For years, homeowners in high-tax states have complained about the $10,000 cap on State and Local Tax (SALT) deductions. It felt like a penalty for living in a nice neighborhood with good schools. Washington finally moved the needle, and the new tax legislation has technically raised that cap to $40,000 for the tax year we are filing now. On the surface, this sounds like a victory.
You might be ready to celebrate and text your accountant. Before you spend that refund mentally, however, you need to read the fine print. There is a phase-down clause in this new rule that most headlines are ignoring. If you earn over a certain amount, this relief might actually cost you more than you think.
