Navigating the Big Beautiful Bill: What Comes Next for Tax Professionals

H.R.1 (formerly known as the One Big Beautiful Bill Act) is one of the most talked about pieces of tax legislation in recent years. Now that this bill has become law, it’s also become an unavoidable part of day-to-day work for firms of all sizes.

While there’s been plenty of media coverage about H.R.1’s complex path through both the House and Senate, the changes it underwent in both chambers, and what the final version signed by President Trump on July 4th entails, tax professionals are still facing a fundamental question: “What now?”

In this latest Blue J Insights blog, we’ve assembled everything tax experts need to know to navigate this landmark shift in tax legislation. 

Navigating a New Tax Landscape:

As its former name implies, if H.R.1 is one thing it’s big. From state and local tax (SALT) deduction changes, to an extension of Tax Cuts and Jobs Act (TCJA) provisions, and special tax deductions for tips and overtime, this new law covers a broad array of tax topics. We won’t unpack all the tax changes this law includes in this blog, but you can find great summaries here and here. Instead, we want to focus on what you need to know for what comes next. 

As a tax professional, your clients will look to you for clarity, strategic guidance, and proactive solutions in the face of new statutory provisions, compliance challenges, and ongoing uncertainties. Below, we outline the key steps tax experts should take to navigate the new era of tax ushered in by H.R.1. 

1. Tailor Your Research to Your Clients

While there’s no client category that will be left unaffected by this law’s far-reaching implications, different clients will be affected in different ways. As such, when you begin exploring H.R.1 in your tax research, focusing your questions on the areas most relevant to your clients will make this task more approachable. 

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Key Topics for Large Corporations

1. Extension and alteration of TCJA provisions, including new section 951B and changes to section 250
2. Permanent section 168(k) bonus depreciation and new section 168(n)
3. Research and development expensing in new section 174A
4. Enhancement of section 163(j) business interest deduction
5. Phaseout of energy tax credits and deductions

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Key Topics for Small and Medium Businesses

1. Extension and alteration of TCJA provisions
2. Research and development incentives
3. Reporting and compliance changes
4. Employee retention credit enforcement
5. Expansion of opportunity zones and other credits
6. Accelerated phase-out of electric vehicle and energy credits

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Key Topics for Individual Taxpayers:

1. Extension and enhancement of the standard deduction and individual tax rates
2. Changes to SALT deductions
3. Changes to the child tax credit and other family benefits
4. Deductions for tips, overtime, and car loan interest
5. Limitations and modifications to itemized deductions
6. Charitable contribution deduction for non-itemizers
7. Reforms to tax credits and exclusions
8. New and enhanced savings vehicles
9. Accelerated phase-out of electric vehicle and energy credits
10. Bonus deduction for seniors 
11. Reporting and compliance changes

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2. Understand the New Statutory Provisions

Aside from getting a grasp of how different areas of H.R.1 are likely to affect your clients, going deep on understanding the new statutory provisions will ensure you have the complete context of what H.R.1 entails. 

• Deep dive into legislative text: Assign team members to review the statutory language of H.R.1, again focusing on areas most relevant to your client base.
• Leverage reputable summaries: Use reputable practice articles to supplement your understanding and identify areas where the statutory language is ambiguous or open to interpretation.
• Monitor regulatory guidance: Stay alert for Treasury and IRS guidance, as many H.R.1 provisions require further clarification. Set up alerts for IRS notices, proposed regulations, and FAQs.

3. Update Compliance and Reporting Processes

Maintaining compliance after such a massive upheaval in tax law is no small task. Setting aside time for your team to ensure they’re all up to speed on any new compliance and reporting requirements will help to make this transition smoother. 

• Revise internal checklists and workpapers: Update compliance checklists to reflect new deduction limitations, phaseouts, and reporting requirements. Ensure your software and templates can handle new data fields and calculations.
• Coordinate with IT and software providers: Work closely with tax software vendors to ensure timely updates for H.R.1 changes, especially for changes to expensing, business interest deductions, and new compliance requirements.
• Train staff on new rules: Conduct internal training sessions on the mechanics of the new provisions and modifications to existing provisions.
• Enhance data collection: For large and complex clients, establish new data flows to capture the information needed for expanded disclosures.

4. Create Proactive Client Communications

As a headline piece of legislation, H.R.1 occupies a uniquely prominent position in your clients’ minds. Be prepared for them to come with questions and even more than that, be sure to have key answers prepared in advance. 

• Segment client outreach: Develop tailored communications for individuals, passthrough businesses, and large corporations, highlighting the most relevant H.R.1 changes for each group.
• Host webinars and Q&A sessions: Offer educational webinars to explain the new rules, using practical examples and addressing common client scenarios (e.g., SALT deduction limitations, ATI calculations for section 163(j)).
• Prepare FAQs and decision trees: Create client-facing FAQs and flowcharts to help clients self-assess their exposure to new limitations and identify planning opportunities.
• Encourage early engagement: Advise clients to review their entity structures and business plans as compliance with the new rules may require significant lead time and coordination.

5. Address Uncertainties and Unresolved Issues

While H.R.1  has officially passed, there’s still some ambiguity around the contents of this nearly thousand-page document. As we wait for the IRS to propose regulations providing guidance on certain provisions in the statute, there are steps you can take now to navigate any uncertainties. 

• Document assumptions and positions: Where statutory language is unclear, document your firm’s interpretive positions and the rationale for client advice. Be prepared to update these positions as guidance emerges.
• Monitor for technical corrections: Track IRS guidance and regulatory developments, including technical corrections and clarifications, and communicate changes promptly to clients.
• Monitor for IRS guidance: Because the IRS is just initiating the process of issuing subregulatory guidance and proposing regulations providing guidance on certain provisions in the statute, you’ll need to keep an eye out for ongoing developments in this area that will help you navigate some of the gray areas in H.R.1. 
• Advocate for clients: Encourage clients to participate in comment periods for proposed regulations and to provide feedback to policymakers, especially on issues causing significant administrative burden or uncertainty.
• Plan for flexibility: Advise clients to build flexibility into their structures and processes, allowing for quick adaptation as rules are clarified or changed.

Next Steps for a New Era of Tax

H.R.1 ’s enactment was just the beginning. Now, tax experts need to adapt to a new era of complexity and opportunity in US tax law. One of the biggest impacts of H.R.1 ’s passage is the increased importance of tax research. With so many changes enacted at once, staying on top of these changes will be a challenge for all tax professionals. Prepare for the future of tax, with the future of tax research. Learn more about how Blue J can support your team in navigating H.R.1 and more. 

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