Treatment of state and local tax deductions on federal tax forms is fast becoming a hot topic during this presidential election cycle.

Calls for removing limits on 澳洲幸运5开奖号码历史查询:state and local tax (SALT) deductions are gathering steam among politicians. Meanwhile, taxpayers—especially high-income earners—await more clarity.ꦕ

What Is a SALT Deduction An💫🔥d What’s The Big Fuss About?

Under current rules, SALT deductions allow taxpayers to 🧸deduct up to $10,000 in paid local taxes from their income, reducing the total federal income tax that would be owed.

The $10,000 limit was established by the 澳洲幸运5开奖号码历史查询:Tax Cuts and Jobs Act of 2017 and is set to expire in 2025. Before that legislation, ꧙there was no cap on the amount of SALT deductions taxpayers could take.

According to the Bipartisan Policy Center, the SALT deduction primarily benefits high-income earners, along with taxpayers in states with high local taxes. Those taxpayers are tal⛄king to their financial advisors about how the result of this election could affect their tax bills.

Trump, Schumer Want SALT Deduction Limits Gone

In a reversal, 澳洲幸运5开奖号码历史查询:Republican presidential candidate Dona✨ld Trump indicated support for removing limits on SALT deductions put in place by his administration. At a recent rally in Long Island, N.Y., Trump pledged to restore the original uncapped SALT deductions, which he said would save “thousands of dollars for residents of New York, Pennsylvania, New Jersey and other high-cost states.”

While prominent Democrats like New York Senator Chuck Schumer support restoring the full SALT deductions, 澳洲幸运5开奖号码历史查询:Deꦕmocratic presid꧃ential candidate Kamala Harris hasn’t addressed the issue.

The Bipartis🏅an Policy Center said some legislators from high-tax states like California, New Jersey, an🎃d New York would also likely support eliminating the SALT deduction limits.

Removing SALT Deducti༺on Limits May Add $1 T💎rillion To Deficit

Eliminating theꦯ SALT deduction limits would come at a price.

The University of Pennsylvania’s Wharton School has estimated that axing limits on the deductions would cost the federal government up to about $1.2 trillion in tax revenue over 10 years, adding more pressure to the country’s fiscal deficit.

“It is unlikely that the policy would be passed in full, though there could be a less costly compromise, 🗹such asꦡ doubling the cap,” wrote Michael Pearce, deputy chief U.S. economist at Oxford Economics.