Maryland Couples Rejoice: Your SALT Deduction Just Got a Major Boost
If you’ve ever looked at your tax return and wondered, “Why can’t I deduct more of what I pay to Maryland?”—you're not alone. For years, many hardworking families have been frustrated by the $10,000 cap on the State and Local Tax (SALT) deduction, especially in high-tax states like ours. But under the newly signed One Big Beautiful Bill Act, that cap is getting a massive temporary boost.
Let’s break it down using a real-world example…
Meet Brian and Michelle from Baltimore
Brian and Michelle are married, both work full-time, and have a combined income of $395,000. They own a home in Maryland and pay about 7% in state income taxes, or roughly $27,650 per year. They also pay about $10,000 in local property taxes—so their total SALT payments come in around $37,650.
Under the old rules (in place since the 2017 Tax Cuts and Jobs Act), they could only deduct $10,000 of that $37,650 on their federal return. The rest? Wiped out—no deduction. That meant they were losing out on over $27,000 in potential deductions every single year.
What's Changing in 2025?
Under the One Big Beautiful Bill Act, the SALT cap increases to $40,000 starting in 2025. That means Brian and Michelle can now deduct the full $37,650 in state and local taxes they pay, as long as they stay under the cap and meet the income thresholds.
But there's a catch:
If your modified adjusted gross income exceeds $500,000, the new deduction starts to phase out. Thankfully, Brian and Michelle are below that threshold.
Standard Deduction Also Got a Bump
The standard deduction is also going up in 2025:
- $31,500 for married couples (up from $30,000 in 2024)
- $15,750 for single filers
So couples like Brian and Michelle will need to weigh whether it still makes sense to itemize deductions or take the new higher standard deduction. With their high SALT payments, itemizing may now give them the bigger break—but that wasn't true just a year ago.
What This Means for You
If you live in Maryland, New York, California, or any state with higher income or property taxes, this SALT deduction increase could be a huge win for your wallet—but only if you plan ahead.
You’ll want to:
- Estimate your 2025 SALT payments
- Compare the itemized vs. standard deduction
- Watch for the $500K phase-out threshold if you have bonuses or investment income
- Consider the impact of other itemized deductions (mortgage interest, charitable donations, etc.)
Action Step: Let’s Run the Numbers Together
The rules are changing, and how you file in 2025 could look very different from past years. That’s why now is the time to create a game plan.
Reach out to Taxsurety today to run a customized projection for 2025. We’ll show you whether the new SALT deduction helps, if you should itemize, and how to maximize your federal tax savings with the latest law changes.
Get clarity before tax season hits—because smart planning now means real savings later.