Owning a home comes with a bill every year that renters never see: the property tax. For millions of homeowners, however, that bill is also one of the largest write-offs on the federal tax return. Under the State and Local Tax (SALT) deduction, you can subtract what you pay in property tax plus either your state income tax or state sales tax from your adjusted gross income — but only up to a $10,000 cap. This calculator shows exactly how much that deduction is worth to you at your marginal tax bracket, and whether itemizing actually beats taking the standard deduction.
Enter your annual property tax, your state income tax, your filing status, and your marginal bracket. The result card applies the $10,000 SALT cap, values the deduction in dollars, and compares your total itemized deductions against the standard deduction for your filing status.
How to Use
- Enter your Annual Property Tax — the total real-estate tax you paid during the year. You can find it on your county tax bill, your escrow analysis statement, or box 10 of your Form 1098 if your lender collects it through escrow.
- Enter your State & Local Income Tax — the state and local income tax withheld or estimated for the year. If you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming (no state income tax), enter the state sales tax you paid instead, which the IRS allows you to claim in place of income tax.
- Set your Marginal Federal Tax Bracket. This is the rate on your last dollar of taxable income, not your effective rate. A deduction saves tax at this top marginal rate, so a $10,000 SALT write-off is worth $2,400 in the 24% bracket but only $1,200 in the 12% bracket.
- Choose your Filing Status — Married Filing Jointly (MFJ), Single, or Head of Household (HoH). This determines the standard deduction you are comparing against.
- Add Other Itemized Deductions if you have them: mortgage interest, charitable gifts, and qualifying medical expenses above 7.5% of AGI. Leave it at zero if you are only testing the SALT line itself.
The result card first shows your total SALT paid and the capped SALT deduction (the lesser of what you paid or $10,000). It then multiplies the capped deduction by your marginal rate to give the tax value, and finally compares your total itemized deductions to the standard deduction so you know whether itemizing is even worth the effort.
The $10,000 SALT Cap
The Tax Cuts and Jobs Act (TCJA) capped the federal deduction for state and local taxes at $10,000 per return ($5,000 for Married Filing Separately) through 2025. Before 2018, the deduction was uncapped, which meant high-tax states like New York, California, New Jersey, and Connecticut effectively received a federal subsidy for their state and local spending.
The cap changes the math dramatically. If you paid $8,000 in property tax and $5,000 in state income tax — $13,000 total — you only deduct $10,000. The extra $3,000 is wasted. At a 32% marginal rate, that wasted $3,000 costs you $960 in lost tax savings. This is why taxpayers in high-tax, high-home-value states feel the SALT cap most acutely.
How Much Is the Deduction Worth?
A deduction is not a credit. It reduces your taxable income, so the dollar value is:
Tax savings = Deduction × Marginal Tax Rate
On the standard case — $5,000 property tax plus $4,000 state income tax = $9,000 of SALT — the full $9,000 falls under the $10,000 cap, so the entire amount is deductible. In the 24% bracket, the value is $9,000 × 24% = $2,160 per year. If that same taxpayer also pays $15,000 in mortgage interest and gives $3,000 to charity, total itemized deductions become $27,000, which — for a single filer whose 2025 standard deduction is $15,000 — produces an extra $12,000 of write-offs worth roughly $2,880 at 24%.
Itemize vs. Standard Deduction
The SALT deduction only helps you if you itemize. The 2025 standard deduction is $29,200 for MFJ, $15,000 for Single, and $21,900 for Head of Household. If your SALT cap of $10,000 is your only itemized deduction, you will almost always take the standard deduction instead — because $10,000 of SALT alone does not clear $15,000 for a single filer, let alone $29,200 for a married couple.
Itemizing starts to make sense when SALT stacks with mortgage interest and charitable gifts. A married couple with a $10,000 SALT cap, $18,000 of mortgage interest, and $4,000 in charitable gifts reaches $32,000 of itemized deductions, which beats the $29,200 standard by $2,800 — worth about $672 in the 24% bracket.
Examples
Example 1 — The headline case (24% bracket). A single filer pays $5,000 in annual property tax and $4,000 in state income tax, with no other itemized deductions. SALT paid is $9,000, which is under the $10,000 cap, so the SALT deduction is the full $9,000. At a 24% marginal rate, the tax value is $2,160. Because $9,000 is below the $15,000 single standard deduction, the calculator recommends taking the standard deduction — the SALT line still matters because it is part of the itemized total, but on its own it does not justify a Schedule A.
Example 2 — A capped high-tax household. A California married couple in the 32% bracket pays $12,000 in property tax on a $900,000 home and $14,000 in state income tax. SALT paid is $26,000, but the cap clamps the deduction at $10,000. The tax value of that capped deduction is $10,000 × 32% = $3,200. Combined with $22,000 of mortgage interest and $5,000 of charitable gifts, total itemized deductions reach $37,000, beating the $29,200 MFJ standard by $7,800 — worth roughly $2,496 in net federal tax savings.
Example 3 — A $1,000,000+ home. A homeowner with a $1,200,000 property tax bill (a commercial or ultra-luxury scenario for stress-testing the engine) and $0 state income tax, in the 37% top bracket. Even though SALT paid is $1,200,000, the deduction is still capped at $10,000, and the tax value is $10,000 × 37% = $3,700. The cap is binding, and extra property tax above $10,000 produces zero additional federal benefit.
FAQ
How much of my property tax is actually deductible?
You can deduct the lesser of (a) your combined state and local property tax plus either state income tax or state sales tax, and (b) $10,000 per return ($5,000 if Married Filing Separately). If your total SALT is under $10,000, every dollar is deductible; above $10,000, the excess gives no federal benefit.
Can I deduct both state income tax and state sales tax?
No. You must choose one or the other each year. If you live in a state with no income tax (Florida, Texas, Washington, and similar), you can use the IRS optional state sales tax tables or your actual credit-card sales tax totals instead.
Does the SALT deduction still exist in 2025?
Yes, through 2025 under current law. The $10,000 cap was enacted by the TCJA and is scheduled to expire after 2025, after which SALT reverts to an uncapped deduction unless Congress extends or modifies the cap. Legislation to raise or repeal the cap has been debated but not enacted.
Is it worth itemizing just for property tax?
Usually no. If your only itemized deduction is the $10,000 SALT cap, it falls below the 2025 standard deduction of $15,000 (Single) or $29,200 (MFJ). Itemizing becomes worthwhile when SALT stacks with mortgage interest, charitable gifts, or large medical expenses.
Does refinancing or paying off my mortgage affect this?
Paying off the mortgage removes the mortgage-interest line, which often pushes itemized deductions below the standard deduction. At that point the SALT deduction alone may no longer be enough to justify Schedule A, and most homeowners switch to the standard deduction even though they still pay property tax.
What about homeowners in states with no income tax?
Enter your estimated state and local sales tax in place of state income tax. The IRS provides an optional sales-tax calculator based on your income, household size, and ZIP code. In states like Texas and Florida, this sales-tax figure is what pairs with your property tax to form the SALT deduction.
Does the SALT deduction apply to second homes or rental property?
Property tax on a second home you personally use is generally deductible on Schedule A within the $10,000 cap. Property tax on a rental property, however, goes on Schedule E as a business expense and is not subject to the $10,000 individual cap — it is deducted in full against rental income.
Disclaimer
This property tax deduction calculator is provided for informational purposes only and does not constitute tax, legal, or financial advice. The $10,000 SALT cap and standard deduction figures reflect 2025 IRS rules and are subject to change; personal exemptions, itemized phase-outs, AMT, and state-specific rules are not modeled. Always confirm your deduction and filing strategy with a qualified tax professional before filing your return.