Limits on state and local tax deductions add a new consideration as you think about where you want to live in retirement.
You could call it an unintended consequence of the 2017 tax law: People in high-tax states may have one more incentive to relocate in retirement.
The law capped allowable state and local tax deductions, including property tax, at $10,000 (for individuals and married couples, filing jointly). “As a result, people who live in states with high taxes, such as New Jersey, New York or California, may no longer be able to deduct all of their state taxes paid on their federal return,” says Vinay Navani, CPA and shareholder at WilkinGuttenplan. Because of that, some are finding that they owe more in federal income tax.
