At Around the Tax World, you can find out all about what’s going on in the wonderful, worldwide world of tax. Every month, we’ll feature a few mini-articles on what’s been going on in the world when it comes to tax, and fully available for viewing even if you don’t have a subscription.
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Check out what’s happening all around the world of tax!
In The Headlines
- The Trump administration takes a 10% stake in Intel. The deal with the semiconductor maker was first confirmed in August 2025 to the tune of an $8.9 billion investment. The shares will be paid for through $5.7 billion in grants from the 2022 U.S. CHIPS and Science Act and $3.2 billion through the Secure Enclave program. In their official statement, the U.S. government says that it will not seek direct representation on the company’s board and will default to voting with the Board of Directors in most cases. This move has been deemed part of a strategy to outpace China in the A.I. race. However, this level of business involvement is unusual in U.S. history. The federal government held temporary stakes in a number of companies during the bailouts of 2008 and 2009, but the U.S. is not currently in a similar economic crisis.
- The U.S.-Israel-Iran conflict is expected to have a global economic impact. As the Trump administration’s strikes in Iran continue, oil prices have simultaneously been rising. Even before the conflict escalated, oil prices had jumped up by 17% this year, likely influenced by Trump’s sanctions against Iran and public criticisms of the Iranian regime. After the president announced the likelihood that strikes would continue for numerous weeks, economists turned an eye to the global energy market. What makes Iran so impactful when it comes to the price of oil? Though the country produces less than 5% of global output, Iran has direct influence over the Strait of Hormuz, which is a key passageway for over 20% of the global oil trade. In the immediate aftermath of the conflict, U.S. crude oil went up by more than 7%, amounting to a $6 increase per barrel.
- Post-Winter Olympics, U.S. lawmakers look to end the “Victory Tax” on medal-winning athletes. The House of Representatives is weighing a new bill: the Tax Exemption for American Medalists (TEAM USA) Act. If passed, this would eliminate taxes faced by winners of gold, silver, and bronze medals. Olympic medals themselves are not particularly valuable, but athletes also receive a financial prize: $37,500 for gold, $22,500 for silver, and $15,000 for bronze (as of 2026). As it stands, not all medalists face the “Victory Tax.” In 2016, Congress passed an act that excluded the fair market value of Olympic medals and cash prizes from an athlete’s taxable income—unless the athlete’s adjusted gross income is $1 million or more. The TEAM USA Act would extend the tax exclusion to all athletes. Even if the bill passes, however, states have their own income tax laws and may not offer an exemption for Olympic winnings.
What's New In The Tax World?
The IRS has released a new OBBBA schedule: Taxpayers can now claim a tax exemption on tips, overtime, and car loan interest
The Trump administration’s “One Big Beautiful Bill” Act includes provisions that allow qualified taxpayers to deduct tips, overtime, and car loan interest from their taxable income. Older taxpayers may also qualify for the new enhanced senior deduction. To provide clarity on how to take these deductions, the IRS recently published instructions for the 2025 tax year. Schedule 1-A PDF is now available to help taxpayers determine their deduction amount and how to claim it.
Part II of the form is for taxpayers who earn tips:
- Maximum deduction: $25,000 for all filing statuses
- Deduction starts to phase out for taxpayers who earn more than $150,000 a year (or $300,000 for married filing jointly)
- Tips must be reported as income to qualify
- Available whether you claim the standard deduction or itemize
- Instructions provide a definition of “qualified tips” and categories of occupations that may qualify
Part III of the form is for taxpayers who earn overtime pay:
- Maximum deduction: $12,500 for single filers or $25,000 for taxpayers who are married filing jointly
- Deduction starts to phase out for taxpayers who earn more than $150,000 a year (or $300,000 for married filing jointly)
- Available whether you claim the standard deduction or itemize
- Instructions define “qualified overtime compensation”
- Overtime pay must be required under section 7 of the Fair Labor Standards Act of 1938
- Overtime pay must exceed the regular rate of pay—only the overage can be deducted
Part IV of the form is for taxpayers who owe car loan interest:
- Maximum deduction: $10,000
- Available whether you claim the standard deduction or itemize
- Instructions define key terms like “qualified passenger vehicle loan interest,” “applicable passenger vehicle,” “final assembly in the United States,” and “personal use”
Part V of the form is for taxpayers who qualify for the enhanced senior deduction:
- Maximum deduction: $6,000 per person
- Deduction starts to phase out for taxpayers who earn more than $75,000 a year (or $150,000 for married couples filing jointly)
- Available whether you claim the standard deduction or itemize
- The taxpayer must have been born before January 2, 1961 and have a valid Social Security number
- If the taxpayer is married filing jointly, each spouse who is claiming the deduction must meet these requirements
State-By-State Updates
- California lawmakers are torn over a new gas tax study. The state relies on gas tax for 80% of its funding for highway maintenance and road repairs. However, the rise in popularity of electric vehicles is contributing to a $31 billion dip in gas tax revenue projected over the next decade. Local Democrats backed a new bill that would order a summary of all current research and recommendations on changing how California’s gas tax is calculated. Studies have looked at the differences in revenue when the tax is based on fuel consumption vs. how much drivers use the road. Many Republican lawmakers have opposed the bill and framed it as an attempt at a tax hike. Meanwhile, rural officials find themselves waiting for the battle to be resolved—their constituents need the revenue for road maintenance, which is essential to supporting local industries.
- Minnesota is looking at a budget surplus—could that mean new tax cuts? The state had previously been expecting a shortfall, but Minnesota is now anticipating $3.7 billion in surplus revenue, resulting in $377 million extra dollars in the budget. Though this isn’t an extravagant amount of extra funding, lawmakers are arguing about where the money should go. Some Republican representatives are advocating for tax cuts and additional spending restraints. This could include reductions in property taxes or tab fees for vehicles. It could also include aligning state tax laws with the federally-approved “One Big Beautiful Bill” Act. However, Democratic representatives have pushed back and expressed concern that the state cannot currently afford to lose the tax revenue. Instead, some lawmakers want to funnel the funds toward school safety, construction projects, and help for immigrants.
- Ohio lawmakers pitch a $500 million property tax reduction. The Ohio House Ways and Means Committee is weighing two bills that would change state rules around property tax rollbacks. Last year, the House already took steps toward changing the tax rollback system. They approved a significant increase to the owner occupied tax rollback—from 2.5% to 15.38% over the course of four years. The first new proposal would shift rollbacks from a percentage to a flat dollar amount. Advocates of the bills named this as a necessary step in creating more equitable treatment of all property taxpayers. Opponents of this move are concerned about the loss of revenue. If lawmakers were to approve a $100 credit, this would cost the state $350 million a year. If a $75 credit, this would add up to $267 million annually. The second bill would apply the rollbacks to all taxes no matter when they were enacted. Right now, the rollbacks only apply to levies passed before 2013.
- Wisconsin’s budget surplus may make room for school funding and property tax relief. The Badger State is bringing in an extra $4 billion this year, and Governor Tony Evers has earmarked a portion of this revenue for funding for public schools. As part of his plan, Evers has been negotiating a per-pupil funding increase that would extend over the next 400 years. Some have pushed back on this plan, stating that it burdens local taxpayers with education costs instead. The governor has also proposed allocating $1.3 billion to property tax relief. Property taxes across the state rose by an average of 8% in 2025. However, a number of Republican legislators argue that the surplus is one-time money and that the state cannot sustain an ongoing tax break. Another lawmaker has suggested an alternate proposal for the surplus: rebates of up to $500 for single filers and $1,000 for married couples filing jointly. The rebates would be issued automatically based on taxpayers’ 2024 returns.
Tax Planning Tips
How could A.I. impact the way taxpayers approach filing season?
Artificial intelligence is being integrated into every facet of modern life—should that include filing taxes? This might be a temptation as taxpayers look for last-minute ways to lower their tax bills. With the tax changes introduced by the “One Big Beautiful Bill” Act, many Americans are expecting to see larger refunds this year. This is partly due to the income tax brackets put in place and partly due to a slew of new deductions, including tax exemptions for tips, overtime pay, and car loan interest. However, these new deductions have fairly complicated rules around who qualifies and how much they are eligible to deduct.
This is where the temptation to use A.I. as a shortcut comes in. Just share your tax questions with a chatbot and get quick answers, right? Unfortunately, not. Tax experts are wary of A.I. tools’ tendency to misinterpret or fabricate information, also known as “hallucination.” Tax laws often change too frequently and include too much nuance for A.I. tools to keep up. This is also an area where the error rate and the consequences of an error are likely to be high. Instead, taxpayers are advised to work with a tax professional and to thoroughly document their eligibility when claiming new deductions.
Can taxpayers refuse to pay federal taxes? Experts weigh in.
The question is popping up more and more often in the public forum: What are the actual consequences of refusing to pay federal income taxes? Online influencers put forward a variety of claims: Income tax is unconstitutional. There are legal loopholes that allow you to opt out of income tax. But are any of these claims verified by actual experts in tax law?
Can an American who owes federal income tax simply refuse to pay? The short answer is no. The 16th Amendment gives Congress the power to levy and collect income tax. Federal courts have received countless lawsuits over the decades challenging income tax—and consistently ruled against them. In fact, the IRS has even published articles about “frivolous tax protester claims,” warning that those who attempt to avoid paying income taxes based on unsubstantial arguments may face civil and criminal penalties.
However, for those who face financial obstacles, that is a different problem with a range of possible solutions. First, if a taxpayer’s income is below the filing threshold or they qualify for significant tax credits and deductions, they may not owe federal taxes at all. Second, the IRS does offer means of support to taxpayers struggling to pay their tax bill. Some taxpayers may qualify for an Offer in Compromise, which allows them to settle their debt for less than they currently owe. Others may qualify to pay off their bill over time through an installment agreement. Finally, taxpayers who are struggling to cover basic living expenses may qualify for Currently Not Collectible status.
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The influencer marketing industry was able to grow during Covid as many advertisers had to adjust or cancel their marketing campaigns. This was because more people were sitting at home consuming content on social media. This new opportunity for smaller influencers has created a new group of taxpayers who need to know their new filing obligations. They’ll also be open to tax planning strategies that you have to help them reduce their tax liability.
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