The Tax Cuts and Jobs Act
(TCJA), P.L. 115-97, limited itemizers' state and local tax (SALT) deductions to $10,000 for tax years 2018 through 2025 (the SALT cap). However, federal policymakers have continued to battle each other and state policymakers over the limit. Although increasing the limit and extending its time frame were part of the Build Back Better Act, H.R. 5376, passed by the House in November 2021, the final version signed into law in August 2022, the Inflation Reduction Act of 2022, P.L.
117-169, included no SALT limit changes. While some lawmakers want complete repeal of the provi-sion, others want to extend it past
2025. With the 2025 sunset getting closer, lawmakers will no doubt continue to raise the issue, and it will remain divisive.
Amid this uncertain prospect, taxpayers will be looking to their CPA tax advisers for guidance on how to plan for the cap's sunset or possible extension, with an eye toward maximizing their deductions under the cap for the 2024 and 2025 tax years. The discussion that follows outlines the possibilities and some sensible approaches.