Connect with us

Accounting

Trump’s tax bill offers planning opportunities for clients

Published

1 year ago

on

Tax clients are already starting to ask their accountants about the many changes in the massive One Big Beautiful Bill Act passed by Congress last week.

“I think they’re just kind of waking up and saying, OK, what’s the bottom line here for me, and how does this affect me?” said Robert Lickwar, a partner at UHY. “Certainly there are things in there that will, but then there’s other things that won’t.”

The bill has both pros and cons for various taxpayers. “It’s like anything with any bill that comes out of D.C.,” said Lickwar. “Some people see parts of it as good, others see it as bad. It depends on how it affects your situation.”

On the positive side is tax rate stability, thanks to the many “permanent” features of the bill, which could nevertheless be changed by a future Congress and administration. “I think the tax rate provisions being stable, at least for another four years, allows for people to better plan their transactions,” said Lickwar. “The fact that there’s certainty with standard deductions and child credits, at least in the short term, is probably good. They made some good adjustments to the Qualified Small Business Stock, and they put a couple other things in there, but that’s a big one for most of my clients.”

The rollbacks in renewable energy tax credits and incentives are causing some gnashing of teeth. “A certain number of people will probably be disappointed with the energy provisions, like the clean vehicles and some of the improvements to the home, including the solar, the wind and the geothermal, and the fact that those are going to be phased out over a relatively short period of time,” said Lickwar. “I’m sure people are probably not overly thrilled about that, and may influence what they do in the next few months, as far as looking to obtain that clean vehicle by September 30 to enable themselves to get the credit.”

Many of the tax incentives for clean energy under President Biden’s Inflation Reduction Act will be coming to an end under Trump’s bill. But there was already some expectation that would happen given the rhetoric coming out of the White House.

“At least from my personal client base, everyone who had something planned is going to proceed,” said Lickwar. “I don’t have any that were waiting till the bitter end to say, What’s going to happen here? I have a few clients that have done roofing projects, for example, on their manufacturing facilities and things of that nature. Those projects have already been done, so nothing has really come down to the wire. I think it’s problematic. There was a little bit of an extension on some of those types of products, and certain of the energy credits were pushed out to a later date, depending on when construction starts.”

Other clients, such as restaurants, will be impacted by the tax exemption on tip income. “Certain of our clients are going to be affected by the tip provisions and the wage provisions,” said Lickwar. “I have no idea how the payroll departments are going to even know where to start. They’re going to have a lot of work to do over the summer.”

He anticipates guidance will be coming from the IRS in the months ahead despite cutbacks at the agency. That may be a challenge, though, given the IRS’s diminished workforce. This week, the Supreme Court lifted an injunction imposed by the lower courts on broad restructuring at the IRS and other agencies across the federal government. The IRS has already lost about 26% of its workforce so far this year, according to a report from National Taxpayer Advocate Erin Collins.

However, Lickwar thinks the IRS will still have enough staffing to produce guidance, at least in an abbreviated form such as FAQ pages, as long as employees didn’t already take the voluntary buyouts offered under the government’s Deferred Resignation Programs. 

“The IRS recently likes to do a lot of things in the form of frequently asked questions, so I think you’re going to see a lot of FAQs coming out from them,” he said. 

“They had a really good tax season, so I’ll be optimistic that they’ll be able to get guidance out to address the major issues that they have to deal with,” he added. 

He pointed out that many provisions simply extend the tax breaks offered under previous legislation.

“It’s already on the books, so they’re not going to need a lot of guidance there,” he said. 

‘There’s a few things in there that they’re going to need guidance on.”

He expects businesses to be pleased with the various provisions. “I think overall that businesses will be happy,” said Lickwar. “Bonus depreciation is coming back. That’s going to influence some buying habits. The 179 deduction is increased. The interest deduction has been revised back to where it was to be able to add back depreciation and also the R&D stuff — no more capitalization required, beginning in 2025 unless the research is done offshore. There’s even a chance for some small businesses with less than $31 million or so in receipts with the ability to get some of the money back from what they capitalized for 2023 and ’24 so I think there’s a lot of good news for businesses there. We  thought we had that a couple of years ago, but it fell apart at the last second.”

It’s unclear how businesses will be able to claim the tax deductions they missed while the provisions weren’t in effect. “As I read the statute, I’m not really sure whether they’re going to make us do an accounting method change or not,” said Lickwar. “They’re going to allow us a deduction over either one or two years. But do I have to change my method? I hope that some sanity prevails and they say, No, let’s just go back to the way we were so I don’t have to file a 3115. It’s good for business, but I’d rather generate business in another fashion.”

Clients should reexamine their estimated payments and withholdings. “In a lot of cases, we set their estimated payments, and they’re withholding using their 2024 tax returns,” said Lickwar.

Accountants should be prepared to offer their clients timely advice. “With some of these business changes that may affect their partnership, their S corp, tip income or overtime income or whatever the case may be, increased standard deductions, the increase in the state and local tax deduction, things may change significantly enough for them where they may want to take a look at whether the estimates or the withholding that they set is appropriate for the remainder of 2025,” said Lickwar. “You don’t want to be in a situation where you are underpaid because the interest rates are pretty high, but you also don’t want to be writing too much of a check if you don’t have to. I would say that we reach out to our clients and say, things have changed. This is how it affects you. Let’s take a look and see whether we can adjust your third and fourth quarter or maybe your fourth quarter estimated payments, and take some of these changes into effect, at least the ones effective for 2025 because many of the provisions are retroactive back to the first of the year.”

Related Topics:
Continue Reading

Accounting

AI-Driven Automation and Continuous Accounting Frameworks

Published

1 week ago

on

August 15, 2026

By

The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

Continue Reading

Accounting

Global ESG Reporting Standards and Double Materiality Compliance

Published

2 weeks ago

on

August 9, 2026

By

Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

Continue Reading

Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

Published

2 weeks ago

on

August 5, 2026

By

Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

Continue Reading

Trending