As tax professionals prepare for the upcoming busy season, the One Big Beautiful Bill (OBBB) enacted in July 2025 has created urgent planning opportunities and permanent changes that will reshape client conversations. Understanding these shifts now is critical to minimizing 2026 tax liability for your clients.
Time-Sensitive Energy Credits Demand Immediate Action
The most pressing issue for year-end 2025 planning involves expiring clean energy incentives. The federal EV tax credit worth up to $7,500 expired September 30, 2025, while both the Residential Clean Energy Credit (30% of qualifying installations) and Energy Efficient Home Improvement Credit (up to $3,200) disappear December 31, 2025. Treasury data shows households averaged $5,000 in savings from these credits, significant money that vanishes if clients wait until 2026.
The only remaining opportunity is the at-home EV charger credit, which survives until June 30, 2026, offering up to $1,000 in tax savings. Clients considering solar panels, electric vehicles, or major energy-efficient upgrades need to act before these deadlines or lose these benefits permanently.
Miscellaneous Itemized Deductions Gone for Good
Tax professionals should prepare clients for disappointment: deductions that were merely suspended under the original Tax Cuts and Jobs Act are now permanently eliminated. This includes unreimbursed employee expenses, investment fees, personal tax preparation costs, hobby expenses, and the home office deduction for W-2 employees. The moving expense deduction for non-military personnel is also gone.
Over 21 million households claimed these deductions before the TCJA. The elimination particularly affects employees with significant unreimbursed work costs, investors with high portfolio management fees, and remote workers who can't establish independent contractor status. Encourage employed clients to negotiate accountable plan arrangements with employers, and evaluate whether W-2 employees with substantial home office expenses might benefit from alternative business structures.
The Family Tax Calculation Has Fundamentally Changed
The permanent elimination of personal and dependency exemptions, worth $4,050 per person in 2017, creates winners and losers depending on family composition. While the enhanced standard deduction and child tax credit were designed to offset this loss, the math doesn't work equally for everyone.
Large families who itemize face particular challenges. Consider a married couple with five children and $14,000 in itemized deductions: their taxable income under current law would be $113,650 compared to $67,650 under pre-TCJA rules. However, the enhanced child tax credit can still produce net savings if all children meet the new work-eligible Social Security number requirement.
Approximately 2.7 million children previously eligible may now be excluded from the child tax credit. Verify SSN eligibility for all qualifying children and at least one parent well before filing season. For clients with multiple dependents, run comparative calculations now, the standard deduction may be optimal even for those who historically itemized.
Alternative Minimum Tax Returns with a Vengeance
High-income clients who haven't paid AMT in recent years may face an unwelcome surprise in 2026. While the OBBB made AMT exemption amounts permanent, it dramatically lowered phaseout thresholds to $500,000 for single filers and $1 million for married couples filing jointly. The phaseout rate also doubled from 25% to 50%.
Run 2026 AMT projections immediately for clients approaching these thresholds. Consider whether accelerating income into 2025 makes sense for those likely to hit AMT next year, and carefully model stock option exercises under the new phaseout structure.
Preparing Your Practice
Success requires immediate client segmentation to identify who's affected by each provision, proactive outreach about expiring energy credits, and comprehensive tax modeling for families and high earners. Update intake questionnaires to remove questions about eliminated deductions, train staff on new child tax credit requirements, and prepare talking points explaining why familiar deductions no longer exist.
The compressed timeline for energy credits and fundamental changes to family taxation mean the clients who wait will pay more. Start these conversations now.
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
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