A Breakdown of the ‘One Big Beautiful Bill’ Act and Its Real Impact

One Big Beautiful Bill Act

The One Big Beautiful Bill Act (often referred to as OBBBA or OBBB, and officially designated as Public Law 119-21) is a sweeping piece of United States federal legislation signed into law on July 4, 2025.1 It is a major component of President Donald Trump’s second-term agenda, encompassing significant changes to tax law, spending, and social programs.

SDG Accountant detailed breakdown of the One Big Beautiful Bill Act (OBBBA) — and what it means in practice.

What is the One Big Beautiful Bill Act?

  • The bill, known as H.R. 1 in the 119th U.S. Congress, was signed into law on July 4, 2025.
  • It is a massive piece of legislation combining tax changes, spending updates (e.g., defence, border, social programmes), changes to energy/clean-tech incentives, and other fiscal matters.
  • The official title “One Big Beautiful Bill Act” is used widely, though some sources note that during the Senate amendment process, the short title was removed.

Key Provisions: Major Themes & Changes

Here are several of the major areas the bill touches — this is not exhaustive, but covers what appears most consequential.

1. Tax-Cuts & Deduction Changes

  • The bill raises the cap on the state and local tax (SALT) deduction: for example, joint filers can deduct up to $40,000 (versus the previous $10,000 cap) starting in 2025.
  • It enhances immediate expensing/write-off rules for businesses (investments, equipment, software) to stimulate domestic manufacturing and capital investment.
  • New deductions/credits: e.g., for qualified overtime income, child tax credit changes, and adoption tax credit modifications.
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2. Changes to Business/Investment Incentives & Clean Energy

  • Some clean energy tax credits that were available under prior legislation (e.g., via the “Inflation Reduction Act”) are phased out or restricted more quickly under OBBBA.
  • E.g., the Congressional Budget Office (CBO) estimates the bill increases the U.S. federal deficit by about $2.8 trillion over ten years..

3. Spending & Programme-Cuts/Shifts

  • The bill raises the statutory debt limit and includes large spending allocations (e.g., defence, border enforcement) alongside cuts or stricter requirements to social programmes (like Medicaid and food assistance).
  • On the flip side, other investment/production incentives (for domestic manufacturing, advanced semiconductors) are strengthened.

4. Impacts on Individuals & Families

  • Some direct tax relief: e.g., larger SALT deduction cap, tax relief for overtime income, changes to child tax credit.
  • However, there are concerns over eligibility shifts, phase-outs for higher income earners, and changes in benefit programmes.

5. International/Cross-Border Effects – Affecting Canadian Entities

Since you are based in Canada (and likely deal with cross-border clients/SEO/ business), these are relevant:

  • Canadian companies doing business in the U.S. and U.S. individuals in Canada should take note.
  • For example, changes to tax treatment of foreign transfers (“remittances”), more aggressive U.S. incentives to keep investment domestic, etc.
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Real-Impact: What This Means in Practice

Here are several of the major areas the bill touches — this is not exhaustive, but covers what appears most consequential.

✅ Potential Benefits

  • For U.S. resident individuals: More generous deductions for SALT, overtime deduction, and certain tax reliefs may reduce tax liability.
  • For U.S. businesses: Enhanced write-offs and investment incentives may encourage capital spending, expansions, and hiring — good for domestic manufacturing, software/hardware production in the U.S.
  • For Canadian firms: If you serve U.S. clients or have U.S. operations, these changes may create new demand (for domestic U.S. services/production) and possibly affect cross-border tax structure.

⚠️ Potential Downsides / Risks

  • Deficit/debt risk: The large fiscal cost means future taxes may need to go up or spending may be cut. The CBO estimates large increases in debt.
  • Cuts to social programmes: The legislation includes stricter eligibility/work requirements for aid programmes and reductions in certain benefits. This can impact lower-income households.
  • Clean energy investment risk: If you or your clients are in renewable energy or clean-tech markets, the accelerated phase-out of credits creates risk in project economics/timeliness.
  • Cross-border complications: For Canadian investors/businesses with U.S. exposure, the new rules may require restructuring or recalculating tax strategy, especially with remittance/excise tax rules.

🎯 For Canadians / Canadian Business Specifically

  1. If your UK/Canada-based brand (you mention working in the Canadian market, etc.) has U.S. suppliers or U.S. operations, you’ll want to review:
    • U.S. tax implications of any U.S. subsidiary or U.S. investment.
    • Changes in the U.S. tax deduction regime may affect the U.S. partner’s cost structure (and indirectly your pricing).
  2. For cross-border clients you service (via SEO, digital marketing), you might find new demand from U.S. firms reacting to these tax changes (e.g., accelerated investment, restructuring).
  3. For Canadians sending money to or receiving money from the U.S., keep an eye on remittance/excise tax aspects.
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SDG Accountants Assessment: Is It a Good Move?

  • On one hand, the bill paints a picture of tax relief + business stimulus, which can boost economic activity and investment.
  • On the other hand, the cost is large, and the benefit distribution may lean toward higher-income individuals and large businesses, leaving vulnerable populations at risk of loss (via reduced social programmes).
  • For Canadian companies, this is both an opportunity (for U.S. market expansion, investment incentives) and a threat (if U.S. tax policy changes shrink margins or change competitiveness).
One Big Beautiful Bill Act

The concept behind the One Big Beautiful Bill Act is simple!

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Final Thoughts

The concept behind the One Big Beautiful Bill Act is simple: Make life easier. Make billing transparent. Reduce stress.

In summary, the One Big Beautiful Bill Act is a massive legislative package that permanently secures key tax cuts from 2017 while introducing new, temporary tax breaks for workers, establishing a new national children’s savings program, and making major changes to domestic and defence spending priorities.

For many Canadians, this could be a positive step toward financial clarity. But it is important to monitor how the Act evolves, how companies respond, and whether affordability truly improves in practice.

Contact SDG Accountants, and one of our Miami Tax Accountants will gladly help. If you need very specific advice on your specific tax situation, you can also click below to get a consultation with one of our tax professionals.

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IRS Form 8854 and U.S. Expatriation Tax: A Guide for Expats

IRS Form 8854

In order to renounce your US citizenship, you are required to submit several forms. One of the vital forms that needs to be submitted is IRS Form 8854. Until you have submitted this form, the Internal Revenue Service will still regard you as a citizen of the United States.

In this article, we will explore in detail the particulars of Form 8854, who qualifies to submit it, and who stands to gain the most from it.

What Exactly Is Form 8854?

Form 8854 is an IRS tax document that is meant to declare one’s U.S. taxes settled once and for all. Until you provide proof that you’ve settled all your dues, the government will continue to regard you as a citizen for tax remittance purposes and expect you to submit taxes regularly.

In the same way, Form 8854 also decides whether you fall within the category of a covered or non-covered expat. If you fall under the covered expat category, you will also need to pay an exit tax as part of your declaratory renunciation.

Who Needs to Submit IRS Form 8854?

Filing IRS Form 8854

Form 8854 must be filled out by U.S. citizens planning to renounce their citizenship. Some long-term residents also need to submit this form when they stop being residents of the United States. More specifically, U.S. residents who have maintained a Green Card for at least eight years out of the last fifteen must complete Form 8854 if they wish to be classified as non-residents.

✅ Form 8854 IS Required If…

A resident alien (typically a green card holder) must file Form 8854 if:

  • Gave up their green card, or had it administratively or judicially revoked or abandoned (e.g., filed Form I-407 with USCIS).
  • They are a “long-term resident” (i.e., held a green card in at least 8 of the last 15 tax years), and they have officially expatriated — meaning they either:
  • This falls under the expatriation tax rules (IRC §877A) and triggers a requirement to file Form 8854, which is a statement of expatriation and a net worth/income/assets disclosure.
Expat Filing Requirements

❌ Form 8854 Is NOT Required If…

A resident alien leaves the U.S. temporarily or gives up their U.S. residency without meeting the “long-term resident” definition. Specifically:

  • You are not a green card holder (e.g., on a work visa like H1B), or
  • You’ve had a green card for less than 8 out of the last 15 years, or
  • You just leave the U.S. and don’t officially abandon your green card.
  • In these cases, Form 8854 is not required.

What Is a Covered Expatriate?

Deciding whether you are a covered or non-covered expat will significantly affect the costs you incur in renouncing your citizenship. In reality, this single determination may drive your finances, determining if renouncing your citizenship is worthwhile at all.

What, then, is the distinction between a covered and non-covered expat? Simply put, covered expats must pay an exit tax when they renounce or terminate their citizenship, while non-covered expats do not.

Who Is Considered a Covered Expatriate?

A covered expatriate is someone who the IRS considers as any of the following standards:

  • Net Worth Test: Your net worth is more than $2 million during expatriation.
  • Tax Liability Test: Your yearly average income tax liability for the last five years crosses a particular figure.
  • The figure is set at $190,000 (adjusted for inflation every year) for the 2024 filing date.
  • If you can prove the above conditions, you will be compelled to pay the exit tax, which affects covered expatriates who give up citizenship or conditional expatriate residency.
  • You haven’t filed or paid your taxes in any of the last five years.

In any of the above circumstances, you are a covered expat and will incur an exit tax. If not, you are a non-covered expat, and the exit tax does not apply to you. In both situations, you must file Form 8854 to determine whether you are covered or noncovered.

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What is the Method for Avoiding the Exit Tax?

Suppose you expatriate as a covered expatriate in the same year you expatriated. In that case, you will incur an income tax liability on the net unrealized asset value (NUA) of your property at the applicable income tax rate on unrealized gains. This assumes the property was disposed of at FMV on the day before the expatriation. As a fundamental taxation principle for non-citizens (expatriates), it is presumed to occur on the day before the date of expatriation.

In other countries, this is commonly known as the “exit tax.”

But there are exceptions for dual citizens and certain minors:

  • One of the prerequisites for dual citizens is that they must have become US citizens and citizens of another country at birth. Upon expatriation, they must continue to be a citizen and tax resident of this other country.
  • Certain minors will qualify for the exception if they expatriated before the age of 18 ½ and were not residents of the U.S. for 10 years before expatriating.

Penalties for Failing to File IRS Form 8854

Failing to file Form 8854 when required can result in a $10,000 penalty and potential ongoing tax consequences under the expatriation rules.

Penalty for Form 8854

The total cost for failing to submit a Form 8854 can be extreme. The first penalty is the noncompliance penalty, which is set at $10,000. (This only applies to covered expats.)

On top of this, assuming you do not submit Form 8854, you will be regarded as an American citizen and, as such, will remain bound to US citizenship-based taxation. This entails being liable for taxes incurred before filing, along with interest and fines attached for the delay.

It does not matter if you are labeled as a covered or non-covered expat; the ideal approach is always to submit this form as required.

Instructions to Complete and Submit Form 8854

Completing Form 8854 comes with unique challenges. For such reason, we do not recommend attempting to fill out this specific form yourself due to potential consequences such as penalties for making even the slightest of errors and miscalculations.

Consider the Case: if you wish not to be deemed a covered expat, you need to attest on Form 8854 that you have been fully compliant with the tax obligations for the last five years – this is something that poses a risk of contention and comes with substantial penalties if the taxpayer is erroneous.

Filing Taxes as a US Expat

Our best advice for safeguarding your interests is to seek a U.S. Expat Tax advisor like the SDG Accountants and file IRS Form 8854 with precision for security and peace of mind.

🔁 What to File Instead (if applicable):

If the individual is not filing 8854 but is ending U.S. tax residency, they may need to:

  • File a dual-status return for the year of departure (Form 1040 + 1040-NR),
  • Attach a residency termination statement,
  • Possibly file Form 8840 (closer connection), or
  • Maintain records for Form 8833 if taking a treaty position.

Still Have Questions about IRS Form 8854 and Your Expat Taxes?

We hope this post has helped you understand what Form 8854 means to you as a U.S. expat.

Contact us, and one of our Miami Tax Accountant will gladly help. If you need very specific advice on your specific tax situation, you can also click below to get a consultation with one of our expat tax experts.

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Navigating BOI Reporting for Parent and Subsidiary Entities in Miami and Tampa

BOI Reporting

Introduction:

At SDG Accountant LLC, we understand that compliance with the Corporate Transparency Act (CTA) is crucial for businesses operating in Miami, Tampa, and beyond. Every corporation, LLC, and other entity formed by filing documents with a state office must submit a Beneficial Ownership Information (BOI) report to the Financial Crimes Enforcement Network (FinCEN), unless they qualify for one of the CTA’s 23 exemptions. Failing to comply with the BOI reporting requirements can lead to significant civil and criminal penalties.

Understanding Beneficial Ownership

The CTA aims to assist national security and law enforcement officials in identifying the individuals who ultimately own or control corporations, LLCs, and certain other entities. This means that the reporting of personal information of these entities’ beneficial owners is mandatory. A beneficial owner is defined as an individual who:

  1. Exercises substantial control over the reporting company.
  2. Owns or controls at least 25% of the reporting company’s ownership interests.

The Role of Subsidiaries in BOI Reporting

Many corporations and LLCs function as subsidiaries owned by parent entities, raising questions about whether these subsidiaries must file BOI reports and who their beneficial owners are. FinCEN’s guidance clarifies these complexities, offering insights into subsidiary exemptions.

Subsidiary Exemption: Criteria and Examples

Under the CTA, a “subsidiary of certain exempt entities” may qualify for an exemption if it is controlled or wholly owned, directly or indirectly, by exempt entities such as:

  • Securities reporting issuers
  • Governmental authorities
  • Banks and credit unions
  • Investment companies or advisers
  • Insurance companies
  • Public Utilities
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However, subsidiaries of entities that are exempt, because they are money service businesses, pooled investment vehicles, or other specific categories, are not covered by this exemption. For a subsidiary to qualify, it must be fully, 100% owned or controlled by an exempt entity.

Example 1: ABC Inc. and DEF Inc., publicly traded corporations, establish three LLCs as part of a joint venture. As securities reporting issuers, both ABC and DEF are exempt and fully own the LLCs, which qualify for the subsidiary exemption.

Example 2: Holdco Corporation, a privately owned holding company, owns and controls several corporations and LLCs. As Holdco is not exempt, none of its subsidiaries qualify for the subsidiary exemption. Each subsidiary must be assessed individually for other exemptions or reporting requirements.

Changes in Exempt Status

If a subsidiary loses its exemption status due to changes in ownership, it must file an initial BOI report with FinCEN within 30 days of the change. Conversely, if a subsidiary that was a reporting company becomes exempt, it must update its BOI report within 30 days.

Determining Beneficial Owners

For subsidiaries owned by entities, beneficial owners are typically individuals with substantial control or ownership interests. For instance, senior officers or individuals who indirectly control the subsidiary through ownership of parent entities may be beneficial owners.

Reporting Exceptions for Exempt Entities

When ownership interests are held through exempt entities, a reporting company can report the exempt entity’s name instead of individual beneficial owners’ personal information. Additionally, a company can use a FinCEN Identifier in place of personal information if the identifier meets specific criteria.

Contact SDG Accountant LLC for BOI Reporting Assistance

For more details about BOI reporting under the CTA, contact SDG Accountant LLC—your trusted accountants in Miami and Tampa. Our team is ready to assist with all your BOI reporting needs and ensure your business remains compliant with all regulatory requirements. Reach out to us directly at admin@sdgaccountant.com.

By choosing SDG Accountant LLC, businesses in Miami and Tampa can navigate the complex landscape of BOI reporting, ensuring compliance and avoiding potential penalties. Stay informed and proactive with our expert guidance and support.

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