Understanding the SALT Deduction
The federal deduction for state and local taxes (SALT) is currently capped at $40,000 for most taxpayers ($20,000 for married filing separately). This expanded deduction applies to tax years 2025 through 2029. After that, the limit is scheduled to return to $10,000.
For taxpayers in high-tax states, or those with significant property taxes, the SALT deduction can have a major impact on overall tax liability.
Why It Matters
Deduction limits matter: The amount you can deduct directly affects your taxable income.
High-income and high-tax areas: Residents in certain states feel these caps more significantly.
Planning window: The higher deduction is temporary, so strategy today affects your future tax position.
The Bottom Line
The rules around SALT deductions will continue to evolve, but proactive planning ensures you’re positioned to take full advantage while managing future changes.
Contact Atherton & Associates today to discuss your SALT strategy.
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