Tuesday, December 12, 2017

SALT Deduction May Remain with $10K Limit

Californians still might retain their ability to deduct state and local taxes from their federal returns under the Republican overhaul -- but with a catch. The total annual deduction would be capped at $10,000, which is the same level as a limited deduction for property taxes that both the House and Senate plans already include. That cap is only about half the size of the average state and local tax deduction for Californians who claim it. Republican congressional leaders said that they are considering the change to their tax overhaul legislation as negotiations begin over the final version.

More

Separate bills that passed the House and Senate both eliminated the state and local income tax deduction, a big blow to many residents of California and other high-tax states.

But the bills retained the deduction for property taxes, subject to the new limit of $10,000.

House and Senate negotiators now are trying to reconcile the two bills in hopes of enacting the tax overhaul by Christmas.

Some California House Republicans, including Majority Leader Kevin McCarthy (R-Bakersfield), are advocating opening the $10,000 property tax deduction to state and local income taxes to help constituents who claim it.

Comments

This will likely be the final outcome on this issue, with many other adjustments to follow.

You can now resume circle flapping over the remaining undecided issues.

#1 | Posted by Rightocenter at 2017-12-11 02:06 PM

So an individual who has a home valued at more than 2 million has to pay more taxes. Cry me a river.

#2 | Posted by docnjo at 2017-12-11 06:09 PM

That is a tear jerker doc. I do feel for them. NOT!!!

#3 | Posted by Sniper at 2017-12-12 01:45 PM

I like caps on deductions. It's gives the benefit to the people who are meant to benefit from it, and stops the very wealthy from getting an unreasonable level. The reason we needed the AMT was because deductions aren't capped.

#4 | Posted by LEgregius at 2017-12-12 05:22 PM

So an individual who has a home valued at more than 2 million has to pay more taxes. Cry me a river.
#2 | POSTED BY DOCNJO
That is a tear jerker doc. I do feel for them. NOT!!!
#3 | POSTED BY SNIPER

Actually, if you and your spouse each make $60,000 and own a home worth about $200,000, you'll hit the SALT limit of $10,000 or be quite close.

You should probably not post anymore. It's getting embarrassing.

#5 | Posted by Sycophant at 2017-12-12 05:23 PM

Syco is pretty much dead on. And while it will hurt me personally, its the right thing to do. State and local taxes have been added for years with the understanding that those taxes would be deducted from Federal taxes. If you are in a high tax State like New York, and have a decent CPA, you are probably not paying much of anything in net Federal Income Tax after deducting all the local taxes. Personally, I think if anything, there should be absolutely no connection between Federal, State and Local taxes. And mortgage deductions should be limited and gradually phased out altogether.

#6 | Posted by bogey1355 at 2017-12-12 05:45 PM

while it will hurt me personally, its the right thing to do

Not when it's being "done" to pay for the biggest giveaway to the wealthy in history.

#7 | Posted by JOE at 2017-12-12 05:51 PM

That is a tear jerker doc. I do feel for them. NOT!!!

#3 | Posted by Sniper

Yet you're so concerned about the kids of the wealthy having to earn their own money that you're willing to blow up the deficit in order to get rid of the estate tax.

#8 | Posted by SpeakSoftly at 2017-12-12 06:50 PM

I guess I don't get it. (Also is the 10K per person or per return if filing married couple?).

SALT deduction will be allowed up to 10K but if standard deduction for married couple is 24K who will be claiming the 10K deduction?

#9 | Posted by rosemountbomber at 2017-12-12 09:43 PM

I need to reduce my salt intake too.

#10 | Posted by LauraMohr at 2017-12-12 09:45 PM

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