This is BIG news!

The so-called SALT, State and Local Taxes, limitation has been raised from a $10,000 deduction to a $40,000 deduction. 

That means many people who have been unable to use the itemized deductions, will now be able to because they will no longer be limited by this limitation. You can now deduct those pesky state income and local property taxes up to $40,000. 

Therefore, many people who were held to the standard deduction will be able to add the SALT to their mortgage interest deduction and charitable deductions to start itemizing their deductions again.

Estimates are that the average taxpayer making $200,000 per will save X dollars.

A key thing to consider: If your income is above $400,000 those itemized deductions begin to phase out. The effective marginal tax rate above $400,000 can be as high as 50%. It is time to consider deferring your income if you are near this income level.

Curious to learn more about this tax law and future tax tips, email accounting@40accounting.com or connect on LinkedIn. 

40 Accounting

Disclaimer: The information supplied is meant to serve as tools for personal and company use at your own discretion in conjunction with accountants, lawyers, or tax professionals.