• • • Changing the balance of taxes — Budget‑driven tax swaps and incentive reforms are changing the balance between income, property, and sales taxes, forcing large companies to revisit their multistate footprint.

    • How revenue is sourced is changing, too — Rapidly evolving digital and AI‑related taxes are creating new nexus, sourcing, and base‑definition issues for businesses that rely on revenue from digital advertising, social platforms, data monetization, and automated tools.

    • Planning amid continued uncertainty — New federal tax regulations, tariff‑related uncertainty, and even the elimination of the penny are all amplifying state‑by‑state complexity for in‑house tax departments.

WASHINGTON, DC — Tax industry experts who gathered at to provide updates on the current landscape of state and local tax (SALT) policy and offer insight that corporate tax departments should consider found, not surprisingly, that they had a lot to talk about in the current economic environment.

Mapping the new SALT frontier

For starters, this year’s SALT agenda is not just an abstract policy story for large, multistate businesses, rather, it’s a direct driver of cash taxes, effective tax rate (ETR) volatility, and audit exposure. Indeed, several state legislatures are advancing new taxes on digital advertising and data, revisiting incentives and data center exemptions, and using conformity to federal law — especially the tax provisions in the One Big Beautiful Bill Act (OBBBA) — as a policy lever, all against the backdrop of slowing revenues and contentious elections.

“Tax swaps” and incentives — States that are facing budget pressure are, unsurprisingly, looking at tax swaps to reduce income or property taxes while broadening the sales & use tax base and trimming exemptions. For example, on March 3, the state of Florida — which already doesn’t have a state income tax — passed legislation that in the state.

Moreover, with the rapid expansion of AI come the extensive need for data centers. Several states are reassessing data center exemptions and credits, either tightening qualification standards, requiring centers to supply more of their own power, or repealing incentives outright. A decision in Virginia to , for example, is viewed as a potential template for other states, particularly in those areas in which energy and environmental concerns are priorities. At the same time, proposals targeting include expanded corporate tax disclosures, CEO compensation surcharges, and enhanced reporting on apportionment and group filing methods.

What companies should consider — Large companies operating over multiple states should consider making an inventory of their credits and incentives by jurisdiction, including looking at sunset dates and political risk indicators.

Companies should also build forward‑looking models that show how any sales tax base expansion would interact with their supply chain and their procurement of digital and professional services.

New exposure for tech, marketing & data

Bipartisan legislators in several states are continuing to expand on digital economies as a revenue and policy target. For example, Maryland continues to lead with its digital advertising tax; while Washington state’s expansion of its sales tax to include certain digital and IT services and Chicago’s social media taxes illustrate the variety of approaches that state and local jurisdictions are exploring to expand their tax base and raise revenue.

Data and “digital resource” taxes — Proposals in states such as New York would tax companies that derive income from resident data, treating data as a natural resource. While no state has fully implemented a comprehensive data tax, however, large platforms and data‑driven enterprises are monitoring these bills closely.

AI‑related SALT rules — Many states still classify AI solutions under existing Software as a Service (SaaS) or data‑processing categories, but some — including New York — are exploring surcharges tied to AI‑driven workforce reductions. And at least two states are explicitly taxing AI, similarly to the way software is taxed.

For corporate tax leaders, some practical next steps should include mapping those areas in which your group has digital ad spending, user bases, data monetization, or AI deployments. Then, overlaying that with current and pending digital tax proposals. In parallel, it is increasingly critical for the tax team to partner with IT and marketing teams to understand how contracts, invoicing structures, and platform design will affect nexus, tax base definition, and sourcing.

Federal shifts magnify multistate complexity

The OBBBA made permanent several of , while expanding SALT relief on the individual side and creating new interactions for multinational groups. Because most states start from federal taxable income — either on a rolling, static, or selective conformity basis — OBBBA changes reverberate across state corporate income tax bases, especially in those states that have decoupled themselves from interest limits, R&D expensing, or new production‑related incentives.

Corporate tax departments must now juggle different conformity dates and selective decoupling rules across rolling and static states, including jurisdictions that automatically decouple when a federal change exceeds a revenue impact threshold. This requires more granular state‑by‑state modeling of OBBBA impacts on apportionable income, deferred tax balances, and cash tax forecasts. It also heightens the risk that political disputes — such as — produce mid‑cycle changes that complicate provision and compliance processes.

Penny elimination — With federal , states now are moving toward symmetrical rounding for cash transactions, rounding the final tax‑inclusive total to the nearest five cents while attempting not to alter the underlying tax computation. For retailers and consumer‑facing enterprises, this shifts the focus to point of sale (POS) configuration, consumer‑protection exposure, and class‑action risk if rounding is implemented incorrectly.

Tariffs and refunds — The U.S. Supreme Court’s Learning Resources, Inc. v. Trump decision under the International Emergency Economic Powers Act in February leaves open how more than $100 billion in and what that means for prior sales & use tax treatment. Streamlined guidance generally treats tariffs embedded in product prices as part of the taxable sales price but excludes tariffs paid directly by a consumer‑importer from the tax base, raising complex questions if tariff refunds reduce costs or sales prices retroactively.

For indirect tax department teams, the confluency of the 2026 SALT changes — including the impacts around everything from data center credits to the recent Supreme Court tariff decision — the need to rely on internal partners across the business has never been stronger. Combining that with a greater reliance on technologies, including dedicated research tools to stay abreast of state-by-state tax changes, may be the best way for corporate tax teams to keep up with compliance requirements and avoid penalties.

You can download a full copy of here

Key takeaways:

• • • Immediate R&D deductions — The One Big Beautiful Bill Act introduces Section 174A, which restores immediate deduction of domestic research and experimental expenditures starting in tax years beginning after December 31, 2024, reversing the controversial five-year amortization requirement that took effect in 2022.

    • Retroactive tax changes — Small business taxpayers with average annual gross receipts of $31 million or less (for tax years beginning in 2025) will generally be permitted to apply this change retroactively to taxable years beginning after December 31, 2021, offering significant opportunities for amended returns and potential refunds.

    • Planning considerations needed — The legislation modified Section 280C, which now requires that domestic R&E expenditures be reduced by the amount of research credit, creating new planning considerations for businesses claiming R&D tax credits alongside Section 174 deductions.

The Tax Cut and Jobs Act (TCJA), enacted in December 2017, brought significant changes to Section 174, impacting how businesses account for research and development (R&D) expenditures. With the passage of the One Big Beautiful Bill Act earlier this year, the landscape has shifted dramatically once again, requiring tax departments to engage in strategic planning and proactive tax management.

Section 174: From immediate expense to amortization

First enacted in 1954, Section 174 allowed for the deduction of expenditures related to R&D in the year the expense occurred. The TCJA eliminated the ability to deduct R&D costs as an expense in the year incurred, requiring costs to be amortized over five years for domestic research and 15 years for research outside of the United States.

Over the years, the IRS released guidance several times on how best to approach Section 174’s R&D capitalization. The most recent substantive guidance came in Notice 2023-63 (in September 2023), which provided interim guidance on the capitalization and amortization of specified research or experimental expenditures; and Notice 2024-12 (December 2023), which clarified the earlier guidance. Additionally, Revenue Procedure 2025-8 (December 17, 2024) provided updated procedural guidance for taxpayers filing automatic accounting method changes related to Section 174 expenditures.

Since the changes to Section 174 took effect in 2022, businesses have struggled to track R&D costs, including what should be excluded or included. This shift created cash flow challenges for innovation-driven industries, leading to widespread calls for reform.

The One Big Beautiful Bill Act: A game-changer for R&D expensing

The One Big Beautiful Bill Act (OB3) that was signed into law by President Trump on July 4th, brought sweeping changes to the tax treatment of domestic R&D expenditures. Under a new addendum, Section 174A, capitalization is no longer required for qualified domestic research activity for tax years beginning after December 31, 2024.

This represents a major victory for businesses that have been lobbying for relief from burdensome amortization requirements. For many businesses, this change will simplify tax compliance, improve cash flow, and reduce overall tax liability.

Importantly, amounts paid or incurred in connection with software development are treated as R&E expenditures eligible for immediate expensing, which can provide particular relief to technology companies and startups. However, research or experimental expenditures attributable to research conducted outside the United States must continue to be capitalized and amortized over 15 years, creating a bifurcated system that requires careful tracking of domestic R&D activities, compared to foreign activities.

The OB3 legislation also includes particularly generous provisions for small businesses. Small taxpayers — those defined by a gross receipts threshold established in Section 448(c) — can amend tax returns as far back as 2022 to reverse the capitalization of R&E expenses. The Section 448(c) threshold is adjusted annually for inflation; and currently, for tax years beginning in 2025, the threshold is $31 million in average annual gross receipts over the prior three tax years.

For all taxpayers that made domestic research or experimental expenditures after December 31, 2021, and before January 1, 2025, will be permitted to elect to accelerate the remaining deductions for such expenditures over a one-year or two-year period, providing flexibility in managing taxable income.

Planning for the new landscape

While the OB3 provides welcome relief, corporate tax professionals must remain vigilant and proactive. The legislation introduces new complexities, particularly around . The change mirrors the Section 280C rules that were in place prior to the enactment of TCJA in 2017, although taxpayers still have the option to make an election under Section 280C that would reduce their research credit by the maximum corporate tax rate (21%) in lieu of reducing their domestic R&E expenditures.

Here are other key considerations for corporate tax department leaders navigating the new Section 174A landscape:

Understanding qualified research — Tax departments must understand what is considered qualified research and development under the new rules. This involves staying current on all guidelines issued by tax authorities and working closely with the company’s R&D team. Critically, teams must now distinguish between domestic and foreign R&D activities, as the tax treatment differs significantly. This information should be communicated to upper management when considering product expansion or enhancements.

Documentation & recordkeeping — Concise documentation of any expense activity remains essential. Tax departments should capture now and decide later — because it’s better to have the data than not. For any R&D activity that takes place outside of the US, all data should be captured separately from domestic activities. Corporate tax departments should systemize documentation, collection, and storage of R&D expense-related information.

Amended return opportunities — Small businesses should immediately evaluate whether they qualify for retroactive relief and assess the potential benefits of amending their returns for the years 2022 through 2024. Even larger taxpayers should analyze whether electing to accelerate remaining unamortized amounts into 2025 or splitting them between 2025 and 2026 provides optimal tax outcomes.

Section 280C planning — Departments must carefully model the interaction between R&D tax credits and Section 174A deductions. The restored reduction requirement means businesses must evaluate whether making the Section 280C election to reduce the credit rather than taking the deduction would provide better overall tax results.

Scenario planning — Departments should develop multiple financial models based on different elections and timing strategies. This will help the company understand the range of impacts these changes will have on cash flow, net operating losses, and overall tax liability.

The OB3 represents a major course correction for R&D tax policy, but it requires tax professionals to adopt a proactive approach to maximize benefits. Corporate tax departments can navigate these changes effectively by staying informed about legislative developments, engaging in continuous learning, and leveraging advanced tax planning strategies. Also, collaboration with internal teams and external advisors will be crucial in identifying opportunities and mitigating risks.

Ultimately, establishing a proactive and nimble mindset will enable corporate tax professionals to optimize their positions and drive business success in this evolving regulatory landscape.

You can find more about how the One Big Beautiful Bill Act has impacted tax issues here

As discussed at the recent Tax Executives Institute 2025 Midyear Conference, these changes in tax policies have the potential to significant impact the tax functions within both domestic and international companies.

Uncertainty in the current tax landscape

The Tax Cut and Jobs Act

In the Budget Act of 1974, a special legislative process was created to allow Congress to make tax and mandatory spending changes necessary to the congressional budget resolution, what is known as the . The timing, size, and permanency of tax packages are pivotal factors that will influence the legislative process and, consequently, the strategic planning of corporate tax departments.

Overall, the provisions of 2018’s Tax Cut and Jobs Act that were set to expire at the end of 2025 will most likely be extended, even though there may be pieces that are repealed or changed. These could include the potential repeal of Section 174 amortization, preservation of the depreciation and amortization in Section 163(j), restoration of bonus depreciation, and incentives for domestic manufacturing.

Inflation Reduction Act and Biden-era credits

The future of regulations established during the Biden administration, including those related to credits outlined in the Inflation Reduction Act, is a subject of considerable debate. The U.S. Treasury’s potential to overturn or modify these regulations, coupled with the Congressional Review Act’s influence on them, adds further layers of uncertainty.

International tax provisions

The international tax landscape is undergoing substantial shifts as well, with a particular emphasis on aligning with Pillar Two and addressing exposure under the Undertaxed Profits Rule. The role of US research & development credits in this context is also significant.

Additionally, the legacy of President Trump’s executive orders continues to influence international tax policy, with retaliatory measures and tariffs becoming key considerations. Further, the potential for bills like the long-dormant Section 891 of the U.S. tax code, which would allow for double-taxing of residents of certain countries, along with additional trade sanctions further complicate the international tax environment.

Pillar One and digital services taxes

The evolution of international tax policy also encompasses the future of Pillar One and the proliferation of digital services taxes around the world. The potential for retaliatory measures from the Trump administration against those countries levying digital services taxes and other unilateral measures is a significant concern. Moreover, the role of Pillar One’s Amount B — which aims to simplify the application of an arm’s length principle to the wholesale distribution of tangible goods — in the evolving international landscape adds another dimension to the strategic considerations for businesses that are operating globally. Understanding these dynamics is crucial for corporate tax departments as they navigate the complexities of international tax compliance and planning.

Key considerations for corporate tax departments

In the Thomson Reuters Institute’s , the second most significant challenge for tax departments cited was concern over tax regulations. This is hardly surprising — over the years the complexities of global taxes and the changing requirements to comply with them has become a top-of-mind concern for tax practitioners.

Now, however, the added layer is the lack of clarity or guidance on new or amended tax policies. For example, manufacturing firms’ raw materials that come from the border are facing on-again/off-again imposed tariffs and start dates. How are business to remain in compliance with the executive order on when to pay tariffs if those dates are changing? And, if there a suspension of an additional tariff after it was paid, does that just become a lost cost for the business? If so, how can companies plan for expenses that will affect their bottom-line.

Further, consider how other multinational leaders’ heads are spinning as nations within the Organization for Economic Co-operation and Development began enforcing Pillar Two around the globe. They had to make sure the right assessments were being made in each region, and then layer on how the retaliatory tariffs may trickle down to US companies doing business in these areas and its effect on what some feel are already overly complex tax regulations with which to comply. Whew!

Managing through extreme changes

Every year, the survey for our State of the Corporate Tax Department report has asked respondents about the approach their department takes to its work. And every year, the overwhelming response has been that most respondents feel their departments are reactive, even though most would like to be proactive. In the current climate, it seems like working more proactively is no longer a nice-to-have but must almost certainly has become a necessity. One can imagine that corporate tax planning must now have a laser-style approach, that the proactive and strategic work (which more than 70% of the respondents say they desire) has to happen. The accounting talent constraints of the industry, including those impacting corporate tax departments, can’t be solved in the immediate short term. Departments will have to find the tools that can help them mitigate the problems that come from their lack of resources. There isn’t a preverbal silver bullet here, but the closest that comes to it will be an increased reliance on technology.

In the 2024 State of the Corporate Tax Department report, more than 50% of respondents said they felt their department was under-resourced (in both people and technology); yet, in another report — the Thomson Reuters Institute’s — more than 90% of respondents said they were optimistic about tax technology and a significant portion said they believed their technology budgets would increase.

Tax department leaders have also acknowledged their need to not only keep up with compliance work but to stay informed about the legislative priorities and potential changes in tax policy. This knowledge will enable businesses to align their tax strategies with legislative developments and optimize their tax positions — and perhaps, with the use of advanced technology tools, departments can do this work more efficiently, leaving time for their tax professionals to become more proactive in their work.

You can download a copy of the Thomson Reuters Institute’s

One of those aspects has been Section 174. First enacted in 1954, Section 174 allowed a deduction of expenditures related to research and development (R&D) in the year the expense occurred. The upgrade to Section 174 under the TCJA eliminated the ability to deduct R&D cost as an expense in the year the expense occurred, and instead the cost would have to be amortized over a five-year period for domestic research and 15 years if it was outside of the United States.

Over the years, the IRS has released guidance several times on how best to approach Section 174 R&D capitalization, including its most recent guidance, issued December 17, 2024, that discussed the required accounting method used with Specified Research or Experimental Expenditures.

However, since the changes to Section 174 which took effect in 2018, businesses have struggled to track R&D costs, including what should be excluded or included as a cost. Some tax experts believe that this year and next could bring significant changes to the tax & accounting industry with a new presidential administration — as well as the fact that some key provisions of the TCJA are set to expire later this year.

President-elect Donald Trump has made it clear that his intentions are to extend all the expiring provisions, but the potential impact of this on the national debt could make this a more difficult task.

Planning for uncertainty

Although there is a unified Congress going into 2025 (with Republicans having a slim majority in the House), there previously was a to reverse Section 174. However, because the cost to the government of implementing a more favorable R&D expensing rule is uncertain, it is questionable whether it would pass.

While much of the upcoming year may be steeped in uncertainty, especially around tax policies, companies now need to strategically plan for and mitigate any possible changes that may be on the horizon and that could impact their business.

Indeed, there are ways that corporate tax departments can plan and prepare for potential changes. Today, many corporate tax departments already feel taxed, no pun intended, and more than half say their work is primarily reactive, with more than 70% expressing a desire to do more proactive work, according to the Thomson Reuters Institute’s most recent .

In 2025 and beyond, tax professionals will have to work differently to be compliant, with Section 174 only being a part of the potential changes that may be coming down the pike for businesses.

Here are a few more considerations for corporate tax department leaders to worry over:

• • • Understanding qualified research — The tax department must understand what is considered qualified research and development. This involves staying current on all guidelines issued by the tax authorities. Also, it is essential to work with the company’s R&D team to understand the research being done and then advise that team on the kinds of expenditures that need to be captured, or which costs do or don’t qualify for deductions. This information also should be communicated to upper management when considering product expansion or enhancements.
    • Documentation & recordkeeping — Making sure there is concise documentation of any apparent expense activity — and, for good measure, require documentation even if there is some uncertainty over whether the related expense is an R&D activity. Capture now, and decide later — because it’s better to have the data than not. This requires working closely with the various internal teams responsible for those activities. And for any R&D activity that takes place outside of the US, all data should be captured in the same manner domestic documentation. In short, corporate tax departments should be systemizing documentation, collection, and storage of any R&D expense-related information.
    • Scenario planning — Departments should also develop multiple financial models based on different potential outcomes of Section 174 adjustments. This will help the company understand the range of impacts and prepare accordingly. Scenario planning can help the company decide on the timing of developing or enhancing products because the data points from the modeling can reveal potential tax savings or liabilities that could impact cash flow.
    • Other tax incentives — Depending on the industry in which the company operates, there may be other tax credits and incentives to consider, like Section 41, which provides tax credits for increasing research activities. Tax teams should ensure that claiming one credit does not adversely affect eligibility for others. Evaluate how R&D activities can be structured to maximize available tax incentives.

In conclusion, tax professionals must adopt a proactive approach to remain agile amid shifting tax policies, including potential changes to Section 174 and sunsetting provisions of the TCJA.

Corporate tax departments can navigate uncertainties effectively by staying informed about legislative developments, engaging in continuous learning, and leveraging advanced tax planning strategies. Also, collaboration with internal teams and external advisors will be crucial in identifying opportunities and mitigating risks.

Ultimately, establishing and fostering a proactive and nimble mindset will enable tax professionals to optimize their positions and drive business success in an ever-evolving regulatory landscape.

You can find more information about how corporate tax departments manage Section 174 rules here.

Today, with 2024 in the rearview and the new tax season on the way, 2025 may be another pivotal year for tax professionals. As they are working with clients to prepare their 2024 taxes, tax professionals also will have to balance some future planning alongside it.

With several provisions of the TCJA set to expire at the end of 2025, tax professionals have to now think through a lens of how some potential expirations could impact clients in 2026 and beyond. With a new party taking over the presidency and both houses of Congress, the likelihood is that most of the provisions set to expire ultimately will not. However, because many discussions will have to be had about the costs of planned tax cuts, there are several factors to consider — and what the final legislation will look like could make quite a difference.

While it’s a gross understatement to say regular tax seasons are hectic for tax professionals, the looming possible changes in the coming season can, for some, create more dread, especially as the industry continues to be plagued by the lack of talent. The potential for more work in the coming season is like the straw that could break the camel’s back.

To help mitigate this, here are some practical tips to not only survive the coming 2024 tax season but also potentially put tax professionals in a position for expanded business growth and opportunities.

Reviewing and updating client strategies

As clients begin to deliver their 2024 financials, this could be an excellent opportunity to review their financial activities over the past year and closely look at what has changed. It is also essential to ask about potential changes in the upcoming 12 to 24 months.

However, how best can tax professionals capture this information? One simple way could be to update your tax return checklist, perhaps adding a note about tax planning and a few questions about future financial considerations. If the firm doesn’t already offer this service, this could be the most straightforward way to begin querying clients about their need for advisory services — and then, begin a plan to offer those.

On the surface, of course, it may not seem like an ideal time. In reality however, it is the perfect time because you will be interacting with clients regarding current taxes, and they will be more open to talking to you about future financial plans given that they’re already thinking about the coming year and beyond. Indeed, there isn’t a single news article that hasn’t commented on the potential expiring provisions of TCJA and their potential impact on taxpayers — so most clients are already aware.

While it’s a gross understatement to say regular tax seasons are hectic for tax professionals, the looming possible changes in the coming season can, for some, create more dread, especially as the industry continues to be plagued by the lack of talent.

In fact, it is essential for tax professionals to seize this opportunity with their clients now. Even if your tax & accounting firm doesn’t formally have an advisory practice and it was something you planned to offer in 2025, the coming tax season gives you the gift of a low stakes start.

By using your tax expertise and the knowledge of your client’s financials to provide them with a few scenarios to consider or rethink could put you on the path to become a trusted advisor.

Not all of your clients may require or want tax planning, however, but this time also provides you with the opportunity to re-evaluate your firm what it needs to do to remain competitive. Ask yourself, what should our firm look like going forward? In short, what is your firm’s plan for future growth?

Is the current business model in which most or all of its revenue comes from doing tax returns ultimately sustainable, especially with the continued pressure of competition on tax compliance? For those firm leaders questioning that sustainability, there may be a ready solution.

Enhancing technological capabilities

Now more than ever, technology is pivotal in improving the effectiveness and efficiency of tax preparation and planning. In fact, tax firm leaders have said technology is a necessary component of their firm’s business strategy, according to a recent survey on tax firm technology. At the same time, however, there has been a delay between thinking about purchasing needed technologies and actually moving the ball on budgeting and action to do it. According to the Thomson Reuters Institute’s State of the Tax Professional Report, on average, only 40% of tax & accounting firms have at least one-quarter of their workflow automated.

By using your tax expertise and the knowledge of your client’s financials to provide them with a few scenarios to consider or rethink could put you on the path to become a trusted advisor.

Those firms that understand and effectively make changes are positioning themselves to better survive and thrive through the coming tax season. Yet, many firms still face multilayered dilemmas — some lack the necessary technologies, for example, while others have sufficient technology but lack their staff’s buy-in, likely because they failed to train staff and maximize the use of the technology. Regardless of where firms sit on this spectrum, according to the survey, almost all recognize that to keep up with regulations, gather and analyze clients’ information, and work more efficiently, more technology is required, especially with the impact of potentially altering how tax work gets done.

Finally, it’s worth noting that while staying informed on tax laws and regulations is incredibly important for tax professionals, clients also will rely on their tax professionals’ expertise to help make sense of all the tax noise in the media and how it matters to them personally. Proactively, tax professionals should provide updates to clients — either individually or as a group (using newsletters or client memos, for example) — on how proposed changes may impact them. Again, this is an opportunity to strengthen current client relationships and create opportunities to acquire new business and new clients.

Clearly, the 2025 tax season presents unique challenges and opportunities for tax professionals. By staying informed, leveraging technology, and maintaining open communication with clients, tax professionals can confidently navigate these potential policy changes.

By preparing now, tax professionals can ensure a smoother tax season, strengthen client relationships, and enhance the overall value of tax services.

You can learn more about the challenges facing tax professionals here.

Impact of the Tax Cuts and Jobs Act (TCJA)

, enacted in 2017, has been comprehensive and offered sweetening changes of recent tax law. The TCJA bought into being numerous deductions that many tax specialists have said altered the financial landscape for businesses and individuals alike, and even . However, as Hunley points out, not all of TCJA was permanent and there are some provisions that are set to expire.

In fact, certain very popular provisions, including the qualified business income deduction, are on the list that is slated to expire. The qualified business income deduction was a benefit for many small business owners and if it is allowed to expire, it could reshape the financial planning landscape for many businesses. The sunset of this provision presents both challenges and opportunities for tax professionals who look to advise their clients on the best course of action.

Potential changes with the election

With an election happening in less than seven months, the possibility of a new administration in the White House looms large, bringing with it the prospect of a tax policy overhaul. In the podcast, we delved into the implications of such a change, particularly in relation to environmental, social & governance (ESG) considerations. Energy tax credits, which are integral to ESG strategies, could see a significant shift in importance, depending on the election results and subsequent policy direction.

If the White House remains as is — that is, President Joseph Biden wins re-election — then these credits, which are intertwined with the broader ESG movement, could see a reorientation to support sustainable and socially responsible initiatives more aggressively. If the White House flips — that is, former President Donald Trump wins — the opposite could be true, especially if the U.S. House of Representatives stays Republican-majority and the U.S. Senate flips. In that case, these energy tax credits would likely be deprioritized, if not outright repealed.

It is worth noting that the growing emphasis around the world on sustainability and responsible corporate governance suggests that there might be increased support for tax incentives that promote environmental stewardship. This could be an area in which lawmakers from both political parties find common ground, given the public’s growing concern over climate change and the desire to incentivize green energy initiatives.

The Green Book and beyond

The prospects of , as outlined annually by the Biden administration, present a complex and ambitious vision for the future of the US tax system. The Green Book is essentially an annual policy document that outlines the administration’s tax priorities, offering a blueprint for potential legislative action.

Hunley’s perspective on the Green Book proposals is cautiously optimistic. He said that he recognizes the inherent challenges in advancing a comprehensive tax reform agenda, particularly those that involve raising revenue or overhauling established tax regimes. For instance, Green Book proposals to close loopholes like carried interest have historically faced stiff resistance from influential interest groups and sectors that benefit from such provisions. Despite this, there’s a sense that some measures, such as expanding individual tax credits, may find common ground across the aisle.

Such action as expanding individual tax credits, especially those aimed at low- and middle-income families, can be politically palatable as they directly support taxpayers and can stimulate economic growth. Credits like the Child Tax Credit and the Earned Income Tax Credit have previously seen bipartisan support, and their expansion aligns with broader social objectives, such as reducing child poverty and incentivizing work.

By contrast, other provisions in the Green Book that seek to raise revenue, such as increasing the top marginal tax rate or adjusting the corporate tax rate, are likely to encounter more resistance. The political climate, public sentiment, and the balance of power in Congress — especially if it changes — all will play critical roles in determining the feasibility of these proposals.

Proactive measures for tax practitioners

In the podcast, Hunley highlights the importance of tax practitioners staying informed and ready to adapt, and he emphasizes the necessity for professionals to educate their clients about the TCJA’s impending sunset provisions. Practitioners should also prepare themselves and their clients for any alterations in deductions and tax credits that are likely to follow.

Staying ahead of the curve is not just good practice, Hunley advises, it is imperative for ensuring that clients are positioned to navigate the tax terrain effectively.

From the nuances of the expiring TCJA provisions to the potential enactment of the Green Book and the election’s influence on tax policies, tax professionals and their clients need to ready themselves for a possibly changing tax policy landscape that may be filled with both complexity and opportunity.

To learn more about the impact of the election on future tax policy, listen to (on Spotify) featuring a conversation with Shaun Hunley, an Executive Editor at ¶¶ŇőłÉÄę.

The challenges range from ensuring that tax professionals get all of their clients’ tax related information in a timely manner to making sure they have what they need to perform their work.

What some firms did to help with busy season

Tax work has become more complex for a host of reasons, from increased regulations and changes in tax laws and policy to more demanding. For some tax & accounting firms, trying to counteract these and other challenges by adopting various strategies is an everyday struggle.

Indeed, professionals from most tax & accounting firms indicated adopting more advanced technology would play a crucial role in helping drive efficiency and streamline processes in their workday, according to the Thomson Reuters Institute’s 2023 State of the Tax Professional Report. Automation and software solutions can significantly reduce manual tasks, allowing professionals to focus on more complex aspects of their work, which is a huge boon for tax & accounting firms.

In general, most US businesses outsource some part of their overall operations, and according to, 57% of them said doing so allowed them to focus more on core business, improve service quality, and solve capacity issues. For tax & accounting firms, outsourcing has become a viable option for handling routine tasks, thus freeing up staff.

When considering outsourcing or right sizing the workforce, tax & accounting firms need first to consider their own staff’s collective skills. By reviewing which tasks are matched with which internal professionals, firms can assess the appropriateness of skill levels and decide whether additional training or education is needed or whether it is more appropriate cases to try to increase the skill-levels of certain employees or consider reassigning them to other tasks. Firms that are able to get these questions correct not only increase their efficiency but possibly generate more staff satisfaction.

Tips & tricks for surviving the busy tax season

Whether a tax & accounting firm has incorporated the above suggestions or not, or whether it is full steam ahead in trying to improve efficiency or streamlining work processes, there is still a level of businesses that all the technology in world will not be able to fix. As tax & accounting professionals rally through the busy tax season, we offer a few suggestions that will hopefully be a salve, a quick respite as the light at the end of the tunnel gets brighter. These simple and fun suggestions are a way to acknowledge firm members’ efforts and offer a gracious thank you for the work they do.

• • • Making simple gestures like impromptu ice-cream social or pizza parties not only boost morale but also reinforce the team’s cohesion. Understanding that time is a precious commodity, a 30-minute ice-cream social in the afternoon or a one-hour pizza party at which everyone gathers and does not talk about work, will be a welcome respite.
    • Regularly checking in with staff to ask about their well-being can make a significant difference in morale. Importantly, reminding everyone that they’re all almost over the surge in work that comes this time of year helps maintain perspective and motivation.
    • Encouraging staff members (and management) to get some exercise — there are plenty of studies that show the positive effects of a physical workout. Note: a workout can be as simple as walk (preferable outside), and studies also show the benefits on sunlight on physical and mental health. Yoga and breathing exercises are also helpful.
    • Promoting laughter – work is serious, however finding some humor each day can be a significant stress reliever.

Preparing for success: Looking ahead to 2025

Looking ahead, tax & accounting firms can take several steps to ensure they are better prepared for future busy seasons. For example, firm leaders should take time to perform a retrospection on the current year’s tax season. Reviewing and identifying what practices worked and what could be improved is essential, and this includes analyzing client feedback, staff input, and workflow efficiencies.

Anticipating regulatory changes is another important step in preparing for the next busy tax season. With tax regulations constantly evolving, firms that stay ahead of these changes can better serve their clients and reduce last-minute scrambles. The Tax Cuts and Jobs Act provisions that are expiring soon is one such area requiring attention.

Further, increasing automation and improving efficiencies should remain perennial priorities for firms. In fact, many tax & accounting firm professionals continued to list improving efficiency as a strategic priority, according to the Tax Professionals Report, which also showed that organizing clients by complexity and establishing advance deadlines for preparation can streamline workflows and reduce stress.

As tax & accounting firm leaders navigate the complexities of the busy season, the blend of technological innovation, strategic outsourcing, talent optimization, and a focus on staff well-being forms a comprehensive approach to overcoming challenges. By looking ahead and preparing strategically, firms can not only survive their busy season, but thrive during these demanding periods, setting a foundation for continued success and client satisfaction.