Explore how the One Big Beautiful Bill Act reshapes tax planning with permanent TCJA provisions, expanded deductions, and strategic opportunities for tax professionals.
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| Key provisions and changes |
| Challenges and opportunities for tax professionals |
| Planning opportunities |
| Key takeaways from the One Big Beautiful Bill Act |
The One Big Beautiful Bill Act (OBBBA) has brought significant changes to the tax landscape, presenting both challenges and opportunities for tax professionals and their clients.
As tax and accounting professionals continue to adapt to these developments, understanding the Act’s key provisions and their implications is crucial for effective tax planning and client advisory services.
Key provisions and changes
The Act brings about several significant changes that tax professionals need to be aware of. As one of the most comprehensive tax reform packages in recent years, it not only solidifies key provisions from the Tax Cuts and Jobs Act (TCJA) but also introduces new deductions and adjustments that will impact a wide range of taxpayers.
Some of the key provisions and changes include:
1. Permanent Extension of TCJA Provisions
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- Standard Deduction: The expanded standard deduction introduced by the TCJA is now permanent.
- Lowered Tax Rates: Individual income tax rate reductions are locked in, eliminating uncertainty around future rate hikes.
2. SALT Deduction Cap Adjustments
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- Raised Cap: The state and local tax (SALT) deduction cap increases from $10,000 to $40,000 starting in 2025.
- Annual Growth: The cap will rise by 1% annually through 2029.
- Phaseouts: Begins phasing out for individuals with modified adjusted gross income (MAGI) over $500,000.
- Expiration: The cap reverts to $10,000 in 2030.
3. New Individual Tax Breaks
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- Tip Income Deduction: Up to $25,000 in tip income is now deductible.
- Social Security Bonus: Individuals aged 65+ can deduct an additional $6,000 in Social Security income.
- Auto Loan Interest Deduction: Taxpayers can deduct up to $10,000 annually in interest on new personal-use vehicle loans (2025–2028), subject to income-based phaseouts
These changes underscore the importance of proactive, strategic tax planning. With permanent provisions and new deductions in play, tax professionals must stay informed and agile to help clients navigate the evolving landscape and maximize their benefits under the new law.
The Act of 2025
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The Act presents both immediate challenges and opportunities for tax professionals, particularly in the areas of client communication and proactive planning. Key challenges include:
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- Managing effective dates of various provisions
- Addressing client misconceptions about new provisions
- Updating tax organizers and communication methods
To overcome these challenges, tax professionals can leverage technology, including AI and data analytics, to:
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- Analyze the bill’s provisions and identify relevant opportunities for clients
- Identify planning opportunities, such as the enhanced qualified small business stock exclusion and the new charitable deduction for non-itemizers
Planning opportunities
The Act provides enhanced planning opportunities, particularly in:
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- Estate planning: Increased estate tax exclusion to $15 million with inflation adjustments
- Small business stock: Increased exclusion for qualified small business stock from $10 million to $15 million
- Charitable contributions: Permanent charitable deduction for non-itemizers starting in 2026
“The use of AI is going to be a huge help for tax professionals. For example, you can upload the bill, all 800+ pages of it, and start asking it questions.”
– Shaun Hunley – Senior Editor of Checkpoint at Thomson Reuters
By staying informed and adapting to these changes, tax professionals can provide more effective advisory services and help their clients navigate the evolving tax environment.
Key takeaways from the One Big Beautiful Bill Act
The One Big Beautiful Bill Act (OBBBA) represents a significant development in tax legislation, offering both challenges and opportunities for tax professionals. By making key TCJA provisions permanent, modifying controversial aspects like the SALT deduction cap, and introducing new provisions, the Act reshapes the tax landscape.
Tax professionals must stay informed about these changes, leveraging technology and proactive planning to navigate the evolving tax environment and provide effective advisory services to their clients.
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