Meta Title: 2025 Tax Changes & SALT Deductions Explained | Pacific Tax
Meta Description: Learn how the 2025 tax changes will affect your state and local tax (SALT) deductions. Get expert insights from Pacific Tax & Financial Group.
A Big Shift Is Coming for Taxpayers in High-Tax States
The 2025 tax year could bring significant changes to your state and local tax (SALT) deductions—especially if you live in a high-income-tax state like California, New York, or New Jersey. With parts of the Tax Cuts and Jobs Act (TCJA) set to expire, it’s important to understand how your deductions and tax strategies may shift.
Recap: What Is the SALT Deduction Cap?
Under the 2017 TCJA, SALT deductions were capped at $10,000 per year. This limitation hit high-income households in high-tax states the hardest, reducing their ability to deduct property taxes and state income taxes.
What Could Change in 2025?
Unless Congress acts, the SALT deduction cap is set to sunset after 2025. That means:
- The $10,000 cap may be lifted or adjusted.
- Taxpayers could deduct the full amount of property and income taxes again.
- The standard deduction may decrease, making itemizing (including SALT) more common.
Who Benefits Most from the Cap Expiring?
- Homeowners in high property tax areas
- Professionals with large state tax bills
- Taxpayers who itemize rather than use the standard deduction
If you’re currently taking the standard deduction because of the cap, a change in 2025 may mean switching back to itemizing—and that means new planning opportunities.
What You Can Do Now
- Review prior returns to see how much you paid in state and local taxes.
- Track your deductions this year in case it makes sense to itemize again.
- Work with a tax advisor to evaluate how the sunset of TCJA provisions affects your strategy.
Stay Ahead of Tax Law Changes with the Right Partner
Don’t get caught off guard by shifting tax laws. At Pacific Tax & Financial Group, we help you plan ahead—whether the SALT cap sticks around or disappears. Schedule your 2025 tax strategy session today.