The Tax Cuts and Jobs Act of 2017 (TCJA) did three things that matter for homeowners:
1. Capped the State And Local Tax (SALT) deduction at $10,000/year. 2. Roughly doubled the standard deduction. 3. Limited the mortgage-interest deduction to the first $750,000 of new-purchase loan balance (down from $1M pre-TCJA).
All three provisions sunset December 31, 2025 unless Congress extends them.
Why this matters right now
If the SALT cap goes away in 2026:
- · **High property-tax states** (NJ, IL, NY, CA, TX, FL in some counties) get their full state-income-tax + property-tax deduction back. A household paying $15,000 state tax + $12,000 property tax would restore $17,000 of lost deduction at a stroke.
- · **More households drop back to itemizing**, because itemized will beat the $14,600/$29,200 standard deduction (2024 figures).
- · **Mortgage interest becomes more valuable** again, because you need to itemize to deduct it.
If the $1M mortgage-interest cap also comes back, Jumbo borrowers recapture deduction on the $750k-$1M slice.
What to do
Don't make irreversible moves based on tax law that hasn't happened yet. Congress has every incentive to punt; extensions are standard. But the planning lens changes depending on scenario:
- · If SALT cap sticks: current refi math holds. Your [tax savings calculator](/calculators/tax-savings) shows honest numbers.
- · If SALT cap expires: your marginal federal rate × restored deduction is real after-tax savings. Could shift a break-even refi decision.
The honest answer
Run your tax-savings calculator with current rules. When Congress acts (probably late 2025 or early 2026), re-run. The math will update. Don't refinance today on the basis of a tax change that may or may not happen.
As always, confirm your numbers with a CPA. We're good at mortgage math; we're not tax advisors.