Happy Sunday, and welcome to Benzinga’s financial advisor newsletter.

Today we're discussing the growing trend of family offices turning to Alternative Investment Funds (AIF) for portfolio diversification, alongside the latest market developments including tariff uncertainties, dollar declines, and upcoming economic data releases that financial advisors should monitor.

So, let’s get into the Industry Chatter!

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INDUSTRY CHATTER

Average Tax Refunds Increase in 2025 Despite Fewer Early Filers

Recent IRS data reveals that tax refunds are substantially larger this year, even though fewer Americans are filing early returns. According to a Detroit Free Press report, this shift presents a valuable opportunity for tax professionals to guide clients through changing tax dynamics.

Larger Refunds for Early Filers

As of February 21, the average federal income tax refund rose to $3,453—a 7.5% increase from the previous year, according to the IRS. The IRS has distributed over $102.2 billion in refunds so far, marking a 10% increase over the same period in 2024.

Decline in Early Filing Numbers

Despite larger refunds, early tax filings have dropped by 4.2% compared to 2024, according to IRS data. This decrease affects both professionally-prepared returns (down 5%) and self-prepared submissions (down 3.3%).

New 1099-K Reporting Requirements

The IRS has lowered the 1099-K reporting threshold to $5,000 (previously $20,000), adding complexity for individuals with side hustles or online sales (IRS, 2025). This change has created confusion among taxpayers, especially regarding the distinction between business income and personal item sales.

Tax professionals should educate clients on accurately reporting these transactions to avoid potential penalties.

IRS Staffing Cuts and Potential Delays

The IRS recently announced the layoff of over 6,000 employees. This staffing reduction raises concerns about slower processing times.

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MARKET RECAP

Stocks Enter Correction Zone, Tariff Fears Hammer Consumer Confidence, Inflation Worries Hit 32-Year Highs: This Week In Markets

Wall Street wrapped up its fourth consecutive week in the red, a losing streak not seen since May 2022, and the S&P 500 index officially entered correction territory after sliding 10% from its February highs.

Investor anxiety remains high, fueled by the looming impact of trade tariffs touted by President Donald Trump and deep, abrupt spending cuts spearheaded by the DOGE office under Elon Musk.

February's inflation data brought positive news, reinforcing expectations for Federal Reserve rate cuts this year. The Consumer Price Index rose 2.8% year-over-year, easing from 3% in January and coming in below economist forecasts of 2.9%. Similarly, wholesale inflation remained unchanged on a monthly basis, marking a stark slowdown from January's 0.6% surge.

Yet, even these cooled-than-expected inflation prints failed to reignite risk appetite, as markets remained firmly focused on policy developments from the White House.

On Thursday, President Donald Trump threatened to impose a 200% tariff on European wines and alcoholic beverages unless the European Union removes its 50% duty on American whiskey.

Earlier in the week, the White House also announced tariffs on Canadian steel and aluminum will double to 50%, with a warning that auto tariffs could surge if Canada does not roll back its retaliatory duties. Trump further reaffirmed his commitment to reciprocal tariffs on global trade partners, set to take effect on April 2.

Consumer sentiment is reflecting the economic turbulence of a regime shift.

On Friday, the University of Michigan's latest survey showed a sharp decline in consumer confidence, with future economic expectations sinking to their lowest since July 2022 and long-term inflation expectations soared to their highest level since 1993 — a troubling sign consumers are bracing for persistent price pressures.

Against this backdrop, gold is once again shining as a safe-haven asset, drawing investors seeking protection. The yellow metal — as tracked by the SPDR Gold Trust (GLD) — surged to fresh all-time highs of $3,000 per ounce, securing gains for 10 of the past 11 weeks.

At the end of the week, markets rebounded amid confirmation that a government shutdown would be averted and the absence of trade-related headlines from Trump.

The Federal Reserve is widely expected to hold interest rates steady next week, but fresh economic projections may start to outline a stagflation scenario, characterized by slowing growth and stubbornly high inflation.

You might have missed…

Tariffs Threaten Automakers: Trade uncertainty threatens U.S. automakers, potentially slashing Ford Motor Co. (F) and General Motors Co. (GM) earnings amid tariff concerns.

THE WEEK AHEAD

US retail sales, Fed chair Powell speaks and interest rate decision, and EU leaders summit

Economic Data

• Monday: US retail sales and home builder confidence index

• Tuesday: US import price index

• Wednesday: US Fed Chair Powell press conference and interest rate decision

• Thursday: US initial jobless claims and EU leaders summit

• Friday: EU leaders summit and European Commission consumer confidence

Earnings

• Monday: Qifu Technology (QFIN), Science Applications International (SAIC)

• Tuesday: KE Holding (BEKE), XPeng (XPEV)

• Wednesday: PDD Holdings (PDD), General Mills (GIS)

• Thursday: Nike (NKE), lululemon athletica (LULU)

• Friday: Carnival (CCL), NIO (NIO)

Click here for the full calendar of economic data and earnings reports.

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