--(BUSINESS WIRE)--Wolters Kluwer Tax & Accounting:
What: The Tax Cuts and Jobs Act (TCJA) put a limit of $10,000 on the itemized deduction for state and local taxes, including state and local income taxes and property taxes. However, the TCJA also increased the standard deduction. A number of states are taking action to try to preserve the deduction.
Why: Taxpayers need to understand how the new limit on the state and local tax deduction might affect them.
- Since individual taxpayers have a choice between itemizing deductions or taking the standard deduction, itemized deductions could be utilized by fewer people with TCJA’s increase in standard deduction
- For those individual taxpayers whose itemized deductions still potentially exceed the standard deduction, TCJA’s limit on the state and local tax (SALT) deduction of $10,000 per year, for both single and joint filers, will impact those taxpayers with a higher SALT, most frequently those in higher tax states
- Some states have or are trying to enact legislation to create alternatives to preserve the deduction, such as through contributions to a state charity or payroll tax deductions
- IRS has announced that they may issue regulations challenging the effectiveness of these state actions to preserve the deduction
Who: Tax expert Mark Luscombe, JD, LL.M, CPA, Principal Federal Tax Analyst at Wolters Kluwer Tax & Accounting, is available to discuss the state and local tax deduction and related tax issues in more detail.
Contact: To arrange interviews with Mark Luscombe or other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact:
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