3 Things I Learned While Studying H.R. 1
As a senior technical writer at the AICPA, I focus on maintaining our extensive catalog of continuing professional education (CPE) courses, specifically those focused on tax issues. It won’t be a surprise to any tax practitioner that my summer was occupied by reading H.R. 1, P.L. 119-21, the law commonly known as OBBBA.
I began my career as the last major tax package — the Tax Cuts and Jobs Act (TCJA) — became law, so I know how overwhelming it can be for young CPAs to digest so much change at one time.
Beyond all the nitty-gritty details of the new tax legislation updates, here’s what I learned while studying H.R. 1 over the past several months.
1. Knowing the TCJA — and what came before — is essential
H.R. 1 is arguably the second-most consequential piece of tax legislation of the past decade, after TCJA. Appreciating H.R. 1’s effects on income taxation requires an in-depth understanding of the TCJA.
The TCJA introduced several temporary provisions that H.R. 1 made permanent just as they were about to expire. Some of these provisions, such as the expanded standard deduction and estate tax exemption, are easy to understand without much background. Others, such as the qualified opportunity zone program, make sense only when you understand the TCJA’s part in creating or modifying them.
Plus, H.R. 1 refers to many temporarily suspended tax provisions that have not been relevant for years, including the personal exemption and the Pease limitation..
Young CPAs — specifically those who began their careers after the TCJA was enacted at the end of 2017 — are likely not familiar with the tax landscape that existed before. For example, they may not know the Pease limitation’s inner workings. Therefore, it may be difficult to think through the planning opportunities for a similar limitation that will apply to high earners starting in 2026.
The AICPA has created several tax resources to help young CPAs — and all other CPAs, for that matter — be proactive advisers for their clients in light of H.R. 1.
In addition to member resources, the H.R. 1 MasterClass Series Bundle, available through Nov. 11, provides 15 hours of expert-led learning that thoroughly explains the story behind the most recent tax changes along with actionable planning ideas. The AICPA’s two-day Tax School, co-located with the National Tax Conference in Washington, D.C., will also cover H.R. 1 in depth.
2. Embracing tax complexity is a CPA’s superpower
It’s no secret that the U.S. tax system is complex. CPAs lead the finance profession by studying, interpreting, and applying these complicated rules to ensure compliance and improve outcomes for our clients. We dive deep into the details, dwelling in nuances, no matter how small. H.R. 1 has introduced another layer of tax complexity that gives CPAs an opportunity to show off our immense value to clients, employers, and the public.
As CPAs, we are uniquely trained to make sense of intricate rules. H.R. 1’s amendments to the Internal Revenue Code make surgical changes to existing sections and create a few new sections. Although the legislation leaves many questions unanswered — and the IRS is working on guidance to help — clients will rely on their CPAs to simplify seemingly undigestible tax changes. It is critical that CPAs in tax carefully study the new legislation to maintain their reputation as a trusted adviser.
Young CPAs who are new to tax research can find so much new complexity overwhelming.
Of course, we could do with some simplification in our tax system. Among the AICPA’s top tax legislative priorities is just that. When drafting H.R. 1, legislators adopted several of our recommendations to create a more navigable tax filing process, including the retention of the qualified business income deduction and an increased threshold for filing forms in series 1099.
3. There’s a lot we still don’t know about H.R. 1
As mentioned, certain H.R. 1 tax provisions leave things up to interpretation.
For example, the AICPA requested immediate guidance on new Section 174A (regarding domestic research and development spending) before the 2024 extended return deadlines. The Treasury Department has already begun sharing details on how it plans to implement parts of the package, particularly related to the new temporary deduction for tipped income. There is much more to come.
CPAs are known for their precision and careful attention to detail. That means we should be aware of H.R. 1’s ambiguities just as well as the written provisions.
There is perhaps no greater place to discuss the particulars of H.R. 1 than at the 50th AICPA National Tax Conference on Nov. 17–18, available online and on-site in Washington, D.C. CPAs can network with their peers, sit in on in-depth discussions of various tax law and practitioner matters, and gain CPE. I’ll be there ready to meet fellow students of H.R. 1 and discuss all its nuances, so come say hi if you see me.