A provision in tax legislation associated with Trump may be revised, potentially resulting in larger tax refunds.

“Last-Minute Tax Overhaul Could Mean Bigger Refunds for Married Couples in 2024”

As tax season approaches, a new proposal may bring some good news for married couples. A provision in President Donald Trump’s 2017 Tax Cuts and Jobs Act, known as the state and local tax deduction (SALT), could potentially be changed to allow for a higher deduction for married filers. This change, if implemented, could result in bigger tax refunds for millions of Americans in 2024.

The SALT deduction was originally limited to $10,000 under Trump’s tax law, but the new proposal would raise the cap to $20,000 for married couples, with the change being retroactive for the 2023 tax year. This means that married couples could potentially double their SALT deduction for the current tax season, providing some much-needed relief for taxpayers.

The SALT deduction has been a controversial topic, with some policymakers arguing that it mainly benefits wealthy homeowners in high-tax states like New York and California. However, others point out that the $10,000 cap is also impacting middle-class homeowners in areas where property taxes are on the rise. Additionally, the cap is seen as a marriage penalty, as it applies to both single and married filers, despite the fact that married couples typically have higher tax provisions.

The proposed law, called the SALT Marriage Penalty Elimination Act, would raise the cap on state and local tax deductions to $20,000 for the 2023 tax year, but only for joint returns with an adjusted gross income below $500,000. This would cover the majority of married couples in the country, with only the highest-earning couples being excluded.

According to estimates from the University of Pennsylvania’s Penn Wharton Budget Model, this change would reduce federal tax revenue by about $12 billion. This is significantly less than the $69 billion that the SALT deduction cost the government in 2017, before the $10,000 limit was put in place.

The proposed change would provide much-needed relief for taxpayers across the nation, as well as addressing the issue of fairness for married couples. Representative Mike Lawler, a Republican from New York who introduced the bill, stated that his constituents are feeling the impact of rising housing costs and inflation, and that this tax relief could greatly benefit them.

In conclusion, the potential overhaul of the SALT deduction could result in bigger tax refunds for married couples in 2024, providing some much-needed relief for taxpayers. This change would not only address issues of fairness, but also help to alleviate the financial burden faced by many Americans.  

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