Questions to Ask Your CPA: Based on the New Rules Under the One Big Beautiful Bill Act (OBBBA)

Questions to Ask Your CPA: Based on the New Rules Under the One Big Beautiful Bill Act (OBBBA)
This comprehensive guide provides essential questions to discuss with your CPA or tax advisor before year-end, especially while key deductions, credits, and exemptions are temporarily expanded under the One Big Beautiful Bill Act (OBBBA). The document is organized by taxpayer category—retirees, business owners, and professionals—to help you take proactive steps in optimizing your tax situation under the new rules. Each section contains targeted questions designed to maximize benefits and minimize tax liabilities based on your specific financial circumstances.
Introduction to OBBBA Tax Changes
The One Big Beautiful Bill Act (OBBBA) introduces significant temporary and permanent changes to the tax code that affect individuals and businesses across various income levels. Understanding these changes is crucial for effective tax planning, especially since many provisions have specific timeframes—some expiring after 2028 or 2030.
1
Temporary Expansions
Several key deductions, credits, and exemptions have been temporarily expanded, creating a limited window for tax optimization strategies.
2
Phaseout Thresholds
Many benefits phase out at specific income levels, potentially triggering higher marginal tax rates for high earners.
3
State Conformity
Not all states conform to these federal changes, potentially creating discrepancies between federal and state returns.
This document provides targeted questions organized by taxpayer category to help you navigate these complex changes. By discussing these questions with your tax professional, you can develop strategies to take advantage of temporary benefits while preparing for future changes. Remember that tax planning should be personalized to your specific financial situation and goals.
Key Questions for Retirees
Retirees face unique tax considerations under OBBBA, particularly regarding Social Security taxation, the new senior deduction, and strategic income recognition. The following questions will help you optimize your retirement tax planning:
Senior Deduction and Social Security
Am I eligible for the new $6,000 (or $12,000 for couples) senior deduction for 2025–2028?
Does our projected income affect the phaseout of this deduction?
How will the new rules affect how much of my Social Security is taxable?
Will my "provisional income" push me into higher Social Security taxation brackets?
Income Planning and Timing
Would it make sense to recognize income now (e.g., Roth conversions) to take advantage of the lower brackets before 2026 phaseouts begin?
Should I accelerate income through annuity withdrawals or capital gains harvesting while tax rates are lower?
How will required minimum distributions (RMDs) affect taxation of Social Security or Medicare premiums?
Charitable Giving Strategies
Can I still deduct charitable gifts? Do I need to itemize, or can I use the new non-itemizer deduction?
Should I itemize gifts in 2025 to avoid the 0.5% AGI floor starting in 2026?
Am I taking advantage of Qualified Charitable Distributions (QCDs) from my IRA to reduce AGI and preserve other benefits?
Would frontloading gifts into a donor-advised fund be more efficient?
SALT and Deductions
Should I delay or accelerate certain income or expenses to qualify for the SALT deduction or avoid losing other deductions?
Can I benefit from the $40,000 SALT cap for 2025–2029?
Will my income cause a phaseout of the cap, triggering a 45.5% marginal rate?
Should I itemize or use the standard deduction plus the senior deduction?
1
Estate and Legacy Planning
Should I gift assets while the $15M exemption is in place?
2
Investment Strategies
Should I harvest long-term gains at 0% or 15% rates in 2025?
3
Medicare Considerations
Will my income push me into higher Medicare premiums (IRMAA brackets)?
4
Other Deductions
Can I deduct car loan interest if I buy a U.S.-assembled vehicle?
Tax Brackets and Income Planning for Retirees
Understanding how the new permanent tax brackets affect your retirement income is essential for optimizing your tax situation. The OBBBA introduces changes that may significantly impact your marginal and effective tax rates, creating both challenges and opportunities for retirees.
Strategic Income Acceleration
Consider whether you should accelerate income into 2025 before the 2026 phaseouts begin. This might include Roth conversions, annuity withdrawals, or capital gains harvesting to take advantage of currently lower tax brackets.
RMD Impact Analysis
Evaluate how required minimum distributions (RMDs) will affect the taxation of your Social Security benefits or Medicare premium surcharges. Strategic planning around these distributions can help minimize overall tax burden.
Social Security Optimization
Determine if the new $6,000 (or $12,000 for couples) senior deduction will reduce your taxable Social Security income. Understanding how your "provisional income" affects Social Security taxation is crucial for retirement planning.
When meeting with your CPA, ask about the potential benefits of income smoothing strategies that might help you maintain consistent income levels across tax years. This approach could help you avoid bracket creep and preserve valuable deductions that might otherwise be lost due to phaseouts.
Additionally, discuss whether municipal bonds versus corporate interest-bearing investments make more sense in your portfolio given the new tax environment. The tax implications of different investment vehicles may have changed under OBBBA, potentially altering the optimal mix for your retirement accounts.
Key Questions for Business Owners
Business owners face unique challenges and opportunities under the OBBBA. The following questions will help you navigate these changes and optimize your tax strategy:
QBI Deduction
Does my business still qualify for the 20% Qualified Business Income (QBI) deduction under the new rules? Should I restructure my entity (e.g., from S-corp to partnership or C-corp) to optimize deductions?
Depreciation
Can I accelerate purchases to take advantage of 100% bonus depreciation now restored? Would Section 179 expensing be better for my situation?
SALT Strategies
Are there ways to reduce my AGI to preserve the full SALT deduction or avoid phaseouts? Can I or my business still use the Pass-Through Entity Tax (PTET) to bypass the SALT cap?
Investment and Capital Gains
Should I explore Opportunity Zone Funds to defer or eliminate capital gains from my business sale?
Can rural QOFs give me a 30% step-up in basis?
How do installment sales or charitable trusts fit under the new rules?
Retirement Planning
Have we evaluated pension or defined benefit plans to reduce taxable income and improve retirement outcomes?
Should I fund a SEP, 401(k), or cash balance plan?
Would doing so reduce AGI enough to preserve other deductions?
Charitable Giving
Should my business fund a donor-advised fund?
How does the 0.5% AGI floor affect our giving strategy?
Are business charitable deductions capped under the new rules?
Succession Planning
Should we restructure ownership or gifting strategies before the exemption sunsets?
Would a GRAT or SLAT reduce estate exposure while retaining control?
How do these changes align with our business's growth, sale, or succession timeline?
Don't forget to ask about payroll and compliance issues: Are we set up to report tips and overtime separately on W-2s? Can we qualify employees for the new tip or overtime deductions? Do we need to revise estimated taxes or entity elections?
Business Structure and QBI Optimization
The Qualified Business Income (QBI) deduction remains a significant tax benefit for business owners under OBBBA, but with important modifications to phaseout rules and eligibility requirements. Understanding how these changes affect your specific business structure is crucial for maximizing tax savings.
Entity Structure
Evaluate whether your current business structure (S-corporation, partnership, sole proprietorship, or C-corporation) remains optimal under the new rules.
W-2 Wage Optimization
Assess if your W-2 wage or property basis ratio is optimized to maximize the QBI deduction.
SSTB Limitations
Determine if your business falls under the Specified Service Trade or Business (SSTB) limitations and how this affects your deduction.
Income Management
Develop strategies to manage business and personal income to stay below phaseout thresholds.
When meeting with your CPA, discuss whether restructuring your entity could provide tax advantages. For example, converting from an S-corporation to a partnership might eliminate certain limitations on the QBI deduction, while switching to a C-corporation might be beneficial if the corporate tax rate is lower than your individual rate after considering all deductions.
Additionally, explore how the timing of income recognition and expense deductions can help you optimize your QBI benefit. Strategic planning around year-end can significantly impact your tax liability, especially if your income is near a phaseout threshold. Your CPA can help you model different scenarios to determine the most advantageous approach for your specific business situation.
Key Questions for Professionals
Professionals, including W-2 employees, 1099 contractors, high earners, and consultants, face unique tax planning challenges under OBBBA. The following questions will help you navigate these changes effectively:
1
New Deductions
Do I qualify for the new tip, overtime, or car loan deductions — and should I be tracking them differently this year?
2
Income Thresholds
Is my income approaching any of the new phaseout thresholds for deductions like SALT, QBI, or the senior deduction?
3
Charitable Planning
Should I consider frontloading charitable gifts into 2025 before the 0.5% AGI floor takes effect in 2026?
4
Income Management
Would Roth conversions, deferred compensation, or a donor-advised fund help me manage income levels more strategically?
Tax Payments and Withholding
Have I updated my paycheck withholdings or estimated payments in light of OBBBA's new tax brackets and deduction rules?
Should I update W-4 or estimated payments for 2025?
Will I owe AMT under the new rules? How should I plan for it?
Compensation Planning
Are my RSUs, options, or bonuses going to push me into a phaseout bracket? If so, can we manage timing?
Should I defer RSUs, bonuses, or business income to avoid phaseouts?
Would a deferred comp plan or Roth conversion be better this year?
Side Income and QBI
Do I qualify for QBI on consulting or freelance income?
Does SSTB classification apply to my profession?
Should I restructure into an LLC or S-corp for tax efficiency?
Family and Generational Planning
Should I open a Trump Account for my child?
Can I maximize employer contributions or match?
Is this account compatible with my estate or 529 plans?
State-specific considerations are crucial: Does your state conform to OBBBA? Should you consider residency changes or multi-state income shifts? These questions can significantly impact your overall tax situation.
Income Planning and Phaseout Management for Professionals
For professionals with W-2 income, consulting fees, or mixed income sources, strategic income planning is essential under OBBBA. The new law introduces various phaseout thresholds that can significantly impact your effective tax rate and available deductions.
When your income approaches phaseout thresholds, each additional dollar earned can effectively be taxed at much higher rates due to the loss of valuable deductions. For example, the SALT cap phaseout for incomes exceeding $500,000 can trigger a marginal rate as high as 45.5% when combined with regular income tax.
Timing Strategies
Consider deferring RSUs, bonuses, or business income to avoid phaseouts. Alternatively, if your income is consistently high, you might benefit from accelerating income in years when you have offsetting deductions.
Retirement Contributions
Maximize contributions to pre-tax retirement accounts to reduce your adjusted gross income (AGI), potentially preserving deductions that would otherwise be lost to phaseouts.
Roth Conversion Planning
Evaluate whether Roth conversions in 2025 would benefit your long-term strategy, especially if you anticipate being in a higher tax bracket in the future or want to reduce future RMDs.
Ask your CPA about implementing a deferred compensation plan if your employer offers one. This can be an effective way to manage your income levels across tax years, potentially keeping you below critical phaseout thresholds while still earning the same compensation over time.
Universal Tax Planning Questions
Regardless of your specific taxpayer category, certain tax planning questions apply universally under the OBBBA. These questions address long-term planning, state tax implications, and strategic opportunities that everyone should consider:
1
Long-Term Planning
How do OBBBA's temporary provisions affect my long-term planning — and what happens after 2028 or 2030 when certain provisions expire?
2
State Conformity
Does my state conform to these new rules, or will my federal and state returns look very different? Should I consider residency changes or multi-state income shifts?
3
Strategic Opportunities
Are there tax strategies we can implement this year to make the most of the window OBBBA provides? Should I accelerate or defer certain transactions?
4
Tax Projections
Can we run a projection now to model the impact of all these changes on next year's tax return? How might my effective tax rate change?
Investment Planning
The OBBBA creates a unique window for capital gains planning. Consider asking your CPA:
Should I harvest long-term gains at current rates before potential changes?
Would investing in Qualified Opportunity Funds help defer or eliminate capital gains?
How should I structure my investment portfolio to optimize tax efficiency under the new rules?
Charitable Planning
Charitable giving strategies may need adjustment under OBBBA:
Should I frontload charitable contributions into 2025 before the 0.5% AGI floor takes effect in 2026?
Would establishing a donor-advised fund provide more flexibility and tax advantages?
How can I optimize the timing and structure of my charitable giving to maximize tax benefits?
Remember that tax planning is not just about minimizing this year's tax bill—it's about optimizing your tax situation over your lifetime. The temporary nature of many OBBBA provisions makes long-term planning both more challenging and more important.
Ask your CPA to help you develop a multi-year tax projection that accounts for the scheduled expiration of various provisions. This forward-looking approach will help you make more informed decisions about timing income, deductions, and major financial transactions.
Preparing for Your CPA Meeting
To make the most of your consultation with your CPA regarding OBBBA tax planning, proper preparation is essential. This final section provides guidance on how to organize your information and approach the meeting effectively.
1
Gather Documentation
Compile your most recent tax returns, current year income projections, investment statements, business financial reports, and any major life changes that might affect your tax situation.
2
Prioritize Questions
From the questions outlined in this document, identify those most relevant to your specific financial situation and list them in order of importance.
3
Set Clear Objectives
Determine what you want to achieve through tax planning—whether it's minimizing current tax liability, preparing for retirement, or optimizing business structure.
When meeting with your CPA, be prepared to discuss both short-term and long-term goals. While the immediate tax savings under OBBBA are important, your strategy should align with your broader financial objectives. Consider bringing a spouse or business partner to ensure everyone understands the planning strategies being discussed.
Ask your CPA to explain how the proposed strategies specifically benefit your situation and what potential risks or drawbacks might exist. Understanding the complete picture will help you make more informed decisions.
Pro Tip: Request that your CPA provide written documentation of the strategies discussed and any action items for you to complete. This will serve as a reference throughout the year and ensure nothing falls through the cracks.
Finally, establish a timeline for follow-up discussions. Tax planning is not a one-time event, especially with the temporary nature of many OBBBA provisions. Regular check-ins with your CPA will allow you to adjust your strategy as your financial situation evolves and as further clarification about the implementation of OBBBA becomes available.
By approaching your CPA meeting with organization and clear objectives, you'll be well-positioned to develop a comprehensive tax strategy that maximizes the benefits available under the One Big Beautiful Bill Act while supporting your long-term financial goals.