By Jeffrey R. Wolfe, Senior Vice President, Manager of Wealth Planning StrategiesPrint This Post
The Tax Cuts and Jobs Act has been touted as a way to help taxpayers keep more of their money and to make the tax filing system easier. However, with a big change in the deductibility of state and local taxes (“SALT”), there are a few clouds in the clarity of the new rules.
Before the changes, individuals could deduct all of their SALT taxes on their federal return. Under the new rules, SALT deductions are limited to $10,000. Moreover, the $10,000 deduction must be either for property taxes, state income taxes or state sales taxes. These limitations may greatly affect tax payers in higher tax states, and may cause individuals to use the standard deduction versus itemized deductions going forward.
Benjamin F. Edwards & Co. does not provide tax advice, therefore it is also important to consult with your tax professional for additional guidance tailored to your specific situation.