insightsArticles

Artificial Intelligence (AI) applications in healthcare have become ubiquitous and pervasive, and their adoption is accelerating. A recent American Medical Association survey disclosed physicians’ confidence in AI’s advantage for patient care is on the rise and their enthusiasm for its use is increasing.  

AI applications in healthcare 

AI applications have proved beneficial in a variety of ways in healthcare settings, including: 

• Managing hospital operations and patient flows 

• Assisting with resource allocation 

• Automating administrative tasks  

• Reducing clinicians’ repetitive tasks 

• Assisting in clinical decision-making 

• Detecting disease states 

• Aiding in clinical documentation 

Considerations for AI adoption 

This era of widespread AI-based application adoption represents a new phase of AI and presents new questions and challenges for healthcare organizations.  

A 2023 Center for Connected Medicine KLAS survey of healthcare systems disclosed only 16% have a system-wide policy for governance of AI usage. Organizations need to consider issues of data protection and privacy, patient consent, physician oversight and review, integration of workflows, and equitable access.  

Healthcare organizations should stay current on the emerging and evolving regulatory framework. For example, the US House bill (H.R. 1) passed in May 2025 proposes to block states from regulating AI models, shifting to federal oversight. It will warrant close monitoring, as the ultimate outcome will undoubtedly impact organizational compliance efforts.   

AI oversight 

Oversight is essential when implementing AI. We recommend that organizations consider forming AI committees composed of executives, information technology officers, legal advisors, clinicians, and cybersecurity specialists. These committees should establish and review institutional policies surrounding: 

• Patient privacy 

• Security measures, including encryption, secure storage, and security audits 

• Physician review of AI-based diagnoses and clinical decisions 

• Patient consent for use of their data, data sharing among applications, risks/benefits of AI-based applications 

• Staff education surrounding application use 

• Workflow integration with EHRs 

• Adoption of new applications 

• Clinician review of AI-generated notes and ambient listening technology documentation 

BerryDunn’s healthcare compliance team incorporates deep, hands-on knowledge with industry best practices to help ensure your operation is compliant and efficient. Learn more about BerryDunn’s team and services. 

This article is part of a series detailing meaningful proposed tax law changes. Read the previous article on key individual tax changes. 

The "Big Beautiful Bill" introduces a new savings vehicle for American families called the Trump Account. This novel provision has largely been overshadowed by other headline items including the SALT cap—and perhaps understandably so. This article will explain what these accounts are, how they would work, and their tax implications, so that if the legislation passes, you can be informed on whether they fit into your family's financial future.

What are Trump Accounts? 

Trump Accounts are specialized savings accounts designed for parents to invest in the futures of their children. 

• Account requirements: These accounts must be established as either a trust or custodial account before the child (the beneficiary) turns eight years old. 
• Contributions: Contributions are limited to cash only, with an annual cap of $5,000 per child (indexed for inflation), and can continue until the beneficiary reaches age 18. 
• Account limit: Each child is allowed only one Trump Account. If multiple accounts are created for the same beneficiary, only the first one qualifies as legitimate; any additional accounts are subject to a steep 100% excise tax on any income they generate. 
• Investment options: Funds can only be invested in stock of a regulated investment company that tracks a "well-established index" or a portfolio composed exclusively of US equities. While this restriction aims to promote long-term, stable growth through proven market indexes, it may limit flexibility compared to other savings options. 

Tax implications and distributions 

The rules governing distributions from Trump Accounts are somewhat intricate, but the overall tax benefits appear limited.

• Return of investment: Any portion of a distribution that represents a return of the original contributions is not subject to tax, which aligns with the fact that contributions are made with after-tax dollars and are not deductible. 
• Earnings: Any earnings or investment gains within the account are taxable to the beneficiary, regardless of how the funds are used. 
• Qualified purposes: If the funds are used for qualified purposes (defined as higher education expenses, a small business or farm loan taken out by the beneficiary, or a first-time home purchase), then the resulting gains are taxed at capital gains rates rather than as ordinary income. 
• Penalties: There is an additional 10% penalty on distributions to beneficiaries under the age of 31 which are not attributable to qualified expenses. 

Encouraging participation: The federal credit 

To encourage participation, the legislation includes a one-time federal credit of $1,000 for beneficiaries born between 2025 and 2028. 

• Automatic deposit: This credit is automatically deposited into a Trump Account unless the taxpayer opts out on their tax return. 
• IRS establishment: If no account has been created and no election out has been indicated, the IRS will establish an account on the beneficiary's behalf, following the processing of the parent's tax return. This automatic enrollment feature could jumpstart savings for many families, particularly those who might not otherwise take the initiative to open an account. 

Comparing Trump Accounts to other savings options 

While Trump Accounts offer some advantages, they have limitations when compared to existing savings plans like 529 plans. 

• Advantages: Trump Accounts offer potential rate arbitrage, tax deferral, and a degree of investment security due to regulatory constraints. They also expand the definition of qualified expenses to include small business loans and first-time home purchases. 
• Disadvantages: They fall short of the full tax-free growth and withdrawal benefits associated with 529 plans. Additionally, they lack some of the flexibility of 529 plans, such as the ability to repay student loans or roll over unused funds into a Roth IRA. The annual contribution cap of $5,000, even when adjusted for inflation, may also limit the long-term impact of these accounts compared to the more generous limits available under 529 plans. 

For families considering how best to invest in their children’s futures, it is important to weigh the novelty of Trump Accounts against the proven advantages of existing plans. If you have questions about your unique situation or would like more information on how these accounts would fit into your family’s financial picture, please do not hesitate to reach out to the BerryDunn Tax Team. We are here to help you navigate these important decisions and ensure a bright financial future for your loved ones.

The Medicare Payment Advisory Commission (MedPAC) recently released its June 2025 Report to Congress, highlighting critical developments in Medicare Advantage (MA). Several key insights emerged with important implications for home health and supplemental benefit policy. 

Home health utilization patterns 

While overall home health use was similar between Medicare Advantage (8.3%) and Fee-for-Service (FFS) beneficiaries (8.6%), MA enrollees were 3.2 percentage points more likely to use home health following hospital discharge. This trend suggests that MA plans may be encouraging the use of home health as a lower-cost alternative to skilled nursing facility (SNF) care. 

Even more notably, MA enrollees received fewer visits on average—approximately 18 visits per year compared to 20 visits for FFS beneficiaries, representing an 11% reduction in service intensity. This occurred even when care was delivered by the same home health agencies, indicating plan-driven differences in utilization management. 

Supplemental benefits and transparency gaps 

Supplemental benefits—such as transportation, groceries, and fitness programs—remain a major draw for MA enrollment. In 2025, MA plans are projected to receive approximately $86 billion in Medicare rebates to fund these benefits, a dramatic rise from $21 billion in 2018. 

However, despite the scale of these investments, critical gaps remain in transparency and accountability. There is limited data on: 

• How frequently these benefits are used 
• How much plans actually spend per benefit  
• Whether they improve health outcomes 

As scrutiny over MA payment intensifies, the lack of reliable data prevents a meaningful assessment of value and impact. Without improved oversight and reporting, policymakers and stakeholders cannot determine whether MA plans are delivering better care or simply redistributing federal funds without measurable benefit. 

Implications for home health 

In the home health sector, providers continue to struggle with constrained reimbursement from MA plans, even as demand for post-acute care alternatives rises. To ensure that MA spending leads to meaningful improvements in care, greater transparency is urgently needed—both in how dollars are allocated and in whether they drive measurable health outcomes. Only with clearer insight into MA spending can we ensure investments are made in areas that deliver true value to patients and the healthcare system. 

BerryDunn’s home health and hospice team is comprised of respected industry leaders and professionals who have dedicated their careers to advancing patient care and navigating core challenges. We partner with clients on a variety of financial, outsourced, and consulting services. Learn more about our team and services.    

As artificial intelligence (AI) becomes increasingly woven into nonprofit operations, boards are stepping into a new and critical role. Traditionally focused on mission oversight and fiscal responsibility, today's boards must also shape how AI is introduced, governed, and aligned with the organization’s values. Below are the seven most important actions a board can take to ensure responsible and strategic AI implementation. 

1. Build board-level AI fluency  

To offer meaningful oversight, board members must first understand the terrain. That means going beyond buzzwords to grasp AI’s potential and pitfalls in a nonprofit context—especially its ethical implications, financial impact, and accessibility concerns. 

Boards should: 

• Encourage ongoing education through trainings, industry briefings, or podcasts 
• Appoint an AI lead or champion to coordinate learning 
• Create space for dialogue between board and staff on emerging AI use cases 

2. Articulate a mission-driven AI vision  

Boards help define the “why” behind AI adoption. A strong vision ensures that tech decisions enhance the mission—not distract from it. 

This vision should: 

• Align AI use with organizational values and goals 
• Clearly state which uses are appropriate or off-limits 
• Address equity, inclusion, and accessibility for staff and stakeholders 

3. Establish policies and oversight structures  

Governance must evolve alongside innovation. Whether through an AI subcommittee or embedded into existing ones, boards should define oversight mechanisms early. 

Key actions: 

• Develop policies that address privacy, accountability, and ethical standards 
• Work with leadership to implement those policies organization-wide 
• Determine how and when AI performance and risks are reported to the board 

4. Invest in readiness across the organization  

AI implementation requires buy-in, training, and trust. Boards can champion a culture of learning that empowers both staff and leadership. 

That includes: 

• Encouraging staff-wide AI literacy, not just executive-level understanding 
• Supporting leaders in preparing their teams for workflow changes 
• Framing AI as a tool for empowerment, not displacement 

5. Prioritize responsible resource allocation  

AI can be expensive and time-consuming to deploy. Boards with financial oversight should evaluate whether investments are sustainable and impact-driven. 

Questions to ask: 

• What specific problems will this AI tool help solve? 
• How will outcomes be measured? 
• Are there grant opportunities or partnerships to offset costs? 

6. Promote transparency and communication  

Successful AI implementation thrives on trust. Boards can support transparency by encouraging open communication with internal teams and external stakeholders. 

Consider: 

• Creating dashboards or reports that track AI performance and risks 
• Soliciting feedback from staff and community members 
• Sharing learnings and ethical commitments publicly, when appropriate 

7. Extend impact to the community  

Nonprofits don't just implement technology—they model inclusive access to it. Boards can advocate for ways AI can serve not only the organization but the broader population. 

Ideas include: 

• Supporting community-based AI training or literacy initiatives 
• Partnering with peer nonprofits to share resources or lessons learned 
• Ensuring AI solutions serve marginalized and underrepresented groups 

Looking forward  

AI implementation is a journey, not a quick fix. Nonprofit boards play a critical role in making sure this journey is rooted in strategy, equity, and mission. With the right vision and structure, AI can become a powerful ally in expanding impact—and the board can be the compass that keeps it on course. 

BerryDunn’s nonprofit tax team works exclusively with tax-exempt organizations throughout New England and beyond. We understand and embrace the unique challenges faced by nonprofits—and recognize the vital importance of putting the mission first. Our team has deep expertise in partnering with nonprofits to develop strategies for success. Learn more about our team and services. 

Newly appointed to lead BerryDunn’s Healthcare Practice Group, Lisa Trundy-Whitten is closely attuned to the healthcare industry. From challenges faced by healthcare organizations to the solutions BerryDunn’s experts can provide, Lisa shares her vision for the team as she takes the helm, as well as thoughtful insights for today’s healthcare leaders. 

Today’s healthcare leaders face historic challenges that require innovative strategies to successfully navigate. From the impact of the proposed $880 billion cuts to Medicaid to redefining the model for employing primary care providers to be more sustainable for health systems, there is a path forward.  

It’s not surprising that BerryDunn’s fastest-growing services are those being shaped by economic uncertainty, regulatory compliance, financial strategy, IT strategy, and sustainability initiatives. As I consider the healthcare landscape today, there are a couple of key areas I’d like to highlight. First, the regulatory changes at the federal level are putting tremendous pressure on healthcare organizations, and second, quickly advancing technology is forcing the industry to evolve rapidly to remain sustainable.  

Impacts of federal regulatory changes 

Proposed shifts in federal policies and laws are creating uncertainty around reimbursement and regulatory compliance. At the top of the list are the Medicaid cuts in the "One Big Beautiful Bill Act,” which passed the US House of Representatives in May and is now up for consideration in the Senate, and the impact of possible changes to provider taxes.  

Major consequences of these possible Medicaid cuts include reimbursement and financial sustainability for organizations. My team and I know you have concerns. You’re wondering how you will make up for the potential lost reimbursement and whether entire programs will need to be eliminated.  

One way BerryDunn is staying ahead of the regulatory curve to support you is by closely monitoring regulatory changes, determining possible impacts, and developing strategies to inform and support our clients.  

Embracing and adapting to new technology 

One challenge with technology is determining how to best leverage it to improve accuracy and efficiency. Uncovering ways to align new tools with existing resources, the ethical use of technology, and governance models all come to mind when I think of the effects of technology on the healthcare industry. AI is one such tool that is constantly emerging and is prompting organizations to seek ways to advantageously employ it.  

Healthcare organizations like yours are working through how to supplement the workforce with technology to create a positive outcome. Technology needs to be integrated in a way that reduces the burden instead of adding to it.  

Our team has professionals skilled at strategic IT analysis and change management. We can assist with IT consulting to guide you on technology planning, EHR, and other system selections for your organization. We have expert advisors who can collaborate with you on the latest technology to help optimize your operations, including AI. 

Our Healthcare Practice Group  

My vision for our Healthcare Practice Group is to continually elevate our team and how we work with—and for—our valued clients. We want to help you integrate financial strategy and innovation to support operations and thrive in a climate of rapid change. To quote Tammy Brunetti, my predecessor in this role, "We are Better Together.”  

BerryDunn has an incredibly full breadth of services, and our team works across healthcare practices to provide a full complement of services. Considering our firm’s early roots in healthcare, we take tremendous pride in being large enough to provide a depth of resources but small and personal enough that we can provide services that fit your unique needs.  

I urge you to learn more about our services and team. We look forward to working with you to create the innovative solutions you require in today’s ever-changing climate. 

Best, 

Lisa Trundy-Whitten 

Read this if you are a healthcare financial leader, such as a CFO, revenue cycle executive, HIM director, or compliance professional.

Healthcare providers face increasing administrative and financial pressure due to the high volume and complexity of payer claim denials. Artificial Intelligence (AI) offers healthcare finance professionals powerful tools to shift denial management from reactive to proactive, significantly enhancing operational efficiency and financial performance. This article explores the use of AI technologies in preventing and managing denials, outlines an implementation strategy, presents case studies, and discusses challenges and future trends.  

Leveraging AI for claim denial management 

Claim denials continue to erode hospital and physician practice margins. According to HFMA and the AMA, denial rates can exceed 10% of submitted claims, with manual rework costing upwards of $25 per denial. The transition to value-based care and payer policy complexity make it difficult to maintain clean claims without significant investments in administrative labor. 

AI, including Machine Learning (ML), Natural Language Processing (NLP), Robotic Process Automation (RPA), and predictive analytics, offers finance leaders scalable, data-driven solutions to mitigate these risks. Leveraging AI across the revenue cycle enables better first-pass yield, reduces days in A/R, and drives sustainable improvements in net revenue. 

Denial landscape and financial implications  

Denials can be broadly placed into two categories:  

• Hard denials are typically irreversible and often result from issues such as contractual non-coverage. 

• Soft denials are potentially recoverable through resubmission or appeals.  

Understanding the nature of these denials is critical for devising effective mitigation strategies. 

What to consider for denials prevention: 

• A lack of prior authorization 

• Medical necessity disputes 

• Eligibility or benefit mismatches 

• Documentation or coding errors 

• Timely filing issues 

These denials often result in a 3–5% reduction in potential revenue—a significant financial impact for large health systems. Moreover, the manual effort required to rework and resubmit denied claims increases the cost-to-collect and diverts valuable resources from more strategic tasks. The resulting financial strain and workflow inefficiencies ultimately affect patient satisfaction and organizational sustainability. 

AI in revenue cycle management 

AI technologies enable healthcare organizations to optimize their revenue cycle operations through automation and intelligence.  

• Machine learning models: Trained on historical denial data, they can predict the likelihood of future denials and suggest interventions to avoid them. By proactively identifying high-risk claims, organizations can reduce rejection rates before claims are even submitted. An example is a decision tree classifier used to predict whether a hospital claim will be denied or approved. 

• Natural Language Processing tools: Play a pivotal role in understanding and extracting value from unstructured data sources such as EHRs, claim notes, and Explanations of Benefits (EOBs). They can identify missing or inconsistent information, automate appeal letter generation, and improve overall documentation quality. An example of NLP is a tool that extracts diagnoses, medications, and procedures from unstructured clinical notes to support accurate coding and streamline billing workflows. 

• Robotic Process Automation: Complements AI by handling repetitive, rule-based tasks such as eligibility verification, claim submission, and payer portal interactions. This frees up human resources for more complex and judgment-based activities. An example of an RPA is a bot that automatically retrieves claim status updates from payer portals and inputs the results into the billing system. 

• Predictive analytics tools: Offer powerful dashboards and forecasting capabilities, helping revenue cycle leaders identify trends, prioritize improvement initiatives, and continuously monitor performance metrics. An example of this tool is a model that analyzes historical claim data to forecast which submitted claims are most likely to be denied. 

Strategic benefits for finance executives 

AI adoption offers a multifaceted return on investment for healthcare finance executives. One of the most direct benefits is revenue enhancement through reduced denial-related leakage. By identifying and addressing risks before claims are submitted, organizations can significantly increase their clean claim rates. 

Operational productivity is also improved. Staff previously tasked with manual denial follow-up can be reallocated to higher-value roles, such as analytics or payer negotiation. This shift not only improves morale but also increases efficiency. 

In terms of compliance, AI helps organizations stay audit-ready by flagging inconsistencies in documentation and coding that may trigger payer audits or regulatory scrutiny. Furthermore, fewer denials and faster resolution cycles contribute to improved cash flow and reduced accounts receivable aging—key metrics for any finance leader. 

Implementation roadmap  

A successful AI implementation begins with defining clear, ROI-based goals. Finance leaders should align projects with measurable KPIs such as denial rate reduction, net revenue uplift, or staffing efficiency improvements. These goals serve as the foundation for all subsequent decision-making. 

Data readiness is a crucial prerequisite. Effective AI models require clean, structured, and integrated clinical and financial data. Organizations must assess their data infrastructure and invest in necessary improvements to ensure a successful deployment. Piloting the AI solution in specific payer segments or service lines allows for early value demonstration and helps build internal support. Positive results from these pilots can then inform a broader rollout strategy. 

Vendor selection should be driven by a thorough evaluation process, focusing on healthcare-specific experience, integration capabilities, and the vendor’s ability to maintain a comprehensive payer rule library. Equally important is preparing the organization for change. Successful adoption depends on cross-functional buy-in, robust training programs, and transparent communication about the benefits of AI. 

Case examples 

Several healthcare organizations have demonstrated the transformative potential of AI in denial management. Here are a few examples: 

• A 900-bed hospital implemented AI-based denial prediction models integrated with its Epic system. The result was a 40% reduction in manual claim rework and an increase in the clean claim rate to 94%. 

• A 400-provider medical services organization deployed NLP-enhanced Clinical Documentation Improvement (CDI) tools. This led to better capture of Hierarchical Condition Categories (HCCs) and a marked decrease in documentation-related payer inquiries. 

• A large, multi-state health system leveraged predictive analytics to identify and address root causes of denials across departments. By retraining staff based on data-driven insights, the system achieved a 33% year-over-year decrease in denials and gained an $8 million boost in net revenue. 

Challenges and mitigation strategies 

Despite the promise of AI, implementation comes with challenges. One major obstacle is the presence of data silos that limit the effectiveness of AI models. Integrating clinical, financial, and administrative systems is essential to create a unified view of the patient and claim lifecycle. 

Another concern is model bias and accuracy. AI tools must be regularly validated and adjusted to ensure their predictions remain reliable and do not inadvertently reinforce systemic issues. Overfitting and underfitting can both lead to misleading outputs if not properly managed. 

Regulatory compliance must also be prioritized. Organizations should only engage with HIPAA-compliant vendors who implement strong data protection measures. Moreover, staff should be trained on the appropriate use of AI outputs to prevent misuse or misinterpretation. 

Cultural resistance can slow or derail implementation. It is important to position AI not as a replacement for human expertise but as a tool that augments and enhances decision-making. Early wins, peer testimonials, and leadership support can help build momentum and buy-in. 

The future: AI as an RCM standard 

The future of revenue cycle management lies in the widespread adoption of AI tools as standard practice. Emerging technologies such as Explainable AI (XAI) will provide transparency into how decisions are made, making it easier to comply with audits and build trust with clinicians and payers. 

Federated learning is another promising development, enabling healthcare organizations to train AI models collaboratively without sharing sensitive patient data. This approach enhances model performance while preserving privacy. 

Real-time denial adjudication engines represent the next frontier, offering the ability to detect and resolve issues as claims are being prepared before submission. Such capabilities will transform denial management from a reactive function into a proactive, dynamic process embedded across the revenue cycle. 

AI: A strategic imperative 

AI adoption is no longer experimental—it's essential. Finance leaders must lead cross-functional efforts to deploy AI solutions that streamline operations, protect margins, and improve payer-provider collaboration. When implemented strategically, AI transforms denial management from a reactive cost center into a predictive, revenue-generating function. 

The future success of healthcare organizations depends on their ability to adapt to evolving reimbursement models, manage cost pressures, and improve data governance. AI serves as a strategic asset in achieving these objectives. As the industry embraces more digital health tools, those who proactively integrate AI into their revenue cycle operations will emerge as leaders, better equipped to deliver financial stability and enhance patient-centered care. In the end, the organizations that view AI not just as a technology but as a business imperative will be best positioned to thrive in the next era of healthcare delivery. 

BerryDunn’s revenue cycle consultants engage with your healthcare organization to objectively review existing processes and develop actionable strategies for short- and long-term performance improvement. Learn more about our team and services. 

This article is part of a series detailing meaningful proposed tax law changes that could have far-reaching implications for individual income and estate taxpayers. Read the previous article on key business tax proposals.

The United States Senate is currently negotiating and drafting tax reform legislation as a follow-on to the House of Representatives ‘One Big Beautiful Bill Act’ (OBBBA), which passed the House in late May. The House-passed legislation contains meaningful tax reforms with potentially significant impact on individual income and estate taxes.

Increased lifetime gift and estate tax exemption

The OBBBA proposes significant changes to the lifetime exemption for gift and estate tax purposes.

Increased exemption: Under current law, the lifetime gift/estate tax exemption is scheduled to revert to its pre-2018 amount of $5 million for individuals and $10 million for married couples (indexed for inflation). The OBBBA proposes to increase the lifetime exemption to $15 million for individuals, or $30 million for married couples, indexed for inflation. Permanency: The OBBBA proposes to make the lifetime exemption permanent. Historically, the exemption amount has been temporary.

Tax planning: The proposed change to the gift/estate lifetime exemption makes now an ideal time for you and your family to consider what strategies to execute for your unique situation. There are several estate planning tools and strategies to consider to ensure tax efficiency. The Intentionally Defective Grantor Trust (IDGT) is one example. When drafted correctly, this type of trust is designed so that its assets are excluded from your taxable estate, yet you – as the grantor – are responsible for paying the income tax on the trust’s earnings. The IDGT offers a powerful dual benefit. First, trust assets grow free of income tax and defer estate taxes, allowing compounding appreciation to work more effectively over time. Second, when the grantor pays income tax from personal assets that are within their taxable estate, it further reduces the grantor’s taxable estate on a dollar-for-dollar basis, maximizing the overall wealth transferred to heirs. This payment of income taxes functions implicitly as an indirect gift to the trust yet does not reduce the grantor’s lifetime exemption amount.

State-level taxes are also a key consideration for gift and estate tax planning as states have widely varying gift/estate tax laws. As tax reform takes shape federally, state legislatures may reform their laws in response to the federal tax law changes, making planning important beyond the federal tax implications.

Itemized deductions

New limitation for highest tax bracket: Taxpayers in the 37% income tax bracket will be subject to a new limitation of overall itemized deductions beginning with tax year 2025. The limitation is 2/37 of the lesser of total itemized deductions or taxable income.

Increased State and Local (SALT) deduction cap: Current law imposes a maximum state and local itemized deduction of $10,000. The OBBBA proposes to increase this limit to $40,000 (for married filing joint taxpayers) beginning in 2025. The increased limit would be phased out for taxpayers with incomes over $500,000.

Notably, the Senate Finance Committee's draft of the budget reconciliation bill, released on June 16, 2025, keeps the $10,000 SALT cap in place. The Senate Finance Committee noted there is an expectation the SALT cap will be subject to further negotiations that may change the Finance Committee cap in the version of the budget bill that is voted on by the full Senate. 

Auto loan interest deduction and 1099 reporting

The OBBBA also introduces a temporary auto loan interest deduction and new reporting requirements.

New tax break: For tax years 2025 through 2028, individuals may deduct up to $10,000 in auto loan interest for personal-use vehicles assembled in the US. This applies to itemizers and non-itemizers.

Eligibility: Applies to personal-use cars, minivans, SUVs, pickup trucks, motorcycles, and recreational towable units.

Phaseout: The deduction phases out for single filers with AGI over $100,000 and joint filers over $200,000.

New IRS Reporting (Section 6050AA): Effective January 1, 2025, lenders receiving $600 or more in interest on qualifying auto loans must issue Form 1099-INT to the IRS and the borrower. This applies to personal-use, US-assembled vehicles. This rule enhances tax compliance by ensuring accurate documentation.

This provision aims to ease vehicle ownership costs and support US manufacturing.

These proposed changes could offer substantial tax relief to individuals for both income and gift/estate taxes. BerryDunn’s tax and compliance team has a deep understanding of the proposed tax reforms and can help you plan for these changes to maximize the opportunities and minimize the costs.

This article is part of a series detailing meaningful proposed tax law changes that could have far reaching implications to all types of businesses.

The debate and negotiations over tax reform are taking shape in the United States Congress. The United States Senate is reviewing the ‘One Big Beautiful Bill Act’ (OBBBA) passed by the US House of Representatives in late May. The House-passed legislation contains meaningful tax reforms with potentially significant impact to businesses and individuals.

Bonus depreciation and Section 179 expensing

The OBBBA also proposes significant changes to bonus depreciation and Section 179 expensing.

Bonus depreciation: The current 40% bonus depreciation for 2025 is proposed to return to 100% for qualified assets placed in service after January 19, 2025, and before January 1, 2030. This allows businesses to fully deduct the cost of eligible assets upfront.

Section 179 expensing: The maximum Section 179 deduction is proposed to increase from $1,250,000 to $2.5 million, with the phase-out threshold rising from $3,130,000 to $4 million.

Key differences: Section 179 cannot create a loss, while bonus depreciation can. Most states do not follow bonus depreciation rules, but some allow Section 179.

Qualified Business Income (QBI) deduction extension and enhancement

The OBBBA extends the existing law that allows a deduction against business income for qualifying flow-through businesses (non-C-corporation entities).

Deduction enhancement: The deduction for QBI will increase from 20% under current law to 23% for tax year beginning after December 31, 2025.

Permanent extension: The deduction for QBI will be made permanent

Threshold limit and inflation adjustment: The taxable-income threshold (currently $197,300 for singles / $394,600 for joint filers in 2025) is increased for inflation, maintaining higher eligibility before limitations begin.

This provision aims to promote economic growth and incentivize the development of new businesses by reducing the income tax costs to business owners of flowthrough entities.

Business interest deductions (Section 163(j))

The OBBBA aims to revise how deductible interest expenses are calculated under Section §163(j).

Adjusted Taxable Income (ATI) calculation: Pre-2022, EBITDA (earnings before interest, tax, depreciation and amortization) was used, allowing higher deductions. From 2022–2024, EBIT became the basis, reducing deductible interest for many companies. The House bill will temporarily restore EBITDA as the basis for tax years 2025 through 2029, which would increase interest deductibility for capital-intensive businesses.

Deduction limit: The 30% of Adjusted Taxable Income deduction limit remains unchanged.

Small business exemption: Currently, businesses with average gross receipts of $30 million or less over the previous three years are exempt from the interest expense limitation. The OBBBA proposes to extend the lookback period to five years and add a new $80 million threshold for manufacturing businesses, with both thresholds subject to inflation adjustments. This could qualify more small and mid-size manufacturers for exemption and provide stability for businesses with fluctuating revenue.

Carryforward rules: Disallowed interest can still be carried forward indefinitely, with rules varying by entity type (C-Corp, Partnership, S-Corp).

This table summarizes the changes:

These changes could offer substantial tax relief, especially for businesses with significant debt financing or capital investments.

The bill is still in committee but has a target enactment date of July 4, 2025, making it crucial for planning. BerryDunn’s tax and compliance team has a deep understanding of the proposed tax reforms and can help you and your business plan for these changes to maximize the opportunities and minimize the costs.

In our work with clients on financial stewardship and internal controls, we often see organizations—especially small businesses, nonprofits, and governmental entities—struggling to balance purchasing flexibility with risk management. Credit cards, purchase cards (p-cards), and debit cards each offer convenience for small-dollar purchases, but also carry varying levels of risk. Implementing strong internal controls is essential to prevent fraud, misuse, and compliance violations. 

Below are best practices tailored to each payment method, with a focus on safeguarding your organization’s assets and ensuring accountability. Establishing clear policies and effective internal controls for each card type should be a top consideration.   

Credit cards: Widely used, but not without risk 

Credit cards are a common tool for operational purchases. However, without proper oversight, they can become a source of fraud and abuse.  

• Monthly independent reviews: Assign a finance team member not involved in card use to review all transactions monthly. This segregation of duties is a cornerstone of effective internal control. 

• Card issuance protocols: Establish a formal approval process for issuing cards, including a credit limit based on job function and purchasing needs. 

• Policy clarity: Define allowable and prohibited uses. For example, prohibit use for grant-funded or capital expenditures unless pre-approved, as these often require additional documentation and controls. 

• Receipt compliance: Require timely submission of receipts and outline consequences for non-compliance (e.g., suspension of card privileges). 

• Employee acknowledgment: Have employees sign a credit card policy agreement annually to reinforce accountability. 

P-cards cards: Flexible and controllable 

P-cards offer more granular control than traditional credit cards, making them a preferred option for many organizations.  

• Vendor restrictions: Limit card use to a pre-approved vendor list to reduce the risk of unauthorized purchases. 

• Role-based limits: Customize spending limits by department or role to align with operational needs. 

• Pre-payment review: Require review of all receipts and transaction logs before paying the monthly bill. 

• Documentation enforcement: Make receipt submission mandatory and enforce consequences for missing documentation. 

• Audit trail: Maintain a centralized log of all p-card activity for audit readiness and transparency. 

Debit cards: High risk, use with caution 

While debit cards provide immediate access to funds, they expose organizations to greater risk due to limited fraud protection and direct access to bank accounts. Debit card use should have robust internal controls and monitoring.  

• Real-time monitoring: Use online banking tools to monitor transactions daily. Assign this task to someone without card access. 

• Transaction limits: Set daily spending and withdrawal caps to minimize potential losses. 

• Bank alerts: Enable transaction alerts for real-time oversight. 

• Bank protections: Choose a bank that offers strong fraud protection and insurance coverage for business accounts. 

• Incident response plan: Develop and test a response plan for potential breaches, including steps for reporting, containment, and recovery. 

Note: Due to the inherent risks, debit cards are generally not recommended for business use unless absolutely necessary and tightly controlled. 

Special considerations for nonprofits and governmental entities 

For nonprofits and governmental organizations, internal controls are not just best practices—they are often compliance requirements. Misuse of funds, especially grant money, can lead to serious consequences, including loss of funding or legal action. 

Our recommendations 

• Avoid debit cards: Stick to credit or purchase cards with stronger controls. 

• Grant compliance: Ensure all purchases made with grant funds are allowable and properly documented. 

• Policy integration: Align card policies with your organization’s broader financial and grant management policies. 

Final thoughts 

Choosing the right purchasing method is about more than convenience—it’s about protecting your organization’s financial integrity. We recommend reviewing your current practices and updating your policies to reflect these best practices. If you need help assessing your internal controls or designing a card policy tailored to your organization, BerryDunn can help. Our specialized nonprofit and governmental teams work with organizations throughout New England and beyond. We understand and embrace the unique challenges faced by these entities—and recognize the vital importance of putting the mission first. Learn more about our team and services.