Under the new plan, taxpayers who itemize will be able to deduct their state individual income, sales and property taxes up to a limit of $10,000 in total starting in 2018.
Currently the deduction is unlimited. But filers have to choose to deduct either individual income taxes or sales taxes. For most people, deducting income taxes is more beneficial (unless of course you live in a no income tax state). In addition, property taxes were also entirely deductible.
While elements of the tax plan could help offset the lower threshold, like the nearly doubled standard deduction, expanded child care credits and lower individual tax rates, they won’t necessarily be enough to make up for the loss of tens of thousands of dollars in SALT deductions that some filers would be losing.
Who claims the SALT?
Almost 90% of the SALT benefit goes to taxpayers with income higher than $100,000, according to the Tax Foundation.
Less than a third of taxpayers itemize deductions to begin with. Of those who do, nearly all of them take the SALT deduction.
SALT deductions: Making sense of new state and local tax caps – Dec. 20, 2017