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๐ OBBBA SALT Deduction New Cap
๐ OBBBA SALT Deduction New Cap
The One Big Beautiful Bill Act (OBBBA) brings a change for many taxpayers by temporarily increasing the State and Local Tax (SALT) deduction:
– From 2025โ2029, the SALT deduction cap rises to $40,000 ($20,000 if married filing separately), with small annual inflation adjustments starting in 2026.
– Phase-Out Rule: For 2025, the benefit begins phasing out at $500,000 MAGI ($250,000 for separate filers), but a minimum $10,000 deduction is always preserved.
– Pass-Through Entities: State-level SALT workarounds remain intact, allowing partnerships, LLCs, and S corporations to bypass federal SALT limits.
– Bonus Tip: Pairing the expanded SALT deduction with other breaksโlike the new senior bonus deductionโcan unlock even greater tax savings.
Planning Opportunities: Careful income managementโsuch as spreading out capital gains or Roth conversionsโcan help you stay below phase-out thresholds and maximize your deductions.
