I HOPE I am misunderstanding this... Colorado now limits tax deductions!!????

[Zoey W.]

I hope I am misunderstanding this regarding new tax law in Calirado... sorry I meant Colorado....

"Effective January 1, 2023, single filers are limited to $12,000 and joint filers are limited to $16,000 of deductions. The current standard deduction in Colorado is $12,950 for singles and $25,950 for joint filers. As such, all individuals with incomes over $300,000 will be subject to deduction limitations.

So if a business or landlord has legitimate write offs for their rental properties (for example) Colorado will NOT allow more than 12k or 16k of legal and LEGITIMATE deductions just because that person earns 300k per year?

https://www.withum.com/resources/colorado-state-tax-updates/#:~:text=Effective%20January%201%2C%202023%2C%20single,be%20subject%20to%20deduction%20limitations.

That is INSANITY!!! 

[Randall Tannen]

Quote from @Zoey W.:

I hope I am misunderstanding this regarding new tax law in Calirado... sorry I meant Colorado....

"Effective January 1, 2023, single filers are limited to $12,000 and joint filers are limited to $16,000 of deductions. The current standard deduction in Colorado is $12,950 for singles and $25,950 for joint filers. As such, all individuals with incomes over $300,000 will be subject to deduction limitations.

So if a business or landlord has legitimate write offs for their rental properties (for example) Colorado will NOT allow more than 12k or 16k of legal and LEGITIMATE deductions just because that person earns 300k per year?

https://www.withum.com/resources/colorado-state-tax-updates/#:~:text=Effective%20January%201%2C%202023%2C%20single,be%20subject%20to%20deduction%20limitations.

That is INSANITY!!! 

It's a cap on itemized or standard state income tax deductions for those earning over $300k. It doesn't impact rental expenses.