As the details of the Tax Cuts and Jobs Act were being worked out, one provision attracted a great deal of attention: state and local tax caps (SALT caps). Ultimately, deductions for state and local sales, income, and property taxes typically deducted on a Schedule A remain in place but are limited. Following the new law, states scrambled to come up with novel ways to re-characterize tax payments to keep taxpayers happy (and clearly, inside their geographic borders). Some states have proposed variations on state and local charitable funds or trusts which would accept payments from taxpayers in satisfaction of state and local tax liabilities. The idea, of course, is that those payments would then be re-characterized as fully deductible charitable contributions for federal income tax purposes.

Source: Forbes May 23, 2018 17:15 UTC