The SALT Deduction Got a Makeover—Here’s What to Know
If you’ve been capped at a $10,000 SALT deduction for years, here’s some good news: under the OBBB, the cap has been temporarily raised to $40,000—but not without conditions.
This expanded deduction applies to tax years 2025 through 2029 and is available only to households with an adjusted gross income (AGI) under $500,000. Once you cross that threshold, the benefit phases out incrementally, eventually bringing the cap back down to the original $10,000.
So, what does this mean in practical terms? If you live in a high-income-tax state—California, New York, New Jersey—or have significant property tax bills, this could be your best shot in nearly a decade to recapture those deductions. And if you itemize deductions, it could meaningfully reduce your taxable income.
Let’s also talk timing. Because this window is short, how and when you pay certain taxes matters. State income tax payments and property tax bills might be more powerful when grouped in the same calendar year. Likewise, combining large charitable gifts with SALT-heavy years could allow you to exceed the standard deduction threshold and actually benefit from itemizing again.
How to Use It:
Review your property and state tax schedule. Strategic payment timing could unlock more value.
Batch deductions where possible. Consider grouping charitable contributions and tax payments in high-income years.
Be mindful of income thresholds. If you’re close to the $500,000 AGI limit, even a small shift could mean the difference between a $40,000 cap and a $10,000 one.
This isn’t a forever change. The $40,000 limit disappears in 2030, unless lawmakers step in to extend it. For now, it’s a short-lived planning opportunity with real potential impact.
👉 Want to see if this deduction applies to you or someone in your family? Let’s run the numbers together. Grab a spot on my calendar!
This article is for informational purposes only and not tax advice. Always consult your tax preparer for guidance specific to your situation.
LynnLeigh & Company - A Registered Investment Advisor This information is provided by LynnLeigh & Co. for general information and educational purposes based upon publicly available information from sources believed to be reliable – LynnLeigh & Co. advisors cannot assure the accuracy or completeness of these materials. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice. Past performance is not a guarantee of future returns.
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