One of the most controversial provisions of the 2017 Tax Cuts and Jobs Act (TCJA) was the limit it placed on state and local tax (SALT) deductions. The TCJA capped the deduction on combined payments for state and local property, sales, and income taxes at $10,000 beginning in the 2018 tax year.
According to the Joint Committee on Taxation, the SALT deduction cost the government $100.9 billion in potential 2017 tax revenue. The estimated SALT deduction costs for 2018 dropped to $43.1 billion. It’s a large part of the tax revenue increase that paid for the corresponding tax cuts.
Many taxpayers won’t be affected by the SALT changes. However, people in states with high taxes and high property values can easily reach $10,000 from either property taxes or state taxes alone.
How do you know if you’ll be affected? Check Schedule A on last year’s tax return. If you entered more than $10,000 on line 5d and your tax status hasn’t significantly changed, you’ll pro…