The One Big Beautiful Bill Act (OBBBA) brings a change for many taxpayers by temporarily increasing the State and Local Tax (SALT) deduction:

– From 2025–2029, 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 breaks—like the new senior bonus deduction—can unlock even greater tax savings.

Planning Opportunities: Careful income management—such as spreading out capital gains or Roth conversions—can help you stay below phase-out thresholds and maximize your deductions.

Disclaimer: This content is provided for educational purposes only and is not legal, tax, accounting, or financial advice. Every situation is unique, so consult your own attorney, CPA, or financial advisor before making decisions based on this information.