In 2017, Congress passed the Tax Cuts and Jobs Act, which instituted a $10,000 cap on itemized deductions for state and local taxes (SALT). Thus, someone who itemizes deductions on their Federal tax return and paid, say, $5,000 in local taxes could deduct it all from their gross income. But if a high-end taxpayer paid $20k in local taxes, they could deduct only $10k.
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SALT Deductions
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In 2017, Congress passed the Tax Cuts and Jobs Act, which instituted a $10,000 cap on itemized deductions for state and local taxes (SALT). Thus, someone who itemizes deductions on their Federal tax return and paid, say, $5,000 in local taxes could deduct it all from their gross income. But if a high-end taxpayer paid $20k in local taxes, they could deduct only $10k.