The One Big Beautiful Bill Act (OBBBA) has reshaped the tax landscape by introducing a series of permanent provisions with far-reaching effects on both individual and business returns. From adjustments to W-2 reporting requirements, to revisions of SALT caps, to expanded opportunities through child tax credits, tax and accounting professionals must navigate these changes effectively to ensure compliance and optimize their clients' financial strategies.
Whether you’re a CPA, tax advisor, or firm partner, the responsibility of interpreting and applying these new provisions cannot be overstated. However, staying abreast of regulatory change is only part of the challenge. The most important piece is communicating the implications clearly and advising your clients effectively. The goal is to balance technical accuracy with strategic foresight, ensuring compliance while uncovering tax-saving opportunities.
This white paper is a comprehensive guide to understanding, implementing, and strategically responding to the OBBBA. From a detailed review of legislative updates to their practical application and strategies for client advisory, you’ll gain a full spectrum of insight. The objective is not only complying with the new provisions but also learning how to position your firm as a trusted advisor who delivers long-term value to your clients.
Part 1 — Understanding the OBBBA: What changed and why it matters
The One Big Beautiful Bill Act introduces a sweeping set of changes. Most notably, the Act makes permanent several provisions that were previously temporary, including individual tax rate adjustments, the Qualified Business Income (QBI) deduction, and 100% bonus depreciation for certain property.
In addition, OBBBA introduces new deductions targeted at specific groups of taxpayers, including seniors aged 65 and older, workers who earn tips, employees receiving overtime pay, and purchasers of U.S.-assembled vehicles. These changes not only broaden the range of deductible expenses but also create new planning opportunities that tax and accounting professionals can leverage to add value to clients.
Key provisions of the OBBBA
At its core, the OBBBA builds upon and extends reforms first introduced in the Tax Cuts and Jobs Act of 2017, locking in permanent bracket adjustments and tax rate reductions. Among the most impactful provisions is the enhancement of the child tax credit to $2,200 per qualifying child, with $1,700 of that amount refundable. This is an important adjustment for middle- and lower-income families.
The Act also increases the standard deduction, thereby reducing taxable income for millions of households, while restoring and making permanent full expensing for R&D and capital investments, a change likely to benefit both small businesses and large corporations.
Furthermore, the Act strengthens Opportunity Zone incentives, encouraging long-term investment in economically distressed areas. While it eliminates certain tax credits — such as for commercial EVs — it introduces expanded tax incentives to promote domestic energy production, particularly nuclear energy. Collectively, these measures represent significant opportunities for tax professionals to refine their clients’ tax strategies.
Let’s take a look at the most significant changes, the rationale behind them, and how they reflect broader legislative trends.
Impact on W-2s
The OBBBA directly impacts payroll reporting and W-2 preparation by modifying the treatment of certain deductions and taxable wages. Employers and payroll providers will need to update their systems to reflect changes in overtime, tip reporting, and allowable deductions, ensuring compliance with the new law.
Tax pro tip. This shift underscores the importance of coordinating closely with payroll departments or third-party providers to confirm accurate withholding and reporting. In practical terms, firms should conduct system audits, train staff on the new provisions, and communicate changes to clients who may notice adjustments in their year-end W-2 statements.
SALT cap
One of the most closely watched changes in the OBBBA is the revision of the state and local tax (SALT) cap. The new law raises the cap to $40,000 for individuals and $20,000 for married couples filing separately, offering some relief to taxpayers in high-tax states. However, the deduction begins to phase out for high earners once modified adjusted gross income exceeds $500,000 for individuals or $250,000 for married filing separately. This means high-income clients will require careful planning to minimize the impact of the reduction.
Tax pro tip. Consider strategies such as bunching deductions, exploring charitable contributions, or reevaluating business entity structures to maximize available tax benefits for your clients under the revised cap.
Child tax credit
The OBBBA increases the child tax credit to $2,200 per qualifying child, while maintaining a refundable portion of $1,700. Eligibility requirements remain largely the same, but the increased amount creates meaningful benefits across a wide range of taxpayers. For example, middle-income families with multiple children will see direct reductions in tax liability, while lower-income families can access more refundable credit to offset payroll and income taxes.
Tax pro tip. Guide your clients through eligibility checks, calculation methods, and filing procedures to ensure they claim the credit accurately. As always, documentation and proactive planning will be critical in maximizing the value of this enhanced benefit.
At-a-glance – OBBBA implications for individuals:
With permanent provisions and new deductions in play, tax professionals must stay informed and agile to help clients navigate the evolving landscape and maximize tax benefits under the new law.
- Permanent extension of TCJA brackets and standard deduction. Individual tax brackets from the 2017 Tax Cuts and Jobs Act are now permanent through 2025 and beyond
- Standard deduction. Increased to $15,750 for single filers and $31,500 for married filers — up from $15,000 or $30,000 — indexed for inflation
- SALT deduction. Cap increased from $10,000 to $40,000 through 2029, including phases with inflation, then reverts to $10,000 in 2030. Phase-out begins at $500,000 MAGI and $600,000 upper cap
- Senior “bonus” deduction. New extra deduction of $6,000 per senior ages 65 and up — $12,000 for qualified couples — effective 2025–2028; phases out at $75K MAGI, $150K joint
- Child tax credit. Increased to $2,200 per child, indexed for inflation beginning 2026
- Tip and overtime deductions. Up to $25,000 deduction for tip income per filer; applies 2025–2028, phases out at $150K MAGI single and $300K joint. Overtime deduction capped at $12,500 for singles or $25,000 for joint; same phase-outs apply
- Auto loan interest deduction. Up to $10,000 per year for interest on loans for U.S.-assembled vehicles taken after 2024; phases out at $100,000 or $200,000 income with a $150,000 or $250,000 cutoff
- Estate and gift tax exemptions. Exemptions increased to $15 million for single and $30 million for joint
- Child savings accounts. New tax-advantaged “Trump Accounts” for children under age 8; details limited but designed for long-term savings
AT-A-GLANCE – OBBBA implications for businesses:
- 100% bonus depreciation and new expensing for certain real property. The OBBBA provides a 100% bonus depreciation and new expensing for certain real property, including nonresidential property, which can help businesses recover costs more quickly.
- Section 199A (QBI) deduction. The 20% deduction for qualified business income from partnerships, S corporations, and sole proprietorships is made permanent, ensuring that businesses can continue to benefit from this tax break. The phase-outs for this deduction have been expanded, and there is now a minimum deduction available for activities generating $1,000 or more of QBI.
- Section 179 expensing. The Section 179 expensing limit has been increased to $2.5 million, allowing businesses to deduct more of their smaller capital purchases upfront.
- Temporary increase in SALT cap. The SALT cap is temporarily raised to $40,000 for taxpayers earning under $500,000 between 2025 and 2029, providing more tax deductions for high earners.
- Pass-Through Entity Tax (PTET) remains intact. Pass-throughs may continue to pay state income taxes at the entity level, which reduces taxable income for owners.
- Charitable contributions. Nonitemizers may now deduct charitable contributions up to a specified limit, and new floors apply to itemized deductions.
With the OBBBA ending certain energy tax credits, be sure to guide your clients in accounting for these expirations, ensuring they take final advantage of expiring provisions where possible and shift toward other tax-efficient opportunities.
Part 2 — Implementing the OBBBA: How firms can operationalize change
Understanding OBBBA is only the first step. The Act’s permanent tax provisions require that firms not only understand the legislation but translate it into actionable steps for clients. To maximize value and maintain compliance, adopting a structured approach to implementation is key.
The following step-by-step guide provides a framework that your firm can follow to assess client exposure, update internal processes, and deliver timely advisory services aligned with the OBBBA.
Step 1: Assess client impact
To start, segment your clients based on their exposure to the OBBBA’s provisions. High-net-worth individuals, small business owners, families with dependents, and clients with significant state and local tax obligations will each experience different levels of impact. By grouping these clients into various categories, you can tailor strategies more effectively, ensuring you address the specific challenges and opportunities presented by the Act.
Consider these questions when segmenting clients:
- Do they have dependents eligible for the enhanced child tax credit?
- Are they based in a high-tax state where the SALT cap applies?
- Do they have significant capital investments, R&D, or energy-related projects?
It is also important not to overlook the vital role that innovative technology plays in assessing client impact. For instance, UltraTax has data mining capabilities that allow tax professionals to identify clients affected by the provisions of the OBBBA, such as those amortizing R&D expenses or those with gross receipts under a certain amount.
With the right AI-powered tax advisory solution in place, you firm can deliver specialized services that lay the groundwork for longer, more meaningful client relationships.
How to assess impact of the OBBBA on clients
With Ready to Advise, you can:
- Identify the optimal tax planning strategy for each client with AI analysis
- Execute tax strategies quickly with agentic AI providing step-by-step guidance
- Create comprehensive profiles that provide tax situations, financial goals, and suggested strategies for each client
Step 2: Educate internal teams
Firm-wide adoption of the OBBBA requires training tax professionals, partners, and support staff. Teams need to be equipped with updated knowledge on permanent tax rate structures, new deductions, and enhanced credits.
Consider leveraging webinars, checklists, and quick-reference guides to upskill staff and ensure internal consistency. Regular workshops or lunch-and-learn sessions can also foster alignment across departments and reduce the risk of errors in client work.
How to upskill your staff on the OBBBA
Use CoCounsel Tax to:
- Streamline tax research with explainable AI-backed answers and built-in citations
- Generate client-ready summaries
- Access up-to-date guidance across federal and state levels all in one place, so your team can move faster and advise with confidence.
Step 3: Update planning models and tools
To operationalize the OBBBA, firms must integrate the new provisions into their tax planning software, financial projection tools, and compliance checklists. Updating models will allow your staff to run accurate scenarios and provide forward-looking advice to clients. Automated solutions can further streamline data intake and reduce manual errors, ensuring accurate calculations under the updated law.
What tax technology tools can help my firm operationalize the OBBBA?
- UltraTax. Provides intelligent handling of deduction calculations and advanced diagnostics to identify overlooked opportunities while streamlining data management. Designed for small to mid-sized accounting firms and tax professionals handling both individual and business returns.
- GoSystem Tax. Supports seamless collaboration, automated workflows, and real-time integration capabilities for modeling multiple scenarios. Designed for mid-sized to large firms, GoSystem Tax excels at managing high volumes of complex corporate, partnership, and international tax filings.
- SurePrep. Used in tandem with the products above, SurePrep automates 1040 preparation and review, freeing up valuable time to focus on higher-value tax planning and advisory services.
Step 4: Review structures
Entity choice remains a crucial consideration under the OBBBA. For example, pass-through entities may benefit from the permanent QBI deduction, while corporations may look to optimize full expensing for R&D and capital investments.
Review your clients’ international compliance obligations, particularly for the ones with global operations impacted by energy-related provisions or cross-border planning. A proactive entity review ensures they will remain positioned for both compliance and optimization.
Step 5: Optimize deductions and credits
The OBBBA introduces new avenues for employer-related credits and energy incentives that can directly reduce tax liability. Tax professionals should review eligibility for deductions related to overtime, tips, and car loan interest, while also identifying business clients that can leverage Opportunity Zone enhancements or clean energy tax credits.
Strategic use of these provisions can provide your clients with immediate tax savings while aligning their financial planning with long-term goals.
Step 6: Implement timing strategies
Timing remains one of the most powerful tools in tax planning. Your firm should advise clients on year-end planning strategies that maximize deductions and defer income where appropriate. Opportunities such as Qualified Small Business Stock (QSBS) exclusions or ownership restructuring can be timed to reduce overall tax exposure.
Remember — these strategies require proactive discussions with clients well before year-end to achieve maximum benefit.
Step 7: Enhance client communication
Clients rely on their tax advisors not only for compliance but also for insight. Your firm can stand out by adopting clear communication strategies such as email alerts, webinars, and personalized tax reviews.
Technology platforms like SafeSend can streamline the secure delivery of documents and client communications, enhancing both efficiency and client satisfaction. Personalized outreach helps clients feel informed and supported, while also reinforcing the firm’s advisory role.
Enhancing client communication under OBBBA
Use SafeSend for:
- Secure, encrypted delivery of updated tax forms and planning documents
- Automated tracking of client signatures and responses
- Faster turnaround on time-sensitive OBBBA-related updates
- A seamless client experience that builds trust and reduces confusion
Step 8: Monitor and adjust
Finally, it’s important to recognize that while the OBBBA creates permanent provisions, interpretations and applications may evolve over time. Ongoing monitoring of IRS guidance, court decisions, and state-level responses will be essential.
Consider implementing a quarterly or semi-annual review cycle to ensure tax planning models remain current and strategies are adjusted as needed. A commitment to continuous improvement will position your firm as a trusted, forward-thinking advisor now and in the years ahead.
PART 3 - Advising clients strategically: OBBBA advisory opportunities and best practices
To effectively use the One Big Beautiful Bill Act as a springboard for strategic tax planning, your firm must go beyond filing requirements to refine workflow processes, smooth out impacts to client, and provide proactive tax-saving guidance.
Let’s look at several ways in which your firm can leverage OBBBA provisions to enhance outcomes for clients while strengthening your advisory offerings.
Optimize income taxes
The OBBBA’s permanence brings predictability to income tax planning. Clients can now take advantage of stable tax brackets for long-term strategies, claim new deductions, and maximize benefits from the increased SALT cap before phaseouts take effect at higher income levels.
Tools like UltraTax provide intelligent handling of deduction calculations, advanced diagnostics to identify overlooked opportunities, and streamlined data management. Similarly, GoSystem Tax supports seamless collaboration, automated workflows, and real-time integration capabilities for modeling multiple scenarios. Paired with SurePrep to automate 1040 preparation and review, your firm can free up valuable time to focus on higher-value tax strategy and planning.
From a tax research and guidance perspective, CoCounsel Tax ensures quick access to the latest regulatory updates, keeping your client strategies fully aligned with evolving interpretations.
Tax tip. Senior clients can save more with OBBBA’s new age-based deductions. Ensure your planning models account for these when projecting long-term tax liabilities.
Plan for estates and gifts
Estate and gift planning remains a cornerstone of client advisory, and the OBBBA provides opportunities to enhance these strategies. Tax professionals should encourage lifetime gifting through trusts and valuation discounts, while aligning strategies with state-specific estate tax rules.
UltraTax makes it easier to track gifting strategies, monitor exemption usage, and generate compliance-ready documentation. In tandem, CoCounsel Tax provides research support for complex estate planning nuances, helping your firm address both federal and state-level requirements with confidence.
Support business clients
For business clients, the OBBBA solidifies planning opportunities around deductions, credits, and entity structures. Firms should help specified service trades or businesses (SSTBs) qualify for the QBI deduction where possible, while using income smoothing techniques to manage taxable income within optimal brackets. Updated planning models for depreciation and interest limitations are essential, especially with full expensing for capital investments restored permanently.
Tools like GoSystem Tax can help firms manage complex business scenarios and entity-level planning, while UltraTax provides robust depreciation modeling and interest deduction analysis. CoCounsel Tax rounds out the toolkit by offering research support for entity definitions, eligibility criteria, and compliance rules.
Tax tip. Use OBBBA’s permanent 100% bonus depreciation to accelerate write-offs for qualifying property. This feature is particularly useful for capital-intensive industries.
Engage clients proactively
Ultimately, the OBBBA presents an opportunity for your firm to strengthen client relationships through proactive engagement. By sending targeted updates, tailoring services, and adopting a holistic approach to planning, you can distinguish your firm as a forward-looking advisory practice.
Consider these proactive client engagement ideas:
- Segment clients for tailored tax strategies
- Offer holistic planning reviews before year-end
- Send quarterly updates on OBBBA impacts
- Host webinars focused on new deductions and credits
Practice Forward and Ready to Advise provide frameworks for advisory service enablement and client segmentation, helping firms build scalable, profitable service lines. Together with CoCounsel, your firm can generate client-specific insights and updates.
On the operational side, SurePrep streamlines document collection and collaboration, creating a better workflow experience for both staff and clients. Together, these tools empower your firm to move beyond compliance and into continuous, relationship-driven advisory work.
Next steps for implementing the OBBBA
In today’s evolving tax landscape, the OBBBA demands that tax and accounting professionals remain informed, agile, and proactive. By understanding the new provisions, operationalizing them within your firm’s workflows, and applying them strategically, you can ensure compliance while unlocking new planning opportunities that deliver meaningful value to clients.
To take the next step, explore the OBBBA Resource Center and discover how our solutions can help you turn legislative change into a competitive advantage.
