If you didn't know (I had to look up myself to confirm) the SALT deduction is the State and Local Tax deduction on federal income tax. It's to allow you to deduct state income tax and/or sales taxes paid, and therefore pay less federal tax to the IRS.
For someone like myself in Texas, capping it did practically nothing as I have no state income tax and the sales tax deduction doesn't get anywhere close to $10k. I didn't even notice.
But, for someone in a high tax coastal state, before they may pay $13k to the State of California in income tax, but can now only deduct $10k. If this person is in the 24% tax bracket, they now owe $720 more to the IRS than before the cap.
I hadn't heard of this, what is it?
If you didn't know (I had to look up myself to confirm) the SALT deduction is the State and Local Tax deduction on federal income tax. It's to allow you to deduct state income tax and/or sales taxes paid, and therefore pay less federal tax to the IRS.
For someone like myself in Texas, capping it did practically nothing as I have no state income tax and the sales tax deduction doesn't get anywhere close to $10k. I didn't even notice.
But, for someone in a high tax coastal state, before they may pay $13k to the State of California in income tax, but can now only deduct $10k. If this person is in the 24% tax bracket, they now owe $720 more to the IRS than before the cap.
That makes sense.
And property taxes in MI are so bad they split it into 2 payments in the year.
When I saw "SALT", my first thought was "nukes".
Ah, the flat deduction hit you the wrong way. I get it.