• Skip to main content
  • Skip to primary sidebar

Ask Liz Weston

Get smart with your money

  • About
  • Liz’s Books
  • Speaking
  • Disclosure
  • Contact

Q&A: Refinancing brings tax questions

November 9, 2020 By Liz Weston

Dear Liz: I recently refinanced my house and got $9,400 cash back. I also received a $2,400 escrow check from my previous mortgage lender. Is this money taxable? Should I put away a certain percentage of it to pay those taxes? My plan is just to put it back into household repairs (fireplace, painting, etc.).

Answer: You got cash back because you took out a larger loan than the one you previously had. You have to pay that money back, so it’s not taxable income. The escrow check represents a refund of money you’d already paid to the first lender. You don’t get taxed on that, either.

Related Posts

  • Q&A: Estate tax versus inheritance tax

    Dear Liz: In a recent column, you wrote that “only six states … have inheritance…

  • Q&A: Federal estate tax exemption

    Dear Liz: You mentioned that the federal estate tax exemption limit this year is $5.49…

  • Q&A: Tax take on inherited house

    Dear Liz: In a recent column, you quoted an attorney saying that if an inherited…

  • Q&A: Capital gains tax

    Dear Liz: I am selling my house. After subtracting all selling costs, stepping up the…

Filed Under: Q&A, Real Estate Tagged With: q&a, real estate, Taxes

Primary Sidebar

Search

Copyright © 2025 · Ask Liz Weston 2.0 On Genesis Framework · WordPress · Log in