There are several misconceptions circulating about the new tax rules under the One Big Beautiful Bill Act (OBBBA). To help you stay informed, we’ve outlined clarifications on a couple of those here, as they might pertain to our situation.
OBBBA Misconceptions
1. Remittance Tax – Applies Only to Cash-Based Transfers
A new 1% tax will apply on cash-based international transfers, including cash, money orders, and cashier’s checks.
- Does not apply to bank wires, ACH, or card-funded transfers.
- Applies to everyone, including U.S. citizens.
- Service providers won’t collect this tax — you are responsible for paying it.
Tip: Use digital or bank-based methods to avoid this tax.
2. SALT (State and Local Tax) Deduction – Temporary Boost, No Long-Term Planning
The SALT deduction cap has been temporarily raised to $40,000 starting in 2025, but:
- It phases out for incomes above $500,000.
- It reverts back to $10,000 in 2030.
- The cap increases 1% per year through 2029 — but only for those under the income threshold.
Key takeaway:
This is a short-term, and if you are making more than 500k, this might not be of great benefit to you anyway. So, not as exciting after all!
As always, please do feel free to let me know if you might have any questions.