What is the “SALT cap”?

Posted bydonovannilesPosted inUncategorizedTags:, , , ,

Generally, you may take an itemized deduction, subject to limitations, for certain state, local, and foreign taxes you pay even if you did not pay the tax while in a trade or business or while carrying on a for-profit activity. You deduct the tax in the taxable year you pay them.

The categories of deductible taxes are:

  • State, local, and foreign income taxes or state and local general sales taxes in lieu of state and local income taxes
  • State and local real property taxes, and
  • State and local personal property taxes.

Overall Limit

As an individual, your deduction of state and local income, general sales, and property taxes is limited to a combined total deduction of $10,000 ($5,000 if married filing separately). 

Nondeductible Taxes

You may not deduct certain taxes and fees on Schedule A, including but not limited to:

  • Federal income taxes.
  • Social security taxes.
  • Transfer taxes (such as taxes imposed on the sale of property).
  • Stamp taxes.
  • Homeowner’s association fees.
  • Estate and inheritance taxes.
  • Service charges for water, sewer, or trash collection.

Published by donovanniles

I was born in Hollywood Florida in 1992 and have enjoyed living in South Florida for 28 years. As a typical Floridian, I enjoy outdoor activites such as gardening, fishing, boating, hunting, and anything else I can enjony under the Florida Sunshine. I am also a reef aquarium hobbyist for over a decade now, with success in aquaculturing corals. I am captivated by butterfly gardens, beekeeping, urban farming, and aquaponics. I am currently pusuing my Certificed Public Account certification and I soon hope to begin my journey learning to be a Master Gardener in the State of Florida.

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