Maybe the least popular change brought about by the Tax Cuts and Jobs Act (TCJA) was a first-ever cap on the federal personal income tax deduction for state and local taxes (SALT).

During 2018 through 2025, there is a $10,000 cap on deductions for the total of the following:1

state income taxes, or general sales taxes if elected instead of income taxes,

state real property taxes, and

personal property taxes.

Thus, for example, if you live in a high-tax state such as California or New York and owe $10,000 or more in property tax, that tax by itself will use up your $10,000 deduction. You’ll get no federal deduction at all for the substantial state income taxes you doubtlessly pay.

States have tried several workarounds to the SALT cap, with poor results.2

But there is now one workaround available to pass-through business owners in a majority of states that really works: electing to have your pass-through business pay ... Log in to view full article.