File MFJ 1040? The must know for how OBBBA will change your return this year.

The recently passed One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, brings significant updates to the tax code, building on the 2017 Tax Cuts and Jobs Act (TCJA). For married couples filing jointly (MFJ) aged 30–45 with children, these changes offer new opportunities to save on taxes and plan for your family’s financial goals.

Below, we break down the key updates that affect you, focusing on personal tax provisions that can make a difference for your household.

1. Increased Standard Deduction

The OBBBA makes the TCJA’s higher standard deduction permanent, ensuring long-term tax simplicity for families who don’t itemize. For MFJ filers, the standard deduction rises from $30,000 in 2024 to $31,500 in 2025, with annual inflation adjustments moving forward. This increase reduces your taxable income, potentially lowering your tax bill and freeing up more money for family expenses, savings, or investments. For busy parents running a household, the larger standard deduction simplifies tax filing by reducing the need to track itemized expenses like mortgage interest or charitable contributions.

2. Child Tax Credit Boost for Growing Families

For families with children, the OBBBA delivers welcome news by permanently increasing the Child Tax Credit (CTC) from $2,000 to $2,200 per qualifying child under 17, starting in 2025. The refundable portion, known as the Additional Child Tax Credit (ACTC), is set at $1,700 in 2025 and will adjust for inflation annually. The income phaseout limits remain at $400,000 for MFJ filers, meaning most families in the 30–45 age range with moderate to upper-middle incomes can claim the full credit. Additionally, the Other Dependent Credit for dependents who don’t qualify for the CTC (e.g., older children or other relatives) remains at $500 and is now permanent. To claim these credits, both you and your child must have valid Social Security numbers.

3. Higher SALT Deduction for High-Tax States

The state and local tax (SALT) deduction cap, set at $10,000 under the TCJA, temporarily increases to $40,000 for MFJ filers from 2025 to 2029, reverting to $10,000 in 2030. This is a significant win for families in high-tax states like New York, New Jersey, or California, where property and income taxes can add up quickly. The higher cap phases out for incomes above $500,000, reducing by 30% of the excess modified adjusted gross income (MAGI) until it hits $10,000. For example, if your MAGI is $600,000, your SALT deduction would be reduced by $30,000 (30% of $100,000), leaving you with a $10,000 deduction.For MFJ filers aged 30–45 with incomes between $200,000 and $500,000, this creates a “sweet spot” for maximizing the SALT deduction, especially if you itemize. This could mean substantial savings for homeowners with young families in high-cost areas, helping you keep more of your hard-earned money.

4. New Deduction for Car Loan Interest

The OBBBA introduces a temporary deduction for up to $10,000 in car loan interest for vehicles purchased for personal use and assembled in the U.S., effective from 2025 to 2028. This deduction phases out for MFJ filers with MAGI above $200,000, reducing by $200 for every $1,000 over the threshold. For example, if your MAGI is $220,000, your deduction would be reduced by $4,000, leaving you with a $6,000 deduction.For busy parents who recently purchased a family vehicle—like a minivan or SUV for school runs and weekend adventures—this deduction can offset some of the costs of financing a new car. Be sure to confirm the vehicle’s final assembly was in the U.S. to qualify. This tax break can help you manage your budget while balancing the demands of parenting and running a business.

5. Trump Savings Accounts for Your Kids

The OBBBA creates a new “Trump account” for children, a tax-favored savings account similar to a nondeductible traditional IRA. Parents can contribute up to $5,000 annually, and a $1,000 tax credit is available when opening the account for a child born between January 1, 2025, and December 31, 2028. Distributions can be used for education, small business investments, or first home purchases after the child turns 18. For forward-thinking families, this account offers a way to save for your children’s future while potentially reducing your tax liability. It’s a practical tool for business owners who want to set their kids up for success without sacrificing current cash flow.

6. Charitable Deduction Opportunities

Even if you take the standard deduction, the OBBBA allows MFJ filers to deduct up to $2,000 in cash charitable contributions starting in 2026, offering flexibility for families who support community causes. For those who itemize, a new 0.5% AGI floor applies to charitable deductions, meaning only contributions exceeding 0.5% of your AGI are deductible. The 60% AGI limit for cash donations to public charities is also made permanent. For families in the 30–45 age group, these provisions make it easier to give back while optimizing your tax strategy, especially if you’re passionate about supporting local schools or charities.

7. Adoption Credit Enhancements

For families growing through adoption, the OBBBA makes up to $5,000 of the Adoption Tax Credit refundable, with the total credit remaining at $17,280 in 2025 (adjusted for inflation). This refundable portion can provide a direct cash benefit, easing the financial burden of adoption costs, which can reach $60,000. For MFJ filers in their 30s and 40s, this enhancement supports your family-building journey while offering tax relief.

8. 
   

Child and Dependent Care Tax Credit (CDCTC): Enhancement: Starting in 2026, the CDCTC has been improved to make child care more affordable. The credit’s applicable percentage increases from 35% to 50% of qualifying expenses for lower-income taxpayers, with a phaseout schedule that ensures a minimum credit of 20%. For MFJ filers, the phaseout begins at $150,000 of adjusted gross income (AGI), reducing the credit by 1 percentage point for each $4,000 (or fraction thereof) above this threshold, but not below 20%.

Eligibility: The credit applies to expenses for the care of children under 13 (or dependents incapable of self-care) to enable parents to work or look for work. Qualifying expenses include costs for daycare, babysitters, or summer camps, with limits of $3,000 for one dependent or $6,000 for two or more.

Impact for MFJ Filers with Kids: For families in the 30–45 age range, this enhanced credit can offset significant child care costs, especially for those with incomes below or near $150,000. For example, a family with $100,000 AGI and $6,000 in qualifying child care expenses could claim a credit of up to $3,000 (50% of $6,000), reducing their tax liability.

Planning Tips for MFJ Filers with KidsTo make the most of these changes, consider these strategies:

• Review Your Filing Status: The increased standard deduction and SALT cap may influence whether itemizing or taking the standard deduction is more beneficial. Work with your tax professional to run projections.

• Maximize Child-Related Credits: Ensure you and your children have valid Social Security numbers to claim the CTC and Other Dependent Credit. Track eligible expenses for the Adoption Tax Credit if applicable.

• Explore Trump Accounts: If you have young children, opening a Trump account could jumpstart their financial future with the $1,000 tax credit.

• Check Vehicle Eligibility: If you’re planning to buy a family car, verify its U.S. assembly to claim the car loan interest deduction.

• Plan Charitable Giving: Align your donations with the new rules to maximize deductions, especially if you take the standard deduction.

Why These Changes Matter

For married couples aged 30–45 with children, the OBBBA provides immediate tax relief and long-term planning opportunities. The increased CTC and Trump accounts support your family’s current and future needs, while the higher SALT deduction and car loan interest break help manage the costs of living in high-tax areas or upgrading your family vehicle.

Sources:

 Fidelity, “What is the One Big Beautiful Bill Act and what does it mean for me?”

AARP, “How ‘One Big Beautiful Bill’ Could Change Your Tax Bill”

H&R Block, “One Big Beautiful Bill tax changes: How and when they impact you”

TaxAct, “The One Big Beautiful Bill Passed: Learn What's Changing”

TurboTax, “Taxes 2025-2026: One Big Beautiful Bill Tax Law Changes and How That Impacts You”

Ameriprise, “The One Big Beautiful Bill: What you need to know”

Ways and Means, “The One, Big, Beautiful Bill is an Economic Lifeline for Working Families”