Level 2

Question

Lacerte appears to be not calculating SALT and 30% haircut limits for taxpayers with AGI greater than $500000. Is anyone else experiencing this problem?

Forum|Forum|3 months ago
March 12, 2026
1 reply
0 views

Example

AGI 549013

SALT before limitation 70508

Interest paid 11895

Contributions 25222

Lacerte calculates total itemized deductions 62413

Microsoft Copilot calculates total itemized deductions 32413

I think Copilot is correct

S

smartcpa

Level 3

549,013 - 500,000 = 49,013

49,013 * .3 = 14,704

40,000 - 14,704 = 25,296

25,296 + 11,895 + 25,222 = 62,413

I don't see the problem

J

jacksinkowskiAuthor

Level 2

smartcpa thanks for the reply.

my understanding is that there are 2 limits to take into account in calculating the total itemized deduction for this taxpayer.

first is the SALT limit which i believe is $1 for $1 over $500000 of AGI with a floor deduction limit of $10000.

the second is a 30% haircut limit on total itemized deductions for AGI greater than $500000. this is calculated by reducing total itemized dedutions by 30% of the AGI income in excess of $500000.

in the example

the first SALT limit is

549013-500000=49013

40000-49013=-9013 floor applies

SALT limit is 10000

the second 30% haircut is

SALT 10000 + int 11895 + ctns 25222 = 47117 total itemized deductions before 30% haircut

30% haircut is 549013-50000=49013 x.30=14704

total deductible itemized deductions is 47117-14704=32413

What am I misunderstanding?

T

TaxGuyBill

Level 15

@jacksinkowski wrote:

my understanding is that there are 2 limits to take into account in calculating the total itemized deduction for this taxpayer.

first is the SALT limit which i believe is $1 for $1 over $500000 of AGI with a floor deduction limit of $10000.

the second is a 30% haircut limit on total itemized deductions for AGI greater than $500000. this is calculated by reducing total itemized dedutions by 30% of the AGI income in excess of $500000.

No.

The 30% haircut is for SALT over $500,000 (see the link for the worksheet in the Schedule A instructions)

Starting in 2026, there will be an additional reduction for Schedule A if the taxpayer is in the 37% tax bracket (I think it is a 2/37ths reduction, but I would need to look it up to verify).

https://www.irs.gov/instructions/i1040sca#d0e1655

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