Salt Deduction Calculator

Estimate your potential State and Local Tax (SALT) deduction for federal income tax purposes.

State Income Tax Paid ($):
Local Income Tax Paid ($):
State Sales Tax Paid ($):
Local Sales Tax Paid ($):
Real Estate Property Taxes Paid ($):
Personal Property Taxes Paid ($):
Tax Filing Status: Single Married Filing Jointly Head of Household Married Filing Separately Qualifying Widow(er)

Your Estimated SALT Deduction:

Enter your tax amounts and filing status above to calculate your potential SALT deduction.

Understanding the SALT Deduction and Its Cap

The State and Local Tax (SALT) deduction is a valuable itemized deduction that allows taxpayers to reduce their taxable income by the amount of state and local taxes they've paid during the year. This can include income taxes, sales taxes, and property taxes. For many homeowners and residents in high-tax states, the SALT deduction has historically been a significant tax benefit.

What Taxes Are Included in SALT?

Generally, the SALT deduction allows you to deduct a combination of:

State and Local Income Taxes: This includes taxes withheld from your paycheck or estimated tax payments made to your state and local governments.
State and Local Sales Taxes: Instead of deducting income taxes, you can choose to deduct state and local sales taxes. The IRS provides tables to help estimate sales tax deductions if you don't have detailed records, or you can deduct the actual amount if you kept receipts. You cannot deduct both state income tax and state sales tax; you must choose one.
Real Estate Property Taxes: Taxes paid on your primary residence and any other real estate you own.
Personal Property Taxes: Taxes paid on items like vehicles, boats, or other personal assets, provided they are assessed annually and based on the value of the property.

It's important to note that you can only deduct taxes you actually paid during the tax year. For instance, if you paid your 2023 property taxes in January 2024, they would be deductible on your 2024 tax return, not your 2023 return.

The $10,000 Cap

Prior to the Tax Cuts and Jobs Act (TCJA) of 2017, there was no federal limit on the amount of state and local taxes an individual could deduct. However, the TCJA introduced a significant change: it capped the SALT deduction at $10,000 per household ($5,000 for married individuals filing separately). This cap applies to the combined total of all eligible state and local income, sales, and property taxes.

This cap has had a substantial impact, particularly on taxpayers in states with high property values and high state income tax rates, such as California, New York, New Jersey, and Massachusetts. Many taxpayers in these areas now find that their total state and local tax payments far exceed the $10,000 limit, meaning they can only deduct a portion of what they actually paid.

How the Calculator Works

Our SALT Deduction Calculator helps you estimate your potential deduction by summing up your reported state and local tax payments. It then applies the federal $10,000 cap (or $5,000 for married filing separately) to determine your maximum deductible amount. The calculator will show you:

The total amount of eligible state and local taxes you entered.
The SALT deduction cap applicable to your chosen filing status.
Your estimated federal SALT deduction, which will be the lesser of your total eligible taxes or the cap.

Example Scenarios:

Let's look at a few examples to illustrate how the cap works:

Example 1: Below the Cap

State Income Tax Paid: $3,000
Real Estate Property Taxes Paid: $2,500
Total Eligible Taxes: $5,500
Filing Status: Single (Cap: $10,000)
Estimated Deduction: $5,500 (Since $5,500 is less than $10,000)

Example 2: Above the Cap (Single/Joint Filer)

State Income Tax Paid: $8,000
Real Estate Property Taxes Paid: $4,000
Total Eligible Taxes: $12,000
Filing Status: Married Filing Jointly (Cap: $10,000)
Estimated Deduction: $10,000 (Since $12,000 is greater than $10,000, the deduction is capped)

Example 3: Above the Cap (Married Filing Separately)

State Income Tax Paid: $7,000
Real Estate Property Taxes Paid: $3,000
Total Eligible Taxes: $10,000
Filing Status: Married Filing Separately (Cap: $5,000)
Estimated Deduction: $5,000 (Since $10,000 is greater than $5,000, the deduction is capped)

This calculator is a helpful tool for preliminary planning, but tax laws can be complex and change frequently. Always consult with a qualified tax professional for advice tailored to your specific financial situation.