Attorney Justin M. Kennedy of Litherland, Kennedy & Associates discusses the key changes brought by the July 2025 tax law and how these updates create new opportunities for proactive tax planning. In this video, he explains which temporary provisions were made permanent, the new provisions scheduled to expire in 2028, and the strategies individuals and families can use now to reduce their tax burden in the coming years.
Justin outlines important tax credits, updated retirement contribution limits, and charitable giving strategies that remain effective even with the increased standard deduction. His goal is to help viewers understand how these changes may affect their tax and estate planning decisions and to highlight planning steps that can provide long-term financial benefits.
SCRIPT:
Hello, I’m attorney Justin M. Kennedy with Litherland, Kennedy and Associates, a California estate planning and elder care law firm.
The July 2025 new tax law brings new opportunities. The law made many temporary provisions permanent and added new provisions that are set to expire in 2028. Leveraging these changes requires careful planning, but the effort you make now could impact your taxes for years to come.
We recommend that you take advantage of available tax credits
Let me explain: Tax deductions reduce the amount of your taxable income according to the percentage of your tax bracket for the year. Tax credits give you a dollar-for-dollar reduction of your tax liability. In other words, tax credits directly reduce what you owe, so knowing which ones apply can make a big difference.
Here are some available tax credits:
The saver’s credit: Worth up to $1,000 (or $2,000 for joint filers), this nonrefundable credit rewards contributions of new money (not rollovers) to retirement accounts. To qualify, you must be at least 18, not a full-time student and not claimed as a dependent.
Earned income tax credit: This is a refundable credit for eligible workers who meet income limits.
Child tax credit: This credit is worth up to $2,000 per qualifying child under age 17; however, it begins to phase out when your gross income exceeds $200,000 (or $400,000 for joint filers).
American opportunity tax credit: This credit offers up to $2,500 per student for the first four years of college. This breaks down to: 100% of the first $2,000 in qualified expenses and 25% of the next $500.
Lifetime learning credit: This credit provides up to $2,000 per return for tuition or job training expenses. It applies to undergraduate, graduate and professional courses and has no limit
on the number of years it can be claimed.
Importantly, you should also review your retirement contributions.
The contribution limit for 401(k) plans increases to $23,500 in 2025. Participants older than 50 can make $7,500 in catch-up contributions (for a total of $31,000). Participants who are 60-63 may contribute an additional catch up amount of $3,750 (for a total of $34,750).
Individual retirement account (or IRAs), the limits remain unchanged from 2024: $7,000 for taxpayers under 50 and $8,000 for those 50 and older.
The tax law increased the standard deductions which mean fewer people will be able to itemize this year. But if you are charitably inclined there are still ways to donate while receiving the tax deduction.
You may combine multiple years’ worth of donations into one to exceed the standard deduction threshold. A good strategy for accomplishing this is to use a donor-advised fund. Contribute a lump sum in one year, claim the deduction, and distribute the charity grants over time.
Another option is to make qualified charitable distributions. Taxpayers aged 70 1/2 and older can direct up to $100,000 (and maybe more in 2025, as the amount is now indexed for inflation) annually from their IRAs to charity, satisfying required minimum distributions without adding to the taxpayer’s taxable income.
If you would like to learn more about how these limits may impact you and your estate planning needs, then we invite you to register for one of our upcoming presentations. You may find those presentations on our website attorneyoffice.com.
Thank you.
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