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If you’re a homeowner—or thinking about becoming one—there’s great news from Washington. Thanks to the 2025 tax reform, you can now deduct up to $40,000 in state and local taxes (SALT), including property taxes. That’s four times the previous cap of $10,000!
💡 Why This Matters
Before this change, many homeowners in high-tax states like California couldn’t deduct all their property taxes. Now, with the higher SALT cap, more people may benefit from itemizing deductions instead of taking the standard deduction.
For 2025, the standard deduction is:
• $15,750 for single filers
• $31,500 for married couples filing jointly
• $23,625 for heads of household
If your deductible expenses exceed these amounts, itemizing could lower your taxable income—and your tax bill.
🧾 What Can You Deduct?
When itemizing on IRS Form 1040 Schedule A, you can include:
• State and local taxes (SALT) – including property taxes
• Mortgage interest
• Charitable donations
• Medical/dental expenses (above a certain threshold)
• Private mortgage insurance premiums (now deductible again)
🏠 Why It’s a Win for Homeowners
The ability to deduct mortgage interest and property taxes has long made homeownership more affordable. This reform helps restore that benefit, especially in areas with higher property values and tax rates.
✅ Pro Tips
• Keep receipts and records for all deductible expenses.
• Talk to a tax professional to see if itemizing makes sense for you.
• Stay informed—this SALT increase is temporary and may change after 2029.
