Accounting for One Big Beautiful Bill
HOT TOPIC | JULY 2025
Exploring key corporate income tax provisions of the One Big Beautiful Bill and their effects on accounting for income taxes.
While H.R. 1 – the budget reconciliation bill known as the ‘One Big Beautiful Bill’ provides sweeping tax law changes, its effects on the accounting for and reporting of income taxes may be more subtle than those experienced with the reduction of the corporate income tax rate and transition tax under the Tax Cuts and Jobs (TCJA). Nonetheless, the provisions within the bill are complex and may affect current and deferred taxes as well as valuation allowances.
Applicability:
- Companies subject to US federal income tax law
Relevant dates
- One Big Beautiful Bill was signed into law on July 4, 2025.
Key impacts
Our Hot Topic summarizes the following key corporate provisions of the bill and the related impact on accounting for income taxes:
- Increased depreciation allowances
- R&E expenditures
- Business interest deduction
- Global intangible low-tax income (GILTI)/Net CFC (controlled foreign corporation) tested income (NCTI) deduction
- Foreign-derived intangible income (FDII)/Foreign-derived deduction eligible income (FDDEI) deduction
- Base erosion and anti-abuse tax (BEAT)
- Energy tax credits
- Excessive employee compensation
- Charitable contributions deduction
- Increased tax rates on investment income of certain private colleges and universities
We also provide additional guidance on disclosures, accounting for changes in tax laws during interim periods, and uncertainty in income taxes.
Report contents
- Accounting for changes in income tax laws
- Provision-specific accounting considerations
- Accounting for uncertainty in income taxes
- Disclosures
- Internal control considerations
Download the document
Policy to provision
Download PDFKPMG reports: Tax subtitle for “One Big Beautiful Bill”
Analysis and observations on the tax subtitle for the "One Big Beautiful Bill"
Explore more
Resource
Handbook: Accounting for income taxes
Latest edition: KPMG explains the accounting for income taxes in detail, providing examples and analysis.
Resource
Handbook: Tax credits
Our in-depth guide explains the accounting for various forms of tax credits in accordance with US GAAP.
Resource
Income tax disclosures
Latest edition: We address common questions regarding the application of recent disaggregation enhancements.
Meet our team
