With tax season underway, many filers are expecting bigger refunds due to retroactive changes enacted in President Donald Trump’s “big beautiful bill.” One expanded tax break in particular could trigger a sizable windfall for certain filers, experts say.
For 2025, the legislation raised the federal deduction limit for state and local taxes, known as SALT, to $40,000, up from $10,000. Filers must itemize tax breaks rather than claiming the standard deduction to benefit from the higher SALT limit. The benefit starts to phase out, or get smaller, once income exceeds $500,000.
“A lot of what’s going to drive higher refunds [for 2025 returns] is the higher SALT cap,” Andrew Lautz, director of tax policy for the Bipartisan Policy Center, a nonprofit think tank, told reporters during a call last week.
Here’s a look at other stories affecting the financial advisor business.
Before 2018, the SALT deduction — which includes property taxes plus either state and local income or sales taxes, but not both — was unlimited. However, Trump’s 2017 legislation capped the deduction at $10,000 through 2025.
