Roth individual retirement account conversions have become a popular way for investors to reduce lifetime taxes . But for some high earners, the strategy could hurt eligibility for the state and local tax deduction , known as SALT.

President Donald Trump 's "big beautiful bill" temporarily increased the SALT deduction cap from $10,000 to $40,000 starting in 2025. The limit increases by 1% yearly through 2029 and reverts to $10,000 in 2030.

Roth conversions transfer pretax or nondeductible IRA funds to a Roth IRA, which kickstarts future tax-free growth. The trade-off is incurring regular income during the year of conversion.

Extra income can impact tax breaks — including the $40,000 SALT cap — due to phaseouts, or benefit reductions, once earnings exceed certain thresholds

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