A lot of taxpayers will see their taxes drop as a result of the tax law passed in 2018. However, some families will see an increase in taxes. One of the main triggers for a tax increase is the new cap on the state and local tax (SALT) deduction.
Previously, families could deduct an unlimited amount of property taxes and state taxes. Under the new law, the deduction for those “SALT” taxes is capped at $10,000.
For example, let’s say a family pays $12,000 in state taxes and $8,000 in property taxes. They will only be able to deduct $10,000 of the $20,000 they’ve paid in SALT taxes. If they have a 30% marginal tax rate, they’re going to pay $3,000 more in tax compared to previous years.
If you have more than $10,000 of SALT, here are a few ways to potentially mitigate the lost deductions:
- GA Heart program
- GA Apogee/GA GOAL programs
- GA film tax credits
Talk to your tax preparer to see if these programs may help reduce your 2019 tax bill. If you have questions, we are here to help!