At Ticker Tape, we do a lot of research on tax strategies for high-income professionals and high-net-worth individuals. One thing we’ve found for 2026 involves the SALT deduction, the deduction for state and local taxes. It lets you deduct income tax paid to a state or local authority against your federal income tax, within certain limits.
The One Big Beautiful Bill raised that deduction for 2026 to a little over $40,000. However, the deduction starts phasing out for people with income above $505,000. That’s how a bonus, such as the $75,000 in the title, could push you into the phase-out. In Texas we pay a lot of property taxes, and New Yorkers pay heavy state taxes, so in both cases we’d like to deduct those taxes. Talk to your CPA about how this affects you.
Key points
- The SALT deduction lets you deduct state and local taxes against federal income tax, within limits.
- For 2026, the cap was raised to a little over $40,000.
- The deduction starts phasing out above $505,000 of income.
- A large bonus can push you into the phase-out, so plan with your CPA.
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