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Accountancy Slice
USA
12th August 2025
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THE HOT STORY

CBO: Trump law to leave 10m uninsured

The Congressional Budget Office (CBO) projects that 10m more Americans will be uninsured over the next decade due to President Trump’s new tax and spending law. The legislation, passed without Democratic support, extends prior tax cuts and adds new ones while imposing Medicaid access restrictions. The CBO estimates the poorest Americans will lose $1,200 annually, middle-income households will gain $800–$1,200, and the wealthiest will gain over $13,000. “Resources will decrease for households toward the bottom . . . and increase for households in the middle and toward the top,” the report said. Critics argue the changes will worsen inequality and undermine healthcare access for vulnerable populations, while supporters claim the tax relief will stimulate economic growth and benefit the broader economy.  

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TAX

Tax savings strategies for business owners

Financial advisors and tax professionals can help clients save significantly under the One Big Beautiful Bill Act, which modifies tax rules for business deductions and capital-gains exclusions. Jere Doyle, an estate planning strategist at BNY Wealth, says: "The message is, people can write stuff off sooner, deduct it sooner." The law raises the annual equipment expense deduction to $2.5m and enhances capital-gains exclusions for qualified small business stock, increasing eligibility limits and exclusion amounts. Holly Swan from Allspring Global Investments noted that these changes provide "a really big incentive to invest in American small businesses." However, the elimination of deductions for employer-provided meals has raised concerns among advisors. Overall, the legislation aims to stimulate economic activity and support business growth.

California's rich miss out on tax breaks

According to the Institute on Taxation and Economic Policy, California's wealthiest individuals will receive significantly smaller tax breaks compared to their counterparts in other states. The top 1% in California, earning over $1.08m, ranks 48th in tax cuts, with an average benefit of $35,260, while those in Wyoming enjoy an average of $134,080. The new tax law, signed by President Trump, raised the maximum deduction for state and local taxes (SALT) to $40,000, limiting the benefits for high earners in California. “The law favors the richest taxpayers and provides working-class Americans with relatively small tax cuts,” noted ITEP. Overall, over 70% of tax cuts will benefit the wealthiest 20%, while middle-income earners will see minimal gains.

Homeowners stand to gain big

According to a Redfin report, homeowners in high-value states could significantly benefit from the proposed elimination of capital gains tax on home sales. The report reveals that over 25.9% of U.S. homes have appreciated by at least $250,000 since their last sale, with 8% exceeding $500,000. The report highlights that states like California, Hawaii, and Massachusetts have the highest shares of homes exceeding these thresholds, while states like Mississippi and North Dakota show minimal gains. The potential tax relief could encourage more homeowners to sell, impacting housing inventory and prices.

Endowment tax hike hits elite schools

The recent increase in the tax on university endowments is creating financial instability for the wealthiest colleges in the U.S., prompting layoffs and hiring freezes. The new tax rates, effective in 2026, will impose an 8% tax on schools with $2m or more in assets per student, while those with $750,000 to $2m will face a 4% tax. Institutions like Harvard, Yale, and Stanford are expected to pay significantly more, with Yale estimating $280m in endowment taxes. Phillip Levine, an economist at Wellesley College, noted that these institutions are "looking for savings wherever possible," which could adversely affect educational access for many students. 

New global tax rule to challenge multinational compliance

Starting in 2025, the Undertaxed Payments Rule (UTPR) will require multinational enterprises to ensure a minimum tax rate of 15% on their global profits. This initiative, part of the OECD's global tax reform, aims to curb profit shifting to low-tax jurisdictions. Accountants and corporate finance teams must prepare for increased compliance demands, as the rule introduces complex calculations and reporting requirements. Firms including Deloitte and EY will likely play a crucial role in assisting companies to navigate these changes. The UTPR underscores the need for robust tax planning and strategic adjustments to align with international tax standards.

INDUSTRY

Advisory services drive firm growth

Firms experiencing significant revenue growth are focusing on advisory services as a key area for future opportunities. Jeanne Bernick, chief client officer at Pinion, noted: "We're just seeing incredible growth in our advisory services." Citrin Cooperman's Jason Krueger emphasized the importance of expanding service offerings to enhance client value. The trend is not limited to top firms; it is seen as a profession-wide imperative. Andrew Gragnani from CBIZ highlighted the need for firms to build out their advisory platforms to remain competitive. As firms navigate challenges, technology and talent acquisition are also critical for sustaining growth. Tim Brackney, CEO of Springline Advisory, stated: "I think there's a huge opportunity on the talent side of our business," indicating a focus on developing the next generation of professionals. Overall, the accounting industry is poised for growth through advisory services and strategic investments.

Tax executives evolve into strategic business advisors

A recent survey by BDO USA highlights a significant shift in the role of corporate tax leaders, who are now acting as strategic business advisors within the C-suite. This evolution is driven by the need to navigate complex policy changes, technological advancements, and increasing business intricacies. For accountants and corporate finance professionals, this shift underscores the importance of integrating tax strategy with broader business objectives. It suggests a growing need for tax professionals to enhance their strategic advisory skills and collaborate closely with other departments to drive business success and compliance in a rapidly changing environment.

WEALTH MANAGEMENT

Trump 401(k) order sparks risk concerns

President Trump's executive order will open 401(k) retirement plans to alternative assets such as private equity, cryptocurrency, and privately held companies. Supporters argue this could boost returns, but experts warn of higher fees, illiquidity, opaque valuations, and increased legal risks. Private equity’s typical “2 and 20” fee model far exceeds the 0.26% average for mutual funds. Illiquid assets are harder to value and monitor, challenging daily pricing systems. Legal disputes, like Intel’s seven-year lawsuit over similar investments, underscore potential liabilities. Success will require lower-cost, transparent products, better investor education, and regulatory safeguards. Analysts say such investments may suit younger savers more than those nearing retirement.

ECONOMY

Trump tariffs raise stagflation fears

Economists are expressing concerns that new tariffs introduced by the Trump administration could exacerbate stagflation risks, characterized by stagnant economic growth and rising inflation. Despite these warnings, the White House maintains that the U.S. economy is experiencing a rebound with low inflation levels. Corporate finance executives should closely monitor these developments, as tariffs could impact supply chains and cost structures, potentially affecting profitability and strategic planning. The situation underscores the importance of adaptive financial strategies in an uncertain economic environment.

CORPORATE

More firms are merging HR and IT departments

Nearly two-thirds (64%) of senior IT decision makers at large companies expect their HR and IT functions to merge within five years, according to a survey by Nexthink, a firm that makes workplace software. Tracey Franklin, the chief people and digital technology officer at biotechnology company Moderna, says her role is being an architect of how work is done. She explains: "I am responsible for the entire HR function and the entire IT function . . . It's [about] how work flows through the organisation, and what should be done with technology – whether that's hardware or software or AI – and where you complement human skills around that." Meanwhile, software company Covisian merged its IT and HR teams in 2023 under the leadership of Fabio Sattolo, chief people and technology officer. He was previously CTO. "If we bring [IT and people] together, we can have a common vision for how technology can have an impact on people and how people can adapt and evolve to leverage the new technology," Sattolo says. 

Liberty Mutual pays to settle bribery case

Liberty Mutual has agreed to forfeit $4.7m in profit to resolve a U.S. criminal bribery investigation involving its Indian subsidiary, Liberty General Insurance. The Department of Justice revealed that the subsidiary paid $1.47m in bribes to six state-owned banks from 2017 to 2022, generating $9.2m in revenue. The case marks the first public enforcement action under a resumed and scaled back anti-bribery law, which had been halted by President Trump in February. The Justice Department has since refocused its enforcement efforts on misconduct that impacts U.S. competitiveness. In a statement, Liberty said it was pleased the Justice Department "acknowledged our proactive approach and affirmed our commitment to integrity and compliance across our global enterprise."

RISK

Trump's AI chip deal 'creates new category of corporate risk'

President Trump's deal with Nvidia to give the U.S. government a cut of the firm's sales in exchange for resuming exports of banned AI chips to China has overturned decades of U.S. national security policy and created an entirely new category of corporate risk, Reuters reports. The move has attracted bipartisan criticism, with lawmakers warning that it risks the creation of a pay-for-play framework for the sale of sensitive technologies to U.S. adversaries. "Export controls are a frontline defense in protecting our national security, and we should not set a precedent that incentivizes the government to grant licenses to sell China technology that will enhance its AI capabilities," said U.S. Representative John Moolenaar, a Michigan Republican who chairs the House Select Committee on China.

AND FINALLY...

Adding up a new image for accounting

A Minneapolis talent agency is spearheading a campaign to challenge outdated stereotypes about accountants, culminating in a Guinness World Records attempt for the "longest line of calculators" on September 24, 2025, at the Target Center. Scouts Talent aims to reignite interest in the accounting profession, which has seen declining college enrollment. The event will feature 1,000 calculators in a continuous line, with free admission requiring registration. It aims to connect accounting professionals, students, and industry leaders, while also providing networking opportunities.
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