One of the defining features of the One Big Beautiful Bill Act (OBBBA) is that it significantly increases the limit on the state and local tax deduction from $10,000 to $40,000. This high-profile tax benefit for reducing taxable income is available for those who itemize deductions on their federal tax returns instead of using the standard deduction.
However, the higher cap on the SALT deduction comes with a catch: a phaseout for those with yearly income exceeding $500,000. While the income-tax rates for most of those taxpayers are 35% and 37% (the top two brackets), the SALT deduction phaseout can push your actual marginal tax rate to almost…
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