Congress passed major tax legislation on July 4, 2025 — formally known as H.R. 1 or Public
Law 119-21 — and it’s reshaping how individuals and families should think about long-term
tax planning. While much of the media coverage focused on political implications, the
practical impact issubstantial forretirees, business owners, and high-income
households.
Here are four of the most important updates — and why they matter for your planning.
1. Tax Brackets Are Now Permanent
The seven tax brackets established under the 2017 Tax Cuts and Jobs Act (TCJA) — 10%,
12%, 22%, 24%, 32%, 35%, and 37% — were originally scheduled to expire at the end of 2025.
That sunset provision has now been eliminated. These brackets are permanent going
forward, giving much-needed stability for tax planning.
For investors, business owners, and retirees doing multi-year Roth conversions or realizing
capital gains, this permanence removes uncertainty. You no longer need to rush income
recognition or worry about reverting to higher tax rates in 2026. Instead, you can take a
more measured, strategic approach to stay in the 12%, 22%, or 24% brackets over time.
2. Seniors Get a New $6,000 Bonus Deduction
Starting in 2025 and continuing through 2028, taxpayers age 65 or older can claim an
additional $6,000 deduction on top of the standard deduction. For a married couple where
both spouses are over 65, that’s a $12,000 bonus.
When you combine that with the base standard deduction ($31,500 in 2025) and the age-
based add-on ($1,600 per spouse), a qualifying couple can deduct up to $46,700 from
taxable income — without itemizing.
This bonus phases out between $150,000 and $250,000 in MAGI for joint filers, so timing
income, IRA withdrawals, and Roth conversions strategically is key.
3. SALT Deduction Cap Expanded (Temporarily)
The deduction cap for state and local taxes (SALT) — previously limited to $10,000 — is
now increased to:
- $40,000 for married couples filing jointly
- $20,000 for single filers
This expanded cap applies from 2025 through 2029, after which it reverts to $10,000. Property taxes on multiple homes can be deducted, provided total SALT deductions stay within the cap. For clients in high-tax states, this creates a new window to maximize itemized deductions.
Note: The benefit phases out between $500,000 and $600,000 in income, but never drops
below the $10,000 minimum.
4. Roth Conversion Opportunities Have Expanded
Thanks to the combination of permanent tax brackets and higher deductions for seniors,
Roth conversions remain a powerful tax strategy. Converting IRA assets to Roth while
remaining in lower brackets helps reduce future RMDs, avoid IRMAA penalties, and lower
the risk of Social Security being taxed.
With so many variables now locked in through 2028 or 2029, this may be one of the best
planning environments we’ve had in years.
Final Thoughts:
These changes create a highly strategic window for thoughtful tax planning. But many of
the most valuable provisions — like the senior bonus deduction and SALT cap relief —
expire after 2028 or 2029.
Now is the time to reevaluate your long-term plan. If you’re notsure how these changes
affect you, we’re here to help.
Source: (U.S. Congress, 2025)
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Kurt Supe, John Culpepper and Brian Quick offer securities through cfd Investments, Inc., Registered
Broker/Dealer, Member FINRA &SIPC, 2704 South Goyer Road, Kokomo, IN 46902, 765-453-9600.
Kurt Supe, Andrew Drufke and Brian Quick offer advisory services through Creative Financial
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