Mortgage Escrow Account: How to Properly Set It Up In QuickBooks

[@dukelovestaxes]

This is such a good video! Thank you so much!

[@STRATAFOLIO]

We are glad you enjoyed it and can use this information to help you with your business!

[@Speedy-Pete]

Hello, I know this video was posted some time ago.. but I'd like to ask what numbering convention you use for your chart of accounts and if you might be able to link a reference to it. I found your video helpful. Thank you!

[@STRATAFOLIO]

Thank you for stopping by. Here is a link to article that contains a downloadable with a chart of accounts and includes more information on the numbering system - stratafolio.com/setting-up-a-chart-of-accounts-for-a-commercial-real-estate-company/. Good luck!

[@Hellocali1]

Would you then create a journal entry to record the property tax as an expense? In the video, the money is going into a the asset bank account, but is not being recorded as a property tax expense

[@STRATAFOLIO]

There are two different ways to account for property taxes. You can pay for them directly by debiting the property tax account and crediting the cash account. Or, if you are paying a mortgage with an escrow account, you are paying into an asset account held for property taxes with your principal payments. When you are ready to account for the property tax expense, you are going to credit the escrow asset account in a journal entry to show the flow from that account to the expense account. Either way will work.

[@Hellocali1]

@@STRATAFOLIO thank you

[@KashaneTiger]

Great video I like the comparison between the 2 mortgages educating me why it's important to capture the escrow monthly taxes and insurance in order to reduce taxes. Thank you!

[@STRATAFOLIO]

Glad you found it helpful!

[@junglestar]

I'd like to know how to do this in quickbooks online

[@jerifrank3945]

Hi Darry - Thank you for reaching out. We don't have a video on this but the process is very similar. You will need to create an account for your escrow, your notes payable (your mortgage), and interest. You will split the notes payable transaction each month for principal, interest, and escrow. You have the option to memorize the transaction, but regardless, there will be some adjustment needed every month to account for the increased payment towards the principal. Hope this helps! If not, I am happy to connect you with a great resource. Take care, Jeri