The One Big Beautiful Bill Act, signed into law in July 2025, introduced a temporary increase to the state and local tax (SALT) deduction, which may affect your tax planning. SALT includes:
- State Income Taxes
- Property Taxes
- Sales Taxes
Hear more from Ann Timoney about the key changes:
For 2025, the cap for filers who itemize deductions was increased to $40,000 (or $20,000 for married taxpayers filing separately) from $10,000. Here are some factors to be aware of when planning:
- The increased deduction is temporary through 2029. In 2030, the deduction cap will revert to $10,000 (or $5,000 for married taxpayers filing separately), and should be planned for accordingly.
- You can only benefit from the deduction when you itemize your deductions. You can continue to benefit from the standard deduction if it exceeds your itemized deductions.
- The deduction phases out with higher incomes, limiting the available cap to $10,000 (or $5,000 for married taxpayers filing separately) once certain thresholds are met:
| Filing Type | Income | Deduction |
| Single | Less than $500,000 | $40,000 |
| Over $500,001 – $600,000 | Deduction reduced by $.30 for every dollar exceeding $500,000. | |
| Over $600,000 | $10,000 | |
| Married, Filing Joint | Less than $500,000 | $40,000 |
| Over $500,001 – $600,000 | Deduction reduced by $.30 for every dollar exceeding $500,000. | |
| Over $600,000 | $10,000 | |
| Married Filing Separately | Less than $250,000 | $20,000 |
| Over $250,001 – $300,000 | Deduction reduced by $.30 for every dollar exceeding $250,000. | |
| Over $300,000 | $5,000 |
As we launch into a new year, it’s a good time to consult your tax professional to determine how to maximize your deductions and proactively plan if you will approach certain income thresholds. Our team is happy to collaborate with your tax advisor to help ensure your tax strategy and broader financial strategy are aligned with your goals.
Complete our financial diagnostic to review your current situation and learn more about key steps forward.
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