“every bill hides a tax increase.”
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quick tax tip
with art werner
cpe today
trump’s new “big beautiful bill” might look like a win for taxpayers…but not so fast. for accountants, lawyers, consultants, and other professional service providers, it could bring a stealthy tax hike.
in this episode of quick tax tip, expert art werner unpacks how this proposed legislation may change the way accountants—and other professionals—get taxed. the bottom line? if you’re part of a pass-through entity, your tax benefits may be about to shrink.
werner opens the discussion with a familiar refrain in tax: it depends.
if you’re operating as a c corporation, the bill doesn’t introduce any major red flags. however, for those structured as s corps, partnerships, or sole proprietorships, especially in states with pass-through entity (pte) tax workarounds, such as new york, the situation could change dramatically.
“these pte-level taxes were a brilliant workaround,” says werner. “they allowed firms to pay state taxes at the entity level—effectively dodging the salt deduction cap and reducing individual income reported on the k-1. it was a great piece of legislation.” surprisingly, the irs supported this maneuver, even issuing regulations to formalize it.
now, that workaround—and the corresponding tax benefit—might be under threat.
the bill specifically targets industries that fall under the “specified service trades or businesses” (sstbs)—a familiar category from section 199a. that means accountants, attorneys, consultants, financial advisors, actuaries, investment professionals, and more could lose key deductions.
“as you earn more,” werner explains, “you start losing the ability to take this pass-through deduction. that’s a tax increase—plain and simple.”
and no, this isn’t just about cpas. the irs has broadened the definition of “accounting” to include enrolled agents and any profession dealing with accounting matters.
one of the most important takeaways from this episode? according to werner, every tax bill includes a hidden increase, even the ones that seem pro-business on the surface.
“this one’s no exception,” he warns. “the loss of deductions for sstbs is a built-in tax hike for high-earning professionals.”
if you’re a tax professional, this isn’t just an academic exercise—it’s personal. this bill doesn’t just affect your clients. it affects you.
- are you in a pass-through entity?
- are you using pte tax workarounds in high-tax states?
- are you in a “specified service” profession that will lose 199a benefits?
if so, this bill could increase your own tax liability—even as you’re advising others on how to save theirs.