How does the SALT deduction cap affect me?

The SALT cap limits how much state and local tax (income or sales tax plus property tax) you can deduct on a federal itemized return to $10,000 per year, whether you're single or married filing jointly. This mainly hurts homeowners and high earners in high-tax states like California, New York, and New Jersey, who often pay far more than $10,000 in state income and property taxes combined but can only deduct $10,000. The cap is a big reason many households that used to itemize now take the standard deduction instead. If you own a business, some states offer a pass-through entity tax workaround that effectively moves the deduction to the business return. To see whether itemizing still beats the standard deduction for you, try wealthserene.com/tools/tax-strategies.