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
- Tariffs and A.I. top the “Global Risks Report” for 2026. Published by the World Economic Forum, the report surveys 1,300 world leaders across government and business about the biggest short-term risks facing businesses today. The number one risk this year was “geoeconomic confrontation,” referring to increased competition and the weaponization of tariffs, regulations, supply chains, and other economic tools. The report expresses concern that these factors could lead to a reduction in global trade and negatively impact economies across the world. Increased inflation and asset bubbles are among the likely side effects of the current trade wars. Second in the ranking was misinformation and disinformation, likely boosted by abuses of artificial intelligence. The negative effects of A.I. is the fastest escalating risk in the report, jumping from 30th to fifth place since last year. Due to these and other factors, half of all leaders polled agreed that they expect turbulent times over the next two years.
- Who might receive an extra $11 billion due to tax refunds? The U.S. stock market. Deutsche Bank economists expect that U.S. stocks could receive a major boost this tax season. About one-third of inflows to U.S. stocks happen between mid-February and mid-April each year. This year, individual tax refunds could come in at $50 billion to $100 billion more than last year, making an increased infusion into the stock market even more likely. Some have made a comparison to 2021 when government-funded COVID-19 relief payments resulted in an uptick in stock investments. However, this year’s tax refunds will not quite match the bump from stimulus payment checks in 2021. Strategists also note that investors’ perceptions of growth and risk also factor into market gains. Deutsche Bank also reported that global earnings reached a 3.5-year high, jumping up by 15% in the final quarter of 2025 with the help of emerging markets and U.S. stocks.
- The Free Press becomes part of the new Paramount Skydance media conglomerate. Known for its skeptical outlook toward the political left, The Free Press was co-founded in 2021 by Bari Weiss, a former op-ed and book review editor for The New York Times. Over the past five years, the online publication has gained 1.5 million subscribers on Substack. Its 170,000 paid subscribers bring in over $15 million in annual revenue, according to The Financial Times. Weiss has now been named editor-in-chief as a part of CBS News, which is owned by Paramount Skydance. This is the latest move to revamp the news unit since the $8 billion Paramount Skydance merger. The merger was delayed in part due to a lawsuit against CBS news filed by President Trump regarding a “60 Minutes” interview with former Vice President Kamala Harris. The lawsuit was ultimately settled for $16 million. Shortly after the settlement, the FCC approved the Paramount-Skydance merger, a deal that also included Paramount Pictures, Paramount+, Comedy Central, and Nickelodeon.
What's New In The Tax World?
Why are tax refunds being issued more slowly this year—and how might this impact the economy?
Tax refunds are often the biggest one-time influx of cash a household sees each year. With the recent legislative changes, refunds are expected to be larger than usual. As of February 6, 2026, taxpayers were seeing an average boost of 10.9% compared to last year—rising from $2,065 to $2,290 per taxpayer. However, this early in the filing season, most refunds have not been issued yet. In fact, the IRS has only issued 7,403,000 refunds as of early February compared to 8,054,000 refunds for the same time period in 2025.
One reason for this is the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). If a taxpayer qualifies for either of these credits, this can create a delay, since legally, the IRS must hold these refunds until mid-February. Those receiving the EITC or ACTC will likely see their tax refunds starting on March 2, 2026. A second reason for the delay is simply that taxpayers are not in a hurry to file this year. As of February 6, the IRS had only received 22,351,000 individual income tax returns, compared to 23,589,000 returns at the same point in 2025—a decrease of 5.2%.
However, another factor is an apparent lag in IRS processing speed. Early numbers indicate that the IRS has processed 12.3% fewer returns than this time last year. This is a point of concern for later filers, since early filers tend to have simpler tax returns and are more likely to claim the standard deduction rather than itemizing. If the agency is struggling to keep up with returns at this point in the filing season, this could be an indicator of significant delays later on. Lastly, a number of taxpayers have not filed yet because the IRS has not made the forms they need available yet. Forms for reporting depreciation and the latest estimated tax payments forms are among those missing at the start of 2026.
How could delayed refunds impact the U.S. economy? A major question at this time of year is whether taxpayers will lean toward spending or saving their money? Economists with the Bank of America Institute anticipate that funds will be spent quickly by lower- and middle-income households who are more likely to wait on refunds to buy more expensive items. Though spending was low in January, the calmer weather and holiday sales led to a boost in February that is likely to increase as refunds and spring bonuses come in.
State-By-State Updates
- Georgians could see an extra $500 through the surplus tax refund program. The Peach State is holding onto a budget surplus that could mean good news for taxpayers who filed a state return for 2023 and 2024. But legislators are not stopping at issuing bonus refunds. The State Senate also passed two tax reform bills focused on lower state income taxes. Bill Number One exempts the first $50,000 in taxable income for single filers or the first $100,000 for married couples filing jointly. This change could reduce taxes for about two-thirds of taxpayers. Bill Number Two would reduce the state income tax rate by 0.5% each year until it reaches just below 4% in 2028. Opponents of these two bills are concerned about cutting into state revenue. Income tax generates $16 billion annually—half of Georgia’s yearly revenue. To offset the loss, supporters of the two bills have proposed cutting corporate tax credits. However, opponents of this move argue that Georgia cannot afford to potentially lose businesses and jobs.
- Montana homeowners can reduce their property taxes—if they act before March 1st. A recent bill provided tiered property tax rates and property tax rebate opportunities for Montanans. Governor Greg Gianforte has been sounding the alarm that the deadline is approaching to apply for the 2026 “Homestead Reduced Rate.” This tax benefit is available for primary residences and long-term rentals. Fortunately for homeowners who applied for and received 2025 property tax rebates, those who qualified in 2025 will automatically receive the 2026 benefit as long as ownership of the residence has not changed. To qualify, the home must be the taxpayer’s primary residence for at least seven months in the 2026 calendar year. Renters also have the option to apply for the “Long-Term Rental Reduced Rate,” which is available to tenants who have held their residence for periods of 28 days or longer for at least seven months of the year.
- New York may launch a pre-tax benefit to cover commuting costs. This new bill would allow employers to set aside their pre-tax earnings to pay for qualified transportation expenses. The tax exemption only applies to state taxes. The setup has been compared to a health savings account but for transportation. Exactly what expenses qualify would be determined by employers—who would also need to formally opt into the program. Examples include buying or repairing a bicycle, bike shares, ride share services, parking costs, and public transit passes. The one exclusion is costs related to buying or repairing a car, since the aim is to incentivize other modes of transit. Supporters of the bill name transportation and child care expenses as the top challenges faced by employees and an obstacle for employers looking to recruit new workers with affordable employee benefits.
- Oregon lawmakers push back on federal tax policies and forge their own path. A new bill just passed by the State Senate would disconnect Oregon’s tax structure from the federal tax cut to avoid a budget gap that could amount to hundreds of millions of dollars. Instead of mirroring all the changes introduced by the “One Big, Beautiful Bill” Act (OBBBA), Oregon would introduce its own tax cuts. Included in the lineup are an expanded Earned Income Tax Credit (EITC) and new tax credit for job creation. The state-level EITC would be increased to 14% of a taxpayer’s federal credit (up from 9%) or 17% for taxpayers with a dependent under age 3 (up from 12%). The job creation tax credit would provide up to $1,000 available to any employer who creates net jobs that pay a least 150% of the minimum wage. Taxpayers can qualify for up to 10 credits. The bill does keep a few of the OBBBA policies, including no taxes on tips or overtime pay.
Tax Planning Tips
Heirs are waiting for more than a year to receive tax refunds after a loved one’s death
Data collected from January 2021 through July 2024 shows that it takes the IRS an average of 444 days to issue tax refunds after someone’s passing. This is a dramatic difference from the 21 days it takes most taxpayers to receive refunds during a typical tax season if they file electronically and use direct deposit. This extended timeline can be especially problematic if beneficiaries are waiting on tax refunds to help pay for funeral expenses, expenses related to closing an estate, or additions to an inheritance.
What is the reason behind these gargantuan delays? When a taxpayer files Form 1310 to claim a federal tax refund on behalf of a deceased taxpayer, the IRS begins a manual process of handling the refund. Though the agency reduced more than 70% of its backlog last year, thousands of taxpayers are still waiting on refund claims submitted over a year ago. While taxpayers cannot directly influence the speed of IRS operations, they can prepare by consolidating your account and keeping detailed records, including how to find key information after your death and who to contact if your beneficiaries need assistance.
So you finally received this year’s tax refund—now what? Make your next steps financially strategic.
With higher-than-usual tax refunds expected this year, many Americans may be planning big purchases. For some who have been waiting on a needed item, repair, or investment, this may be the wisest move. For others, however, this is an opportunity to maximize the impact that this influx of cash has on your budget this year and in the years to come.
One option is to deposit the money into a high-yield savings account or certificate of deposit account (CD). Interest rates are lower now than coming out of the COVID-19 pandemic, but they are still fairly high and provide a simple way to build upon that money. 12-month CDs are offering an interest rate of about 1.61% compared to a standard savings account, which is offering an average of 0.39%.
Another smart move is to pay off any high-rate debts. Many taxpayers are carrying sizable credit card debt, which has an average interest rate of about 21%. Similarly, if you owe money on a high-rate mortgage, now may be the right time to pay that down. Though mortgage rates are dropping, they are still much higher than a few years ago, and unless you are in the low 2-4% range, reducing your mortgage now can save you more money over the long run.
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CURRENT EDITION
Kwong v. United States: A Pandemic-Era Decision That Could Reshape Tax Deadlines, Penalties, and Refund Opportunities
The 2025 court decision, Kwong v. United States, is quietly gaining traction among tax professionals for exactly these reasons. Its implications could be far-reaching, potentially opening the door to refund claims, penalty abatements, and revived tax deadlines that many assumed were long closed. But there’s a catch: the opportunity to act may be time-sensitive, and the window to preserve claims could begin closing in just a few short weeks. Here’s what the court actually decided and why it matters now.
Untapped State Benefits for Veterans: Planning Opportunities for Advisors and Families
Two veteran clients with seemingly similar financial profiles can end up with very different outcomes, simply based on where they live and how informed they are. Much of that difference comes down to smaller, state-specific benefits that tend to sit just outside the typical planning checklist. But when layered alongside federal veteran benefits, they can reshape major decisions like where to buy a home or settle long-term. For advisors working with military families, recognizing how these state benefits show up in real life can go a long way in helping veteran clients feel seen, understood and better supported in the decisions ahead.
What The Heck Is A Cash Balance Plan?
One of my obsessions is about what we can do for somebody who has high earnings and not much else. When I review multiple collections of year-end tax tips, there is not much for HENRY (high earnings not rich yet) other than a couple of Captain Obvious things like maximizing 401(k) contributions. Henry doesn’t have losses to harvest and is not about to set up a private foundation or a donor advised fund. Charity begins at home. So I got excited when I saw ads about cash balance plans. Was this the great white whale that I have been seeking that is a good answer for Henry? Or is it some sort of scam? As we will see it turns out to be neither, but it is probably something you should consider for some high earners.
