SALT Deduction Changes

The SALT (State and Local Tax) deduction has undergone significant changes[1].

Currently, for tax years 2018 through 2025, there's a $10,000 limit ($5,000 for Married Filing Separately) on the combined deduction for state and local taxes, including income taxes (or sales taxes), real estate taxes, and personal property taxes[1].

Starting in 2025, the deduction limits will change significantly[2].

• 2025: $40,000
• 2026: $40,400
• 2027: $40,804
• 2028: $41,212
• 2029: $41,624
• After 2029: Returns to $10,000

For Married Filing Separately, these limits are halved. Additionally, for tax years before 2030, these deduction limits are reduced by 30% of the excess of modified AGI over threshold amounts, which start at $500,000 in 2025 and increase annually[2].