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aeyejr
New Member

My State Income tax withholding during 2018 put me over the $10k SALT limit for Fed deduction. Should I have simply adjusted my W4 to withhold less State Income tax?

 
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Hal_Al
Level 15

My State Income tax withholding during 2018 put me over the $10k SALT limit for Fed deduction. Should I have simply adjusted my W4 to withhold less State Income tax?

Probably not. SALT is deductible, and limited to $10K, whether you pay thru withholding or when you file your return. All that changes is which year you take the deduction and are limited to $10K. Only is you average amount (per year) is less than $10K is it worth trying to get the withholding close to perfection. 


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4 Replies
Lisa995
Level 12

My State Income tax withholding during 2018 put me over the $10k SALT limit for Fed deduction. Should I have simply adjusted my W4 to withhold less State Income tax?

Do you end up with a refund of withholding on your state return or a balance due?
♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪
TomYoung
Level 13

My State Income tax withholding during 2018 put me over the $10k SALT limit for Fed deduction. Should I have simply adjusted my W4 to withhold less State Income tax?

You withhold state income taxes to satisfy your state's payment requirements, not to get yourself under the $10,000 limit for federal itemized deduction purposes.  Maybe you could have limited withholding so as to not "waste" the extra dollars for federal itemization purposes.  But, maybe, that would have made you "underpaid" for state purposes and therefore incur underpayment penalties.  You have to steer a course between $10,000 for federal purposes and being underpaid for state purposes, if you can.  And, maybe, you can't.
aeyejr
New Member

My State Income tax withholding during 2018 put me over the $10k SALT limit for Fed deduction. Should I have simply adjusted my W4 to withhold less State Income tax?

Thank you.  I guess as long as I receive a refund from the State in the amount i went over the &10k it doesn’t make much of a difference.
Hal_Al
Level 15

My State Income tax withholding during 2018 put me over the $10k SALT limit for Fed deduction. Should I have simply adjusted my W4 to withhold less State Income tax?

Probably not. SALT is deductible, and limited to $10K, whether you pay thru withholding or when you file your return. All that changes is which year you take the deduction and are limited to $10K. Only is you average amount (per year) is less than $10K is it worth trying to get the withholding close to perfection. 


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