It's going to be a long tax season (again) ...
Good news is that many of you may wind up paying less tax.
Here's what's up...
H.R. 7160, the SALT Marriage Penalty Elimination Act, was passed out of the House Rules Committee yesterday. If enacted, the bill would increase the current $10,000 state and local tax (SALT) itemized deduction limitation to $20,000 for married taxpayers filing jointly if their adjusted gross income is less than $500,000.
As currently written:
The increase would apply only to the 2023 tax year; and
The $500,000 AGI threshold would be a cliff, meaning that MFJ taxpayers with $500,000 or more of AGI would still be limited to the $10,000 deduction.
The bill must still be passed by both the full House and the Senate.
What this means is that if your income is less than $500k, the plan should be to write up your tax return as soon as possible and give you a decent estimate of where your taxes will land. And then we put it on hold, pending whether or not this bill moves forward. If it does, it can mean real tax savings for you.
Please let me know if you have questions.