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官方开奖结果体彩网:state and local tax (SALT) deductions are gathering steam among politicians. Meanwhile, taxpꦆayers—especially high-inc🌜ome earners—await more clarity.

🌊 What Is a SALT Deduction And 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 wo🐲uld be owed.

The $10,000 limit was established by the 澳洲幸运5官方开奖结果体彩网:Tax Cuts and Jobs Act of 2017 and is set to expire in 2025. Before that legislation, there w🤡as no cap on the amount of SALT d⛄eductions 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 a✅re talking to their financial advisors about how the result of thi💯s election could affect their tax bills.

Trump, Schumer Want SALT Deduction Limits Gone

In a reversal, 澳洲幸运5官方开奖结果体彩网:Republican presidential candidate Dꦉonald 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官方开奖结果体彩网:Democratic presidential candidat𝔉e Kamala Harris hasn’t addressed the issue.

The Bipartisan Policy Center said some legislators from high-tax states like California, 𝔉New Jersey, and N🃏ew York would also likely support eliminating the SALT deduction limits.

Remo𒀰ving SALT Deduction Limits May Add $1 Trillion To Deficit

Eliminatin🌸g the 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 as doubling☂ the cap,” wrote Michaᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚel Pearce, deputy chief U.S. economist at Oxford Economics.