State and local taxes (SALT) can significantly impact cash flow and the after-tax return to business owners and investors.
For 2018–2025, your entire itemized deduction for state and local taxes — including property tax and either income or sales tax — is limited to $10,000 ($5,000 if you’re married filing separately). This will have a significant impact on higher-income taxpayers with large state and local income tax and/or property tax bills.
The Tax Cuts and Jobs Act (TCJA) eliminates or limits many tax breaks, and much of the tax relief provided is only temporary (unless Congress acts to make it permanent). The combined impact of these changes will ultimately determine whether you see reduced taxes. It also will dictate which tax strategies will make sense for you this year, such as the best way to time income and expenses.
We can help you identify which changes affect you and the best strategies for maximizing the new tax law’s benefits and minimizing any negative tax ramifications.
