How to maximize the bigger SALT deduction for 2025 under Trump’s ‘big beautiful bill’

How to maximize the bigger SALT deduction for 2025 under Trump’s ‘big beautiful bill’

Published Tue, Dec 2 2025

8:30 AM EST

Key Points

• President Donald Trump's "big beautiful bill" increased the SALT deduction limit to $40,000 for 2025, up from $10,000 in 2024.
• The cap reverts to $10,000 in 2030, which leaves five years to leverage the bigger tax break.
• Experts cover strategies to maximize the larger SALT deduction limit before year-end.

Greg Hinsdale | The Image Bank | Getty Images

If you live in a high-tax state, you could see some relief from income and property levies for 2025 — thanks to a change enacted via President Donald Trump's "big beautiful bill."

The Republicans' multitrillion-dollar legislation temporarily raised the limit for the federal deduction for state and local taxes, known as SALT.

For 2025, the SALT deduction cap is $40,000, up from $10,000 in 2024, which includes state and local income taxes and property taxes. You can claim the SALT deduction if you itemize tax breaks.

While the $40,000 limit increases by 1% yearly through 2029, the cap reverts to $10,000 in 2030 — which leaves five years to leverage the bigger tax break.

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"I definitely have been reaching out to clients that have historically high state and local taxes," said certified financial planner JoAnn May at Forest Asset Management in Riverside, Illinois. She is also a certified public accountant.

Most taxpayers can't claim the SALT deduction because 90% of filers don't itemize, according to the latest IRS data. However, the tax break primarily benefits higher-earning homeowners, experts say.

Residents of New York, California, New Jersey, Massachusetts and Connecticut could see the biggest tax break from the higher SALT limit, according to a September analysis from Redfin. The real estate site estimated median resident savings in each of those states could be more than $3,000.

If you qualify for the higher SALT deduction for 2025, here's how to maximize the tax break before year-end, according to financial experts.

'Load up on deductions'

One of the challenges of claiming the SALT deduction is that your itemized tax breaks — including SALT, charitable gifts, the medical expense deduction, among others — must exceed the standard deduction. For 2025, the standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly.

One way to exceed those thresholds could be to "load up on deductions," such as prepaying your property taxes for 2026 before year-end, according to CFP Abigail Rose, director of tax planning for Keeler & Nadler Family Wealth in Dublin, Ohio.  

That could be coupled with a bigger 2025 charitable gift via a so-called donor-advised fund, said Rose, who is also a CPA. Transferring money to a donor-advised fund provides an upfront tax break, but functions like a charitable checkbook for future gifts.

Beware of the 'SALT torpedo'

For 2025, the $40,000 SALT deduction limit starts to phaseout, or get smaller, once your modified adjusted gross income exceeds $500,000. After you pass $600,000, the SALT deduction cap drops to $10,000. 

When earnings fall between $500,000 and $600,000, you could be subject to what some experts are calling a "SALT torpedo," or artificially high tax rate, as you increase income but lose part of the deduction.

"You really have to run the numbers," said May from Forest Asset Management. But "there is some interesting planning for that."

For example, self-employed taxpayers could shift the timing of income and expenses, which could reduce MAGI for 2025, if needed, she said. Of course, that is more difficult for W-2 employees.

However, if you're on the edge of the MAGI thresholds, you may avoid selling investments or making year-end Roth individual retirement account conversions, which boost income, experts say.  

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