The tax code underwent significant changes with the passing of H.R. 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA), in 2025. With the law’s major shifts to deductions, credits, and business provisions, CPAs are navigating a more complex landscape as they help clients prepare for the 2026 tax season. With H.R. 1 in its first full year of implementation, knowing the nuances of the law is critical for delivering real value and ensuring compliance.
Here are 10 critical provisions that need to be on your radar.
1. Permanent lower tax brackets
One of the most significant changes under H.R. 1 is the permanent extension of Tax Cuts and Jobs Act (TCJA) tax brackets — 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The permanency offers long-term stability for planning. This means CPAs should review client withholding and estimated payments now to ensure accuracy and avoid surprises.
2. Increased standard deduction
The standard deduction gets a major boost starting with 2025 returns: $15,750 for single filers, $23,625 for heads of household, and $31,500 for joint filers. This increase will affect itemization strategies, so CPAs should update tax projections and educate clients on whether itemizing still makes sense.
3. SALT deduction cap expansion
For taxpayers in high-tax states, the state and local (SALT) deduction cap jumps from $10,000 to $40,000 through 2029 before reverting to $10,000 in 2030. Although this offers temporary relief, phaseouts for high-income households mean careful modeling is essential.
4. New deductions for workers
Between 2025 and 2028, H.R. 1 introduces deductions for tips, overtime pay, and car loan interest — up to $10,000 annually. These provisions create planning opportunities for clients in service industries, so CPAs should proactively identify eligible clients. For the 2025 tax year, you may need to file draft Schedule 1-A, a temporary IRS form to claim these deductions
Answer your clients’ questions with these FAQs on qualified tip and overtime deductions based on IRS-released guidance.
5. Senior tax break
Taxpayers age 65 and older can claim an additional $6,000 deduction through 2028. This change could significantly affect retirement planning, so CPAs should incorporate it into income strategies for these clients.
6. Child tax credit enhancement
Families benefit from an increased child tax credit (CTC) of $2,200 per child, with the refundable portion of $1,400 made permanent and indexed for inflation. When factored into family tax strategies and withholding adjustments, this maximizes benefits.
7. Qualified business income deduction made permanent
The 20% qualified business income (QBI) deduction for pass-through entities is now permanent, along with higher income thresholds and safe harbor rules. This stability allows CPAs to confidently advise business owners on long-term planning. As H.R. 1 evolves, Master Class Plus webcasts can help busy CPAs stay ahead with concise, practical updates that connect directly to client needs and planning decisions.
8. Bonus depreciation and Sec. 179
H.R. 1 reinstates 100% bonus depreciation permanently and raises Sec.179 limits to $2.5 million, with phase-outs starting at $4 million. CPAs should guide clients on timing asset purchases to maximize these benefits.
9. Estate and gift tax exemptions
Estate planning is advanced with exemptions soaring to $15 million per individual and $30 million for couples, indexed for inflation. This opens doors for wealth transfer strategies, making it critical for CPAs to revisit estate plans.
10. Expanded education and savings provisions
H.R. 1 broadens 529 plan uses, but makes sweeping changes that significantly curtail or accelerate the expiration of many major clean energy tax credits. CPAs should explore these provisions to help clients save more effectively.
Next steps: Invest in comprehensive learning solutions
The significant changes ushered in by H.R. 1 will redefine the next decade of tax planning. CPAs who invest in their own professional development and education will deliver exceptional value, strengthen client relationships, and future-proof their practices.
Because the sweeping changes will affect tax and personal financial planners differently, learning solutions can’t be one-size-fits-all. Enroll in H.R. 1-specific learning solutions geared toward your professional-development needs. Whether you’re an entry-level tax practitioner or a firm partner, the updated Tax Staff Essentials ensures skills stay relevant and refreshed.
The Planning after tax changes news and resource hub provides the latest guidance and tools on a variety of tax topics. Additional tax provision summaries and insights on H.R. 1’s critical tax changes will help you guide clients.
Tax developments also happen frequently and swiftly — and can significantly alter an already complex landscape. Enroll in the self-paced online course bundle, Navigating H.R. 1 “OBBBA”: Comprehensive Tax Impacts for Individuals, Businesses, and International Clients, to sharpen your expertise on these tax provisions and more.
For additional updates and legislative news, become a member of the AICPA Tax Section.
A solid understanding of H.R. 1 ensures you can guide clients accurately, reduce risks, and remain compliant with the new requirements.