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Painting Business Owners: What to Expect for Itemized Deductions in 2025. #SmallBusinessTax

Name: Painting Business Owners: What to Expect for Itemized Deductions in 2025. #SmallBusinessTax
Uploaded: 2025-02-10T14:15:06+00:00
Duration: 56 s
Channel: Daniel Honan
Description: In this segment, the speaker discusses one of the most criticized provisions of the Tax Cuts and Jobs Act—the $10,000 limit on the state and local tax…

10 Feb 2025 · 1 min

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In this segment, the speaker discusses one of the most criticized provisions of the Tax Cuts and Jobs Act—the $10,000 limit on the state and local tax (SALT) deduction. The cap means that regardless of how much a taxpayer pays in property taxes or state income taxes, only up to $10,000 can be deducted when itemizing. The speaker explains how this restriction, combined with the doubled standard deduction, has forced many taxpayers—especially those in high‑tax states who previously benefited from large mortgage‑interest deductions—to switch to the standard deduction. While using the standard deduction simplifies tax filing, it also means that taxpayers who continue to pay substantial state and local taxes may be missing out on potential deductions. The speaker expresses hope that the SALT cap might be removed in the future, which would allow residents of states like New York, California, and New Jersey to reclaim larger itemized deductions.

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one of the more uglier parts of Tax Cuts and Jobs Act was the $10,000 limit on the state and local tax deduction, often referred to as the SALT deduction. What that meant is no matter how much you paid in property taxes or state income tax, the most you could itemize was $10,000. And that actually pushed a lot of people into using the standard deduction. I used to itemize because I had a lot of mortgage interest and I live in a higher tax state. But after that cap, and the doubling of the standard deduction, I found myself using the standard. It does make your tax reporting a little bit easier because you don't have to fill out an extra schedule. But if you are paying a lot of state and local taxes, you're probably missing out because of that cap. We are hoping that cap will be removed. If you are in a fellow high-tax state like New York, California, New Jersey, you might be able to see a little bit more of a deduction moving forward.