HIGH PROPERTY TAXES
What’s new: The OBBBA raises the State and Local Tax (SALT) deduction for income and property taxes at the local and state level for taxpayers who itemize on their returns for tax years 2025 through 2029. The ceiling on the deduction increases from $10,000 to $40,000 in 2025 for single and married filing jointly taxpayers ($5,000/$20,000 for married filing separately)…then rises by 1% annually each succeeding year.
For every dollar of MAGI above the threshold of $500,000 for single and joint filers ($250,000/married
Filing separately, the SALT cap is reduced by 30% of the excess income until it phases out at $600,000 ($300,000/married filing separately)—but the deduction is not reduced below $10,000.
What to do: Evaluate whether it’s more beneficial to itemize deductions when you file federal income taxes.