The New Tax Bill: Additional Deductions, Permanent Tax Changes, & Child Tax Credit
- mackenziestussie
- Jul 30
- 2 min read
Updated: Jul 31
Big Changes Ahead: What the New Tax Bill Means for Your Retirement Plan
At Whitener Capital Management, we stay ahead of the curve to help you prepare—not just react—to changes in legislation that affect your financial future. One of the most significant updates to come out of Washington recently is the passage of a new tax bill that modifies the federal tax brackets, standard deduction, and certain credits, including changes that impact retirees and families. Here’s what you need to know:
Federal Income Tax Brackets: What Was Going to Expire Is Now Permanent
Prior to the new legislation, the tax bracket changes made under the Tax Cuts and Jobs Act (TCJA) were set to expire after December 31, 2025. That would have meant a reversion to higher rates starting in 2026. However, the new bill makes the current lower tax brackets permanent.
For example:
A married couple filing jointly with income between $96,951 and $206,700 would have moved into the 25% bracket under the previous law, but they will remain in the 22% bracket under the new provision.
The top marginal rate remains at 37%, instead of reverting to 39.6%.
This permanence adds some much-needed clarity and planning stability for both retirees and high earners alike.
Standard Deduction: No More Sunset Clause
Another key provision in the new bill is the permanent extension of the higher standard deduction. Without this change, the standard deduction would have been nearly cut in half starting in 2026 (shown in column two). These figures will continue to be indexed for inflation.
A Boost for Seniors: Temporary but Impactful
We covered this provision in detail in our last post, but it’s worth revisiting. Beginning in 2025, taxpayers age 65 and older will be eligible for an additional $6,000 standard deduction (potentially $12,000 for married couples). However, it’s important to note that this is a temporary measure, set to expire after the 2028 tax year. This new deduction is subject to income phase-outs.
While the benefit is short-term, it presents a valuable window for strategic tax planning—particularly for retirees considering Roth conversions, charitable contributions, or timing income distributions. Taking advantage of this deduction while it’s available could lead to meaningful tax savings.
Child Tax Credit: A Modest Increase
Parents will see a bump in the Child Tax Credit, which increases to $2,200 per child in 2025 and will be indexed for inflation in subsequent years. This increase could mean a slightly lower tax bill for families in the coming years—especially those with multiple dependents.
When Do These Changes Take Effect?
All of the above changes—including tax brackets, the standard deduction, the child tax credit increase, and the senior deduction—go into effect for the 2025 tax year. That means now is the time to revisit your financial plan, not next April.
What This Means for You
Whether you're nearing retirement, already drawing Social Security, or managing income and tax strategies for your family, these updates will likely affect your financial picture. Our role is to help you navigate these shifts and optimize your plan accordingly.
