The One Big Beautiful Bill Act (OBBBA) brings significant updates to federal tax law, and one of the most beneficial changes for business owners is the temporary expansion of State and Local Tax (SALT) deductions. Understanding how to leverage this change can create meaningful savings—especially for businesses in high-tax states.
The New SALT Deduction Cap
The 2017 Tax Cuts and Jobs Act set a $10,000 cap on SALT deductions, limiting tax relief for many high-income earners and small business owners. The One Big Beautiful Bill Act temporarily raises that cap to $40,000 from 2025 through 2029, before reverting to $10,000 in 2030
However, there’s a catch: for taxpayers with modified adjusted gross income (MAGI) above $500,000 (or $250,000 for married filing separately), the deduction begins to phase out—reducing by 30% for every dollar above the threshold.
In the Trenches with Our Clients
Our focus at Alpina Tax & Accounting Services, we specialize in helping business owners and entrepreneurs turn legislative changes into strategic opportunities. The expanded SALT deduction presents a window to reduce taxable income and improve cash flow—but only with careful planning.
Advising our Clients::
- Evaluating Eligibility – We’ll project your income and determine how the phase-out thresholds affect your potential deduction.
- Explore Business Structure Options – We analyze whether restructuring—such as separating entities or utilizing non-grantor trusts—could maximize your SALT benefit.
- Implement PTET Workarounds – We review available Pass-Through Entity Tax (PTET) elections that may allow your business to deduct state taxes at the entity level, effectively bypassing the federal SALT cap.
- Develop a Long-Term Strategy – Since this higher cap sunsets in 2029, we create a multi-year tax plan to capture maximum savings while maintaining compliance.
We can guide you through every step—from evaluating your current position to optimizing your structure for the new SALT environment.
💼 Ready to see how these new rules could benefit your business?
Contact us today to schedule a consultation and discover how to make the most of these temporary—but powerful—tax advantages.
👉 Lets talk and see how to maximize your savings from 2025 through 2029.