Tax deductions

Governors in high income states like New York are complaining about the tax deductions for state income tax and local property tax. In the recently passed tax legislation, the state and local tax deductions will  be capped at $10,000 starting with your 2018 tax return These new laws will effect mostly upper income earners. You can deduct mortgage interest up to a $750,000 mortgage and the state income tax and local property tax together cannot exceed $10,000. In Minnesota the property tax on a $350,000 home is under $3,000. This leaves $7,000 to deduct for state income tax and that equates to a $125,000 income for married filing joint. So the new tax law effects mostly people who have incomes above $125,000 and this is about 15% of taxpayers.