Federal Reserve Delivers Second Consecutive Rate Cut, Signals Uncertainty Ahead

On October 29, the Federal Reserve approved its second straight interest rate cut, lowering its benchmark federal funds rate by 25 basis points to a range of 3.75%–4.00%. The move was backed by a 10–2 vote, reflecting divisions within the Federal Open Market Committee (FOMC) about the pace of easing. Fed Chair Jerome Powell emphasized that another rate cut in December is “not a foregone conclusion,” citing growing debate among policymakers and uncertainty about inflation and employment trends. For consumers and businesses, the latest cut could bring some relief through lower borrowing costs on mortgages, auto loans, and credit cards. However, the Fed’s cautious tone suggests taxpayers should avoid assuming a steady decline in rates when preparing for year-end financial and tax planning strategies.

 

2026 Social Security COLA and Earnings Limits Announced

Following delays caused by the recent government shutdown, the Social Security Administration (SSA) has released the 2026 inflation-adjusted figures. Benefits for Social Security and Supplemental Security Income (SSI) recipients will increase by 2.8%, impacting roughly 75 million Americans. The maximum earnings subject to Social Security tax will rise to $184,500, while the earnings limits for workers under full retirement age and those reaching full retirement age in 2026 will increase to $24,480 and $65,160, respectively. The higher Social Security payments will begin in January 2026, with SSI increases effective December 31, 2025

More details are available at: www.ssa.gov/cola/

 

IRS Issues Guidance on ERC Limitations Under the 2025 Act

The IRS has released Fact Sheet 2025-07 addressing the new limitations on Employee Retention Credit (ERC) claims for the third and fourth quarters of 2021. Under the 2025 One Big Beautiful Bill Act, the IRS is prohibited from allowing or refunding ERC claims filed after January 31, 2024, if those claims remain unresolved after July 4, 2025. The FAQs clarify that this limitation does not apply to claims filed after January 31, 2024, that were already refunded or credited before July 4, 2025. However, the IRS notes that standard compliance reviews and adjustments may still occur. Returns that include ERC claims subject to this limitation will continue to be processed, but refunds will not be issued for those claims after the cutoff date.

For more information: https://bit.ly/4qC4E7Y 

 

IRS Clarifies Operations During Federal Government Shutdown

In an October 21 statement, the IRS outlined which services remain available amid the ongoing federal government shutdown. While agency operations are limited, tax laws and filing deadlines remain in effect, and taxpayers are expected to continue filing and paying taxes as normal. The IRS will accept and process payments submitted electronically or by mail. However, refunds are being issued only for individual Form 1040 returns that are error-free, electronically filed, and eligible for direct deposit. Most other refunds will be delayed until normal operations resume. The agency continues to encourage electronic filing, as paper returns and correspondence will not be processed during the shutdown. While live phone assistance is restricted, automated toll-free services remain available for basic taxpayer inquiries.