From new tariffs and audit crackdowns to updated tax rules on overtime and Social Security, this week’s headlines signal an era of deeper scrutiny and shifting opportunities for clients.
We break down President Trump’s sweeping tariff blitz, including stacking penalties on India and new levies on EU and Latin American goods. Plus, two IRS enforcement alerts: one targeting e-commerce sellers, the other going after cash-heavy businesses. Also in the spotlight: a new federal deduction for overtime pay, and big Social Security changes impacting retirement timelines and payroll taxes.
Here’s what to watch this week.
1. Trump’s Tariff Blitz—India, Brazil, EU Face New Trade Penalties
Yahoo Finance
Trump hits India with additional 25% tariff as world braces for sweeping duties
President Trump has unleashed a wave of new trade actions, including an additional 25% tariff on India for its Russian oil imports—bringing India’s total tariff exposure to 50%.
Other headline moves:
- Mexico received a 90-day delay on increased tariffs.
- Brazil faces new 50% tariffs (excluding orange juice and aircraft parts).
- EU exports will face 15% tariffs under a new deal-in-progress.
- South Korea secured a deal at a 15% flat tariff rate, favoring U.S. exports.
- The de minimis exemption on imports under $800 will end Aug. 29.
Global firms, especially those in cross-border logistics or goods importation, should evaluate supply chain risks and reassess pricing, VAT compliance, and foreign tax credits.
2. IRS Launches Enforcement Campaign Against E-Commerce Sellers
Yahoo Finance / ACCESS Newswire
IRS Targeting E-Commerce Sellers in 2025
Online sellers on Shopify, Etsy, Amazon, and similar platforms are now in the IRS’s crosshairs. The agency is using expanded 1099-K reporting, third-party payment matching, and AI-driven flagging systems to pursue income underreporting.
Even small vendors may see unexpected notices if shipping fees, returns, or platform refunds inflate their reported income. Sellers relying on Venmo, PayPal, or Stripe should review what counts as business income—and what doesn’t—before year-end.
Advisors with e-commerce clients should urgently review recordkeeping practices and prepare for possible IRS correspondence.
3. New Overtime Deduction Offers Limited, Retroactive Relief
Susan Tompor for USA Today
Overtime pay tax break: What the new IRS rules really mean
A retroactive tax break on qualified overtime is now live under the OB3 Act. Employees may deduct the “half” portion of time-and-a-half pay earned in 2025, retroactive to Jan 1.
However, eligibility is subject to income caps:
- $150,000 MAGI for single filers
- $300,000 for joint filers
While the White House touts up to $1,400 in annual tax savings, experts warn the definition of “qualified overtime” is nuanced and will require taxpayer diligence. Expect new 1040 worksheets in early 2026.
4. IRS Scrutinizing Cash-Based Businesses in 2025
Morningstar / ACCESS Newswire
IRS Begins Scrutinizing “Cash-Only” Businesses in 2025
The IRS has launched a renewed compliance campaign targeting restaurants, salons, barbershops, and other cash-heavy operations. Armed with new data filters and audit tools, the agency is focused on unreported income risks in businesses lacking point-of-sale systems or digital deposit trails.
Even compliant business owners may be flagged if recordkeeping is weak or cash deposits aren’t reconciled to returns. Advisors should encourage proactive income reviews and stronger documentation practices before year-end.
5. What’s Changing in Social Security for 2025
USA Today
Social Security updates for 2025
A series of Social Security changes are going into effect for 2025, with wide-ranging impacts for workers, retirees, and employers:
- Full retirement age rises to 67 years and 6 months
- The payroll tax wage cap increases to $180,500
- Cost-of-living adjustment (COLA) for 2025 set at 2.6%
Advisors should begin educating near-retirement clients now, particularly those deciding whether to delay benefits, continue working, or shift investment timelines.
Your Takeaway This Week
Global trade, IRS enforcement, and income-specific deductions are making headlines—and tax advisors are squarely in the middle of the action.
No matter if your clients are scaling e-commerce businesses, working hourly jobs, planning retirement, or running cash-heavy operations, staying proactive is more important than before. This week is a clear reminder that compliance and strategic planning are non-negotiable.
Want help navigating these policy changes or building modern advisory workflows?
Talk to Harness today and learn how our platform helps tax firms stay ahead of what’s next—from AI tools to vetted financial advisor referrals. (We were recently featured in NerdWallet for doing just that.)
Schedule an introduction today.
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