SALT Deduction 2025 in California: What it means for homeowners

Hi friends,

Let’s talk about something in Trump’s new tax bill that actually makes me happy. Big tax change on the horizon. The SALT deduction is getting some relief. If you live in California, especially in Sonoma County, this may help when you itemize. Here is what changed, who benefits, and how to plan before you file.

A little background and a personal story

Back in 2018, when Trump’s first tax bill went into effect, I had mixed reactions depending on the client.

For some long-time homeowners with low property taxes and no mortgage, the higher standard deduction worked.

For me, not so much.

This Gen X girl bought her second house in 2008.. My property taxes are high, and so are my state income taxes. When I saw that I could only deduct $10,000 total for state and property taxes, I was not a happy camper. I am a tax preparer, but I am also a taxpayer. When I see limits that feel unfair, I get frustrated. So when I read about this new SALT change, I felt some relief.

Home in Sebastopol with local art.

What changed

The SALT cap moves from $10,000 to $40,000 starting in 2025.

It is scheduled to increase by 1 percent each year from 2026 through 2029.

Under current law it returns to $10,000 in 2030 unless Congress acts.

Some high earners will see a phase out.

For details, see IRS Schedule A instructions.

Who benefits in California

You will likely see the most value if you itemize and your combined state income tax and property tax were limited by the old $10,000 cap. Homeowners in higher-tax areas often benefit. If you usually take the standard deduction, you may still keep it if that produces a lower Salt deduction for homeowners in 2025 in California. 

How to plan for 2025

·      Add up your 2025 property tax and state income tax payments SDI and DMV license fee.

·      Run a quick projection for standard deduction versus itemizing with the new cap.

·      If you are close to the cap, talk with a pro about timing of payments.

·      Keep good records for property tax and state estimates.

Book a tax preparation review.

Quick FAQs

Do I need to itemize to use the higher cap?

Yes. The SALT deduction applies only when you itemize.

Will my California return change?

State rules are different. Check state conformity each year.

Should I switch from standard to itemized?

It depends on your totals. Compare both in a 2025 projection.

What to do next

If you think this change affects you, book a planning call. We will look at your numbers, compare options, and set you up for a smooth 2025 filing. You can contact us to set it up, or book tax consulting if you want strategy help.

Warmly,

Melissa Ochoa

Enrolled Agent & Owner, Apple Blossom Tax Service

Serving Sebastopol and Sonoma County