SALT Deduction Gets Sweeter: the New $40,000 Cap
Big tax news for homeowners in high-tax states: the new federal law has raised the state and local tax (SALT) deduction cap from $10,000 to $40,000—offering substantial relief, especially to high-earning clients with expensive homes and hefty property tax bills. As I shared with Yahoo Finance, this much higher SALT cap will make a real difference for many of my clients in states like New York, Oregon, and California. For the first time in years, some are finding that it actually pays to itemize their deductions again, particularly those holding larger mortgages.
This change is more than a technical tweak—it could shift thousands of dollars back into homeowners’ pockets. However, the boost isn’t permanent: the $40,000 cap will rise slightly each year until 2030, when it reverts to $10,000, and households making over $500,000 will see the benefit window close even earlier. For many working professionals, this is a window to revisit tax strategies—potentially ramping up pre-tax retirement contributions, charitable giving, or tax-loss harvesting—to maximize their advantage. As always, the details matter, so if you have questions about how the new SALT cap impacts your financial planning or whether itemizing now makes sense, let’s connect. The rules may be in flux, but the opportunity for strategic, personalized planning is wide open.