The World Cup Crosses All Kinds Of Borders Edition

It is easy to be cynical about the World Cup. For weeks, we’ve heard that the tickets are too expensive, the travel is too complicated, and the logistics are too much. Add in concerns about heat, commercialization—my son is among those grumbling about water breaks during games, even when temperatures are mild—and the sheer size of the tournament, and there appears to be no shortage of reasons to complain.

And yet, every four years, the World Cup still feels a bit magical. For a few weeks, strangers in different languages argue over the same call, celebrate the same goal, and hope—against all available evidence—that this could be their year. You don’t have to know every player to understand the belief that somehow, anything can happen.

You can see it in host cities like Philadelphia, where my daughter has been volunteering with FIFA. You can feel it watching an airline pilot dance with Curaçao’s “Blue Wave,” and hear it in the bagpipes carried along by Scotland’s Tartan Army. You can’t help but take a second look at Norway’s viral send-off photo, with the team dressed in authentic Viking gear—yes, really.

And then there are the moments that make the tournament feel less like a sporting event and more like a shared group chat: Spain’s 18-year-old phenom Lamine Yamal checking out Walmart, Germany soccer superfan Freddy discovering the Waffle House and Ella Langley, and fans from all over the world turning the ordinary into must-follow social moments. (Freddy, by the way, now has nearly half a million followers on X, formerly Twitter.)

The result is that the 2026 World Cup is not just the biggest tournament in soccer history. This year, it is also a vibe.

And that feeling—that we are all in this together—turns out to be true in tax, too. Tax rules follow money, work, and people across borders even when (or maybe especially when) it comes to sports. With the U.S. hosting 78 matches in 11 cities, including the final, those borders will matter to players, coaches, referees, and other tournament participants.

And there’s a lot of money (and tax) to be navigated. The top five highest-paid players at the 2026 World Cup earned more than $675 million last year. (Spoiler alert: Messi isn’t at the top.)

There’s also a lot of revenue headed to the U.S. Last year, FIFA projected that the World Cup would add up to $17.2 billion to GDP, roughly 0.05% of the U.S. economy.

And new billionaires are being minted every year, thanks to the sport. David Beckham retired from professional soccer in 2013 at age 38. Since then, he’s built a $1 billion empire, mainly in the U.S. (Fun fact: In 2005, the tax laws in Spain were changed to benefit wealthy foreigners. One was known as Beckham’s Law because Beckham was one of the first to take advantage of it—some speculate that it was actually written for him.)

He’s not the only soccer star to re-invent himself in the U.S. Lionel Messi, considered by many to be the greatest soccer player in the world, signed with Inter Miami in 2023, eschewing much bigger deals abroad—including a reported $500 million offer from Saudi Arabia’s Al-Hilal. It’s likely no coincidence that he landed in Florida, a state with no income tax.

And yes, I’m clearly a soccer fan. If you’re not one yet, be sure to check out our great Forbes coverage, including the sport’s impact on taxes, as the tournament continues. Not sure where to start? Check out this soccer guide for beginners and aficionados.

And with that, I’m off to watch a little soccer and think, inevitably, about taxes. Until next time, may your brackets be kind, your records be match-ready, and your favorite team give you fewer surprises than the IRS.Enjoy your weekend,

Kelly Phillips Erb (Senior Writer, Tax)

This is a published version of the Tax Breaks newsletter, you can sign-up to get Tax Breaks in your inbox here.

Questions

This week, a reader asks:

I’ve heard that if I run my tax returns through AI, I can write off my AI subscription. Is that true?

So, this tackles two issues at once.

So, first, for 2026, personal tax preparation fees are generally not deductible on federal returns. Before 2018, those fees were deductible on Schedule A as miscellaneous itemized deductions, but only to the extent that total miscellaneous deductions exceeded 2% of adjusted gross income. The Tax Cuts and Jobs Act suspended that deduction, and later legislation made the change permanent.

There is still an important exception for business-related tax prep costs. If part of your tax prep fee relates to a business, rental property, farm, or similar activity reported on a business or income schedule, that portion may still be deductible.

That said, the expense does not necessarily have to be paid to a tax professional. Generally, if you buy tax software, a tax guide, or another resource to help with business, rental, or farm tax matters, that cost may also be deductible as a business expense. Costs tied only to your personal return would not be.

The same basic idea could apply to AI help. For example, if you pay for an AI tool to help organize business records, summarize business receipts, draft client materials, or research business tax issues, the business-use portion may be deductible as an ordinary and necessary business expense. For a full-year AI subscription, deduct the business-use percentage based on a reasonable method, such as time used, number of projects, or another consistent allocation. For example, if you used the subscription 70% for business and 30% personally, you would generally deduct 70% of the annual cost. Occasional or incidental business use probably would not justify deducting the full year, so keep records showing how the subscription was used.

Statistics, Charts, and Graphs

AFP SpaceX’s expected initial public offering (IPO) could deliver an unexpected tax windfall to California, even after Elon Musk moved the company’s headquarters to Texas. The company’s offering, which would value SpaceX at roughly $1.77 trillion, is expected to create significant wealth for current and former employees, including thousands who still live and work in the Los Angeles area and may owe California income tax on stock-related gains (estimates suggest as many as 7,661 remain in the county).

That matters because California taxes high earners at rates of up to 12.3%, with an additional 1% tax on income over $1 million, while Texas has no personal income tax. The exact timing and size of the revenue bump remain uncertain, particularly because employee stock sales may be subject to vesting schedules, lockups, and staged sales, but the IPO could still generate meaningful personal income tax revenue for California.

(For more on how SpaceX’s expected IPO could mint thousands of employee millionaires with stock options, RSUs, and a private-company employee stock purchase plan, click here).

Taxes From A To Z: W is for Withholding Agent

A withholding agent is the person or business responsible for withholding tax from certain payments and sending that money to the IRS. You’re likely most familiar with withholding tax when it comes to your paycheck, but it can also apply to other payments, especially when money is paid to foreign persons or entities.

If you are the one making a payment that may be subject to withholding, the IRS may hold you responsible for ensuring the right amount of tax is withheld. This often comes up when a U.S. business pays a foreign person or company. For example, if a U.S. company pays royalties, interest, dividends, or certain service payments to someone outside the U.S., the company may need to determine whether withholding applies and remit any required tax to the IRS.

Even though the tax may technically be owed by the person receiving the income, the payer—the withholding agent—can still be on the hook for failing to withhold. That’s especially important when payments cross tax borders (See Pub 515 for more information about withholding agents paying income to foreign persons.)

And for ordinary withholding agent status, there generally is no formal IRS agreement to “opt in” to being a withholding agent. A person or business becomes a withholding agent simply by controlling or handling a payment subject to withholding.

Tax Trivia

With a population of roughly 156,000, Curacao, which went undefeated in its CONCACAF confederation qualifiers, is the least populous country ever at the World Cup (the record was previously held by Iceland with a population of 350,000 during the 2018 World Cup). For 2026, Curaçao’s individual income tax rates are progressive, starting at 9.75% and topping out at what rate?

(A) 15%

(B) 23%

(C) 37.5%

(D) 46.5%

Find the answer at the bottom of this newsletter.

Positions And Guidance

The IRS and its Security Summit partners announced a restructuring of the public-private partnership to strengthen protections against tax-related identity theft and fraud. The updated structure adds five work groups focused on earlier threat detection, stronger data protections, improved information sharing, and coordinated responses, with added emphasis on payroll-related risks.

The IRS released the June 2026 applicable federal rates and related prescribed rates in Rev. Rul. 2026-11, with short-, mid- and long-term AFRs increasing slightly from May. AFRs are commonly used to set minimum interest rates for tax purposes on related-party loans, including family loans, and the ruling also provides adjusted AFRs, Section 382 rates, Section 42 low-income housing credit percentages, and the Section 7520 valuation rate.

Noteworthy

Forbes is seeking professionals who have demonstrated outstanding success helping clients adopt, implement, govern, or scale AI solutions within CPA firms for its Top Consultants List. Find out more and submit your nomination here.

The IRS announced that 27 states have elected to participate in the Federal Scholarship Tax Credit program, which allows eligible taxpayers to claim a federal tax credit of up to $1,700 for qualified contributions to Scholarship Granting Organizations (SGO). To claim the credit, taxpayers must contribute to an SGO in a participating state that has submitted a list of qualified organizations to the IRS.

The AICPA honored seven CPAs during its ENGAGE 2026 conference in Las Vegas, recognizing their volunteer service and contributions to the accounting profession. The honorees included Mathieu Lupien as the inaugural recipient of the Mathieu Lupien Technology Advisory Volunteer of the Year Award, and six Standing Ovation recipients recognized for achievements in personal financial planning and technology advisory services.

Baker Tilly announced it has entered into an agreement to acquire Anchin, Block & Anchin LLP (Anchin), a New York-based accounting, tax and advisory firm serving privately held businesses, investment funds, and high-net-worth individuals and families. Baker Tilly will establish New York City as the firm’s headquarters.

Key Figures

That’s how many addresses the IRS provided Immigration and Customs Enforcement (ICE) under a controversial data-sharing agreement, according to a new report from the Treasury Inspector General for Tax Administration (TIGTA). ICE had requested address information tied to more than 1.2 million records, and the IRS ultimately released addresses after an automated process matched ICE-provided information against IRS records.

TIGTA found problems with the IRS’s handling of the matching process. According to the watchdog, the system did not accurately and consistently identify and match records. That means that some requests that should have been rejected may not have been, while other potential matches may have failed due to formatting differences.

The issues were largely tied to messy or inconsistent data. TIGTA said name and address fields included variations such as initials, multiple last names, hyphens, missing spaces, abbreviations, punctuation, and questionable ZIP codes. In some cases, the IRS system did not verify whether a five- or nine-digit number was actually a valid ZIP code, meaning entries with placeholder or otherwise invalid address information could still pass the initial screen.

Trivia Answer

The answer is (D) 46.5%.

The progressive rates in the country are 9.75%, 15%, 23%, 30%, 37.5%, and 46.5%. Similar to the U.S., Curaçao residents are taxed on worldwide income, while nonresidents with Curaçao-source income are taxed only on that income.

Curaçao also has special penshonado rules for qualifying foreign individuals who move to the island, generally aimed at people age 50 or older with foreign-source income. Under those rules, certain foreign-sourced income may be taxed at a preferential 10% rate.

Worth A Second Look

The links, clips, and tax takes readers loved (and a few you may have missed):

You can find last week’s newsletter here.

Tax Filing Deadlines

📅 June 15, 2026. Due date for your 2026 Q2 estimated tax payment.

📅 June 15, 2026. Last day for U.S. taxpayers living abroad to file without a further extension (payment was still due April 15).

Tax Conferences And Events

📅 June 18, 2026. Death, Taxes and What Comes Next. Forbes members-only webinar. Registration required.

📅 June 22-25, 2026. Latino Tax Fest. MGM Grand Hotel & Casino, Las Vegas, Nevada.

📅 July 13-15, 2026. NATP Taxposium. Huntington Convention Center, Cleveland, Ohio.

Feedback

We’d love your thoughts. What’s helpful? What’s confusing? What tax topics do you want more of? Email me directly—I read every message.

If you have a tax question, conference or tip for me, check out our guidelines and submit it here.