Solano Real Estate Scene: Does paying property taxes through impound account affect tax liability?

A Daily Republic reader named Barbara wrote in to ask about her mortgage interest tax deduction. She says her well-seasoned mortgage balance and her interest rate are so low that she cannot even itemize deductions any more. Her question was whether canceling her impound account, aka escrow account, and paying the taxes and insurance on her own might make a difference on her income taxes. The answer is no. The mortgage interest and property taxes on your primary residence are usually fully tax-deductible on Schedule A of your tax return – along with your state income tax, charity contributions, tax prep fees and unreimbursed employee expenses – but if the total of all these deductions are not higher than the standard deduction, then the taxpayer obviously will use the standard deduction. The amount you pay for taxes is the same whether you have an impound account or not. I personally have an impound account on my mortgages for the simplicity. (Fewer checks to write and stamps to buy.) I teach all these young people in my life and all my customers as much as I can about the importance of being financially smart. I do classes and short seminars on debt management and the importance of investing to become financially happy and successful when you retire. However, one thing for darn sure is I am no Mr. Know It All. My brother, Greg Porter, is my CPA in San Francisco. He’s pretty expensive, but he helps me with my taxes and answers questions professionally on how to reduce income taxes. I am lucky to have a great lawyer, Terry Duree in Fairfield, with 40 years of experience in real estate that protects me from stepping in “you know what” and refers me and my clients to other lawyers for legal matters that are not his specialty. I am also extremely lucky to have been working with Mark Sievers and Leo Martinez over at Epsilon Financial in Fairfield over the past 17 years. The company manages most of my retirement account to protects me from myself. I started my career in 1980 and by 1990 I had made an average of $50,000 per year for a total of $500,000. In January 1990, I looked up and had a wife, four kids and no money. My net worth was a negative number and this is when I woke up and decided that I needed professional help and began maximizing my IRA contributions and paying my bills perfectly on time because I never wanted to be less than broke again. My point is that I can give tips on the importance of many topics that include things like the benefits of having a living trust, but I didn’t go to college for six to eight years like the guys I mentioned above, so don’t hesitate to get advice from folks with initials after their name and a great reputation.