So currently I just take the standard deduction of 30k. It the salt tax gets raised to 40k I would then itemize and now I could deduct property taxes, local sales tax?

Could I also include the interest I paid on my mortgage? If so I’d go from 30k deduction to closer to 70k.

If so an additional 40k at 32% would be $12,800 left in my pocket. That’s a game changer if I’m doing my math right.

This post was edited on 5/22/25 at 9:42 am

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Posted by horsesandbulls

Destin, FL

Member since Jun 2008

5168 posts

Posted on 5/22/25 at 9:44 am to Rize

I believe salt tax phase out limit proposed is 500k AGI. I don’t know many people making under 500k that also are paying 40k in property and local taxes. Kudos to you if you are keeping track of receipts for sales tax and didn’t buy a car.

You should have been reporting mortgage interest all along on your sch A even if you took the standard. Likely would have qualified to itemize if your property taxes, sales tax and mortgage interest will allow you to get an 85k deduction instead of the standard after the rule goes into place. (If 40k is the salt, in prior years it would only be 10k, so you would have been able to realize 55k in itemized deductions)

As always, consult with a tax professional as I may be missing something here and am just a dumbass on a message board.

This post was edited on 5/22/25 at 9:47 am

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Posted by Mingo Was His NameO

Brooklyn

Member since Mar 2016

37536 posts

Posted on 5/22/25 at 9:50 am to horsesandbulls

quote:
Likely would have qualified to itemize if your property taxes, sales tax and mortgage interest will allow you to get an 85k deduction instead of the standard after the rule goes into place. (If 40k is the salt, in prior years it would only be 10k, so you would have been able to realize 55k in itemized deductions)

Huh?

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Posted by Mingo Was His NameO

Brooklyn

Member since Mar 2016

37536 posts

Posted on 5/22/25 at 10:04 am to Rize

quote:
So currently I just take the standard deduction of 30k. It the salt tax gets raised to 40k I would then itemize and now I could deduct property taxes, local sales tax? Could I also include the interest I paid on my mortgage? If so I’d go from 30k deduction to closer to 70k.

If I’m understanding you correctly you pay roughly $30k in mortgage interest. If that’s the case, yes with the SALT limit raised, you could take the $40k SALT deduction and deduct the $30k in mortgage interest to raise your deduction from $30k (standard deduction for MFJ) to $70k of itemized deductions.

You still should have itemized before though if you pay $30k in mortgage interest because you could have taken that last year and $10k of SALT so you’d still be over the standard

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Posted by Rize

Spring Texas

Member since Sep 2011

18877 posts

Posted on 5/22/25 at 10:13 am to Mingo Was His NameO

quote:
If I’m understanding you correctly you pay roughly $30k in mortgage interest. If that’s the case, yes with the SALT limit raised, you could take the $40k SALT deduction and deduct the $30k in mortgage interest to raise your deduction from $30k (standard deduction for MFJ) to $70k of itemized deductions. You still should have itemized before though if you pay $30k in mortgage interest because you could have taken that last year and $10k of SALT so you’d still be over the standard

I just bought the house and first mortgage payment was January of this year.

I asked AI what my mortgage interest would be on my loan and it said $43,000 but that doesn’t seem correct. If it is I would be able to itemize and take $53,000 vs the standard $30k.

I just checked my statement and it’s $43,000 a year in interest and 10k in salt tax. I could pick up an additional 10k in property taxes if it’s raised to 40k.

This post was edited on 5/22/25 at 10:41 am

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Posted by MSTiger33