How accounting firms navigate compliance, planning, and advisory shifts under OBBBA

The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, represents one of the most consequential tax reforms since the Tax Cuts and Jobs Act. For accounting firms, the Act fundamentally reshapes compliance workflows, client advisory strategies, and planning opportunities across individual, pass-through, and business taxpayers. With numerous provisions made permanent and others phased in through 2028, firms must quickly translate statutory changes into actionable guidance for clients while strengthening documentation, modeling, and multi-year planning capabilities.

Why the OBBBA matters for accounting firms

Unlike prior short-term tax legislation, the OBBBA provides a longer planning horizon by making several core provisions permanent. This stability increases client demand for forward-looking tax strategy, multi-year modeling, and entity-structure analysis. Accounting firms are uniquely positioned to serve as strategic advisors—not just compliance providers—by helping clients optimize deductions, manage state conformity differences, and navigate expanded reporting requirements beginning in the 2026 filing season.

Section 199A: Qualified business income deduction — Expanded and made permanent

The OBBBA permanently preserves the 20% Qualified Business Income (QBI) deduction under Section 199A, eliminating long-standing uncertainty for pass-through entity owners. Phase-in thresholds increase to $75,000 for single filers and $150,000 for joint filers, expanding eligibility for many small and mid-sized business clients. The Act also introduces a new inflation-adjusted minimum deduction of $400 for taxpayers with at least $1,000 of QBI, effective for tax years beginning after December 31, 2025. Importantly, no major new regulations are expected, allowing accounting firms to rely on established planning frameworks while refining income-threshold and wage/property optimization strategies.

SALT deduction cap and continued importance of PTET planning

The OBBBA temporarily increases the state and local tax (SALT) deduction cap to $40,000 for both single and joint filers for tax years 2025 through 2028. The deduction phases out for taxpayers with adjusted gross income between $500,000 and $600,000, with amounts above $600,000 reverting to the $10,000 cap. The cap is indexed for inflation through 2029 before fully reverting to $10,000. Crucially, state pass-through entity tax (PTET) workarounds remain intact, preserving one of the most powerful planning tools for accounting firms serving high-income pass-through clients in high-tax states.

Section 163(j): Interest deduction planning reopens

The Act permanently restores the business interest deduction limitation to 30% of EBITDA, effective beginning in 2025. This change significantly benefits capital-intensive businesses and pass-through entities that were constrained under the EBIT-based limitation. The OBBBA also expands special floor plan financing rules to include trailers and campers and introduces new ordering rules for capitalized interest effective for tax years beginning after December 31, 2025. Accounting firms should reassess debt structures, interest capitalization methods, and entity elections to fully leverage the restored EBITDA framework.

Excess business loss limitation (§461(l)) made permanent

The OBBBA makes permanent the excess business loss limitation of $250,000 for single filers and $500,000 for joint filers. Excess losses continue to be carried forward as net operating losses in subsequent years. This permanence reinforces the need for proactive loss utilization strategies, entity selection analysis, and income-smoothing techniques—particularly for professional service firms, real estate investors, and closely held businesses experiencing income volatility.