What is the Itemized deduction cap for top earners?
The itemized deduction cap for top earners is a provision under Section 70111 of the One Big Beautiful Bill Act that limits the tax benefit of itemized deductions for taxpayers in the 37% bracket. Effective 2026, it reduces allowable deductions by 2/37 of the lesser of total itemized deductions or taxable income above the 37% threshold ($626,350 single, $751,600 joint). The QBI deduction is excluded. Tax loss harvesting can help reduce income and minimize the impact of this cap.
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