9. There’s No Doubling Dipping On SALT
First off, “SALT” stands for “state and local taxes.” These can be deducted from a person’s federal income tax filing. The individual deduction is capped at $10,000. The bad news is that married couples also face the same cap regardless of whether they file jointly or separately.
If married and filing separately the SALT cap for an individual is $5,000. This can hit two high earners who get married particularly hard. It can also hit one high earner hard as their maximum SALT deduction drops. For everyone else, though, the SALT cap is not worth worrying about. If you take the standard deduction it’s not something that should ever even cross your mind.
High earners and people living in high-tax states or locales are the most directly affected by the rule changed during tax reform in 2018.
8. You Can Maximize This 2021-Only Tax Deduction
The CARES Act of 2020 has made it easier for people to receive tax benefits for their charitable donations. Up to $300 in cash donations can be deducted per person. This means married couples can realize a $600 tax deduction.
There are a few things to note here. First, the charity you donate to has to be recognized by the IRS. Second, you can take this deduction alongside the standard deduction. Yes, there is no itemization required (meaning you can take the standard deduction and layer this one-time only deduction on top of it, without itemizing.) Third, you have to give cash in some form and cannot claim this deduction for donating property, time or items. Finally, unless Congress acts, this deduction will be phased out after the 2021 tax year.