In this episode, Ed and Dan explain recent changes to the State and Local Tax (SALT) deduction following the passage of the One Big Beautiful Bill Act of 2025. The law significantly increases the SALT deduction cap beginning in 2025 and introduces income phaseout rules for higher-income taxpayers. This episode reviews how the updated limits work, who may benefit, and what federal employees and retirees should understand when reviewing itemized deductions.
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FedLife Podcast (Ep.165): SALT Deduction Changes Explained
Join us as Dan and Ed break down how the updated SALT deduction rules may affect taxpayers and highlight key considerations when evaluating itemized deductions under the current tax law.
In this episode, you’ll learn:
• How the SALT deduction cap increased from $10,000 to $40,000 under the new law
• The income phaseout rules that may reduce the deduction for higher-income taxpayers
• What taxes qualify for the SALT deduction, including income, property, and sales taxes
• How the cap will adjust annually before reverting to the prior limit in 2030
• Examples showing how modified adjusted gross income (MAGI) affects the allowable deduction
• Additional considerations related to reporting state and local taxes on Schedule A
Source Article: https://stwserve.com/salt-deduction-changes-how-the-40000-cap-impacts-high-income-feds/
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