You’ve no doubt heard a lot about the “One Big Beautiful Bill.” This sweeping legislative proposal is designed to streamline and simplify a range of tax, financial, and regulatory measures into a single, comprehensive package. While the name may sound lighthearted, the bill itself carries serious implications for taxpayers, business owners, and financial professionals alike. In this post, we’ll break down what’s inside the bill, touching on the important tax provisions for individuals and business owners alike.
The bill has, by a slim margin, been approved by the United States House of Representatives. The United States Senate, specifically the Senate Finance Committee, has released proposed language of their ‘version’ of the bill; however, the Senate as a whole has yet to vote on the proposed legislation.
While the language of the different versions of this bill are in many ways consistent, addressing a large variety of topics, there are important differences. Below you’ll find a breakdown of the important tax implications of bills and how they differ –
Extension of individual provisions that originated with the Tax Cuts and Jobs Act (TCJA).
Many of the tax provisions of the TCJA are set to expire at the end of 2025. The text of both legislative vehicles looks to address the sunset of these provisions for individual taxpayers.
| Provision/Tax Topic | House Version | Senate Version |
| Lower tax brackets (10, 12, 22, 24, 32, 35 and 37) |
Provision made permanent. | Provision made permanent. |
| Elimination of personal exemption | Provision made permanent but allows a temporary $4,000 deduction for seniors age 65 and older after 2024 and before 2029. | Provision made permanent but allows a temporary $6,000 deduction for seniors age 65 and older after 2024 and before 2029. |
| Increased alternative minimum tax (AMT) exemption and threshold | Provision made permanent. | Provision made permanent. |
| Lower limitation on the deduction of mortgage interest | Provision made permanent. | Provision made permanent with mortgage insurance premiums qualifying as residence interest for purposes of the deduction. |
| Increased standard deduction | Provision made permanent with annual increase outlined in the text of the bill. | Provision made permanent with annual increase outlined in the text of the bill. |
| State and Local Tax (SALT) deduction | Increases limitation from $10,000 (under TCJA) to $40,000 with annual increases until 2033. | Increases limitation from $10,000 (under TCJA) to $40,000 with inflationary increases. |
| Child tax credit | Provision made permanent with a temporary increase to $2,500 through 2028 and including inflationary adjustments after 2028. | Increase the base credit to $2,200 including inflationary adjustments. |
| Estate tax exclusion | Provision made permanent with increase in base exclusion to $15 million for decedents dying in 2026 and including inflationary adjustments after 2026. | Provision made permanent with increase in base exclusion to $15 million for decedents dying in 2026 and including inflationary adjustments after 2026. |
| Educator expenses | Not addressed. | Allows for unreimbursed educator expenses to be deduction as a miscellaneous itemized deduction (currently capped at $300 as an above the line adjustment). |
New individual provisions
There has been a large amount of media coverage on the tax changes promised during the Trump administration’s most recent election campaign. These new provisions address many of the more widely talked about changes.
| Provision/Tax Topic | House Version | Senate Version |
| No tax on tips | Provides a deduction from income for amounts received as tips. | Provides a deduction from income for amounts received as tips with deduction capped at $25,000. |
| No tax on overtime | Provides a deduction from income for amounts received as overtime pay. | Provides a deduction from income for amounts received as overtime pay. |
| Automobile loan interest deduction | Allows for a deduction of up to $10,000 for interest paid on automobile loans in 2025 through 2028. | Allows for a deduction of up to $10,000 for interest paid on automobile loans in 2025 through 2028. |
| Trump accounts | Creates tax-favored accounts for newborn children, seeded with $1,000. | Creates tax-favored accounts for newborn children, seeded with $1,000. |
Business provisions
The TCJA created a number of largely tax beneficial changes to legislation. As with the individual provisions above, many of these are set to sunset after 2025. Both houses of Congress have addressed many of these expiring provisions.
| Provision/Tax Topic | House Version | Senate Version |
| Bonus depreciation | Provides for 100 percent bonus depreciation through 2029 for property acquired post January 19, 2025. | Provides for 100 percent bonus depreciation through 2029 for property acquired post January 19, 2025. |
| Research and experimental expenditures | Reinstates the deduction for domestic research and experimental expenditure costs incurred after 2024 through 2029 (taxpayers can elect to amortize). | Makes permanent the deduction for domestic research and experimental expenditure costs, allowing certain taxpayers a retroactive deduction to 2022. |
| Qualified business income deduction | Provision made permanent, increasing the deduction to 23 percent of qualified business income. | Provision made permanent. |
The Senate will need to finalize and approve their version of the bill – an event that appears to be just over the horizon. Assuming this occurs, the House will need to approve the Senate bill as-is or the language of the two separate versions of the bill will need to be reconciled. This reconciliation process is typically handled in joint committee sessions and can be tedious and time-consuming.
Depending on the final differences in the two legislative texts, the bill could move quickly through the reconciliation process if required. Congress as a whole is highly motivated to take action as it relates to these provisions, which could also move the process along more quickly than is typical.
emc will continue to monitor the progress of this legislation as it is finalized in the Senate and moves toward final reconciliation and approval. If you have questions in the meantime, reach out to your advisor at emc – we’d be happy to help!
Annual Report Requirement Under Pennsylvania Act 122 of 2022 – Deadline Approaching!On November 3, 2022, then-Governor Tom Wolf signed Act 122 of 2022 into law, establishing a new annual reporting requirement for business entities operating in Pennsylvania. The Act brings Pennsylvania in line with many other states by requiring both domestic and foreign business associations to file annual reports with the Pennsylvania Department of State.
Entities subject to the new requirement include Pennsylvania business corporations, limited liability companies (LLCs), limited partnerships (LPs), professional associations, business trusts, nonprofit corporations, and other domestic association types, as well as all registered foreign associations.
The requirement to file annual reports begins in calendar year 2025. Filing deadlines vary based on the type of association:
Newly formed or newly registered associations will be required to file their first annual report in the year following their formation or initial registration in Pennsylvania.
Each annual report must include the following:
The filing fee for submitting an annual report is $7 for business corporations, LLCs, and LPs. Nonprofit corporations and other entities organized for not-for-profit purposes are exempt from the fee.
The Department of State will mail annual report reminders to each association’s registered office address at least two months prior to the applicable filing deadline. It is critical that associations keep their information up to date with the Department to ensure timely delivery of these notices. However, failure to receive a notice does not relieve an association of its obligation to file.
Failure to file an annual report will subject an association to administrative dissolution, termination, or cancellation. Starting with reports due in 2027, associations that do not file within six months of their due date will face these administrative actions.
Important Note: If another entity has assumed the name of an association seeking reinstatement or reregistration, the original association must adopt a new name.
As your tax advisors, emc CPAs would like to clarify that the filing of these annual reports is not included in our tax preparation and filing services. Since this filing constitutes a legal matter, we recommend that you consult with your corporate legal counsel or another qualified legal professional to ensure compliance with this new requirement
For more information and to access the filing portal, please visit the Pennsylvania Department of State’s official page: Annual Reports | Department of State
Sean Mansberger has been Promoted to Partner!emc is thrilled to announce the promotion of Sean A. Mansberger to Partner!
Sean has been an invaluable member of our team, bringing his expertise in tax compliance, financial statements, and consulting to our small business clients with dedication and excellence. His commitment to helping clients navigate complex financial matters has played a crucial role in our continued success.
Sean was an original member of the firm when it started over five years ago. His passion for the firm, client service, and staff development has contributed largely to the firm’s success thus far.
Please join us in congratulating Sean on this extremely well-deserved achievement! We are excited about the continued contributions and impact Sean will have in his new leadership role!
Navigating The Corporate Transparency Act: A Guide for Our Valued ClientsAs your trusted Certified Public Accountant, we are committed to keeping you informed about significant changes in laws that may impact your business. Today, we want to enlighten you on the Corporate Transparency Act (CTA) and its significance to your company.
The Corporate Transparency Act, signed into law in 2021, represents a crucial step towards promoting transparency and preventing illicit financial activities. This law aims to enhance corporate accountability by requiring certain businesses to disclose their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN).
The CTA primarily targets companies that are easily susceptible to money laundering, terrorist financing, and other financial crimes. It requires these businesses to report details about their ultimate beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Beneficial owners are individuals who directly or indirectly hold at least 25% ownership interest in the company, exercise substantial control, or receive substantial financial benefits from the entity.
The Corporate Transparency Act applies to corporations, limited liability companies (LLCs), and other similar entities. If your business falls within these categories, it’s crucial to familiarize yourself with the filing requirements to ensure compliance.
As your dedicated financial partner, we are here to help keep you informed of these changes in the law and any developments that may occur as the law’s implementation continues. Our recommendation as it relates to the filing requirements, determination of eligibility, and actual filing, is to contact your attorney.
The Corporate Transparency Act is a significant stride towards promoting transparency and accountability in the business world. If you have any questions or concerns regarding the CTA, please do not hesitate to reach out.
Thank you for entrusting us with your financial matters.
Audit Requirement Changes for Employee Benefit PlansUnderstanding the conditions triggering a mandatory audit for your 401(k) plan has historically posed a challenge, especially for companies hovering around the 100-employee threshold. Thankfully, in a world that is becoming increasingly complex and challenging, the Department of Labor has simplified things starting in 2023. Instead of counting all eligible plan participants regardless of if they actually contribute to the plan, a company now only has to report eligible employees that have a balance in the plan and terminated employees that still have a balance in the plan. As far as the timing of the balance is concerned, this is based off of the beginning of your plan year. This change is expected to reduce the number of plans that qualify as “large plans”, which serves as the basis for audit requirement.
As an example, consider the following fact pattern. A company has 75 employees eligible for the 401(k) plan at the beginning of the year, and only 20 of them actually participate and have a balance at the beginning of the year. Additionally, there are 40 terminated employees who still maintain a balance in the plan. Under the old methodology, this would mean the plan has 115 (75 + 40) employees for the purposes of filing the Form 5500, and an audit would be required because it exceeds the 100 participants requirement. Under the new methodology, only the 20 employees that participate and the 40 terminated employees with balances would count, so with 60 participants, they would be well under the audit requirement.
It is important to note that there is still the “80-120 Participant Rule” in effect. This allows plans with between 80 and 120 participants at the beginning of the plan year to file the Form 5500 in the same manner as they did in the prior year. So if a plan had 90 participants in the prior year and increased to 104 participants, they could opt to continue to file as a small plan and forgo the required audit for that year.
Aside from attempting to simplify the methodology for people, the DOL hopes this change will encourage more small businesses to establish 401(k) plans so that their employees have an easily-accessible retirement vehicle.
Even with this change, navigating your 401(k) plan and the necessary audit requirements can be challenging. emc is here to provide guidance and help along the way.
Bridgette Toth is Now an Enrolled Agent!We’re thrilled to announce that Bridgette Toth has successfully fulfilled all the requirements to attain the prestigious status of Enrolled Agent with the Internal Revenue Service. An Enrolled Agent is an individual who has demonstrated expertise by passing a rigorous three-part comprehensive IRS examination, covering both individual and business tax returns.
This esteemed designation represents the highest level of recognition bestowed by the IRS. Those who achieve Enrolled Agent status not only showcase their tax knowledge but also commit to upholding ethical standards. To maintain this elite status, individuals like Bridgette must complete 72 hours of continuing education courses every three years.
Bridgette’s dedication to her professional development is commendable, and we take pride in her accomplishment. By enhancing her skills, she is better equipped to serve our clients with excellence. Congratulations, Bridgette, on this significant achievement!
Eisenhart is now emcFour and a half years ago, Kevin Eisenhart, Sam Gantz, and Sean Mansberger embarked on the journey of founding Eisenhart and Company. Their vision was to cultivate a team-first culture while delivering top-notch accounting, tax, and business advisory services.
This August marked a pivotal moment as Eisenhart and Company expanded its horizons by introducing an audit division. The addition of Hunter Mink and Dan Boyle not only enhanced the firm’s service capabilities but also reunited long-time colleagues Eisenhart and Mink, who share a history since the inception of their public accounting careers.
The name “emc” symbolizes the rich history of collaboration between Eisenhart and Mink, highlighting the collective efforts of the entire company that contributed to its success.
The firm is thrilled to unveil its new identity and brand, inviting clients, the community, and friends to explore the transformation on our new website: emccpas.com.
Reflecting on the unforeseen growth of the firm, the founders express gratitude to their families, clients, and community for unwavering support. Since its inception, Eisenhart and Company, has been committed to infusing and extraordinary level of enthusiasm, dedicated, and perspective, a focus that will persist under the new emc brand.