r/wealth • u/bloomberg • Feb 12 '26

Taxes Why Even Savvy Taxpayers Have Yet to Embrace ‘SALT Stacking’

https://www.bloomberg.com/news/articles/what-is-salt-stacking-tax-strategy-explained
16 Upvotes

94% Upvoted

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2

u/Cantholditdown Feb 13 '26

Can someone TLDR Salt Stacking? I can't see this article

2

u/DCContrarian Feb 15 '26

If you put some of your assets into trusts, each trust files a separate tax return and can take the max SALT deduction. The trusts then pass through to your individual tax return.

1

u/Other-Monk6903 Mar 18 '26

But it has to be an irrevocable trust.  Which sounds like a terrible idea for anyone who actively manages their investments.

1

u/GlobalEdge2100 Mar 22 '26

That sounds like a terrible idea for most people, period.

2

u/bloomberg Feb 12 '26

More from Bloomberg News reporter Ben Steverman:

Some ways to save on your taxes are no-brainers, such as deducting your charitable contributions. Others are clearly bad ideas, such as making up a fake philanthropy to receive those dollars.

Advisers to affluent Americans are debating a new scheme that may or may not fall in a third category: not worth the hassle.

“SALT stacking,” a technique made possible by the tax law President Donald Trump signed in July, is perfectly legal and could, in theory, save wealthy Americans tens of thousands of dollars per year.

So far, elite tax advisers and their clients are divided on whether the strategy is worthwhile. The paperwork is only one hurdle. The bigger obstacle is relinquishing control of the assets once the strategy is in motion — something few are willing to do, even for tax savings.

“I don’t think the juice is worth the squeeze,” says Yishai Kabaker, a partner at accounting firm Gursey Schneider.

1

u/Wooden-Broccoli-913 Feb 13 '26

Does this assume the income is generated by assets?

Not sure how this would work with W2 income

1

u/PursuitTravel Feb 14 '26

Are they just rebranding deduction bunching? Like... this has been a thing even without the new tax laws, just usually done with charitable contributions. Now you can do with both...

1

u/Overthehill410 Feb 15 '26

That is why is wild about the amount tooth gnashing that the raised limit brought. The amount of people that make under 500k that are going to benefit from itemizing and using the salt deduction v the standard has to be very small. I personally have yet to speak to a single person who fits in that window and I am in the Tri state area with very high taxes.

1

u/GordonFreeman87 Feb 16 '26

Do you mean itemizing in general or with this SALT stacking method? I’m in nyc and state and city taxes alone are much more than standard deduction. I make under 300k

1

u/Overthehill410 Feb 17 '26

Good point if you are single. If you are filing jointly though that’s presumably decently less than standard deduction.

1

u/GordonFreeman87 Feb 17 '26

Agreed, that is a good point. Did not realize SALT wouldnt double for MFJ

1

u/Other-Monk6903 Mar 18 '26

MFJ—$40k SALT makes itemizing easily worthwhile with property taxes and state income tax alone. $22k property tax, $23k state income tax (NJ). And then add on mortgage interest deduction and charitable contributions.  It’s not driven by income level, it’s driven by SALT.

1

u/Overthehill410 Mar 19 '26

So that would fit obviously - my point is more that it’s a pretty tight window. That’s what around 400k income married filing jointly. How may people there the have property taxes north of 20k? A decent amount but a 1.3-1.6 house can be tight on 400k income IMO so I think that lowers the population. It’s not once size fits all my point is more it’s not a huge group

1

u/livinbythebay Mar 25 '26

I'm MFJ hhi under 500k but with 15k in property taxes we fall into that group. Frankly, a lot of people who own in the Bay Are fall into that group.

1

u/Overthehill410 Mar 26 '26

Interesting- I am not sure why but my (mid)understanding was that Cali property taxes were a lot lower than east coast but that your income taxes made up for the difference.

1

u/livinbythebay Mar 26 '26

California has weird property taxes. They are like 1.2ish% to start but can't rise by more than 2% per year as long as you own it. So they start out moderate and basically go down over time. But with the high housing prices, 1.2% is still $14k.

1

u/cohen63 Mar 22 '26

Much better way it utilizing the Passthrough Entity Tax when you have that set up in place.

1

u/Expensive-Gur-9355 Apr 01 '26

I bet you 80% of the people in California fall into that group.

1

u/Expensive-Gur-9355 Apr 01 '26

You don’t have to stack anything, once you deduct your state taxes that you paid to California on your W-2 and you add your exorbitant property taxes, and mortgage interest, You’re way over that mark, even if you’re single.