2025 SALT Deductions

[Anonymous]

Anonymous wrote:NY CA NJ people: prepay your 2026 prop taxes now before the new year. You’re welcome.

Also, prepay college tuition in December for the spring semester.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With SALT deduction in 2025, that would push us to itemize, and would give us the full benefit of charitable deductions right? (Unlike in 2026, when there are more limitations on charitable deductions.) Trying to get a handle on the full scale of the tax savings.

The limits are pretty loose — you can't deduct the first .05% of your charitable donations. For my family, that knocks off about $200 in deductible donations, but we typically deduct more than $10,000 a year in charitable giving, so I don't really intend to change anything because of that tax change.

Sorry, that's not right — typo. It's first .5%, and we lose about $2,000 in deductible donations. Still not planning to give less.

Thanks — not necessarily about giving less, but I am wondering about doing a DAF in 2025 to take a larger charitable deduction in 2025, then direct the money to charity in future years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With SALT deduction in 2025, that would push us to itemize, and would give us the full benefit of charitable deductions right? (Unlike in 2026, when there are more limitations on charitable deductions.) Trying to get a handle on the full scale of the tax savings.

The limits are pretty loose — you can't deduct the first .05% of your charitable donations. For my family, that knocks off about $200 in deductible donations, but we typically deduct more than $10,000 a year in charitable giving, so I don't really intend to change anything because of that tax change.

Sorry, that's not right — typo. It's first .5%, and we lose about $2,000 in deductible donations. Still not planning to give less.

You’re making $400,000 in donations? Good for you!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With SALT deduction in 2025, that would push us to itemize, and would give us the full benefit of charitable deductions right? (Unlike in 2026, when there are more limitations on charitable deductions.) Trying to get a handle on the full scale of the tax savings.

The limits are pretty loose — you can't deduct the first .05% of your charitable donations. For my family, that knocks off about $200 in deductible donations, but we typically deduct more than $10,000 a year in charitable giving, so I don't really intend to change anything because of that tax change.

Sorry, that's not right — typo. It's first .5%, and we lose about $2,000 in deductible donations. Still not planning to give less.

You’re making $400,000 in donations? Good for you!

Er, no, I misstated the cap. You can’t deduct the first .05 percent of your income in donations.

[Anonymous]

Anonymous wrote:Why is it beneficial to prepay 2026 property taxes? Just trying to understand.

If your state and local taxes (real estate, income taxes, personal property taxes) don’t add up to the limit you can deduct, you can prepay your 2026 taxes to get a bigger deduction. You will have less to deduct next year, though, because it’s cash basis.

[Anonymous]

Those blessed with a house good for you. Some of us have been priced out for awhile.

[Anonymous]

Anonymous wrote:Those blessed with a house good for you. Some of us have been priced out for awhile.

not really, no such thing, you are just not buying. use this salt deduction as part of the savings you will get from your monthly but will be getting it in april.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why is it beneficial to prepay 2026 property taxes? Just trying to understand.

If your state and local taxes (real estate, income taxes, personal property taxes) don’t add up to the limit you can deduct, you can prepay your 2026 taxes to get a bigger deduction. You will have less to deduct next year, though, because it’s cash basis.

Yes, this is why it's only really important to do in 2030 the year before it goes away.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With SALT deduction in 2025, that would push us to itemize, and would give us the full benefit of charitable deductions right? (Unlike in 2026, when there are more limitations on charitable deductions.) Trying to get a handle on the full scale of the tax savings.

The limits are pretty loose — you can't deduct the first .05% of your charitable donations. For my family, that knocks off about $200 in deductible donations, but we typically deduct more than $10,000 a year in charitable giving, so I don't really intend to change anything because of that tax change.

Sorry, that's not right — typo. It's first .5%, and we lose about $2,000 in deductible donations. Still not planning to give less.

Is this something in the OBBBA? Because it isn’t anything that has ever been true before.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With SALT deduction in 2025, that would push us to itemize, and would give us the full benefit of charitable deductions right? (Unlike in 2026, when there are more limitations on charitable deductions.) Trying to get a handle on the full scale of the tax savings.

The limits are pretty loose — you can't deduct the first .05% of your charitable donations. For my family, that knocks off about $200 in deductible donations, but we typically deduct more than $10,000 a year in charitable giving, so I don't really intend to change anything because of that tax change.

Sorry, that's not right — typo. It's first .5%, and we lose about $2,000 in deductible donations. Still not planning to give less.

Is this something in the OBBBA? Because it isn’t anything that has ever been true before.

Yes, it's new.

[Anonymous]

Anonymous wrote:if your MAGI is under $500,000. Phases down to $10,000 if MAGI is over $600,000

And if you itemize. I wonder how many people: 1) have state tax deductions over $10k, 2) make under $600k MAGI, and 3) itemize. In many states, if you itemize federal then you have to itemize state too, and if you're only substantial itemized deduction is state taxes, then you'll get no deduction at all at state level (since state taxes are not deductible on state taxes). That seems like a pretty small universe.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With SALT deduction in 2025, that would push us to itemize, and would give us the full benefit of charitable deductions right? (Unlike in 2026, when there are more limitations on charitable deductions.) Trying to get a handle on the full scale of the tax savings.

The limits are pretty loose — you can't deduct the first .05% of your charitable donations. For my family, that knocks off about $200 in deductible donations, but we typically deduct more than $10,000 a year in charitable giving, so I don't really intend to change anything because of that tax change.

Sorry, that's not right — typo. It's first .5%, and we lose about $2,000 in deductible donations. Still not planning to give less.

Is this something in the OBBBA? Because it isn’t anything that has ever been true before.

Yes, it's a new floor on deductible donations — nothing is deductible until it exceeds .5% of your income, starting in 2026.

[Anonymous]

Anonymous wrote:

Anonymous wrote:if your MAGI is under $500,000. Phases down to $10,000 if MAGI is over $600,000

And if you itemize. I wonder how many people: 1) have state tax deductions over $10k, 2) make under $600k MAGI, and 3) itemize. In many states, if you itemize federal then you have to itemize state too, and if you're only substantial itemized deduction is state taxes, then you'll get no deduction at all at state level (since state taxes are not deductible on state taxes). That seems like a pretty small universe.

Odds are you're itemizing if you're paying mortgage interest, no? Between SALT and interest, that's enough to get us over the standard deduction even before we take charitable donations into account. Especially now that the SALT cap is significantly higher than the standard deduction amount.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:if your MAGI is under $500,000. Phases down to $10,000 if MAGI is over $600,000

And if you itemize. I wonder how many people: 1) have state tax deductions over $10k, 2) make under $600k MAGI, and 3) itemize. In many states, if you itemize federal then you have to itemize state too, and if you're only substantial itemized deduction is state taxes, then you'll get no deduction at all at state level (since state taxes are not deductible on state taxes). That seems like a pretty small universe.

Odds are you're itemizing if you're paying mortgage interest, no? Between SALT and interest, that's enough to get us over the standard deduction even before we take charitable donations into account. Especially now that the SALT cap is significantly higher than the standard deduction amount.

We didn't itemize last year because of the SALT cap, but we will this year. Our property taxes alone (in NJ) are $25K. We make around $350K AGI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:if your MAGI is under $500,000. Phases down to $10,000 if MAGI is over $600,000

And if you itemize. I wonder how many people: 1) have state tax deductions over $10k, 2) make under $600k MAGI, and 3) itemize. In many states, if you itemize federal then you have to itemize state too, and if you're only substantial itemized deduction is state taxes, then you'll get no deduction at all at state level (since state taxes are not deductible on state taxes). That seems like a pretty small universe.

Odds are you're itemizing if you're paying mortgage interest, no? Between SALT and interest, that's enough to get us over the standard deduction even before we take charitable donations into account. Especially now that the SALT cap is significantly higher than the standard deduction amount.

Before the SALT cap was introduced in 2017, 80% of households making between $100-500K were itemizing. After the cap was set at 10K only 22.5% itemized. Raising the cap again is going make a huge difference, especially in this area.