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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In The Headlines
- Costco takes the Trump administration to court over tariff payments. The popular warehouse club is requesting a full refund on all tariffs paid this year. Tariffs have been at the center of a number of lawsuits since President Trump imposed his “reciprocal” and “fentanyl” tariffs at the beginning of 2025. Now the businesses and state governments protesting the tariffs are awaiting a verdict from the Supreme Court. If the Supreme Court agrees with the plaintiffs that these tariffs are unconstitutional, the federal government could be required to issue billions of dollars in refunds. So why not wait for the official ruling? Costco is attempting to protect itself in case the Supreme Court either rules in favor of the tariffs or blocks future levies but does not require the government to pay back the estimated $90 billion it has already collected. The retail giant is also nearing a December 15th “liquidation” deadline, which is when U.S. Customs and Border Protection will make a final calculation of tariffs on imported goods.
- Are we on the verge of a department store comeback? Macy’s sets a positive trend, reporting its strongest growth in over three years. This marks the second consecutive quarter that Macy’s has increased its full-year sales and earnings outlook. Net sales are expected to come in at $21.48 billion to $21.63 billion—much higher than its previous projections of $21.15 billion to $21.45 billion. Early estimates may have been cautious due to higher tariffs and lower discretionary spending trends among consumers. So what is the retailer’s secret? The store recently invested in increased staffing and eye-catching visual displays. However, Macy’s also shuttered 64 stores within the last year as part of their turnaround strategy. Then again, Macy’s isn’t the only department store seeing higher sales. Kohl’s recently raised its annual profit forecast and saw its stocks go up by 20% that same day. Dillard’s also reported a 7.5% year-over-year increase in its quarterly earnings and a 19% increase in its stock prices, leading to a record-high.
- AI firm Anthropic may be aiming for one of the all-time biggest IPOs. The world of AI is proving to be as competitive as ever. According to a report by the Financial Times, Anthropic, maker of popular chatbot Claude, is planning a 2026 initial public offering that is expected to have a record-high valuation. Part of the push to go public is Anthropic’s rivalry with OpenAI. The ChatGPT creator is reportedly also weighing a 2026 IPO, though representatives from both companies have declined to confirm their plans. Anthropic recently made significant investments including starting a $50 billion infrastructure build-out, tripling its international workforce, and hiring former Airbnb executive Krishna Rao as its new Chief Financial Officer. The AI company is also in talks with a number of potential investors, such as Microsoft and Nvidia who have already committed a combined $15 billion. In total, Anthropic’s private funding goal is likely to reach over $300 billion.
What's New In The Tax World?
New tax-advantaged “Trump Accounts” receive a $6.25 billion boost from the Dell family
Of the many provisions introduced by the “One Big Beautiful Bill” Act, one has gotten very little press until this month. A multibillion dollar donation from tech founders Michael and Susan Dell suddenly brought Trump Accounts into the spotlight. This new program creates individual investment accounts for children born between January 1, 2025, and December 31, 2028. The federal government will kickstart these accounts with a $1,000 deposit per child. Then starting on July 4, 2026, family members and others can make annual contributions of up to $5,000. Employers can contribute up to $2,500 per account, and nonprofits may be allowed to contribute beyond that $5K limit, though the exact rules have yet to be finalized.
Parents and guardians can file online Form 4547 to establish an account. To be eligible, your child must be a U.S.-born citizen, and both parents must have Social Security numbers. The Treasury Department will follow up with enrollees starting in May 2026. The funds must be invested in a low-cost, diversified U.S. stock index fund or the equivalent. Funds cannot be withdrawn until the child turns 18, but taxes are deferred on growth until the money is withdrawn. Once withdrawn, the funds can be used for higher education expenses, post-secondary education credentialing, buying a home, or starting a business.
What is expected to change given the Dells’ hefty donation? That $6.25 billion will go toward expanding the number of children who can set up a Trump Account. Children ages 10 and under who were born before January 2025 can receive a $250 starter fund. This expansion is only available to children living in ZIP codes where the average income is less than $150,000. However, estimates suggest that about 75% of ZIP codes across the U.S. will qualify. The Dells are aiming to reach at least 25 million children through this expanded program.
Critics of the program have named that families already have access to government-provided savings accounts and that the new Trump Accounts do not improve upon the range of options. For instance, 529 accounts are available for college savings or K-12 tuition. In addition to tax-deferred growth, 529 accounts enjoy tax-free withdrawals, and certain states offer tax deductions or credits for contributions to these accounts.
State-By-State Updates
- Florida may change its constitution to create property tax relief for homeowners. A collection of four Republican-led proposals would eliminate non-school homestead property taxes. However, this change would cut revenue for local governments by about $14.1 billion within the first year. While some lawmakers have argued that the state has a spending problem and reduced revenue may force necessary cuts, others are concerned that local services will take the hit, including education, emergency services, infrastructure, recreation programs, and water management. Critics of the proposals also fear that business property taxes will go up instead. In addition to the four measures on homestead taxes, the state is weighing three other constitutional amendments and a separate property-tax bill sponsored by the House Speaker. Governor Ron DeSantis has spoken out about prioritizing property tax cuts, but he has also publicly disagreed with the House’s proposals. The governor has been pushing lawmakers to agree on a single tax proposal to appear before voters on the November 2026 ballot.
- Illinois property owners are protesting skyrocketing tax bills. Many residents of Cook County are facing tax increases of more than 100% on their homes. Chicago homeowners have especially been hit by major tax hikes. Estimates show that homes in the West Garfield Park neighborhood saw an average increase of 133%, and homes in the North Lawndale neighborhood saw an average increase of 99%. Neither is a high-income area. Unfortunately, Chicago’s second installment property tax bills arrived months late. Instead of receiving bills in July with payments due by the end of August, homeowners just received their bills in November. That leaves little time between the due date in December and the next tax bill, which is due in April. In response, many taxpayers have been lining up to appeal their property assessment. However, the Assessor’s Office says that the higher bills are not just because residential property values went up but because commercial property values went down. This shift has caused a heavier burden on residential owners.
- Massachusetts homeowners are gearing up for a property tax increase in 2026. Boston Mayor Michelle Wu is warning residents that property taxes could rise by 13% in the new year. This could mean an extra $780 on the average homeowner’s tax bill. The mayor has been advocating for shifting more of the city’s tax burden from residential properties to commercial properties, but no legislative changes have come about yet. Commercial property values have been dropping since the pandemic. Over the past two years, they decreased by a total of 11%, but residential values rose by a total of 5% during the same time period. These changes mean that this year Boston-based businesses will see a 4.4% decrease in their property tax bills. To address the rising residential property taxes, Wu put forward a home rule petition, which would temporarily allow the city to shift more of the tax burden onto commercial property owners. The proposal has been approved by the Boston City Council and Massachusetts House of Representatives but appears to be stalled in the state Senate.
- Vermont property taxes could rise 12% next year to cover public education costs. In previous years, lawmakers used one-time payments to lower tax bills for residents, but no long-term solution has been agreed upon. If lawmakers opt not to pass new legislation, property taxes in the Green Mountain State will have increased by almost 41% over the past five years. Some lawmakers are concerned that younger families may choose to relocate rather than buy homes in the state given the rising tax rates. Proponents of tax relief say that the extra funding for schools does not seem to be making a difference. They point to plummeting test scores and lower student enrollment. This is despite Vermont spending an additional $942 million on public education within the last two decades. Some have suggested focusing on ways to streamline school budgets including consolidating Vermont’s 100-plus school districts and redistributing how tax dollars are allocated.
Tax Planning Tips
Capital gains taxes are causing Baby Boomers to reconsider their approach to estate planning
More and more retirees are holding onto their homes to avoid a high tax bill. Under current law, when residential property sales yield profits over $250,000 for single filers (or over $500,000 for married couples), the seller will owe capital gains taxes. The exact capital gains tax rate depends on your overall income: it can be as low as 0% or as high as 20%. Since property values across the U.S. have doubled in recent years, more homeowners are facing this hefty tax bill.
What is the solution? If the homeowner instead holds onto their home until their passing, their heirs will typically not have to pay tax on the property. There is a federal estate tax, but the 2025 threshold is just under $14 million for single taxpayers (and about $28 million for married couples), so most beneficiaries do not have to pay it. Heirs receive a “stepped-up tax basis,” which means they don’t have to pay capital gains tax unless they later sell the home. However, this trend has had an adverse side effect: younger families are having trouble buying larger homes because fewer affordable options are on the market.
A tax benefit for student loans is expiring—here’s what that means for 2026
The American Rescue Plan Act of 2021 changed how student loan forgiveness was treated. Previously, when student loan debt was canceled by the government, that student still owed tax on the forgiven amount, levied at their usual income tax rate. As of 2021, the forgiven loan became tax-free. However, this policy is set to expire at the end of 2025, and the Trump administration is not showing signs of looking to renew it. Without new legislation, loan forgiveness will return to being taxable in 2026.
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CURRENT EDITION
This Is The Only Other Year-End Tax Tip Guide You Need
So as I did last year, I have reviewed a multitude of year-end tax tips articles. One of them is a real standout that you should be sure to check out. If you missed it, you should definitely roll back to the November 15 edition and go over Dominique Molina’s piece, which focuses on what you need to do sooner rather than later in response to OBBBA. It provides more detailed, relevant, actionable advice that you won’t see anywhere else than any of the multitude of pieces I have reviewed. As for the rest, I will give you a basic rundown of what I call the SOSO (same old, same old) and a few suggestions that stand out as different that I will get into a little more along with some thoughts of my own.
The Corporate Vault: How to Use a C Corporation to Stockpile Cash for the Future
When most people think about saving for the future, their minds jump to retirement accounts—401(k)s, IRAs, maybe even defined benefit plans. But business owners have another option that often goes overlooked: using a C corporation as a strategic savings vehicle. By leveraging the flat 21% corporate tax rate, smart income shifting, and careful timing of distributions, business owners can “stockpile” cash inside a corporation, building wealth for future use without the red tape of traditional retirement plans. Want to see how top tax strategists legally use C corporations as private retirement vaults while avoiding double taxation and IRS scrutiny? Continue reading to learn the blueprint.
When TikTok Tax Hacks Backfire: Helping Clients Misled by Social Media Scams
Jessica, a self-employed consultant, was thrilled when she found a viral TikTok video promising a “little-known” tax trick. The video claimed she could get a huge refund by claiming a special Fuel Tax Credit and even writing off her family’s beach vacation as a business expense. Following the advice, Jessica filed an amended tax return and waited eagerly for a windfall. A few months later, instead of a refund check, Jessica received a stern IRS notice. Her so-called credits were disallowed, her refund was denied, and she now faced penalties. Jessica isn’t alone. Every tax season, well-intentioned taxpayers get lured by false tax advice on social media, only to end up in trouble. As tax professionals, we often meet panicked clients like Jessica who need our help to untangle the mess.
