The One Big Beautiful Tax Bill Act, as passed by the House and revised text was released Monday by the Senate, includes a number of significant tax provisions for both corporate taxpayers and nonprofits.

“Even before we saw the legislative text of the One Big, Beautiful Bill, we knew these would be the big provisions for most of our clients that they were interested to see what was going to happen,” said Jess LeDonne, director of tax technical at the Bonadio Group. “The big one that I get the most questions about right now would be the expensing of research and development costs, Section 174. That provision, specifically, allows for the temporary suspension of the amortization, so you would be able to immediately expense those costs. They also expanded that provision to include software development expenditures as well. Some of the provisions are kind of a permanent extension of some of the Tax Cuts and Jobs Act. This one specifically is a temporary suspension of the amortization requirement. Essentially it will allow for immediate expensing of R&D costs only for tax years 2025 through 2029. This isn’t permanent, but it still is for a lot of clients a welcome potential change.”

Another significant provision involves bonus depreciation, Section 168(k). “The bill, as written as it currently sits in the Senate, would allow for 100% bonus depreciation to be reinstated,” said LeDonne. “This would again be temporary, based on the placement service date of the equipment, and it would be for a property placed in service from essentially Inauguration Day. They picked Jan. 19 of this year, and before Jan. 1, 2030.”

She sees that as a welcome extension. “That was the one we have been watching phase down already, and was set to phase out completely by 2027,” said LeDonne. 

Another provision involves the qualified business interest deduction provision. “There’s an increase there from 20% to 23% and that one does not have a sunset date, so that would be more of a permanent potential increase to that QBI deduction,” said LeDonne. 

Business interest deductions would also be extended “The last one that I’m always being asked about would be the change in the calculation for the limitation on business interest expense deductions in 163(j),” said LeDonne. “There’s a temporary reinstatement in the bill to go back to the EBITDA-based calculation. And that would be for tax years 2025 through 2029. That was the other one that we’ve been watching those specific provisions to see what’s going to happen based on the Tax Cuts and Jobs Act expirations and phasedowns. Those were some of the biggest business-side provisions that we’ve been asked about.”

Nonprofit tax changes

Nonprofits such as foundations, colleges and universities would also see wide-ranging impacts from the bill that was passed by the House and whose amended text was released Monday from Senate Republicans.

“The tax bill, as it’s written right now out of the House, has a number of provisions that impact the nonprofit sector,” said Aaron Fox, a managing director at CBIZ. “We will see how many of them stay in effect after the Senate is done marking up the bill. Some of the more notable provisions in the bill, to my mind, are the private foundation increase in tax rates depending on the size of their asset base. That would mark a significant departure from historic norms, where previously the tax rate was only 1.39%, and the rationale was that it was there to pay for the cost of administering foundations. But the increased rates up to 10% for the very large foundations with $5 billion or more in assets really represents a change in approach and would pay for other parts of the bill.”

The increase in tax on investment income for colleges and universities could also have a major effect on larger educational institutions. “Right now, the current rate is 1.4%, but in certain instances where the student-adjusted endowment amount goes up to $2 million or more, then colleges could be looking at significant increases in that excise tax rate,” said Fox. “That’s a pretty significant one that would not impact all of higher education, but have a pretty broad impact on the bigger colleges that have very strong balance sheets.”

Other provisions involve royalty income and transportation tax fringe benefits. 

“Royalty income change is going to be pretty broad in application, because many nonprofits, especially in the social welfare space, have royalty contract arrangements, and some of those royalties relate to name and logo licensing or sales,” said Fox. “I think that has an opportunity to have a really broad impact as well. Finally, my fourth one would be what they’re thinking about doing with transportation tax benefits and bringing back the rule that created unrelated business income tax on the provision of those benefits, which is sort of a tricky area in the tax law. It created a lot of uncertainty and difficult filings for nonprofits back in 2017 and 2018 when this idea was first put into law and then later repealed.”

The Public Company Accounting Oversight Board reported that deficiency rates remain high across examination, review and audit engagements.

In the 2024 edition of its annual report on broker-dealer audits, the PCAOB found a slight improvement across firms’ examination engagements year over year. It found at least one deficiency in 17 (59%) of the 29 examination engagements it reviewed, a decrease of two from 2023. 

The largest audit firms performed 15 of the examination engagements reviewed, and deficiencies were identified in six, a decrease from the year prior. The remaining audit firms performed the other 14 engagements reviewed, and deficiencies were identified in 11, also a decrease from the year prior. 

Results were consistent year to year across firms’ review engagements. The PCAOB reviewed 64 engagements and found at least one deficiency in 27 (42%), consistent with the 2023 results. 

The largest audit firms performed 15 of the review engagements reviewed, and deficiencies were found on two, which is the same as 2023. Meanwhile, the remaining audit firms performed 49 of the review engagements, and deficiencies were identified in 25, also the same as the year prior. 

Finally, audit engagement deficiencies increased across all firms. The PCAOB found at least one deficiency in 68 (66%) of the 102 audit engagements it reviewed, an increase of 10 from 2023. 

The largest audit firms performed 31 of these audit engagements, and at least one deficiency was identified in 13 (42%0, three more than the year prior. The remaining audit firms performed the other 71 engagements, and at least one deficiency was identified in 55 (77%), an increase of seven from 2023.

The areas with the most deficiencies were revenue, journal entries and evaluating audit results. Deficiencies in revenue procedures included instances where firms did not sufficiently test whether recorded revenues were accurate, performance obligations were satisfied and disclosure requirements were met. For journal entries, firms did not consider the characteristics of potentially fraudulent journal entries when identifying and did not perform journal entry procedures. And for evaluating audit results, firms did not sufficiently evaluate whether the broker-dealer financial statements were presented fairly in accordance with Generally Accepted Accounting Principles.

For decades, accounting firms have operated on a rhythm as reliable as a metronome: a rush of activity from January through April, followed by a lull that stretches through the summer and beyond. This seasonality has shaped everything from staffing patterns to service delivery models. Tax professionals gear up for a mad dash, auditors dive into quarter-end chaos, while leadership scrambles to balance capacity with unpredictable workloads.

But the once-effective model of heavy lifting during tax season followed by a revenue drought isn’t just outdated — it’s increasingly unsustainable. Firms report post-April revenue drops of up to 50%, causing financial strain and operational uncertainty. At the same time, clients become more demanding as their expectations grow. Today’s business leaders don’t just want tax prep. They expect strategic insights, thoughtful planning and a reliable partnership year-round.  This current business environment — exacerbated by economic uncertainty, fee pressures and the ongoing CPA talent shortage — is exposing the growing cracks in the traditional accounting model.

What was once a manageable cycle is now a source of instability. Firms that continue operating this way risk more than missed revenue; they risk falling behind in a profession that’s evolving faster than ever. A model built on periodic surges can’t support the kind of consistent, forward-thinking service today’s clients demand. And it certainly won’t help attract or retain top talent who increasingly value work-life balance and meaningful engagement over burnout-driven heroics.

This is a pivotal moment for accounting firms. It’s time to shift from reactive to proactive, from transactional to relational. Fortunately, a new path is already emerging. Subscription-based service models, scalable AI tools and modern outsourcing strategies are changing how firms operate. These approaches are not theoretical, though; they’re practical, proven and already delivering results for forward-thinking firms.

So, how do accounting firms pivot toward stability and year-round growth? It starts with three key elements:

1. Adopt subscription models: Hourly billing and one-off engagements limit growth and deepen seasonality. Instead, accounting firms should move toward packaging their services into monthly retainers — turning what used to be a once-a-year interaction into a continuous relationship. Whether it’s monthly bookkeeping, quarterly tax planning or ongoing advisory services, subscription models drive consistent revenue and strengthen client loyalty. According to industry surveys, firms embracing this model have seen an 80% increase in the number of clients on recurring billings.

2. Leverage AI for advisory at scale:  Artificial intelligence isn’t about replacing accountants — it’s about freeing them up to do more of what matters. By automating repetitive tasks like data entry, categorization, and report generation, AI tools help firms reallocate talent toward higher-value, insight-driven advisory work. Even small firms can now deliver real-time dashboards and forecasting tools that used to be the domain of big players. And with AI’s ability to quickly surface trends and risks, firms can offer strategic guidance without hiring additional staff — a major win in today’s tight labor market.

3. Modernize outsourcing: Outsourcing has traditionally been seen as a cost-cutting tactic, but its real value lies in scalability and expertise. Today’s strategic outsourcing goes beyond basic functions — it enables firms to expand capacity, tap into specialized knowledge, and improve client satisfaction with faster turnarounds and broader capabilities. When done right, outsourcing becomes a force multiplier that allows firms to offer more services with greater flexibility, without overburdening internal teams.

The benefits of this new approach are compelling:

• Predictable revenue: Instead of the feast-or-famine cycles of old, firms can count on steadier income streams. This predictability reduces financial risk and makes growth planning far more effective.
• Stronger client relationships: Regular touchpoints foster trust and engagement, which leads to better retention and new business opportunities. In fact, 82% of accountants say that technology is helping create more meaningful client interactions.
• Scalable growth: With smart technology and strategic outsourcing, firms can grow services without growing overhead. This not only expands margins but also enhances employee experience, reducing burnout and improving retention.
• Happier teams: A smoother, more manageable workload throughout the year means less stress and more job satisfaction. That’s a meaningful consideration in a field where turnover is rising and experienced professionals are harder to find.

Key strategies lead to firm sustainability

The accounting landscape is evolving, and with it, the business model must evolve too. Firms that embrace subscription-based billing, leverage AI to scale advisory services and modernize outsourcing aren’t just streamlining operations — they are unlocking new, more profitable revenue streams. This shift transforms the traditional feast-or-famine cycle into a foundation for sustainable, year-round growth.

By strengthening client relationships, improving talent retention and reducing operational risk, these strategies help firms build lasting financial resilience. Predictability no longer just reduces risk. It drives results.