In this segment, Jose and Sharina dive into one of the most painful surprises for business owners, the SALT deduction cliff. Initially, the $40,000 SALT deduction seemed like a win for high earners, but there’s a catch. For those making over $500,000, the benefit starts phasing out, and by the time you hit $600,000, the deduction is completely gone. This means that what looked like a tax-saving opportunity can quickly turn into a big disappointment if you’re not prepared.
Jose explains that many high earners don’t realize the phase-out rule until it’s too late, which is why proactive tax planning is so important. Rather than waiting until tax season to figure out how to navigate these rules, it’s crucial to anticipate and plan throughout the year. This allows you to strategically adjust your income and deductions to avoid the SALT cliff and maximize your savings.
With the right tax strategy, you can prevent surprises like these and stay ahead of the curve. Proactive tax planning is an ongoing process that helps you not only minimize taxes but also align your financial strategy with your long-term goals.
