Accounting
Tax planning for the unknown
It’s the time of year that most tax professionals begin reaching out to clients to begin planning for the tax season and tax years ahead — and this year, more than any in recent memory, is a very tough time to plan.
Why is it such a tough time to plan? “Historically, when we talk about tax planning, it involves deferring income or bunching expenses or implementing shifting strategies,” said Annie Schwab, franchise operations manager at Padgett Business Service. “But not this year!”
That’s because two events are looming to cause uncertainty: The Tax Cuts and Jobs Act is set to expire at the end of 2025, and the November elections will usher in a new president and Congress. Either or both may cause major disruptions in tax.
There are three possible outcomes of the elections: Republicans take control, Democrats take control, or a divided government. It’s likely that the new president will want to get legislation through as soon as possible, according to Padgett president Roger Harris, so it’s possible that we could see changes sooner rather than later, closer to the expiration of the TCJA at the end of 2025.
- Individual tax rates. The TCJA lowered tax rates to 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The top rate, 37%, was lowered from 39.6%. The TCJA rates will expire Dec. 31, 2025, and revert back to the prior rates. The top tax rate beginning Jan. 1, 2026 is currently slated to be 39.6%.
- Standard deduction. The standard deduction was nearly doubled for all filing statuses ($12,000 for single filers and $24,000 for married filing jointly) by the TCJA. As a result, many taxpayers itemized deductions. Starting in 2026, the standard deduction is slated to be about half of what it is currently.
The act also impacted various Schedule A deductions:
- SALT: The state and local tax deduction was capped at $10,000. After 2025, this limitation will expire, allowing greater benefit from deducting taxes during the calendar year, including real estate taxes, state or local income taxes, and personal property taxes.
- Mortgage interest deduction: The TCJA generally suspended the home equity loan interest deduction. It limited the home mortgage interest deduction to the first $750,000 of deductible interest. Beginning in 2026, this is scheduled to revert to pre-TCJA levels, allowing interest to be deducted from the first $1 million in home mortgage debt and $100,000 in a home equity loan.
- Miscellaneous itemized deductions: The TCJA temporarily eliminated these deductions, which will once again be allowed starting Jan. 1, 2026, under the previous rules, to the extent they exceed 2% of the taxpayer’s adjusted gross income.
- Child Tax Credit. The CTC was increased from $1,000 to $2,000 per qualifying child. This higher tax credit will revert to pre-TCJA levels in 2026 to $1,000 per qualifying child.
- Alternative Minimum Tax exemption and phaseout. The TCJA increased exemption amounts, as well as the exemption phaseout threshold, lessening the AMT burden on taxpayers. At sunset, the AMT exemption will revert to pre-TCJA levels. The number of taxpayers subject to AMT is expected to double.
A number of business provisions are also up in the air:
- QBI 20% deduction (Section 199A). Owners of passthrough businesses and partnerships and S corporations, as well as sole proprietorships, may currently claim a deduction of up to 20% of qualified business income. Beginning in 2026, the Section 199A QBI deduction will no longer be available.
- Bonus depreciation on qualified property. The TCJA changed the applicable percentage on qualifying property, ranging from 100% for property placed in service after Sept. 27, 2017, and before Jan. 1, 2023, to 0% for property placed in service after Dec. 31, 2026.
In a recent
The credit is available to individuals and their businesses. To qualify, they must buy it for their own use, not for resale, and use it primarily in the U.S. In addition, their modified adjusted gross income may not exceed $300,000 for married filing jointly or a surviving spouse, $225,000 for head of household, or $150,000 for all other filers.
Taxpayers can use modified AGI from the year they take delivery or the year before, whichever is less. If they do not transfer the credit, it is nonrefundable when they file their taxes, so they can’t get back more than they owe in taxes, or apply any excess to future years.
At the time of sale, a seller must give the buyer information about the vehicle’s qualifications, and must also register and report the same information to the IRS.
The vehicle must be an electric vehicle, plug-in hybrid electric vehicle, or fuel cell vehicle. The manufacturer’s suggested retail price of a pickup truck, van or SUV must be $80,000 or less; for all other passenger vehicles, $55,000 or less. Final assembly must have occurred in North America. For vehicles placed in service on or after April 18, 2023, the vehicle must meet the critical mineral and battery requirement. Visit
Planning for planners
Harris and Schwab also discussed the recently discovered breach of nearly 3 billion Social Security numbers. The IRS and the practitioner communities are asking that tax preparers encourage taxpayers to get an IP PIN, regardless of whether they were part of the breach. At a minimum, they should have the “Security Six” implemented: anti-virus software, firewalls, multi-factor authentication, backup software, drive encryptions, and a virtual private network.
They noted that a WISP — or written information security plan — is required by law. It has been around for several years, and has been added to the PTIN application. The IRS has
“It is meant to be a living document, not something you put in a drawer,” remarked Schwab.
Tax professionals face a number of real challenges, according to Harris: Fewer people are going into the profession, workers want a great degree of flexibility, compensation packages are complex, and outsourcing is becoming a reality.
“Practitioners tend to price by the hour or by form,” he added. “There needs to be a movement to price for value, and be the clients’ trusted advisor, not just a tax preparer.”
Aprio, a Top 25 Firm based in Atlanta, has acquired JMS Advisory Group, a firm that specializes in unclaimed property compliance and escheat process development, also based in Atlanta
Financial terms of the deal were not disclosed. Aprio ranked No. 24 on Accounting Today’s just released
JMS was founded in 2006 and helps clients mitigate risk and capitalize on opportunities through managed unclaimed property compliance. The team includes attorneys, CPAs, CFEs and others.
JMS has a wide range of clients, including enterprise companies, financial institutions, credit unions, insurance companies, hospitality and health care organizations.
“As Aprio continues its rapid growth, we are committed to expanding our services to meet the evolving needs of our clients,” said Aprio CEO Richard Kopelman in a statement Tuesday. “The addition of JMS gives us the opportunity to continue strengthening our position as a future-focused advisory firm. JMS’s focus on escheat management and asset recovery not only enhances our current capabilities but also allows us to deliver even more impactful solutions to help businesses navigate complex compliance challenges.”
JMS president and CEO James Santivanez is joining Aprio as a partner and provides guidance to clients on unclaimed property and state and local tax issues.
“We created JMS to make an impact nationally in the unclaimed property consulting industry, and I’m proud of our nearly 20-year history of helping clients mitigate risk and capitalize on opportunities resulting from accurate and properly managed unclaimed property compliance,” Santivanez said in a statement. “Joining with Aprio takes us to the next level, allowing us to build upon our success while providing even greater value to our clients. This is an exciting next step in our journey.”
JMS founder and director Sherridan Santivanez is also joining Aprio as a partner. He specializes in representing clients before state enforcement authorities and managing complex audits and voluntary disclosures for some of the world’s largest companies. She provides strategic guidance on audit preparation and navigates interactions with state and third-party auditors.
Aprio received a
The American Institute of CPAs and the National Association of State Boards of Accountancy are asking for comments on their proposal for an additional pathway to CPA licensure through
The AICPA and NASBA proposed the
The UAA changes would:
- Enable states to adopt a third licensure pathway that requires earning a baccalaureate degree with an accounting concentration, completing two years of professional experience as defined by Board rule, and passing the Uniform CPA Examination;
- Shift to an “individual-based” mobility model, which allows CPAs to practice in other states with just one license; and
- Add safe harbor language to ensure CPAs who meet existing licensure requirements preserve practice privileges.
The proposals come as several states are already moving forward with their own changes, including
The updates reflect feedback gathered during a late 2024 exposure draft period and forward-looking solutions being advanced by state CPA societies and boards of accountancy to increase flexibility for licensure candidates while maintaining the integrity of the CPA license.
The AICPA and NASBA are asking for comments on the proposed changes by May 3, 2025. They can be submitted through this
The UAA offers state legislatures and boards of accountancy a national model they can adopt in full or in part to meet the licensure needs of each jurisdiction.
The proposal would maintain the current two pathways to CPA licensure:
- Earning a post baccalaureate degree with an accounting concentration, completing one year of professional experience as defined by Board rule, and passing the CPA exam; and,
- Earning a baccalaureate degree with an accounting concentration, plus an additional 30 semester credit hours , completing one year of professional experience as defined by Board rule, and passing the CPA exam.
Small business employment held steady last month, according to payroll company Paychex, while wage growth continued below 3%
The
“Our employment data continues to show moderate job growth and wage growth below three percent,” said Paychex president and CEO John Gibson in a statement Tuesday. “The consistent long-term trend we’re seeing is a small business labor market that is resilient and stable with little job movement among workers. At the same time, small business owners are optimistic about future business conditions despite uncertainty about how to adapt to a rapidly evolving legislative and regulatory landscape.”
The Midwest remained the top region in the country for the ninth consecutive month with a jobs index level of 100.54. Seven of the 20 states analyzed gained more than one percentage point in February, led by Texas (up 2.11 percentage points).
Phoenix (101.92) increased its rate of small business job growth for the fourth month in a row in February to rank first among the largest U.S. metros.
Construction (3.29%) regained its top spot among industries in terms of hourly earnings growth in February, followed closely by “other services” (3.27%) and manufacturing (3.21%).
The pace of job growth in manufacturing gained 2.39 percentage points to 99.52 in February, the industry’s biggest one-month increase since April 2021.
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