Your August 2026 Financial Update

Back-to-School Tax Breaks You May Be Missing

August means school supply runs, tuition payments, and for many families, a significant hit to the budget. The good news: several tax benefits can offset those costs. The American Opportunity Tax Credit covers up to $2,500 per eligible student for the first four years of higher education. The Lifetime Learning Credit applies to a broader range of courses, including graduate programs and professional development. For K-12 families, contributions to a 529 plan may be deductible on your Georgia state return. And if you're self-employed and taking courses to maintain or improve your skills, those education expenses may be fully deductible as a business expense. Review your situation now — some of these credits phase out at higher income levels, and planning ahead can help you stay within the thresholds.

Q3 Estimated Tax Payment Due September 15 — Don't Miss It

If you're self-employed, a freelancer, a landlord, or have significant investment income, your third-quarter estimated tax payment is due September 15. Missing this deadline triggers an underpayment penalty — even if you plan to pay everything when you file in April. The IRS calculates the penalty on each quarter independently, so a late Q3 payment can't be offset by an early Q4 payment. If your income has changed significantly since you set your estimated payment schedule earlier this year, now is the time to recalculate. A mid-year income spike — from a business sale, a large consulting project, or a capital gain — may require a larger Q3 payment than originally planned. Contact our office if you'd like help running the numbers before the deadline.

Social Security Timing: When Should You Start Taking Benefits?

The decision of when to claim Social Security is one of the most consequential financial choices you'll make — and one of the most misunderstood. You can begin as early as age 62, but your monthly benefit is permanently reduced by up to 30% compared to waiting until your full retirement age (66 or 67, depending on your birth year). Delay past full retirement age and your benefit grows by 8% per year until age 70. For a healthy individual who expects to live into their 80s, waiting often results in significantly more lifetime income. But the right answer depends on your health, other income sources, spousal benefits, and tax situation. If you're within five years of retirement, this is a conversation worth having now — not the month before you plan to file.

Is Your Business Entity Still the Right Fit?

The entity structure you chose when you started your business may no longer be the most tax-efficient option. A sole proprietor earning $150,000 in net profit pays self-employment tax on every dollar. An S corporation owner paying themselves a reasonable salary can reduce that burden significantly by splitting income between salary and distributions. Similarly, a single-member LLC that has grown into a multi-owner operation may benefit from restructuring as a partnership or corporation. Entity changes have tax consequences and require careful planning — they're not something to do casually — but for many business owners, the annual tax savings justify the one-time cost of restructuring. If your revenue has grown substantially since you formed your business, it's worth a review.

IRS Impersonation Scams Are Surging — Here's How to Protect Yourself

The IRS consistently ranks phone and email impersonation scams among the most common threats facing taxpayers. Scammers pose as IRS agents, threatening arrest, deportation, or license revocation unless immediate payment is made by wire transfer, gift card, or cryptocurrency. The IRS will never call you demanding immediate payment without first mailing a bill. It will never require a specific payment method. It will never threaten to send law enforcement for non-payment without giving you the opportunity to question or appeal the amount owed. If you receive a suspicious call or email claiming to be from the IRS, do not provide any personal information. Hang up, and report the contact to the Treasury Inspector General at 1-800-366-4484. If you're unsure whether a notice you received is legitimate, bring it to our office — we can verify it for you.