November 1, 2025 · OBBBA Series
The New SALT Rules Under OBBBA — What You Need to Know for 2025
The new $40,000 SALT cap is here. Who actually benefits in Alabama, and how to lock in the maximum deduction before December 31.
$40,000
The 2025 SALT cap — up from $10,000
The new numbers
- Married filing jointly: $40,000
- Single / Head of Household: $20,000
- Phase-out starts at $500,000 modified AGI — reduces by $1 for every $2 over $500K
- Completely gone at $660K (MFJ) / $430K (Single)
The Alabama impact
- The average Jefferson County homeowner with $8K–$12K in property tax plus state income tax can now deduct everything
- Baldwin & Shelby County high-value homes often hit $20K+ in property tax alone — a huge new benefit
One move to make before December 31, 2025
Pay your January 2026 property tax bill in December 2025 if your county allows it. It becomes deductible on your 2025 return under the new $40K cap.
Quick Bookkeeping Tip
Record the early payment correctly
Create a liability account called "Prepaid 2026 Property Taxes" and record the December payment there. It will flow straight to Schedule A, Line 5b.
Ask us before you prepay →Next month (December 1): Q4 estimated taxes under the new permanent TCJA rates, plus last-minute 2025 moves.
Daniel P. Jajeh, CPA
Big Beach Books, LLC · Gulf Shores, Alabama
These newsletters provide general tax and bookkeeping education only and are not personalized advice. Consult your CPA about your specific situation.