The American representative Josh Gottheimer (D-NJ) speaks during a press conference on the Salt Caucus outside the Capitol of the United States on Wednesday 08 February 2023 in Washington, DC.
MATT MCCLAIN | The Washington Post | Getty images
While the debates increase for the president Donald Trumpthe political agenda, modifies a Key Tax Presentation Could benefit higher employees, say the experts.
Adopted via the Tax on tax reductions and jobsor TCJA, from 2017, there is a Limit of $ 10,000 On the federal deduction on state and local taxes, known as salt, which sunset after 2025 without action of the congress.
Currently, if you detail tax lounges, you cannot deduct more than $ 10,000 in levies paid to the governments of states and premises, including income and equity taxes.
Raise the salt cap at been a priority For some legislators of high tax states such as California, New Jersey and New York. With a thin republican majority, these voices could have an impact on negotiations.
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While Trump promulgated the salt ceiling of $ 10,000 in 2017, he Reversed his position On the campaign path last year, promising to “recover salt” if it is re -elected. He has renewed calls for reform since his enslavement.
Legislators have launched several updates, including a complete repeal, which seems unlikely with a tight budget And several competing priorities, say the experts.
“Everything must meet in the context of the wider package”, but a higher deduction limit may be possible, said Garrett Watson, director of policies analysis at Tax Foundation.
Here could be touched.
How does salt deduction work
During the tax deposit, you choose the highest of the standard deduction or your detailed deductions, including salt capped at $ 10,000, medical costs above 7.5% of your gross adjusted income, Charitable gifts and others.
From 2018, the law on tax reductions and jobs has doubled the standard deduction and adjusts each year for inflation. For 2025, the standard deduction is $ 15,000 for single declarations and $ 30,000 for married couples jointly.
Due to the high threshold, the vast majority of declarants – approximately 90%According to the latest IRS data – use the standard deduction and do not benefit from detailed tax reductions.
As a rule, detailed deductions increase with higher income and employees tend to owe more in state income and land taxes, according to Watson.
Which benefits from a higher salt limit
Generally, higher employees would benefit the most from the increase in the ledge deduction limit, according to experts.
For example, a proposal, which would remove it “wedding penalty“In federal income taxes, implies increasing the ceiling of the deduction of salt for married couples which deposits jointly from $ 10,000 to $ 20,000.
Which would offer almost all tax lounge to households Make more than $ 200,000 per year, according to a January analysis of the tax policy center.
“If you are increasing the ceiling, the people who benefit the most will have an average of average income,” said Howard Gleckman, principal researcher at the Urban-Brooking Tax Policy Center.
Of course, the upper average income seems different depending on where you live, he said.
Forty of Top fifty districts of the US Congress Imprected by the salt limit can be found in California, Illinois, New Jersey or New York, an analysis of the Bipartisan Policy Center for the 2022 redistribution found.
If the legislators have completely repealed the cap, Households earn $ 430,000 or more would see almost three -quarters of the advantage, according to a distinct analysis of the tax policy center from September.
