Accounting professionals keep up with complex new rules that they say will benefit businesses
In many professional fields, continuing education is essential to keep abreast of developments. That’s particularly true for the accounting professionals who businesses and individuals rely on to mitigate unnecessary tax burdens each year.
For 2025, that extra learning will be vital with President Donald Trump’s sweeping economic and tax reforms — known as the One Big Beautiful Bill Act, which was signed into law in July.
Accountants across Northwest Indiana acknowledge that the new federal tax laws are pro-business and will benefit their clients. But to know what’s in the 870-page bill, accountants must remain on top of what’s going on in their profession. That’s why continuing education is so important.
J.T. Eagan, managing director of NWI Tax and clinical assistant professor of accounting at Purdue University Northwest, said it’s important for people in his profession to be lifelong learners. He always tells his students that the rules governing their work are constantly shifting and evolving. The rules can change with the approval of new legislation at the federal and state levels, so it’s crucial to be informed.
“If you’re not a lifelong learner, this isn’t the career for you,” said Eagan, who has been in accounting for 20 years. “Just to maintain your licensure, you have to maintain continuing education hours each year. We eat, live, breathe, sleep and die this stuff.”
Matt Stosich, a certified public accountant based in Schererville, said there are numerous resources practicing accountants can use to continue their education.
Webinars and in-person seminars provide critical information about the tax landscape. Briefs issued by the Internal Revenue Service also provide important information, Stosich said. The Indiana CPA Society keeps its members informed of changes, and the American Institute of Certified Public Accountants publishes the monthly “Journal of Accountancy” that includes pertinent information for the profession, he said.
“Being on top of when the IRS publishes their guidance for the year and making sure you’re as current as possible is just part of the job,” Eagan said. “You have to drink up as much as you can. Join a Zoom when you can. I listen to online webinars when I’m in the car. Getting that new information so you can better serve your clients is critically important.”
Tax changes
The bill Trump signed is a collection of tax breaks, spending cuts and other Republican priorities that include new funds for national defense.
Containing about $4.5 trillion in tax cuts, the legislation makes permanent business-friendly legislation passed during Trump’s first term. It was scheduled to sunset next year. Under this year’s bill, the existing corporate tax rates and individual income brackets become permanent.
The bill offers American businesses large and small some significant benefits.
The law preserves the 199A small business deduction, which is a tax deduction of up to 20% on qualified business income for owners of pass-through businesses, such as sole proprietors or S-corps. The act made the deduction permanent.
“That was a big relief. The QBID has been huge in the small business industry. To have someone say you only have to pay tax on 80% of your income is a huge benefit,” said Sue Voth, owner of Quincy, Illinois-based V&R Accounting and a faculty member of the Indiana University Tax Institute.
Other benefits include 100% expensing for U.S.-based manufacturing efforts, including new factories, factory improvements, equipment, and research and development.
The law also eliminates taxes on overtime and tips with some limits, which the White House estimates will provide some workers with an additional $1,500 a year.
Voth said small businesses who employ tipped workers or pay overtime will need to pay careful attention to their paperwork.
Voth said that the rules on reported tips only apply to federal taxes. However, Social Security, Medicare and state income tax will still be taken. There is a limitation to what’s considered tax free, she said.
The same goes for overtime pay. The only overtime that qualifies for the inclusion is the premium amount, which is about half the regular hourly pay. She said that’s something of a misconception about this new rule. Voth also said the no-taxation rule is only up to $12,500 in overtime pay for an individual. Anything earned over that will be subject to full taxation.
“Businesses will need to keep these in mind when they’re filling out their paperwork,” she said.
Other provisions within the law that benefit businesses include changes to 1099 reporting requirements for subcontract work. The $600 threshold for filing 1099s will increase to $2,000 on Jan. 1, 2026. Voth said that will bring some relief to businesses that use a significant number of subcontractors.
The bill also supports an expansion of Opportunity Zones, which are economically distressed areas designated by the states to attract private investment through the availability of federal incentives. This is expected to unlock more than $100 billion in new investments, which the administration believes will lead to more than 1 million new jobs in rural and distressed communities.
Plenty of time
Eagan said he is grateful for the timing of the bill. Because it was signed in July, accounting professionals have time to meet with business clients to discuss how the laws will impact them and what options are available to take advantage of the changes.
He also praised the fact that some of the provisions within the law, including the bonus depreciation, are retroactive to Jan. 19, 2025, one day before Trump’s second presidential inauguration. That provides businesses “a ton of opportunity,” he said.
Bonus depreciation within the tax code became available to businesses after the Sept. 11 terrorist attacks. The idea behind the provision is that if a business purchases a pricey asset, such as a computer server, the cost could be depreciated over a five-year period, which Eagan said is a “long time for businesses to recover for that asset.” Now, with 100% depreciation, businesses can immediately see the benefits.
“Businesses can go back to Jan. 19 and see which assets they’ve acquired to determine what they want to take the 100% depreciation on,” Eagan said. “This could actually free up some additional capital that was going to be put into a quarterly payment and can now be used to grow and scale their businesses. This is a potential cash flow that the businesses weren’t expecting.”
Stosich added that, with a few months left in the calendar year, businesses can elect to make some purchases they may have been delaying due to the depreciation advantages.
To provide a broad understanding of the changes brought by the bill for his business clients and others who are interested, Josh Belk, owner of St. John-based Lodestar Tax & Consulting, launched a YouTube channel, “Belk on Business.” He shares his insights on the tax changes.
He explained that some of the changes in the law may be confusing and hopes the information contained within the video logs is informative to businesses and individuals. Belk calls the bill a “big win” for real estate pros and business owners.
Specific benefits
Beyond the benefits for businesses, the act also provides breaks for individuals and families.
The seven federal income tax brackets of 10%, 12%, 22%, 24%, 32%, 35% and 37% have been made permanent.
The act permanently increased the standard deduction. As of Jan. 1, 2025, the deduction is set at $15,750 for single filers and married filing separately. The deduction for the head of household is $23,625 and $31,500 for married couples filing jointly.
There are also available deductions for the interest on automobile loans for vehicles that are made in the United States.
The Child Tax Credit has been increased to $2,200 per qualifying child.
The cap on the State and Local Tax (SALT) deduction has been temporarily raised from $10,000 to $40,000 for tax years 2025 through 2029. However, this new cap starts to phase out when income exceeds $500,000, Eagan said. This creates a tax penalty for higher earners in this income bracket.
While the bill was largely business-friendly, one area that did not fare as well is green energy. Stosich calls green energy “the biggest loser” of the legislation.
During President Joe Biden’s administration, electric vehicle ownership was incentivized through the tax plans. However, the current credit of about $7,500 was scheduled to end Sept. 30.
Some other business deductions for energy efficiency will expire, as will any home improvement credits for energy efficient devices. Those expire Dec. 31, Stosich said.
Qualified professionals
When it comes to business taxes, the advice is clear — work with a professional tax preparer.
Stosich noted that business owners with complicated returns should trust a professional tax preparer who is familiar with the most recent changes in the law and what changes will be implemented over the next year or two.
He stressed that there is a significant amount of misinformation about tax benefits floating around on social media and warned that much of it is likely incorrect or does not apply to a business’ situation.
“Take anything you see on social media with a grain of salt and work with a professional to see what the law really says,” Stosich said.
In all, the bill contains more than 100 tax provisions that are detailed and full of nuance. The accountants agreed that it will take some time for businesses to fully realize how it will impact them, both positively and negatively.
Stosich said it’s important for business owners to understand their current situations and what kinds of tax impacts they can expect to see this year, as well as in the near future.
Eagan said the biggest pitfalls many smaller businesses make is “being idle and not sitting down with their accountants” to discuss what actions should be taken throughout the year. With the changes from the act this year, it’s even more important, he said.
“If you only get together once a year with me, then fire me. I’m not doing my job,” Eagan said. “If you’re only thinking about your books, your records and tax situation in the spring, then you’re too late.”
He said change can be hard especially when it comes to financial records.
“For some clients, it’s never the right time to make a change and go with a proactive accountant, but it’s better to go ahead and make that move,” he said. “Ultimately it can be a good change.”
That’s a sentiment shared across the board. “Work with someone who is on top of things and will stay abreast of things,” Stosich said. “It’s important to work with a qualified professional. That’s just a reality of the situation with taxes.” •
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