May 12th, 2026
By Margaret Allen
PRESENTED BY Crowne Point Tax & Wealth Counsel
THIS WEEK
Shopping Abroad This Summer? Make the Tax Code Work for You Before You Fly Home
Three major tax provisions quietly reshaped the 2026 landscape, and most filers have not caught up. The expanded standard deduction now sits at $15,750 for single filers and $31,500 for joint filers, shrinking the pool of itemizers but freeing up bigger baseline write-offs. A new above-the-line deduction for tips and overtime income is already lifting paychecks in service and hourly sectors. And the temporary expansion of the Child Tax Credit pushed the refundable portion higher for the 2025 filing season, with another bump scheduled for tax year 2026. Together, these changes mean the old rules of thumb — itemize aggressively, defer income, max every retirement bucket — need a fresh look this year.
A few principles set the savvy travelers apart:
VAT rates across the EU typically run from 17% to 27%, so even a moderate shopping trip can mean hundreds of dollars back in your pocket.
The refund is not automatic. You must request the VAT refund form, sometimes called a Tax Free form, at the time of purchase, and the store must be a participating retailer.
Refunds only apply to goods you are taking home unused. Open the box once you are back, not before, or risk having the refund reversed at customs.
Treating VAT like a coupon at checkout is the wrong frame. Treat it like a deduction you have to document, and the math starts working in your favor before you ever leave the store.
ALSO THIS WEEK
Five Practical Moves to Save Money When You Shop in Europe
Beyond the VAT refund itself, the difference between a costly trip and a smart one usually comes down to a handful of habits travelers form before they ever board the plane. A recent Condé Nast Traveler guide and several consumer finance breakdowns line up on the same handful of moves: the basics still beat the gadgets, and a little airport prep beats almost any in-flight rewards trick.
A few worth folding into your prep checklist:
Carry your physical passport when shopping. Most stores will not issue a VAT refund form without seeing it, and a photo on your phone is rarely accepted.
Pay in the local currency, not in dollars. When the card terminal asks if you would like to be charged in USD, decline. The convenience exchange rate is almost always worse than your card network’s.
Use a credit card with no foreign transaction fees. A 3% fee on a 1,500 euro shopping trip is roughly $50 you never need to spend.
The common thread is that tax savings often come from timing, eligibility, and coordination rather than from last-minute scrambling. The people who benefit most are usually the ones planning before the opportunity closes.
QUICK HIT
The Minimum Spend Rule Most Travelers Forget
Many EU countries set a minimum purchase threshold before a VAT refund can be claimed, and it is not the same everywhere. France currently requires a minimum spend of about 100 euros at a single retailer on the same day. Italy sits closer to 70 euros. Spain dropped its threshold to zero a few years ago. The takeaway is simple: if you are shopping multiple stores, ask before you split a purchase across them. Consolidating receipts at one retailer can be the difference between a refund and a missed one. Read more here.
THE BOTTOM LINE
Three Travel Money Moves Worth Making Before You Pack
A successful European shopping trip is built before the suitcase is. Three moves stand out right now: review your credit card lineup and confirm at least one card carries no foreign transaction fees, set up a travel notification or contactless wallet so payments are not blocked the moment you land, and bookmark the VAT refund process for the countries on your itinerary so the steps are familiar before you walk into your first store.
There is also a practical reason not to leave this for the airport. VAT refund operators like Global Blue and Planet Tax Free run separate kiosks at most major airports, and queues during summer peak weeks routinely stretch beyond the recommended check-in window. Travelers who walk in with their forms already filled out, receipts organized, and goods accessible move through the line in minutes. Travelers who arrive cold often miss the validation deadline entirely, which means the refund disappears no matter how much was spent.
The main takeaway is the same one we keep coming back to: the difference between paying full price and paying smart price is rarely about luck. It is about doing the small, deliberate work before the moment arrives. Whether the topic is tax planning at home or shopping abroad, the rule does not change. Plan before the window closes, not after, and let your refund work as hard as your wallet does.
That’s the week. See you next issue.
Margaret Allen
Editor-in-Chief
Smrtt Money
P.S. Tax season doesn't wait — and neither do the rules. The sooner you have a strategy in place, the more you keep. Book your free 30-minute session here.