Accounting
Congress passes Trump tax bill
House Republicans passed the wide-ranging Trump tax legislation dubbed the One Big Beautiful Bill Act, overcoming resistance from a group of GOP holdouts and united opposition from Democrats.
The bill passed by a vote of 218 to 214, mainly along party lines with only two no votes from Republicans, Thomas Masie of Kentucky and Brian Fitzpatrick of Pennsylvania.
The bill would extend the expiring tax breaks from the Tax Cuts and Jobs Act and make many of them permanent. A summary of the main provisions can be
House Minority Leader Hakeem Jeffries, D-New York, spoke out extensively against the bill, which he dubbed the “one big ugly bill” during a record-breaking marathon speech lasting over eight hours and 44 minutes in a last-ditch effort to delay the bill from being passed. He repeatedly denounced the cuts to Medicaid and the Supplemental Nutrition Assistance Program to fund the tax cuts.
The legislation makes extensive tax changes and preserves the expiring tax breaks from the TCJA.
“It’s important that some of the provisions of the Tax Cuts and Jobs Act not be allowed to expire,” said Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals. “That’s part of what’s making the headlines. It’s really important legislation to get many of those provisions continued.”
Among the key provisions that have been under negotiation are the expansion of the so-called SALT cap for state and local tax deductions, which is going to be increased to $40,000 for five years.
“That’s going to give people who have more than $10,000 in state and local taxes, local property taxes, etc, the ability to possibly benefit from that,” said O’Saben. “They’ve still got to get over the standard deduction, which is also increased in the One Big, Beautiful Bill, but not to the extent where standard deductions were basically doubled under the original Tax Cuts and Jobs Act. It is possible that many taxpayers may still not benefit from the increase in the SALT limitation.”
“It’s generally looked at as a tax and spending bill, and that is a big portion of what it does,” said Casey Burgat, an assistant professor and director of legislative affairs at George Washington University. “On the tax side, it will obviously extend the Trump tax cuts passed in 2017. Those things will continue to benefit the wealthy disproportionately. It will explode the deficit, despite Republicans claiming that we’re going to grow our way out of this, and then there’s a lot of smaller provisions that will affect a lot of people’s everyday lives, especially those at the bottom of the income food chain.”
He believes the bill will give tax professionals plenty of work in the future to help their clients.
“I’d imagine that accountants and tax professionals will benefit from this, in that there’s going to be changes, and you need businesses to rely on you to explain what’s going on, to talk about the changes in regulations and what type of benefits or tax credits your company or an individual can qualify for,” said Burgat. “While this is an extension of the biggest piece of tax cuts with the Trump income tax brackets, there’s a lot of changes, including eliminating a lot of those tax credits, particularly on the green economy side that were included in the Inflation Reduction Act during the Biden administration.”
The legislation takes aim at the tax credits won for the renewable energy industry from the Inflation Reduction Act.
“Most of corporate America spent 2025 playing defense in Washington, trying to convince lawmakers not to raise their taxes,” said John Gimigliano, co-lead of the federal legislative and regulatory services group in the Washington National Tax at KPMG LLP, in a statement. “In the end, the business community comes away from the Senate bill avoiding most of their worst-case scenarios. One notable exception to this of course is the renewable sector. Wind and solar developers in particular would see a rapid phase out of the tax credits they rely on to support the economics of those investments. For many in that sector, this bill would represent their fears confirmed.”
Tax breaks for tips and overtime are also important tax considerations. “My concern was how that’s going to work, and I think that’s what tax professionals will be mostly interested in,” said O’Saben. “What do we do on Monday morning, July 7, when this becomes the law if you happen to be a company that does payroll, or you work with small businesses? It would appear that the deduction for tips or overtime will truly be at the individual employee level, meaning there’s going to be a deduction on the 1040. What we’re guessing at NATP is how that’s going to be handled. The challenge for employers or payroll services will be to identify on the W-2 when it’s issued at the end of the year on payroll reports as they go through the year as to what amount of cash tips did the employee incur, or what amount of overtime did they incur?”
While Trump’s campaign promises for tax breaks on overtime pay and tips are in the bill. the limits on Social Security aren’t fully there. “The other big proposal that I’m actually disappointed with is that the President talked about Social Security not being taxed, and in both the House and Senate versions, what they’ve come up with is a senior deduction,” sad O’Saben. “The original House version was $4,000 per person, so a grand total for a married couple of $8,000. The Senate version was $6,000, so that would be $12,000 for a married couple if they’re both age 65 or over. That’s a far cry from making Social Security benefits not taxable.”
“I’m a tax professional , and clients have said at least I don’t have to claim my Social Security benefits this year. Not so,” O’Saben cautioned. “You’re still going to have to claim your Social Security benefits, but if you’re a senior receiving Social Security benefits, then you’ll have this senior deduction.”
Businesses will be able to benefit from the return of 100% bonus depreciation. “Bonus depreciation was phasing out, and in 2025, I believe, was down to about 40% of the cost of an item placed in the service during the year,” said O’Saben.
Another provision involves Trump savings accounts for children. “If there’s children under the age of five, born in 2025 to 2028, there’s going to be a savings account opened for babies fed by the government with $1,000 and then families or grandparents can add to these accounts to a limit of $5,000,” said O’Saben. “That might be an interesting thing to see to help spur some savings for children as time goes on.”
The NATP had worked with the AICPA on beating back a provision in the House version of the bill that would have limited the SALT deduction for pass-through businesses like accounting firms, and it wasn’t preserved in the Senate version of the bill that was passed by the House.
The American Institute of CPAs issued a statement lauding passage of the bill. “The passage of the One Big Beautiful Bill Act, which includes a number of important provisions beneficial to the accounting profession, is a win for millions of businesses, taxpayers and tax practitioners across the country,” said AICPA president and CEO Mark Koziel in a statement. “Among the numerous provisions supported by the AICPA, this bill expands the use of section 529 accounts for costs associated with obtaining a post-secondary credential; repeals the lowered threshold for Form 1099-K; makes permanent 100 percent bonus depreciation; makes permanent the section 199A qualified business income deduction; extends and enhances the Paid Family and Medical Leave Tax Credit; removes the restriction on the regulation of contingency fees; retains current rules around the excess business losses limitations; and removes the limit on pass-through businesses’ state and local tax (SALT) deductions.
“We are thankful to the members of Congress who supported millions of businesses’ ability to retain pass-through entity tax SALT deduction and our partners throughout the state CPA societies and other professional service businesses for their diligent advocacy on this important issue,” Koziel added. “No bill is perfect — however, there are many beneficial tax provisions in this bill that I believe support the business community and will help grow our economy. The tax provisions in this bill will help facilitate tax planning earlier in the year, which can help reduce the anxiety of the unknown for many taxpayers. We look forward to continuing our work with Congress and the Administration to improve these provisions as they are implemented.”
“It appears that the Senate heard the AICPA and they heard us in saying that we found that was not fair,” said O’Saben. “If your friend has a flower shop right next to you, and you’re an accountant in the next building, the flower shop qualifies for a higher SALT limitation, and you don’t, so that didn’t seem to make any sense.”
Over the last few years, AI has gone from being a novelty to a mission-critical business strategy for many accountants. Innovative, forward-thinking firms are using these tools to streamline manual tasks, ensure compliance and provide the best possible service to their clients. According to the 2025 Intuit QuickBooks
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However, AI adoption is at varying levels across the industry. While nearly every firm has begun experimenting with basic AI tools, many remain in a sandbox phase, hesitant to move toward full-scale integration due to perceived complexity or costs.No matter where you may fall on the integration spectrum, the fact remains: AI is rapidly reshaping the accounting industry. If you’ve delayed AI adoption in your business, you’ll want to create a focused plan to catch up.
Time is of the essence, but don’t sacrifice strategy for speed
Firms that are ready to take the leap from casual use to deep integration may find themselves in need of accelerated adoption, but speed should not come at the cost of strategy. Identify tangible, practical ways that easy-to-use tools can impact your business through automation. Having a strong strategic focus allows firms to implement workflow changes to streamline manual tasks, ensure compliance and provide excellent service to your clients.
To begin your AI journey, here is a four-step plan that firms can use to transition from experimentation to execution, in a safe, practical manner:
Step 1: Kick off your first AI project
As is the case with many things, getting started is often the most challenging step. While enthusiasm is high, uncertainty with implementation risks can cause hesitation. The key is to lower risk by embracing AI and implementing an intentional, phased approach. Begin by weaving AI tools into high-impact, low-risk tasks, such as summarizing meeting notes, drafting client or firm-wide memos, or translating complex concepts into easy-to-understand ideas. Monitor results carefully and, if these initial attempts need adjustment, be prepared to pivot to the next use case until you can clearly demonstrate that AI systems are delivering a measurable impact on your operations. From there, you can learn from early experiences, adapt strategy, and scale appropriately to complete more complex projects.
Step 2: Dig into your AI toolkit
The marketplace is crowded with AI-powered tools that promise to do everything from enhancing your workflows to improving the customer experience. It can be hard to know which ones are worth investing your time and money. Find a trusted source like a respected peer, or leverage your professional network to help discuss the tools that may be the best fit for achieving your business goals. You can also look within the tools you’re already using to see if they offer AI-powered features, which can help ease into the transition. Additionally, look for free high-quality education to upskill your team. For example, Anthropic offers a Claude AI University that provides excellent foundational resources for moving beyond basic prompts.
Step 3: Review an AI security checklist
An important element in AI implementation is security. With AI tools needing access to firm and client data to function, it leads to questions of how the data will be protected. This makes the right AI and cybersecurity strategy critical. Firms must proactively ensure that client data remains protected from today’s increasingly sophisticated threats by embracing an established cybersecurity framework such as
Step 4: Openly discuss AI usage with your clients
Once you’ve established the best way to use AI tools that meet your firm’s needs, you’ll want to communicate all of the advantages afforded by these tools to your clients. Make sure you highlight the benefits and simultaneously ensure you are addressing any potential concerns. It’s also important to get explicit consent from all clients if you’re sharing their information with the third-party tools you may use. While this might seem like an extra step, it will go a long way toward fostering a greater level of transparency and deepen trust between you and your clients.
Don’t get left behind
Adopting AI does not have to be intimidating, expensive or overly complex. Think of it as a strategic business move that will not only keep you competitive, but will potentially free you up to focus on keeping clients happy and growing your practice. By strategically focusing on these best practices, identifying AI use cases in a phased approach, evaluating the right tools for your business, ensuring client information is secure and clearly communicating your AI strategy, you’ll be AI-ready in no time.
The Financial Accounting Standards Board met this week to discuss its projects on accounting for transfers of cryptocurrency assets and enhancing the disclosures around certain digital assets, such as stablecoins.
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During Wednesday’s meeting, FASB’s board made certain tentative decisions, according to a
At a future meeting, the board plans to consider clarifying the derecognition guidance for crypto transfer arrangements to assess whether the control of a crypto asset has been transferred.
FASB also began deliberations on the
The board decided to provide illustrative examples in Topic 230, Statement of Cash Flows, to clarify whether certain digital assets such as stablecoins can meet the definition of cash equivalents. It also decided to include the following concepts in the illustrative examples:
- Interpretive explanations that link to the current cash equivalents definition;
- The amount and composition of reserve assets; and,
- The nature of qualifying on-demand, contractual cash redemption rights directly with the issuer.
FASB plans to clarify that an entity should consider compliance with relevant laws and regulations when it’s creating a policy concerning which assets that satisfy the Master Glossary definition of the term “cash equivalents“ will be treated as cash equivalents.
“I agree with the staff suggestion to look at examples,” said FASB vice chair Hillary Salo. “From my perspective, I think that is going to help level the playing field. People have been making reasonable judgments. I agree with that. And I think that this is really going to help show those goalposts or guardrails of what types of stablecoins would be in the scope of cash equivalents, and which ones would not be in the scope of cash equivalents. I certainly appreciate that approach, and I think it has the least potential impact of unintended consequences, because I do agree with my fellow board members that we shouldn’t be changing the definition of cash equivalents, and it’s a high bar to get into the cash equivalent definition.”
“I’m definitely supportive of not changing the definition of cash equivalents,” said FASB chair Richard Jones. “I believe that’s settled GAAP in a way, and we’re not really seeing a call to change it for broader issues. I am supportive of the example-based approach. The challenge with examples, though, is everybody’s going to want their exact pattern, but that’s not what we’re doing.”
The examples will explain the rationale for how digital assets such as stablecoins do or do not qualify as cash equivalents and give a roadmap for other types of digital assets with varying fact patterns to be able to apply.
“We really don’t want to be as a board facing a situation where something was a cash equivalent and then no longer is at a later date,” said Jones. “That’s not good for anyone, so keeping it as a high bar with certain rigid criteria, I think, is fine.”
Stablecoins are supposed to be pegged to fiat currencies such as U.S. dollars and thus provide more stability to investors. “In my view, while a stablecoin may meet the accounting definition established for cash equivalents, not every one of those stablecoins in the cash equivalent classification represents the same level of risk,” said FASB member Joyce Joseph.
She noted that the capital markets recognize the distinctions and have established a Stablecoin Stability Assessment Framework to evaluate a stablecoin’s ability to maintain its peg to a fiat currency. Such assessments look at the legal and regulatory framework associated with the stablecoin, and provide investors with information that could enable them to do forward-looking assessments about the stability of the stablecoin.
“However, for an investor to consider and utilize such information for a company analysis the financial statement disclosures would need to include information about the stablecoin itself,” Joseph added. “In outreach, the staff learned that investors supported classifying certain stablecoins as cash equivalents when transparent information is available about the entities at which the reserve assets are held. Therefore, in my view, taking all of this into consideration a relevant and informative company disclosure would include providing investors with the name of the stablecoin and the amount of the stablecoin that is classified as a cash equivalent, so investors can independently assess the liquidity risks more meaningfully and more comprehensively by utilizing broader information that is available in the capital markets and its emerging information.”
Such information could include the issuer, reserves, governance and management, she noted, so investors would get a more holistic look at the risks that holding the stablecoin would entail for a given company.
The board decided to require all entities to disclose the significant classes and related amounts of cash equivalents on an annual basis for each period that a statement of financial position is presented.
Entities should apply the amendments related to the classification of certain digital assets as cash equivalents on a modified prospective basis as of the beginning of the annual reporting period in the year of adoption.
FASB decided that entities should apply the amendments related to the disclosure of the significant classes and amounts of cash equivalents on a prospective basis as of the date of the most recent statement of financial position presented in the period of adoption.
The board will allow early adoption in both interim and annual reporting periods in which financial statements have not been issued or made available for issuance.
FASB also decided to permit entities to adopt the amendments to be illustrated in the examples related to the classification of certain digital assets as cash equivalents without the need to perform a preferability assessment as described in Topic 250, Accounting Changes and Error Corrections.
The board directed the staff to draft a proposed accounting standards update to be voted on by written ballot. The proposed update will have a 90-day comment period.
Senators introduced several pieces of tax-related legislation this week, including measures aimed at improving customer service at the Internal Revenue Service, cracking down on tax evasion and curbing the carried interest tax break, in addition to efforts in the House to repeal the Corporate Transparency Act.
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Senators Bill Cassidy, R-Louisiana, and Mark Warner, D-Virginia, teamed up on introducing a bipartisan bill, the
The bill would establish a dashboard to inform taxpayers of backlogs and wait times; expand electronic access to information and refunds; expand callback technology and online accounts; and inform individuals facing economic hardship about collection alternatives.
“Taxpayers deserve a simple, stress-free experience when dealing with the IRS,” Cassidy said in a statement Wednesday. “This bill makes the process quicker and easier for taxpayers to get the information they need.”
He also mentioned the bill during a
“I’m happy to meet with the team … and do all I can to make it as good as you want it to be,” said Bisignano.
“My bill would equip the IRS with the legislative mandate to create an online dashboard so that taxpayers can monitor average call wait time and budget time accordingly,” said Cassidy. He noted that the bill would allow a callback for taxpayers that might need to wait longer than five minutes to speak to a representative, and establish a program to identify and support taxpayers struggling to make ends meet by providing information about alternative payment methods, such as installments, partial payments and offers in compromise.
“I know people are kind of desperate and don’t know where to turn for cash, so I think this could really ease anxiety,” he added. “This legislation is bipartisan and is likely to pass this Congress.”
Cassidy and Warner
“Taxpayers shouldn’t have to jump through hoops to get basic answers from the IRS — and in the last year, those challenges have only gotten worse,” Warner said in a statement. “I am glad to reintroduce this bipartisan legislation on Tax Day to ease some of this frustration by increasing clear communication and making IRS resources more readily available.”
Stop CHEATERS Act
Also on Tax Day, a group of Senate Democrats and an independent who usually caucuses with Democrats teamed up to introduce the Stop Corporations and High Earners from Avoiding Taxes and Enforce the Rules Strictly (Stop CHEATERS) Act.
Senate Finance Committee ranking member Ron Wyden, D-Oregon, joined with Senators Angus King, I-Maine, Elizabeth Warren, D-Massachusetts, Tim Kaine, D-Virginia, and Sheldon Whitehouse, D-Rhode Island. The bill would provide additional funding for the IRS to strengthen and expand tax collection services and systems and crack down on tax cheating by the wealthy.
“Wealthy tax cheats and scofflaw corporations are stealing billions and billions from the American people by refusing to pay what they legally owe, and far too many of them are getting a free pass because Republicans gutted the enforcement capacity of the IRS,” Wyden said in a statement. “A rich tax cheat who shelters mountains of cash among a web of shell companies and passthroughs is likelier to be struck by lightning than face an IRS audit, and Republicans want to keep it that way. This bill is about making sure the IRS has the resources it needs to go after wealthy tax cheats while improving customer service for the vast majority of American taxpayers who follow the law every year.”
Earlier this week. Wyden also
The Stop CHEATERS Act would provide the IRS with additional funding for tax enforcement focused upon high-income tax evasion, technology operations support, systems modernization, and taxpayer services like free tax-payer assistance.
“As Congress seeks ways to fund much-needed policy priorities and address our growing national debt, there is one common sense solution that should have unanimous bipartisan support: let’s enforce the tax laws already on the books,” said King in a statement. “Our legislation will make sure the IRS has the resources it needs to confront the gap between taxes owed and taxes paid – while ensuring that our tax enforcement professionals are focused on the high-income earners who account for the most tax evasion. This is a serious problem with an easy solution; let’s pass this legislation and make sure every American pays what they owe in taxes.”
Carried interest
Wyden, King and Whitehouse also teamed up on another bill Thursday to close the carried interest tax break for hedge fund managers that
Carried interest is a form of compensation received by a fund manager in exchange for investment management services, according to a
Under the bill, the
“Our tax code is rigged to favor ultra-wealthy investors who know how to game the system to dodge paying a fair share, and there is no better example of how it works in practice than the carried interest loophole,” Wyden said in a statement. “For several decades now we’ve had a tax system that rewards the accumulation of wealth by the rich while punishing middle-class wage earners, and the effect of that system has been the strangulation of prosperity and opportunity for everybody but the ultra-wealthy. There are a lot of problems to fix to restore fairness and common sense to our tax code, and closing the carried interest loophole is a great place to start.”
Repealing Corporate Transparency Act
The House Financial Services Committee is also planning to markup a bill next Tuesday that would fully repeal the Corporate Transparency Act, which has already been significantly
If enacted, the repeal would eliminate beneficial ownership reporting requirements, removing a transparency measure designed to help law enforcement and national security officials identify who is behind U.S. companies.
“This repeal would turn the United States back into one of the easiest places in the world to set up anonymous shell companies, something Congress worked for years to fix,” said Erica Hanichak, deputy director of the FACT Coalition, in a statement. “These entities are routinely used to facilitate corruption, financial crime, and abuse. Rolling back the CTA doesn’t just weaken transparency, it signals to bad actors around the world that the U.S. is once again open for illicit business.”
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