When the One Big Beautiful Bill Act was signed into law on July 4th, 2025, one of its most talked about tax provisions was the increase in the State and Local Tax (SALT) deduction cap from $10,000 to $40,000.

Greetings from Killingsworth Spencer, Lynn Spencer here. As 2025 progressed, some taxpayers adjusted their withholding and estimated tax payments on the expectation they would be entitled to the full $40,000 deduction. However, when tax season arrived, many discovered that qualifying for the full amount was not as straightforward. Income-based phase-outs reduce the allowable deduction for many higher income households, leaving tax balances due higher than expected.

For GA taxpayers, there was another surprise. Even those who qualified for the full deduction discovered that GA did not conform to the federal change. Amounts deducted above Georgia’s allowable limit were added back when calculating GA taxable income.

While the increase in the SALT cap provided relief for some taxpayers, the actual benefit depends on income levels, state conformity rules, and other technical provisions that were missed in the headlines. This is where proactive tax planning can make a significant difference.

Killingsworth Spencer’s CPAs can model tax impacts so that 2026 tax bills are planned rather than discovered in April 2027. In certain cases, planning identifies opportunities within existing tax laws as well as entity level tax elections for business owners that can mitigate the impact of SALT cap limitations on the overall tax burden. Pass Through Entity Tax (PTET), is an elective strategy allowable in GA that legally bypasses the federal cap on SALT deductions. While using it reduces taxes, it can be complicated.

Killingsworth Spencer in Roswell, GA, is dedicated to helping taxpayers in Fulton and Cobb Counties determine the best tax options for their particular circumstances. For more information on any tax matter or to schedule an appointment, please call us at 770-552-8286. Visit us at www.killingsworthspencerllc.com

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