"The OBBBA temporarily boosts the state and local tax deduction cap, or SALT, from $10,000 to $40,000 (for married couples filing jointly and single filers). This higher cap applies from 2025 through 2029.Run the numbers: For 2025, the standard deduction is $31,500 for married couples and $15,750 for singles. If your total itemized deductions - including mortgage interest, charitable giving, and state and local taxes (up to the new $40,000 cap) - add up to more than your standard deduction, you should itemize."
"The OBBBA introduced several temporary above-the-line deductions (available whether you itemize or not) to help middle-income workers. But they have very strict income and benefit limits.The qualified overtime pay deduction: Capped at $25,000 for married couples filing jointly and $12,500 for singles. Only the extra "half-time" portion of your time-and-a-half pay qualifies for the deduction. For a married couple, this benefit begins to disappear if your MAGI hits $300,000 and is entirely gone once your MAGI reaches $550,000."
The OBBBA temporarily raises the state and local tax (SALT) deduction cap to $40,000 for married and single filers from 2025 through 2029, improving the value of itemizing when combined deductions exceed 2025 standard deductions ($31,500 joint, $15,750 single). The $40,000 SALT cap phases out starting at $500,000 MAGI and returns to $10,000 at $600,000 MAGI. The law creates temporary above-the-line deductions with strict income limits, including a qualified overtime deduction capped at $25,000 joint ($12,500 single) that applies only to the extra "half-time" portion of time-and-a-half pay and phases out between $300,000 and $550,000 MAGI. A qualified tips deduction allows up to $25,000 per return for formally reported tip income.
Read at Fast Company
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