Increased SALT Limit (2025)
What changed in 2025:
The cap on the state and local tax (SALT) deduction increases:
The cap on the state and local tax (SALT) deduction increases:
- From $10,000 to $40,000, if you’re filing jointly (MFJ) or as head of household (HOH)
- From $10,000 to $20,000, if you’re married filing separately (MFS)
NOTE The limit increases by 1% each year through 2029
You can claim this higher deduction if:
- You itemize deductions instead of taking the standard deduction
- Your tax year starts in 2025 through 2029
- Your Modified Adjusted Gross Income (MAGI) is within the threshold.
- The SALT deduction begins phasing out after $500,000 MAGI and is eliminated at $1,000,000 MAGI.
- MAGI is equal to the Adjusted Gross Income (AGI) plus some foreign earned income exclusions (see IRC §911, 931, and 933 for details).
What this means for you:
If you pay high property taxes or live in a high-tax state, this change could:
- Let you deduct more of the taxes you’re already paying
- Help you reduce your taxable income
- Lower your overall tax bill
Example: If you are a homeowner in a high-tax area with a $600,000 home, you could see thousands more in deductible taxes due to the higher limitation.
Related Links