| Good morning from Chattanooga, |
| Two things happened this week that are worth your attention before the calendar flips. The Social Security Administration locked in higher payroll numbers for 2027, and the IRS started pushing out automatic refunds to adoptive families, no amended return required. Underneath both is a theme that keeps coming up: the tax calendar doesn't wait for April, and the moves you make in the next ten weeks matter. |
|
By the numbers
|
|
$192,300
2027 Social Security wage base
| |
about $400
Avg. Chattanooga property tax increase 2026
| |
more than 50,000
Adoptive families receiving automatic IRS refunds
|
|
|
|
IN THIS ISSUE
|
1
|
The Social Security wage cap is going up, and your paycheck math changes with it |
|
2
|
Adoptive families may have a refund coming, and no paperwork is needed |
|
3
|
Ghost preparers are a real risk, and the IRS says the problem is bigger than it looks |
|
4
|
Chattanooga property taxes: a lower rate, but a higher bill for most owners |
|
5
|
Around Chattanooga: IBMA World of Bluegrass comes to downtown Chattanooga this week, and 2 more coming up |
|
|
|
The lead · PAYROLL WATCH
|
|
The Social Security wage cap is going up, and your paycheck math changes with it
|
| Starting January 1, 2027, the Social Security wage base rises from $184,500 to $192,300, meaning higher earners and their employers each owe Social Security tax on an additional $7,800 of income. |
| The Social Security Administration announced the change alongside a 3.6% cost-of-living adjustment for retirees. For most workers earning under $184,500, nothing changes. But if you or a key employee earns above that line, the 6.2% Social Security tax keeps running $7,800 longer into the year than it did in 2026. For small business owners running payroll, that also means a matching $7,800 more on the employer side. |
| |
Why it matters: If you run payroll or receive a W-2 above $184,500, update your budget now so the January surprise doesn't land as a cash-flow problem in February.
|
|
|
Read at Journal of Accountancy →
|
|
|
FAMILY TAX
|
|
Adoptive families may have a refund coming, and no paperwork is needed
|
| The IRS has started sending automatic refunds to more than 50,000 taxpayers who carried forward adoption tax credits from prior years, following a new Treasury interpretation of the law. |
| Under the clarified rules, adoption credit carryforwards from tax years 2020 through 2024 can increase the refundable portion of the credit on your 2025 return, up to $5,000 per qualifying child. The IRS says it will identify eligible families on its own and expects most refunds out before year-end. You do not need to file an amended return to receive it. |
| |
Why it matters: If you adopted a child in the last five years and carried an unused adoption credit forward, check that your address and banking information on file with the IRS are current so the refund reaches you.
|
|
|
Read at Accounting Today →
|
|
|
FRAUD ALERT
|
|
Ghost preparers are a real risk, and the IRS says the problem is bigger than it looks
|
| A new Government Accountability Office report found that the IRS is struggling to track so-called ghost preparers, paid tax preparers who don't sign the returns they file, leaving clients exposed to stolen refunds and fraud liability. |
| The problem is that six separate IRS offices share responsibility for the issue, and the agency's databases don't communicate well enough to connect the dots. Ghost preparers can pocket your refund, file false information under your name, then disappear. Under current law, the taxpayer, not the preparer, is left holding the bill for what's on that return. |
| |
Why it matters: Every legitimate paid preparer must sign your return and include a Preparer Tax Identification Number: if yours is unsigned, that is the first sign something is wrong.
|
|
|
Read the full story →
|
|
|
LOCAL NUMBERS
|
|
Chattanooga property taxes: a lower rate, but a higher bill for most owners
|
| The city approved its lowest-ever property tax rate at $1.93 per $100 of assessed value for fiscal year 2026, but rising reassessments mean the average Chattanooga property owner will still pay about $400 more this year than last. |
| That gap between the headline rate and the actual bill is worth understanding. When assessed values climb faster than the rate falls, the net result is more tax owed, even though the rate itself set a record low. The city's combined sales tax rate sits at 9.25%, made up of Tennessee's 7% state rate plus a 2.25% Hamilton County addition, so local tax costs come from several directions at once. |
| |
Why it matters: If you are a Chattanooga homeowner or a small business owner watching overhead, the reassessment, not the rate, is the number driving your actual tax bill this year.
|
|
|
Read at NewsChannel 9 →
|
|
|
Quick hits
|
|
Around Chattanooga
IBMA World of Bluegrass comes to downtown Chattanooga this week
Starting tomorrow, downtown Chattanooga becomes the center of the bluegrass world for five days. The IBMA World of Bluegrass runs October 20 through 24, with the Bluegrass Ramble showcases, the annual Bluegrass Music Awards, and free outdoor Pickin' in the Park performances at Miller Park and Miller Plaza. If you haven't been before, the outdoor stages are genuinely worth stepping away from the desk for.
Also coming up
|
|
|
Tip of the week
|
Run a year-end payroll check before November
Pull a payroll register now and compare each employee's year-to-date wages against the new $192,300 Social Security wage base. If anyone is on track to cross that threshold in the last weeks of the year, you have time to adjust withholding projections and avoid a year-end reconciliation scramble. This also catches bonus payments that can push someone over the cap in December when there's no room left to correct course.
|
|
|
|
|
|
How was this issue?
|
|
Until next week,
Marcus, CPA & founder
|
|
| P.S. If you think you might be in line for that adoption credit refund and want a second set of eyes on your account, feel free to reach out. |