Last updated for tax year 2026 · Last reviewed
SALT deduction cap
The state-and-local-tax (SALT) deduction is capped at $40,400 per return ($20,200 married filing separately) for 2026 — up from $40,000 in 2025 — a combined limit on state income tax, local tax, and property tax. The cap phases down by 30% of every dollar of modified AGI above $505,000, reaching a $10,000 floor at roughly $606,333 of MAGI. Originally a flat $10,000 under the 2017 TCJA, it was raised by the One Big Beautiful Bill Act (OBBBA), July 2025; the cap rises 1%/year through 2029, then reverts to $10,000 in 2030.
Bonus depreciation
First-year "bonus" depreciation is 100% and permanent for qualifying property acquired after January 19, 2025, restored by the One Big Beautiful Bill Act (OBBBA, July 2025). The old TCJA phase-down schedule below now applies only to property acquired on or before January 19, 2025.
Legacy phase-down (property acquired on or before Jan 19, 2025), by year placed in service:
| Placed in service ≤ 2022 | 100% |
| 2023 | 80% |
| 2024 | 60% |
| 2025 | 40% |
| 2026 | 20% |
| 2027 and later | 0% |
Section 179 expensing
Section 179 lets a business deduct the full cost of qualifying equipment in the year placed in service. For 2026: up to $2.56M, phasing out dollar-for-dollar once a year's total equipment purchases pass a second, higher threshold. OBBBA (July 2025) raised both limits and made them permanent; they are indexed for inflation annually. Unlike bonus depreciation, Section 179 can't create a business loss.
QBI (Section 199A) phaseout thresholds
The 20% qualified-business-income deduction begins phasing out for specified service businesses at ≈$201,750 taxable income (single) / ≈$403,500 (married joint) for 2026, now completing $75k / $150k higher (fully phased out ≈$276,750 / ≈$553,500). These thresholds adjust for inflation every year. OBBBA (July 2025) made the deduction permanent and added a new $400 minimum deduction for taxpayers with at least $1,000 of QBI and material participation.
TCJA individual provisions (now permanent)
Many individual TCJA provisions — the current bracket schedule, the (roughly doubled) standard deduction, the SALT cap, and the QBI deduction — were originally written to expire after 2025. The One Big Beautiful Bill Act (OBBBA), enacted July 2025, made them permanent (the SALT cap on its own separate schedule — see above). The post-2025 sunset is resolved.
This page is a planning reference, not tax advice, and may lag breaking legislation. Confirm the current-year figures with the IRS or a CPA before acting.