In previous Sikich updates, we explained how Congress can pass tax legislation using the special “budget reconciliation” process — a complex, two-step procedure that requires coordination between the House and Senate. Think of it as the “Taxes Two-Step.”
Step One: Budget Resolution Passed
The first step involves both the House and Senate agreeing on the same budget resolution. This resolution sets the framework and dollar limits for the various congressional committees to write specific tax and spending provisions. That step was completed when the House approved the resolution on April 10, 2025, following Senate approval on April 5.
Step Two: Congressional Committees Begin Work
With the budget framework in place, the next phase shifts to the 21 congressional committees (11 in the House, 10 in the Senate) responsible for crafting the actual legislation. Of particular interest are the House Ways and Means Committee and the Senate Finance Committee, which will handle the tax-related provisions.
When Congress returns from its two-week recess, work on the tax bill is expected to accelerate. Early May will likely bring more details, including potential extensions of key provisions from the Tax Cuts and Jobs Act (TCJA), business-related incentives like bonus depreciation and research expenditures, certain proposals from President Trump introduced during his presidential campaign, revenue offsets, and more.
The Finish Line: Final Votes and Presidential Signature
Once the committees complete their work, the budget committees will compile the entire package and ensure it aligns with the previously passed resolution. Then, both the House and Senate will need to vote again — this time on the final, comprehensive budget and tax bill. If it passes both chambers, it will go to the president for signature.
That said, the path forward is far from guaranteed. The bill may be modified during the process to gain enough support from key legislators, who will be weighing not only the tax provisions but also proposed spending revisions. Given Republicans’ narrow majorities in both chambers, final passage remains uncertain.
As the year goes on without passage of this legislation, uncertainty will continue to grow —especially around the potential sunset of key TCJA provisions at the end of the year. This uncertainty may create challenges for taxpayers as they plan.
For questions or guidance, please reach out to your Sikich tax advisor.
About Our Authors
Tom Bayer, CPA, CExP, has specialized expertise in the areas of business succession planning, tax planning and compliance, and business advisory. He has deep experience providing a range of accounting, tax, and business advisory services to commercial clients across industries.
Jim Brandenburg, CPA, MST, possesses extensive experience and knowledge in corporate and partnership tax law, mergers and acquisitions, and tax legislation. His expertise includes working with owners of closely held businesses to identify tax planning opportunities and assist them in implementing these strategies.
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