California homeowners can now deduct up to $40,000 in state and local taxes (SALT) for incomes under $500,000, a significant increase from the previous $10,000 cap. This temporary change, effective from 2025 to 2029, offers major relief for middle-income families, especially in high-tax cities like San Jose and San Francisco. The cap will rise 1% annually before reverting in 2030, benefiting both homeowners and some non-homeowners through broader tax savings.
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