The SALT deduction cap jumped from $10,000 to $40,000 in 2025. If you own a home and pay more than $10,000 in property taxes and state income taxes combined, you could save thousands on your federal tax return this year. This is a temporary win through 2029, so let’s make sure you’re taking full advantage of it.

Greetings, Lynn Spencer here. Let me break down this good news and why it likely matters for your wallet.

What Just Happened with SALT?

SALT stands for “State and Local Taxes”, basically, the amount you can deduct on your federal tax return for state income taxes and property taxes combined. For years, this deduction was capped at $10,000, which didn’t go very far if you owned a home in Roswell, Alpharetta, Milton, Johns Creek, Marietta, and Sandy Springs.

As of 2025, thanks to the One Big Beautiful Bill Act (OBBBA), that cap just skyrocketed to $40,000 for individuals and couples filing jointly. For those filing separately, it’s $20,000.

This change means you may potentially now deduct up to four times as much as before.

The Income Limits: Who Qualifies?

Here’s the catch (because there’s always a catch, right?): The full $40,000 deduction is available if your Modified Adjusted Gross Income (MAGI) is under $500,000 (Married Filing Joint).

If your MAGI is above $500,000, there is a phase-out of the MAGI deduction. Here is an example:

  • MAGI of $550,000: You are $50,000 over the limit (MFJ). The phase-out is 30% of $50,000, which is $15,000. So, your SALT cap drops from $40,000 to $25,000.
  • MAGI of $600,000 or higher: The deduction completely phases out and reverts back to the old $10,000 cap.

Should You Itemize or Take the Standard Deduction?

Good question. For 2025, the standard deduction is:

  • $15,750 for single filers
  • $31,500 for married couples filing jointly

If your total itemized deductions (SALT + mortgage interest + charitable contributions + medical expenses) exceed those amounts, itemizing makes sense. With the new SALT cap, many more people in our community will find that itemizing may save them money.

This isn’t a one-size-fits-all answer. Everyone’s situation is different, and the devil is in the details. That’s why it’s worth sitting down with a local CPA who knows the tax landscape.

What You Should Do Right Now

  1. Gather your documents. Pull together your 2025 property tax statements, your 2024 tax return, and your tax statements for 2025.
  1. Do the math. Add up your total SALT expenses. If they exceed $10,000 (for many homeowners in our area, they do), you may benefit from the new cap.
  1. Talk to a CPA. Don’t leave money on the table. A quick consultation can help you understand exactly how much you’ll save and whether there are other strategies you should consider.
  1. Plan ahead. If you’re close to the $500,000 MAGI threshold, we can help you strategize.

At Killingsworth Spencer, we’ve been helping families and businesses in North Fulton, Gwinnett, and Cobb counties since 2001, and our CPAs, Enrolled Agents, and tax experts are committed to making sure our clients keep more of what they earn. You can reach us at (770) 552-8286 or shoot us an email through our website at info@killingsworthspencerllc.com.

Disclaimer: This post is for general information only and should not be taken as legal or financial advice.