Under the Tax Cuts and Jobs Act (TCJA) of 2017, deductions for State and Local Taxes (SALT) have been capped at $10,000 for taxpayers who itemize deductions. SALT includes:
Currently, the standard deduction is $15,000 for single filers and $30,000 for joint filers, with additional amounts for those over 65 or blind (between $1,550 and $3,900). To benefit from SALT deductions, your total itemized deductions—including mortgage interest, charitable donations, and qualifying medical expenses—must exceed your standard deduction.
Unless Congress takes action, the TCJA will sunset at the end of 2025, reverting to the American Taxpayer Relief Act of 2012 (ATRA) tax code. This creates two significant changes:
These combined changes mean that significantly more taxpayers will likely benefit from itemizing deductions starting in 2026, with SALT playing a major role in tax planning strategies.
The passing of the current version of the One Big Beautiful Bill by the house as of May 30th. :
The final outcome remains uncertain as Washington develops new tax legislation. We will keep you informed as changes develop
What This Means For You: If you pay significant property taxes or state income taxes, 2026 could bring meaningful changes to your tax situation. Now is the time to begin planning for these potential changes.
For more information on how SALT changes might affect your financial plan, please contact your Financial Advisor at BLBB: 215-643-9100.
BLBB does not provide tax advice. Please consult your personal tax advisor.
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