SALT Deduction

The SALT deduction, which stands for State and Local Taxes deduction, allows taxpayers to deduct certain taxes paid to state and local governments from their federal taxable income. This includes income taxes, property taxes, and some sales taxes. However, the Tax Cuts and Jobs Act of 2017 capped the SALT deduction at $10,000 for individuals and married couples filing jointly. This means that if your total state and local tax payments exceed this amount, you can only deduct up to $10,000 when calculating your federal taxes, which can impact your overall tax liability.