Day 4: Higher Standard Deduction & Child Tax Credit—More Money for Families (But Not for Everyone)

Welcome back to our series on the One Big Beautiful Bill Act (OBBBA) and what it means for your taxes.

Today, we’re talking about two changes that directly impact millions of families: a higher standard deduction and a bigger Child Tax Credit. These changes mean more money in your pocket—but there’s important fine print.

What Changed?

Under the 2017 TCJA:

• The standard deduction nearly doubled, reducing the number of people who itemized.

• The Child Tax Credit increased from $1,000 to $2,000 per child.

Without new legislation, these benefits were set to expire after 2025.

Under the OBBBA:

• The higher standard deduction is made permanent. For 2025:

  • $29,200 for married couples filing jointly

  • $14,600 for single filers (adjusted for inflation)

• The Child Tax Credit rises to $2,200 per child, possibly more under some versions, and may be indexed for inflation.

Who Benefits?

• Families with children who gain more savings through a higher credit.

• Taxpayers who don’t itemize still enjoy meaningful tax relief.

• Middle-income families save hundreds, or even thousands, annually.

For example, a family with two kids could gain an extra $400–$1,000 in tax credits under the OBBBA.

Who Should Still Be Cautious?

• Higher-income families may lose some or all of the Child Tax Credit due to income phaseouts (starting at $400,000 for married couples, $200,000 for single filers).

• Singles without kids won’t see benefits from the increased credit.

• Some families may find itemizing now provides a larger deduction if their expenses exceed the standard deduction.

Why Tax Planning Matters Now More Than Ever

Even good news like higher deductions and credits needs thoughtful planning. Tax planning helps you:

• Compare the benefits of itemizing vs. taking the standard deduction.

• Maximize the Child Tax Credit without triggering phaseouts.

• Integrate credits and deductions into a bigger financial plan.

• Avoid surprises next tax season.

A personalized tax strategy ensures families keep as much of their hard-earned money as possible.

Wondering how these changes affect your family’s tax bill? Let’s create a tax plan tailored for you. Schedule a discovery callto learn how our tax planning services can help you save under OBBBA.

Up next: Day 5 – Permanent Lower Tax Rates: Why It Matters (And Who Should Still Be Careful)