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
Trump settles his lawsuit against the IRS—and gains audit protection in the process. President Trump, his sons Donald Jr. and Eric, and their company recently announced that they would drop their $10 billion lawsuit against the agency. The lawsuit was connected to the president’s leaked tax returns and the search of his Florida home, Mar-a-Lago. Shortly after the announcement, Attorney General Todd Blanche signed an agreement that the federal government will not seek an audit or tax payments from the plaintiffs on any pending tax claims. The deal was met with criticism from a number of tax experts who believe the arrangement is illegal. The Justice Department stated that this only applied to current tax issues, not future tax returns. Each year, the IRS is required to conduct an audit of the president’s tax returns. The settlement also establishes a $1.8 billion “anti-weaponization” fund for investigating politicized prosecutions and providing compensation.
Meta lays off 8,000 employees and shifts 7,000 more to A.I.-centered roles. Massive layoffs at Meta reduced its workforce by about 10%. In an employee memo, CEO Mark Zuckerberg stated that the staff reduction was necessary because “success isn’t a given.” The social media giant already eliminated 1,000 employees in January and hundreds more in March. Then in April, Meta announced major layoffs and canceled plans to fill its 6,000 open positions. Instead, funds are purportedly being redirected to A.I. to help the company stay competitive. This means that roles related to A.I. infrastructure, foundation models, and monetization are expected to stay intact. Zuckerberg has stated that the company does not expect additional company-wide layoffs this year, though sources have said that another round of layoffs may happen in August. Meta is not the only company making layoffs to increase their investment in A.I. Cisco announced that 4,000 employees would be let go, and Microsoft is offering voluntary buyouts to about 7% of its U.S.-based workers.
Reebok, Champion, and Brooks Brothers fans may soon have a chance to become stockholders. Authentic Brands Group is the management firm behind well-known brands like Brooks Brothers, Champion, Guess, Juicy Couture, Reebok, and Sports Illustrated. The company recently hired Wynn Resorts executive Matt Maddox to become its next CEO. Founder and current CEO Jamie Salter spoke to the strategy behind this move—the company has almost gone public twice and is finally hoping to seal the deal within the next 12 months. Salter will stay on and focus on the mergers and acquisitions aspect of the business, while Maddox takes on day-to-day operations and prepares the company for growth. Authentic Brands Group currently generates about $38 billion in retail sales per year and hopes to grow into a $100 billion company. The company previously focused mainly on acquiring apparel brands but is shifting more toward entertainment.
What's New In The Tax World?
Jeff Bezos stirs up talk about eliminating income taxes in a recent interview
In his recent spotlight on CNBC, the billionaire and Amazon founder argued that the bottom 50% of income earners should pay no income tax. Current estimates suggest that the taxes paid by this group only amounts to 3% of U.S. federal income tax. Meanwhile, the top 1% of taxpayers pay about 40% of all federal income tax. This includes Bezos whose estimated net worth stands at about $279 billion. The tech mogul argued that reducing income tax to 0% for lower income earners could boost entrepreneurship.
In the same interview, Bezos spoke against raising taxes on the wealthy, saying it would not help the average taxpayer. This comes at a time when midterm elections are drawing near and taxes are at the center of debate. A number of Democratic lawmakers have been advocating for new wealth taxes for millionaires and billionaires. Meanwhile, Republicans’ “One Big Beautiful Bill” tax cuts have been critiqued as tax breaks for the rich.
What are the big tax proposals currently in play? This November, California voters will decide whether to approve a one-time billionaires’ tax. Earlier this year, Massachusetts Senator Elizabeth Warren proposed the Ultra-Millionaire Tax Act, which would impose a 2% tax on households and trusts worth more than $50 million, a 1% tax on billionaires, and a 40% “exit tax” on individuals worth $50 million who give up their American citizenship. New Jersey Senator Cory Booker also introduced the Keep Your Pay Act, which would make the first $75,000 in income tax-exempt for all married couples filing jointly.
On a local level, New York City Mayor Zohran Mamdani announced plans for a “pied-à-terre” tax, specifically targeting wealthy property owners who do not live in the city full time. This tax is supported by New York Governor Kathy Hochul and will apply to homes valued at $5 million or more. Jeff Bezos also spoke to this proposal in his interview and supported the idea of a tax on luxury second homes. Notably, Bezos primarily resides in Miami but owns three condos in New York City, valued at about $80 million in total.
Debates over tax policy will likely only intensify as November draws near.
State-By-State Updates
New Mexico faces disappointing results from its $512 million in state tax credits. The New Mexico Legislative Finance Committee recently completed an assessment of 24 state tax credits and tax cuts, each intended to create economic growth in the state. The credits in question were all effective during fiscal year 2025. Unfortunately, the study found that none of these tax changes generated a return on investment. In other words, the average tax credit brought in less than $1 in tax revenue for every $1 spent by the state. The most successful tax credit offers sales tax relief to businesses for manufacturing, but this credit only earned 16 cents for every dollar lost by the state. The least successful tax credits only generated one cent for every dollar spent—a sales tax exemption for small businesses on “Small Business Saturday” and a sales tax exemption for credit unions. However, a positive outcome was that 10 out of the 24 tax credits caused some economic growth. The highest ROI came from the state’s manufacturing investment credit, which produced $1.39 in economic benefit for every $1 in tax credits.
North Carolina edges closer to a limit on property tax hikes. The state House recently approved a constitutional amendment that would allow voters to make the critical decision—can lawmakers introduce a cap on property tax increases? The proposal must also pass the Senate to make it onto the ballot this November. The power move here is that constitutional amendments do not need approval from the governor to advance. Even if the proposal moves forward, the exact limit will not be determined until the 2027 legislative session. The idea for this amendment came from the House’s property tax reform committee as a way to provide tax relief. However, opponents to the idea are concerned about the effect on county governments. Property taxes fund local services that could end up underfunded if tax increases are capped. Others argue that the General Assembly already has the power to limit levies, so the bill will not be worth enacting.
Oregon nixes a gas tax proposal to fund transportation projects. Given the already-high gas prices across the country, it was hardly a surprise that voters resisted a tax that would add 6 cents to the cost of every gallon. In Oregon, the average price for a gallon of gas has already risen 35% over the past year. More than 80% of voters in the Beaver State shot down the measure, which would have increased the state’s gas tax, doubled vehicle title and registration fees, and introduced a temporary payroll tax hike. The revenue from these tax increases would go toward public transit systems. The state is currently facing a transportation funding gap that lawmakers are struggling to fill. Rising costs for labor and construction mean that the state may not be able to keep up with basic maintenance like fixing potholes, repaving roads, repairing bridges, and supporting snow plow operations. One of the reasons gas tax revenue is lagging is the growing popularity of fuel-efficient and electric vehicles.
Washington cities adjust to new statewide sales tax exemptions. A new law signed in March introduced the widely-debated “millionaires tax,” which introduces a 9.9% state income tax on taxpayers earning over $1 million annually. This part of the measure is expected to add billions to the state coffers. The second part of the law features a sales tax exemption for diapers, hygiene products, and over-the-counter drugs. Because sales taxes are also imposed on a local level, cities across the state are weighing what this means for their revenue. Many cities rely mainly on sales and property taxes for basic services like police and fire, as well as road maintenance and social service projects. In response to the gaps, the state legislature is planning to backfill city budgets, though the exact amount available has not been determined.
Tax Planning Tips
The enhanced premium tax credit didn’t make it to 2026—what has the impact been?
Lawmakers opted not to renew the expanded version of the Affordable Care Act (ACA) marketplace tax credits. As a result, deductibles have increased by an average of $1,000 for those with ACA marketplace plans. The lower-priced but higher-deductible “bronze” plans saw increased enrollment, rising from 30% to 40%. The “silver” plans (lower deductible but higher cost) saw a dip in enrollment from 57% to 43%. Overall ACA enrollment fell by 21.5% since the enhanced credits expired on December 31, 2025. This amounts to about 5 million people. The largest percentage of people who unenrolled had income in the 400% to 500% Federal Poverty Level range.
Monthly premiums also saw an uptick—the net cost rose from $113 to $178. This is the most direct effect of the end of the enhanced premium tax credit. The total enrollees still receiving a subsidy fell from 92% in 2025 to 87% in 2026. The number of new enrollees this year also fell by over 1 million compared to the same time last year.
Good tax planning stretches far beyond April—ask these questions today for tax savings tomorrow
The right time to start planning for the next tax season is always now! To help you get your head in the tax planning game, here are five questions to ask yourself:
- What has changed since last year? Taxpayers sometimes make the mistake of assuming they can take the same approach as last year. Not only do tax laws change year-by-year but personal circumstances can too. One example is the standard deduction vs. itemized deductions: make sure you actually do the calculation instead of defaulting to last year’s choice.
- What can I do today that will yield savings in April? Certain tax planning steps must be taken months in advance to count. For example, retirement contributions can be made today and may provide a tax deferral opportunity. Investment decisions will also impact your tax bill. Should you make a sale this year and pay that capital gains tax? Could it make sense to sell at a loss and take advantage of a tax deduction?
- Is my tax refund too high? Remember, a refund is not the same as savings. This might just mean that you overpaid throughout the year, either through quarterly estimated payments or withholding. Consider whether adjusting your tax payments might allow you to invest that money and earn actual additional income.
- Does the math support the tax planning moves I’m making? Taxpayers sometimes assume that things like charitable contributions and investments will help lower that tax bill. Without crunching the actual numbers, you won’t know whether that $1,000 donation is having the impact you hoped, and you may still need to offset your tax liability in other ways.
- Where do I need to ask for help? Tax planning is complex enough that leveraging the help of tax software and especially tax experts can make a major difference. If you run a business, inherited an estate, or are in a high-income year, seek advice from a Certified Tax Planner.
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Small Mistakes With Huge Costs for Your Client’s Tax Returns
We’ve all been there. A client walks into your office and, somewhere in the conversation, you realize that a seemingly minor oversight, a missed deadline, a form nobody filed, an election nobody mentioned, has spiraled into a five- or six-figure tax problem. In my years of practice, some of the most expensive mistakes I’ve seen weren’t the result of aggressive planning gone wrong. They were small, quiet errors. The kind that happens when a deadline slips, an election isn’t made, or a form gets overlooked entirely. The tax code is unforgiving in these situations, and the IRS has little sympathy for “I didn’t know.” This article walks through some of the most common, and most costly, small mistakes that can devastate your client’s tax situation, along with practical guidance for avoiding them.
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