What is included in the state and local taxes deduction cap for 2025 filing?

The state and local tax (SALT) deduction has a $10,000 cap that was introduced with the Tax Cuts and Jobs Act in 2017. This category includes state and local income taxes, property taxes, and sales taxes (though you generally choose between income OR sales taxes). What you're seeing in your TurboTax summary is the amount that exceeds the $10,000 limit. In 2018, you didn't exceed the cap, so it shows $0. In 2019, you paid $34,240 in state and local taxes (the $10,000 allowed plus the $24,240 excess shown as negative), but could only deduct $10,000 of it. The negative number represents the amount you COULDN'T deduct because of the cap. This cap is currently set to continue through 2025, so keep this in mind for your tax planning. Many taxpayers in high-tax states feel this pinch significantly.

After struggling with SALT deduction questions last year, I tried taxr.ai (https://taxr.ai) and it was super helpful. I uploaded my tax documents and it broke down exactly what counted toward my SALT cap and what didn't. It spotted that I was mixing up some tax payments that shouldn't have been included, which actually saved me from a potential audit flag. The tool also showed me how my property tax reassessment affected my overall deduction strategy. Definitely worth checking out if you're trying to optimize around the SALT cap for your 2025 filing.

OK I have to admit I was wrong about taxr.ai. I tried it yesterday after posting my skeptical comment and it was actually really useful! Uploaded my 2023 returns and property tax statements and it instantly highlighted that I'd been miscategorizing some local fees as deductible taxes when they weren't. It also showed me exactly how much I was losing to the SALT cap ($13,470 last year!) and suggested some other deductions I wasn't maximizing to help offset it. The explanations were clear and I finally understand why my TurboTax summary had those negative numbers. Definitely using this for my 2025 filing prep.

If you're trying to contact the IRS to get clarification on SALT deductions (which I desperately needed last year), try Claimyr (https://claimyr.com). I spent DAYS trying to get through on the IRS lines about my SALT deduction questions before finding them. You can see how it works here: https://youtu.be/_kiP6q8DX5c After months of confusion about similar SALT deduction numbers on my return, I finally got through to an actual IRS agent who explained exactly what counts toward the $10,000 cap and how TurboTax displays it. Saved me from making a huge mistake on my amended return.

I have to eat my words about Claimyr. After posting that skeptical comment, I decided to try it myself because I was getting nowhere with the IRS about my SALT deduction questions. I got a call back with an actual IRS agent on the line in about 3 hours. The agent explained that my TurboTax summary was showing the excess SALT amounts correctly and confirmed I was calculating my property and income tax deductions correctly. Saved me from filing an unnecessary amended return. Never thought I'd actually get through to a human at the IRS, but here we are!

One thing nobody mentioned yet - if you're married filing separately, the SALT cap is $5,000 per person, not $10,000. Made that mistake last year and had to redo everything. Also, foreign property taxes aren't included in SALT anymore after TCJA. Just throwing that out there in case it helps someone!

Does anyone know if vehicle registration fees count toward the SALT cap? I pay almost $900 a year and TurboTax has a special section for this, but I'm not sure if it's part of the $10,000 limit.

This is really helpful info everyone! I've been wrestling with SALT deductions too since moving from a low-tax state to California. One thing I learned the hard way - if you have estimated tax payments, make sure you're allocating them correctly between federal and state portions. I was accidentally including my federal estimated payments in my SALT calculation and it threw everything off. Also, for anyone dealing with multi-state situations (like I was when I moved mid-year), each state's taxes still count toward the same $10,000 federal cap. So if you paid $6,000 to one state and $5,000 to another, you're right at the limit even though you dealt with two different tax systems. The timing of property tax payments can be tricky too - it's based on when you actually paid, not when the tax year was for. So December 2024 property tax payments go on your 2024 return even if it's for the 2025 tax year.