Back-to-School Sales Tax exemption: A brief on tax reductions during the academic season
Earlier Back-to-School Shopping Trends and Mid-Year Tax Review
In the midst of economic uncertainty, parents are starting their back-to-school shopping earlier than ever, with over half (51%) doing so out of concern for rising prices due to tariffs and inflation. According to recent data, two-thirds (67%) of back-to-school shoppers had already begun purchasing items as early as July, a significant increase from the previous year (55%).
This proactive behavior is a response to the potential cost hikes expected from tariffs announced to take effect starting August 1, 2025. By shopping early, families are aiming to avoid these anticipated price increases on school-related imports. Retailers and consumers alike are also taking advantage of early discounts, shopping at discount stores, and leveraging summer sales to save on essentials like clothing, shoes, school supplies, and electronics.
While many have started shopping early, a large majority still plan to complete purchases later, often waiting for better deals or spreading out their budgets. This strategic shopping behavior is also influenced by shifts in back-to-school trends, with students increasingly requesting more detailed and tech-related items.
A mid-year tax review is another strategic opportunity for individuals to step back, evaluate where they stand, and make informed adjustments that could significantly impact their year-end tax outcome. This includes reassessing income, deductions, and tax withholdings to align tax planning with any changes in financial situation or goals. Retirement planning is an important aspect of this review, as choosing between a Roth IRA or a traditional IRA can significantly impact future income, tax burden, and financial flexibility.
Meanwhile, the Social Security Administration has proposed changes that could impact how individuals interact with the agency. Those who call the agency may soon need to go online to get a one-time code before they can generate a benefit verification letter, obtain a tax statement or replacement Form 1099, change their address, or request a claims status. This proposal has sparked concerns, particularly among seniors who may not have easy access to online services.
In tax matters, the value of tax professionals lies in their ability to interpret tax rules, apply judgment, and ask the hard questions that AI can't or doesn't know to ask. While automated tools offering general guidance are permitted, if they interpret tax rules based on someone's personal data, they may cross into regulated territory. The goal is not to compete with AI but to work with it, using technology to streamline processes and focus on providing personalised advice.
The IRS Nationwide Tax Forum will take place in various cities across the US from August 5-September 16, 2025. The National Association of Tax Professionals Las Vegas Tax Forum will also take place on September 17-18, 2025, at the Paris Hotel, Las Vegas, Nevada. Registration is required for both events, and discounts are available for some partner groups.
In other news, the IRS will apply any federal income tax refunds to your tax debt until it is paid in full. If you owe a federal or state government-related debt, it can be turned over to the Treasury Offset Program (TOP), which helps collect the debt by holding back money from a federal payment, such as a tax refund or Social Security check.
Finally, it's important to note that November 3, 2025, is the due date for individuals and businesses affected by storms in Arkansas and Tennessee that began on April 2, 2025, while September 30, 2025, is the due date for those impacted by terrorist attacks in Israel.
[1] Back-to-School Shopping Trends 2025 [2] Tariffs and Back-to-School Shopping 2025 [3] Back-to-School Tech Trends 2025
- In the realm of finance and business, understanding the potential impact of tax laws is crucial for individuals planning their retirement. For instance, making informed decisions about retirement accounts could translate to significant tax breaks in the future, a matter that the IRS workforce is well-versed in.
- As families prepare for back-to-school expenses, they might also want to consider a mid-year tax review to optimize their financial situation. This could include reviewing tax withholdings, deductions, and planning for potential IRS installment agreements, audits, or even tax refunds, all pertinent aspects under the purview of the IRS.
