Question

Capping state tax deduction to $10K

Forum|Forum|5 years ago
April 8, 2021
1 reply
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How is it fair that I pay $22k to Oregon taxes but only $10k get deducted for my federal?

Could I some how make use of these extra $12K

Thanks,

Eliyah

TurboTax Business Windows

E

ee-ea

Employee

The state and local tax (SALT) deduction permits taxpayers who itemize when filing federal taxes to deduct certain taxes paid to state and local governments. The Tax Cuts and Jobs Act capped it at $10,000 per year, consisting of property taxes plus state income or sales taxes, but not both.

E

ekiladaAuthor

Thanks. I understand that. The question is; how is that fair? Fir the extra $12K I am paying taxes twice; once to the state and the other to the federal government. How is that even legal? That seems to be a new law passed in 2017, but I don’t understand how it is legal.

Thanks,

Eliyah

E

ee-ea

Employee

Fair in taxes is like beauty, it is in the eye of the beholder.

How fair is it tat Warren Buffet pay a lower rate than his secretary.

The 16th amendment allows an income tax and Congress fills in the details.

Two quotes from New Colonial Ice Co. v. Helvering, 292 US 435 - Supreme Court 1934

Whether and to what extent deductions shall be allowed depends upon legislative grace; and only as there is clear provision therefor can any particular deduction be allowed.

Obviously, therefore, a taxpayer seeking a deduction must be able to point to an applicable statute and show that he comes within its terms.