I’m a relatively new homeowner, so my knowledge gaps are considerable. So I wanted to tap the brain trust of a…more experienced audience.
While checking my mortgage, I looked up my escrow account. In 2025 and 2023, I apparently had a surplus. I have my documentation set to paperless, so the checks attached to these docs weren’t real. But I do not recall ever getting or cashing any escrow related checks. An internet search suggested I check my state’s unclaimed property website; nothing under my name popped up.
I’m planning to call the customer service line for my mortgage company tomorrow, but what’s my likely outcome here? I’d assumed that any surplus would be kept in the escrow account for future expenses, but that doesn’t seem to be the case?
Because of a difficulty I had with figuring out where to put my property taxes for this year’s federal return, I checked last year’s, which I filed using commercial tax software (I know, I know). Apparently, I put in a certain amount in as property tax last year, but I actually don’t remember where I got the number I used, and I apparently put it in the wrong place (under miscellaneous real estate taxes rather than in the same screen as the rest of the mortgage form info). The “real” number from box 10 in the tax form for that year from my mortgage company is significantly higher, and might’ve made a $400+ difference in my tax payment. Is this worth pursuing, or is the headache or potential attention make it not worth it? How should I pursue if I should; an amended return?
File the amended return. The commercial software you used should make that trivial. There is no “potential attention”. Millions of people file amended returns every year.
Why did you say that? That is exactly the way almost everyone should do it.
It makes no sense to totally DIY it with paper forms, and it makes little sense for most people to pay some other people to do it unless their taxes are highly complex. Somebody with a job and a house are not complex.
Doing your own taxes with software requires one to be methodical and thorough and read carefully only proceed when they understand what they’ve read. Most people can manage that degree of diligence for a couple hours once a year. Some can’t, and those folks ought to pay somebody to do it for them.
That suggests to me you should have gotten paper checks, or an ACH transfer of the amount. If your escrow account was configured to roll any surplus forward, they probably would not have generated facsimiles of checks. Probably. Definitely worth a call to customer service to make sure you understand. There should have been an “escrow analysis” form attached which is basically a roster of all the money going in and out over the year. If they are rolling a surplus forward, you should see that as an entry.
As said by others above, it’s normal that an escrow account doesn’t come out to exactly zero over the course of a year. They want a small surplus, say 5% of whatever the total payouts are. But they don’t want huge surpluses, nor a surplus that grows from year to year.
As with taxes, this stuff isn’t complicated, but it does take paying attention to every piece of paper or email that comes in and making sure you a) understand what it said, b) aren’t surprised by what it said (if so, seek clarification from somebody), and c) you promptly do whatever may be necessary in response to what it said. A general attitude of “Eh, I’ll look at it next week” is a recipe for lost money and blown deadlines and maybe even ruined credit.
For 400 bucks, I would certainly pursue filing an amended return. If you used commercial software (like Turbo Tax or TaxSlayer), you should be able to re-open that software and it should have an option to file an amended return.
I did that with Turbo Tax a few years ago and it was no big deal to file an amended return.
I recently received a check from my mortgage servicer for excess escrow. I’m set to paperless statements, but I still received a check in the mail.
In my case, a new roof gave me a significant discount on my insurance, so after the insurance and taxes were paid there was over a $1000 too much left in the account, so they “dispursed” it to me. My last mortgage payment was still at the too high escrow, but it looks the next one has been adjusted down, so any excess next year will be lower.
UPDATE: I called my mortgage holder, and I was told that while a previous year’s surplus was put back into the account, I should’ve gotten a check for last year’s. I asked for a reissue, and they told me to follow up on Friday.
As for the amended return, after a couple of false starts, I put in the correct info, and it’s a difference of $440. I can’t e-file the amendment, so I’m printing up the forms and mailing them. It’s a hassle, but it’s still four hundred bucks.
Thanks for the advice!
(Also, I was “I know, I know” about commercial tax software because I know they’re the ones who’re lobbying to prevent the IRS from having proper e-filing options. I’ll have to look around to find better ones for next year.)
Second update: Oops, I looked at my 2023 return to see if I did something similar there, and found a significantly bigger real estate tax claimed there than what was in my mortgage tax form for that year. What may have happened is that I, not knowing about that line on my mortgage tax form, tried to manually input real estate taxes and put part of them paid over the past two years in the wrong tax year.
If so, then I’m likely exactly where I need to be (the mistake last year having made up for the one in the previous year), so I probably don’t have to send in any amendments at all.
So no extra money. Oh well, at least I know now, and I found out about the escrow thing. Thanks again!