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Accountancy Slice
USA
6th January 2026
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THE HOT STORY

U.S. companies get tax break

The U.S. and over 100 countries have reached an agreement exempting American companies from certain foreign taxes, marking a significant step in the ongoing discussions about a global minimum tax. This deal allows U.S.-based multinationals to avoid the 15% global minimum tax established by the Organization for Economic Cooperation & Development (OECD). Treasury Secretary Scott Bessent played a crucial role in securing the exemption, which prevents other nations from imposing additional taxes on U.S. subsidiaries. The OECD estimates that the global tax program could generate $220bn in revenue for governments worldwide. The agreement also addresses concerns over digital taxes on U.S. tech giants like Google and Amazon, which the U.S. government argues are being unfairly targeted.

FILING 1099s

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TAX

Trump tax cuts to boost 2026 growth

President Trump’s 2026 tax cuts are expected to inject $30bn–$100bn into the U.S. economy, mainly via larger refunds and business incentives. While economists forecast 2% growth, caution remains due to rising unemployment, ongoing tariffs, and income inequality. “2026 is shaping up to be a decent year,” said Olu Sonola of Fitch. Businesses such as Gat Creek anticipate tax incentives will spur equipment investment. Yet concerns persist over AI-driven job loss, elevated costs, and weak labor demand. The Fed projects 2.3% growth, citing favorable fiscal policy and easing inflation pressures.

Tax overhaul: A mixed reception

The recent tax code overhaul, known as the One Big Beautiful Bill Act (P.L. 119-21), has sparked contrasting reactions among Republicans and Democrats. Republicans, including House Ways and Means Committee member Beth Van Duyne, assert that the bill is well-received by businesses, saying: “People are going to have to feel those effects to make them feel that this bill was solid and successful.” They emphasize the bill's retroactive tax cuts, which amount to $132bn for 2025, aiming to avoid the pitfalls of the 2017 Tax Cuts and Jobs Act. Conversely, Democrats express concerns over the bill's impact on Medicaid and rural hospitals, with Senator Jeanne Shaheen highlighting fears about coverage loss. The political stakes are high as both parties prepare for the upcoming elections, with Democrats aiming to leverage public discontent over the bill's perceived benefits for the wealthy.

New tax rules hit gamblers hard

Starting in 2026, gamblers across the U.S. will only be able to deduct 90% of their losses against winnings, a significant reduction from the previous 100% allowance. This change, part of President Trump's One Big Beautiful Bill Act, has sparked criticism from Nevada lawmakers and the gaming industry. Russell Fox, managing member of Clayton Financial and Tax, said: “Ninety percent of players lose,” highlighting the potential impact on casual bettors. The U.S. Treasury Inspector General for Tax Administration reported that inadequate enforcement on gambling winnings resulted in $1.4bn in uncollected taxes from 2018 to 2020. U.S. Rep. Dina Titus has introduced the FAIR BET Act to reverse this tax change, arguing it will drive players to unregulated markets. The Senate is also considering the FULL HOUSE Act to restore the full deduction.

Iowa Democrats unveil tax relief plan

Iowa House Democrats have introduced a property tax relief plan ahead of the 2026 legislative session, featuring a 4% cap on property tax growth, rebates for homeowners and renters, and a freeze for seniors. Democratic state Rep. Dave Jacoby emphasized the plan's goal to provide “certainty” for taxpayers, stating: “This is a certainty that we have not seen in years.” The proposal includes tripling the Homestead Tax Credit and offering $1,000 rebates for homeowners and $500 for renters for two years before the cap takes effect. The plan aims to support public safety workers' retirement funds and is funded through the Iowa Taxpayer Relief Fund. While the Democrats await a cost estimate from the Legislative Services Agency, they hope for bipartisan discussions on tax relief during the session.

Massachusetts eyes income tax cut

The Massachusetts Opportunity Alliance is advocating for two ballot questions aimed at reducing the state's income tax from 5% to 4% and increasing the frequency of tax refunds. The alliance has invested approximately $1.6m in this initiative, emphasizing that “Massachusetts has one of the highest tax burdens in the country.” Jim Stergios, the alliance's co-organizer, noted that a tax cut could save taxpayers an average of $1,300 annually while boosting the state's GDP by billions. However, the proposals face significant legislative opposition, with concerns that they would primarily benefit high earners and jeopardize fiscal stability. House Ways and Means Committee Chairperson Aaron Michlewitz warned that such cuts could lead to severe budgetary challenges.

AUDIT & REPORTING

Audit quality: A mixed bag

The PCAOB has raised alarms about rising audit deficiencies, with the deficiency rate reaching 43.6% in 2023, up from 40% in 2022. Erica Williams, the PCAOB chair, described these results as “completely unacceptable,” emphasizing the need for solutions rather than excuses. Despite the negative outlook, a deeper analysis of PCAOB data suggests that audit quality improvements may be more effective for smaller firms and international offices of larger firms. The PCAOB has conducted 12,031 inspections from 2009 to 2023, revealing that while Big Four firms have lower deficiency rates, Mid-Tier firms struggle significantly, with a deficiency rate of 63.8% in 2023. The PCAOB is responding by launching resources aimed at enhancing the performance of smaller audit firms, recognizing their critical role in investor protection.

TECHNOLOGY

Machines won't replace accountants, experts say

Despite fears of AI replacing accountants, experts assert that technology will enhance their roles rather than eliminate them. Prashant Ganti, vice president at Zoho, emphasized that "AI can only augment their role but cannot replace them," highlighting the importance of human judgment and accountability in accounting. While AI can automate repetitive tasks, it lacks the ability to manage complex scenarios and maintain ethical standards. Kacee Johnson from AI-focused advisory firm Be Radical noted that AI's lack of accountability is a significant barrier to replacement. The consensus among professionals is that while the nature of accounting roles may evolve, the profession itself will not disappear. As Jon Hilton from LBMC stated: "AI replaces or augments skills not necessarily people," indicating a shift towards more complex responsibilities for accountants.

AI reshapes accounting careers

A recent study from Stanford University reveals that early-career positions in AI-exposed fields, particularly accounting, have dropped by 13% since 2022. Lisa Huang, SVP of Product – AI at Xero, emphasizes that while automation is transforming the profession, experienced accountants are still in demand due to their strategic insights. The study highlights a "readiness gap," where 65% of small businesses see AI as vital, yet 53% believe its absence wouldn't affect their operations. This presents an opportunity for accountants to bridge the gap between client optimism and action, guiding them in AI adoption. Huang notes: "Accountants can make the greatest difference here: translating AI's promise into practical outcomes." As AI tools become more accessible, the accounting profession is poised to redefine its value by focusing on strategic foresight rather than administrative tasks.

Unlocking AI skills for accountants

MYCPE ONE has launched the AI CPE Academy, an educational hub aimed at equipping accounting professionals with essential AI skills. As AI becomes integral to the industry, the academy offers structured, CPE-approved courses designed to enhance efficiency and client service. Courses include "AI Productivity Tips with Microsoft Copilot for Professionals" and "Advanced ChatGPT for Accountants," among others. The academy also provides certification programs such as Certification in AI for Accountants (CAIA) and AI Masterclass Certification (AIMC), validating professionals' ability to apply AI responsibly.

FIRMS

Ascend expands West Coast presence

Ascend has acquired Sweeney Conrad, a Seattle-based firm, to bolster its West Coast operations. The acquisition involves Sweeney Conrad adopting an alternative practice structure, with non-attest services provided by Sweeney Conrad Advisors LLC.

Capstone expands with North Star acquisition

Capstone Accounting and Tax, located in Bend, Oregon, has acquired North Star Tax & Accounting, which operates in Snohomish and Lynden, Washington. This acquisition enhances Capstone's footprint in the Pacific Northwest, integrating North Star's operations under the Capstone brand while maintaining local client services.

ECONOMY

Holiday shopping rises despite debt surge

Holiday shopping surged in 2025, with 203m Americans shopping over Thanksgiving weekend - the highest in nearly nine years - despite household debt reaching $18.59trn. While some economists argue rising incomes and low unemployment offset risks, others warn of growing delinquencies, especially among lower-income groups. Overall, most experts and executives agree that elevated debt and financial stress could undermine long-term economic stability, even if a crisis isn't imminent.

SMALL BUSINESS

Navigating the HR minefield

Running a small business can be challenging, especially when it comes to HR and tax compliance. Upeka Bee, Founder & CEO of DianaHR, shares her experience of receiving a $20,000 notice from the IRS regarding payroll taxes, despite having no employees at the time. After extensive communication with the IRS and her payroll vendor, she discovered that the issue stemmed from duplicate filings. "Don't ignore the notice," she advises, emphasizing the importance of addressing IRS communications promptly. She also highlights the need for small business owners to utilize appropriate software and services to avoid such complications. Ultimately, her experience led her to implement her own HR solutions, relieving her of the burden of managing these issues alone.
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