Accounting
Maximize tax benefits with year-end tax planning for accountants
As we approach the end of 2024, year-end tax planning is at the forefront of every accountant’s agenda. With changing tax regulations and incentives, staying informed about the latest updates is crucial for optimizing client outcomes.
Bonus depreciation: phasing down, but still relevant
Bonus depreciation is an additional first-year tax deduction that affords many taxpayers significant cash tax savings early on and supports future tax planning strategies. Under the Tax Cuts and Jobs Act, the bonus is applicable to both acquired and newly constructed assets placed into service after Sept. 28, 2017. While the rate of bonus depreciation continues to phase down, it remains a critical tool for accelerating deductions on qualified property. Unless there is some legislative change, the scheduled phase-down period, presents both opportunities and challenges for 2024:
- 2024: 60%
- 2025: 40%
- 2026: 20%
- Fully eliminated by 2027.
Accountants may want to ensure their clients maximize current-year benefits and advise them on the timing of asset acquisitions and in-service dates, particularly for significant purchases, in order to take advantage of the higher bonus depreciation rates before they decline further.
Qualified property includes assets with a MACRS recovery period of 20 years or less, such as decorative lighting and Qualified Improvement Property. Notably, QIP applies to nonstructural, interior improvements made after the building is first placed in service by the taxpayer and remains a key focus area.
Tangible property regulations: the repairs vs. capitalization debate
The tangible property regulations provide guidance for costs incurred to acquire, produce or improve tangible property. Issued in 2013, these regulations are critical to a client’s capitalization, depreciation and expensing procedures for fixed assets. Proper classification of expenditures under TPRs can result in significant tax savings. Accountants should conduct a detailed annual review of their clients’ capitalization policies, fixed-asset accounts and current-year expenditures to identify items eligible for expense treatment or the case of assets permanently removed from service, an evaluation and correct calculation of the partial asset disposition (which must be taken in the tax year of disposition). Some of the best practices include:
- Repairs: Expenses meeting the “routine maintenance” or “de minimis safe harbor” criteria can be expensed immediately, reducing taxable income.
- Improvements: Many capitalized items may be eligible for expensing and/bonus depreciation.
- Dispositions: Current year partial and/or entire asset dispositions are being accounted for. It is important that the client addresses this write-off opportunity in the current year as dispositions cannot be retroactively corrected.
Accountants should revisit prior-year classifications for possible adjustments, especially under the 5-year automatic change rule for Form 3115.
Cost segregation: accelerate depreciation with detailed analysis
Cost segregation studies continue to be a cornerstone of tax strategy for businesses with substantial real estate investments. These studies reclassify components of a building into shorter-lived assets, allowing for accelerated depreciation.
Many decorative interior finishes and special purpose electrical and mechanical assets may be depreciated over five and seven years with land improvements, or 15 years instead of 27.5 or 39 years for buildings.
Today, cost segregation studies are becoming more complex but increasingly rewarding, particularly for projects involving Qualified Improvement Property. For clients who own nonresidential properties, significant deductions can be recognized when they are performing interior improvements and renovations. Based on thousands of studies, a large portion of our client’s building improvement capex qualifies as QIP.
A thorough review of capitalized assets can identify opportunities for reclassification and ensure compliance with updated regulations. Close consideration should be given to the scope of a study to address the detail not only needed to support assets eligible for accelerated depreciation but also to serve as a reference document to support TPR activities during the ownership period.
Energy tax incentives: leverage enhanced deductions and credits
The Inflation Reduction Act significantly enhances energy tax incentives, including Sections 179D and 45L, making them a focal point for businesses investing in energy-efficient properties. Energy-efficient buildings and homes offer lucrative opportunities for tax savings:
Accountants should ensure compliance with certification standards and explore these incentives to offset construction and renovation costs.
SALT updates and trends: stay ahead of state-level changes
State and local tax developments continue to reshape compliance requirements:
- Increasing movement toward flat tax rates;
- Adjustments to net operating loss limitations, including caps in Illinois and California;
- Expansion of digital economy taxation; and,
- Enhanced sin taxes, such as Maryland’s increased tobacco tax and California’s firearms excise tax.
As states adapt to economic pressures, accountants should monitor legislative changes that may impact client liabilities or planning strategies.
Year-end action items for accountants
To prepare clients for the year ahead and ensure they are well-positioned, accountants should consider the following steps:
- Review capitalization policies: Update client policies to align with current regulations and optimize expense classifications.
- Assess past and current capitalized items: Identify opportunities to reclassify assets or apply safe harbor elections.
- Conduct fixed asset reviews: Look for partial asset disposition opportunities, especially for underutilized or retired assets.
- Leverage Form 3115: File for permissible accounting method changes where beneficial.
- Plan for 2025 capex: Discuss the implications of future capital expenditures, particularly as bonus depreciation phases out.
The 2024 tax environment is rich with opportunities but demands diligence from accountants to navigate effectively. As always, proactive planning and thorough documentation remain essential for compliance and maximizing benefits. For specialized assistance, consider consulting experts in cost segregation, energy tax credits and TPR applications to enhance the overall strategy.
Big Four firm PwC announced new agentic AI capacities, including a model that proactively identifies areas of value leakage and acts inside the tools teams already use to fix them itself.
The new solution,
The software, which is supported by PwC’s recently released
The system connects directly into ERP environments, continuously monitors key metrics, and acts inside the tools teams already use. For example, a supply chain agent might detect rising shipping costs and automatically reroute deliveries to reduce spend. Finance agents can spot and correct billing errors before they reach the customer. Clients typically see measurable efficiency gains in the first quarter, with continued improvements over time as the system learns and adapts.
“Too many transformations still rely on one-off pilots and stale data, stretching the gap from insight to impact and suffocating ROI,” said Saurabh Sarbaliya, PwC’s principal for enterprise strategy and value. “Agent Powered Performance flips the economics by distilling PwC’s industry transformation playbooks into AI agents that turn static insights into compounding gains, without rebooting each time.”
Agent Powered Performance is platform-agnostic and built on an open architecture so it can work across different LLMs based on client preferences and task-specific needs. It works with major enterprise platforms including Oracle, SAP, Workday and Guidewire.
Agent OS Model Context Protocol
PwC also
By integrating this standard, agent systems registered as MCP servers can be used by any authorized AI agent. This reduces redundant integration work and the overhead of writing custom logic for each new use case. By standardizing how agents invoke tools and handle responses, MCP also simplifies the interface between agents and enterprise systems, which will serve to reduce development time, lower testing complexity, and cut deployment risk. Finally, any interaction between an agent and an MCP server is authenticated, authorized and logged, and access policies are enforced at the protocol level, which means that compliance and control are native to the system—not layered on after the fact.
This means that agents are no longer siloed. Instead, they can operate as part of a coordinated, governed system that can grow as needs evolve, as MCP support provides the interface to external tools and systems. This enables organizations to move beyond isolated pilots toward integrated systems where agents don’t just reason, but act inside real business workflows. It marks a shift from experimentation to adoption, from isolated tools to scalable, governed intelligence.
Research Composer
Finally, a PwC spokesperson said the firm has also launched a new internal tool for its professionals called Research Composer, a patent-pending AI research agent embedded in the firm’s ChatPwC suite, designed to accelerate insight generation by combining web data with PwC-uploaded content.
Professionals will use the Research Composer to produce in-depth, citation-backed reports for either the firm or its clients. The solution is intended to enhance the quality of client work by equipping teams with research and strategic analysis capabilities.
The AI agent prompts users through a step-by-step research workflow, allowing them to shape how reports are packaged—tailoring the output to meet strategic needs. For example, a manager in advisory services might use Research Composer to evaluate white space opportunities across industries or geographies, drawing from internal reports and up-to-date market data.
Eide Bailly, a Top 25 Firm based in Fargo, North Dakota, is growing its presence in the Pacific Northwest by adding Traner Smith, based in Edmonds, Washington, effective June 2, 2025.
Traner Smith’s team includes two partners and 16 staff members and specializes in tax compliance and advisory services. Financial terms of the deal were not disclosed. Eide Bailly ranked No. 19 on
Eide Bailly already has offices in Seattle, but hopes to grow further in the Pacific Northwest. “We’re pleased to welcome the talented team at Traner Smith to Eide Bailly,” said Eide Bailly managing partner and CEO Jeremy Hauk in a statement Monday. “Their expertise with high-net-worth individuals, real estate and privately held businesses aligns well with our strengths, and their client-centric approach is a perfect cultural fit. Having an office in Edmonds, Washington, is a great complement to our existing presence in Seattle. Together, we’re poised to deliver even greater value to families and businesses in the Seattle metro area.”
“Joining Eide Bailly is a natural next step for us — it provides access to deeper technical resources in areas like state and local tax, national tax, succession planning and international tax while allowing us to continue the personalized service our clients value,” said Kevin Smith, a partner at Traner Smith, in a statement.
“With this expanded support and platform, we’re excited to grow our reach, elevate what we do best, and help more clients than ever before,” said Shane Summer, another partner at Traner Smith, in a statement.
Eide Bailly has announced several other mergers in recent weeks. Earlier this month, it added
In 2023, Eide Bailly added
Top 100 firm
“We began working with Knuula in Spring 2024 to streamline our engagement letter process,” said Don Murphy, Managing Member of BMSS. “It quickly became clear that Knuula was not only a strong solution for us, but also an ideal partner in advancing industry-wide automation.”
While the specific terms of the deal were not disclosed, a spokesperson with Knuula said that, after this investment, BMSS and a collection of 21 of their partners now own 13% of the company. The investment represents not some passive revenue deal but an active collaboration between the two companies, with the spokesperson saying they will be working closely together on things like product development, new features, improvements, and networking.
The deal comes about a year after Knuula integrated with QuickFee, a receivables management platform for professional service providers, which allowed users to have engagement letters directly connecting to their QuickFee billing platform, tying the execution of the letter directly to the billing process.
“We’ve long sought to partner with a firm focused on strategic innovation in the accounting space,” said Jamie Peebles, founder of Knuula. “To develop a perfect solution for large firms, it is ideal to have a partner that is willing to work closely together and iterate quickly. This requires constant feedback between our two teams. The IT team from BMSS worked with our development team constantly and helped us iterate rapidly. We also had consistent input from partners, manager, and administrative staff to help us make valuable changes to Knuula. BMSS was a perfect partner for us.”
PwC AI agent acts proactively to preserve value
Eide Bailly merges in Traner Smith
BMSS announces investment, collaboration with Knuula
New 2023 K-1 instructions stir the CAMT pot for partnerships and corporations
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