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Inside the Senate version of the Trump tax bill OBBBA

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1 year ago

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After a 50-50 vote — with Vice President J.D. Vance providing the tie breaker — the Senate passed its version of the budget reconciliation bill. The bill now goes back to the House where it faces an uncertain future. 

The Senate version differs in many respects from the House-passed version — and even in some respects from the Senate Finance version.

Below are some of the major provisions:

  • SALT limit. The state and local tax deduction limit was increased to match the House version with a $40,000 limit, adjusted for inflation, except it reverts to $10,000 in 2030. There is also a phase-down for modified adjusted gross incomes above $500,000, but never below $10,000. The provision to limit the pass-through entity workaround was dropped from the bill. It is not clear how this will be received by the House Republicans, who pushed for a permanent $40,000 limit.
  • Senior deduction. The senior deduction remained at $6,000 in the Senate version, through 2028, compared to $4,000 in the House version. It includes a phase-out at MAGI of $75,000, $150,000 for joint filers. This should not result in a large fight with the House except over the cost.
  • Child Tax Credit. The Senate bill raises the CTC to $2,200, indexed for inflation, and makes it permanent. The $1,400 refundable credit is made permanent. The $500 dependent credit is also made permanent. A Social Security number is required for the credit. This is not significantly different from the House version.
  • Moving expense deduction. The Armed Forces moving expense deduction is expanded to include members of the intelligence community.
  • Child and Dependent Care Credit. The Senate proposes to increase the maximum credit to 50% from 35%, while preserving a 20% minimum credit.
  • Charitable deduction for nonitemizers. The Senate bill proposes a larger deduction of up to $1,000 ($2,000 for joint filers). It also proposes a new 0.5% floor on itemized individual charitable contributions and a 1% floor on corporate contributions.
  • Excise tax on college endowments. The Senate proposes a smaller excise tax on the investment income of endowments of private universities and colleges than the House, with the current rate of 1.4% on endowments of$500,000 to $750,000; 4% on endowments of $750,000 to $2,000,000; and 8% on endowments over $2,000,000. Some House Republicans may push to retain the much higher tax rates in the House version.
Vice President J.D. Vance at the Capitol in June 2025
Vice President J.D. Vance at the Capitol

Aaron Schwartz/Bloomberg

  • Clean energy provisions. Like the House, the Senate version includes terminations of many of the clean energy provisions from the Inflation Reduction Act. The clean vehicle and energy efficient home provisions tend to terminate by the end of 2025. However, several of the industry focused provisions tend to have terminations more spread out than the House version. There may be some fight in the House over these longer terminations.
  • International provisions. The international provisions in the Senate bill are revised from the House version and also from the Senate Finance version in several respects. It is not clear that the differences will be a major problem in the House.
  • Direct File. In an interesting change, rather than just terminating Direct File, the IRS’s recently developed free tax-filing system, the Senate version proposes to fund a study on a private/public partnership to expand Free File to a larger percentage of taxpayers. This may be an issue with some House Republicans.
  • Deficit. The Senate used an unusual budget gimmick to take the position that making permanent provisions that are already in the Tax Code does not require that those extensions be paid for under budget reconciliation. This has left the Senate bill with a projected $3.3 trillion addition to the deficit. Some House Republicans are already raising objections to this result.
  • Medicaid. While not a tax provision, it appeared that the House Medicaid reductions would cause problems in the Senate. However, the Senate version also includes similar Medicaid deductions, so this may not be a major issue as the bill returns to the House. Some House Republican members wanted greater Medicaid cuts, others wanted fewer cuts. It may balance out in the final debate. 
  • Senate parliamentarian. The Senate parliamentarian rejected several of the provisions in the legislation, some of which had come from the House. This helped upset some of the funding balance and brought calls for replacement of the parliamentarian. However, many experts had predicted that some of the provisions would not pass muster under the budget reconciliation rules. The House will have to address the changes made by the Senate parliamentarian.
  • Other provisions. There are many other tax provisions included in both the House and Senate versions of the legislation. In addition to the differences highlighted herein, the House may want time to consider these many differences even though the differences have not been highlighted in the public discussions. Some of the House provisions may have had support from a particular House Republican who may object to changes to a provision that they had promoted.

Summary

Predictions are that the Senate bill may face significant hurdles in the House. However, it was expected to face significant hurdles in the House the first time around, and it was also expected to face significant hurdles in the Senate. Both versions passed by the narrowest of margins. 

All of the congressional Republicans want to extend the individual provisions of the Tax Cuts and Jobs Act and none of them want to give up on budget reconciliation and be forced to negotiate with the Democrats. There will be a lot of pressure to not be the Republican who scuttles the legislation.

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Accounting

Embedded AI and Automated Anomaly Detection Reshape Modern Corporate Accounting Frameworks

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2 days ago

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September 13, 2026

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Embedded AI and Automated Anomaly Detection Reshape Modern Corporate Accounting Frameworks

The accounting and audit landscape in 2026

The accounting and audit landscape in 2026 is defined by the full integration of artificial intelligence directly into core enterprise software platforms. Rather than operating as standalone third-party tools, generative AI, automated reconciliation, and continuous anomaly detection are now natively embedded within major ERP engines including SAP, Oracle, Microsoft Dynamics, QuickBooks, and Sage. This technology integration is transforming daily financial operations, internal reporting controls, and external audit workflows.

Recent industry benchmark surveys reveal a widening performance gap

Recent industry benchmark surveys reveal a widening performance gap between finance teams utilizing integrated AI automation and those relying on legacy manual processes. Organizations actively leveraging embedded AI report up to 37% higher revenue per employee, driven by automated invoice matching, instant ledger entries, and predictive cash flow modeling. Routine, high-volume transactional tasks that once required manual intervention are now executed in real time with continuous digital audit trails.

AI introduces new governance and control responsibilities

However, the widespread deployment of embedded AI introduces new governance and control responsibilities for accounting professionals. Auditing standards now mandate strict verification protocols for algorithmically generated journal entries and financial commentary. External auditors are evaluating enterprise AI governance frameworks, reviewing automated rule sets, testing data ingestion pipelines, and ensuring that financial controllers maintain human-in-the-loop oversight over automated system outputs.

Furthermore, cloud governance and data security have become core operational skills for modern CPAs and controllers. As financial ledgers and client data stream through interconnected cloud ecosystem APIs, accounting teams must implement multi-factor access controls, continuous data encryption, and strict data privacy compliance to protect sensitive financial records from cyber vulnerabilities.

The embedding of AI into enterprise accounting software redefines internal financial controls and career requirements for accounting professionals. Business owners and finance leaders must update governance protocols, invest in staff digital literacy, and ensure accounting systems maintain rigorous audit compliance to capture productivity gains safely.

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Accounting

Mandatory ESG Reporting Standards Demand Standardized Non-Financial Audit Trails

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1 week ago

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September 5, 2026

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Mandatory ESG Reporting Standards Demand Standardized Non-Financial Audit Trails

Corporate accounting departments face an expanded regulatory mandate as mandatory sustainability and Environmental, Social, and Governance (ESG) reporting frameworks take full effect internationally. Governed by the European Union’s Corporate Sustainability Reporting Directive (CSRD) and the International Sustainability Standards Board (ISSB) IFRS S1 and S2 standards, enterprise financial controllers are now legally required to track, verify, and report non-financial data with the same internal controls and auditability as traditional financial statements.

The expansion shifts ESG compliance

This regulatory expansion shifts ESG compliance from marketing departments to corporate accounting offices. Financial managers are now responsible for gathering, consolidating, and verifying carbon emissions metrics, supply chain labor conditions, water usage, and climate risk exposures across multi-tiered corporate structures. These non-financial metrics must be integrated into standardized general ledgers to withstand rigorous third-party audit assurance processes.

To comply with these rigorous reporting mandates, accounting software providers have added dedicated ESG modules designed to aggregate data from IoT sensors, utility platforms, and vendor management systems. Controllers are implementing internal control frameworks—modeled after traditional COSO frameworks—to ensure the completeness, accuracy, and consistency of sustainability disclosures, protecting organizations against greenwashing penalties and litigation risks.

The transition requires significant cross-functional collaboration between accounting teams, legal counsel, and operational directors. Accounting professionals are expanding their technical expertise beyond financial ledgers to master carbon accounting methodologies, lifecycle assessment standards, and non-financial data governance protocols, fundamentally expanding the role of the modern corporate accountant.

Why This Information Matters
Mandatory ESG disclosures require companies to treat environmental and social metrics as audited financial records. Executives, accountants, and board members must institute formal tracking and assurance processes to satisfy legal mandates, maintain investor confidence, and mitigate regulatory non-compliance risks.

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Accounting

SEC’s Semiannual Reporting Proposal Faces Investor Pushback: What CFOs Need to Know

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3 weeks ago

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August 25, 2026

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U.S. Securities and Exchange Commission (SEC)

A proposal from the U.S. Securities and Exchange Commission to potentially shift some public companies away from quarterly financial reporting toward a semiannual model is drawing significant pushback from investors, even as it continues moving through the regulatory process. The debate has direct implications for corporate finance teams, auditors, and the broader transparency of U.S. capital markets.

What the SEC Proposed

According to a summary published by accounting advisory firm Cohen & Co., the SEC issued a proposed rule on May 19, 2026, aimed at simplifying financial reporting requirements for many U.S. public companies. The proposal would potentially reduce the frequency of certain mandatory disclosures from quarterly to semiannual, a structural change that has not been made to core U.S. reporting requirements in decades.

The proposal follows an extended debate within U.S. policy circles, with proponents arguing that reduced reporting frequency could lower compliance costs and free up management time for longer-term strategic planning rather than quarter-to-quarter results management.

Why Investors Are Pushing Back

Comment letters submitted in response to the proposal have been extensive, and according to Cohen & Co.’s review of the public record, investors “appear to be largely opposed” to the shift, viewing frequent interim reporting as a core benefit of U.S. capital markets relative to other jurisdictions.

Accounting and law firms have taken a more measured position, generally urging any changes to remain aligned with the Financial Accounting Standards Board (FASB), whose existing disclosure requirements and guidance are built around a quarterly reporting cadence. A shift to semiannual reporting without corresponding changes to FASB guidance could create friction between SEC filing requirements and GAAP-based disclosure expectations.

Lessons From the U.K. Experience

The debate is not without precedent. The United Kingdom moved away from mandatory quarterly reporting for listed companies in 2014, returning to a semiannual disclosure requirement. According to Cohen & Co.’s analysis, that experience offers a cautionary data point: there was no measurable increase in capital expenditure or R&D investment following the change, while analyst coverage of affected companies declined as reliable interim information became less available — a particular risk for smaller and newly public companies that rely on analyst coverage to maintain investor visibility.

Practical Implications for Finance Teams

Beyond the debate over disclosure philosophy, the proposal carries practical complications. Many companies have debt covenants and credit agreements structured around quarterly financial delivery; a shift to semiannual reporting could require renegotiating those terms. Reduced reporting frequency would also extend the “window of market silence” between disclosures, a factor that governance and investor-relations teams would need to manage carefully to avoid information asymmetry.

Separately, and unrelated to the reporting-frequency debate, the SEC and FASB have continued finalizing more routine updates this year. New Accounting Standards Updates are taking effect for December 31, 2026, fiscal year-ends covering income tax disclosures, credit loss measurement, induced debt conversions, and stock compensation, according to Eide Bailly’s review of 2026 ASU activity. Additional guidance on paid-in-kind dividends and environmental credits is also on the near-term horizon.

What to Watch Next

The semiannual reporting proposal remains in the comment and review phase, and no final rule has been adopted as of this writing. Finance leaders should monitor the SEC’s regulatory agenda for further movement, while treating the current quarterly reporting requirement as the operative standard until any final rule is issued and an effective date is set.

Given the extent of investor opposition documented in the comment file, a full shift to mandatory semiannual reporting appears more likely to result in either a scaled-back compromise or continued study rather than swift adoption — though the SEC’s ultimate direction remains uncertain.

 

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