If you itemize your deductions, the aggregate amount of State and Local Taxes shall not Exceed $10,000.
SALT TAXES ARE: State and Local Taxes are Real Estate Taxes, State and Local Income Taxes, State and Local Personal Property taxes.
Based on our experience from the 2019 tax season (2018 Form 1040), the $10,000 SALT limitation forced many taxpayers to use the Standard Deduction.
For your 2019 Form 1040 The Standard Deductions per the IRC are:
|Married Individuals Filing Joint Returns||$ 24,000|
|Heads of Households||$ 18,350|
|Unmarried Individuals||$ 12,200|
|Married Individuals Filing Separate Returns||$ 12,200|
E Ten Broeck predictions:
Due to the fact that taxpayers who used to itemize are now forced into the Standard Deduction, I have the following predictions:
- Charitable deduction: There will be a decline in charitable giving.
- Mortgage Interest Deduction: There will be a decline in Home Ownership, more taxpayers will consider renting verses owning a home. Same applies to Real Estate Taxes.
- SALT Taxes: Taxpayers will consider moving to states that offer lower lower real estate and income taxes.
- Employee Business Expense Deduction: Employees with high out-of-pocket expenses will form LLC’s.
- Investment Interest Deduction: Investors will seek lower fees, and/or use discount brokers.