Accountancy Slice

North America

The Senate is set to vote on the One Big Beautiful Bill, which includes significant tax provisions that have evolved since the Senate Finance Committee's initial proposal. If passed, the bill will return to the House, where its future is uncertain. Key changes, as outlined in the Journal of Accountancy, include making tax rates from the Tax Cuts and Jobs Act permanent, increasing the standard deduction, and temporarily raising the SALT cap to $40,000. Major Medicaid cuts are a major part of the package, along with food assistance for low-income Americans and financial aid for college students. The bill also introduces deductions for tips and overtime pay, while eliminating many clean energy tax incentives. AICPA has expressed gratitude for the rejection of new tax increases on pass-through entities. The bill aims to address various tax priorities, impacting both individuals and businesses. To help speed the bill's passage - President Donald Trump has asked for it to on his desk by July 4th - Republicans have declared that the extensions of expiring tax cuts will have no impact on the federal budget. Rather than use standard congressional accounting, Republicans are saying that extensions of tax cuts set to lapse Dec. 31 don’t count toward budget deficits the same way that new tax cuts do, because they are just continuing current policies. According to the Congressional Budget Office, that assumption turns the Senate’s bill from a $3.3tn deficit increase that can’t pass through reconciliation into a $508bn deficit decrease that can. Republicans are expected to endorse the accounting move in a procedural vote early today.