Categorizing escrow refund?
After paying off the mortgage, I received a check from the servicer for the remaining, unspent escrow (property taxes, homeowner insurance) on the mortgage. I have not been running an escrow (asset) account on Q Classic (Home & Business), just split transactions each month covering P&I, insurance, taxes. Should this be considered a form of deferred income? It's a refund of escrow payments already made to the servicer's escrow account.
Best Answer
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Throughout the year you've been categorizing the P&I, insurance, taxes as expenses.
The mortgage company gave you a refund which you will eventually have to make payment yourself.
I suggest you categorize the refund to the categories you used in your monthly mortgage payments
Pay your property taxes and homeowner insurance from those categories when due. They'll come knocking soon …0
Answers
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Since you haven't been tracking an Escrow account, and have just been recording the Escrow component of your mortgage payment as an expense (which, bTw, is incorrect), you should record the refund using the same category that you used for the expense … thus reducing the expense.
It's incorrect because at year end, when you're doing your taxes, your haven't paid the full escrow amount as RE taxes …. you've only paid what was actually paid from Escrow towards your taxes. Anything remaining in the account is for another purpose (say, insurance) but it's an asset to you in any event.
Q user since February, 1990. DOS Version 4
Now running Quicken Windows Subscription, Business & Personal
Retired "Certified Information Systems Auditor" & Bank Audit VP0 -
I understand the reason for tracking an escrow account in Q.
You're right that the remainder — which is what I'm asking about — is an asset. It's there for future, not past expenses, is not allocated for anything in particular, and is in effect being transferred back to my general fund to use for any expense or just for savings.
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Throughout the year you've been categorizing the P&I, insurance, taxes as expenses.
The mortgage company gave you a refund which you will eventually have to make payment yourself.
I suggest you categorize the refund to the categories you used in your monthly mortgage payments
Pay your property taxes and homeowner insurance from those categories when due. They'll come knocking soon …0
