Property Tax Deduction Calculator 2025 β SALT Cap $10,000
Calculate your SALT deduction with the $10,000 cap. Enter property tax, state income tax, and local taxes to see how much is deductible and your tax savings.
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Can use instead of income tax (whichever is higher) $0
SALT Deduction (Capped)
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Total SALT Before Cap
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Lost to Cap
$0
Federal Tax Savings
SALT Deduction Breakdown
How to Use This SALT Deduction Calculator
Enter your annual property taxes and state income taxes paid. The calculator determines the optimal combination (income tax vs sales tax) and applies the $10,000 SALT cap. The result shows your actual deduction and how much was limited by the cap.
The Formula
State taxes = max(state income tax + local tax, state sales tax)
Total SALT = property tax + state taxes
SALT cap = $10,000 (single/MFJ) or $5,000 (MFS)
Allowed SALT deduction = min(Total SALT, cap)
Tax savings = allowed SALT deduction Γ marginal tax rate
Total SALT = property tax + state taxes
SALT cap = $10,000 (single/MFJ) or $5,000 (MFS)
Allowed SALT deduction = min(Total SALT, cap)
Tax savings = allowed SALT deduction Γ marginal tax rate
Example
Homeowner in New Jersey, 24% bracket:
Property tax: $12,000 | State income tax: $6,000
Total SALT: $18,000
SALT cap: $10,000
Amount lost to cap: $8,000
Tax savings on $10,000 deduction at 24%: $2,400
Without cap: would have saved $4,320
Property tax: $12,000 | State income tax: $6,000
Total SALT: $18,000
SALT cap: $10,000
Amount lost to cap: $8,000
Tax savings on $10,000 deduction at 24%: $2,400
Without cap: would have saved $4,320
Extended
SALT Workaround Strategies
Pass-through entity tax, timing strategies, and state-by-state SALT cap impact
Strategies to reduce your federal tax burden despite the SALT cap.
SALT Cap Impact by State
| State | Avg Property + Income Tax | Amount Above Cap | Annual Tax Cost of Cap |
|---|---|---|---|
| New Jersey | $22,000 | $12,000 | $2,880β$4,440 |
| California | $18,000 | $8,000 | $1,920β$2,960 |
| New York | $20,000 | $10,000 | $2,400β$3,700 |
| Connecticut | $16,000 | $6,000 | $1,440β$2,220 |
| Illinois | $14,000 | $4,000 | $960β$1,480 |
| Texas | $9,500 | $0 | No impact |
| Florida | $5,000 | $0 | No impact |
SALT Workaround Strategies:
1. Pass-Through Entity Tax (PTET): Available in 30+ states. S-Corps and partnerships pay state tax at entity level β fully deductible as business expense. Saves 37 cents per dollar of state tax at the top rate.
2. Charitable remainder trust: Donate appreciated assets, get income stream + deduction.
3. Timing property tax payments: Prepay next year's property taxes in December (if assessment is due and amount is known). But AMT rules may limit this strategy.
4. Home office deduction: Business portion of property taxes may be deductible as business expense, bypassing SALT cap.
1. Pass-Through Entity Tax (PTET): Available in 30+ states. S-Corps and partnerships pay state tax at entity level β fully deductible as business expense. Saves 37 cents per dollar of state tax at the top rate.
2. Charitable remainder trust: Donate appreciated assets, get income stream + deduction.
3. Timing property tax payments: Prepay next year's property taxes in December (if assessment is due and amount is known). But AMT rules may limit this strategy.
4. Home office deduction: Business portion of property taxes may be deductible as business expense, bypassing SALT cap.
Frequently Asked Questions
What is the SALT deduction cap?
The State and Local Tax (SALT) deduction is capped at $10,000 per year ($5,000 for married filing separately) under the Tax Cuts and Jobs Act. This limit applies to the combined total of property taxes plus either income taxes or sales taxes β whichever combination is higher. The cap is set to expire after 2025 without further legislation.
Can I deduct both property tax and state income tax?
Yes, but together they cannot exceed the $10,000 SALT cap. You can deduct property taxes plus state and local income taxes (or state sales taxes, whichever is larger), but the combined deduction is limited to $10,000. Most homeowners in high-tax states like CA, NY, NJ, and IL hit this cap easily.
Is the SALT deduction only for homeowners?
The property tax portion requires property ownership, but renters can still deduct state income taxes and local taxes up to the $10,000 cap if they itemize. However, most renters use the standard deduction ($15,000 single, $30,000 MFJ in 2025), which exceeds their total itemized deductions, making the SALT deduction irrelevant.
What are SALT workarounds for business owners?
About 30+ states have Pass-Through Entity Tax (PTET) laws that let partnerships and S-Corps pay state tax at the entity level, which is deductible as a business expense (not subject to the $10K SALT cap). This is the most widely used SALT workaround for self-employed and business owners, potentially saving 37% federal tax on state taxes paid.
Should I itemize or take the standard deduction?
Itemize only if your total itemized deductions exceed the standard deduction ($15,000 single / $30,000 MFJ in 2025). With the SALT cap at $10,000, you need significant mortgage interest, charitable contributions, or other deductions to beat the standard deduction. Run both scenarios β this calculator shows your SALT deduction even if you end up taking the standard deduction.