer the ability to use your credit and/or debit card.


The most important thing to take into consideration when making this payment type is when you do it. If you want to claim the deduction on your taxes, you will need to make the payment the same year you report it. The Internal Revenue Service (IRS) will not allow you to make a payment in 2019 and claim it on your taxes for 2018. They will only consider payments made between January 1st and December 31st of that year. Therefore, if you are short on the full amount, it is better to use a credit line to make the payment and then pay it off over time.

Double Check Eligibility

Before you make an online payment, if you are wanting a deduction for it, make sure you are eligible to start with. The deduction is only for people who are personally liable for the tax. If you are making payments for a home you do not own, then you will not qualify for the property tax deduction. In addition, if you are being required to pay extra for improvements to the property, you will not be allowed to add those into your property tax deduction with the IRS.


Most deductions you can use on your tax return will require you to itemize. This means that you could possibly receive less money on your return than if you took a standard deduction. For example, if you are qualified for a standard deduction of $8,500, and your itemized deductions equal only $6,000, then it is not beneficial to consider the property tax deduction. While your online payments will give you some boost with itemized deductions, if it is not more than the $8,500, you will not come out ahead.

To recap making online payments for property taxes, look at how it will affect your taxes to see if it is worth making payments ahead of schedule or waiting until they are due. However, it is always wise to make sure you only pay the amount that you can afford, since online payments come straight from your bank. Contact a company that offers help with online property tax payment in order to learn more.