Congress is weighing whether to pass a tax package that would impact millions of families by increasing the child tax credit. In the meantime, should you wait to file your taxes until the decision is made? The IRS commissioner has weighed in.
Parents Question When to File Taxes While Tax Bill is Uncertain
Tax season is here, and that means millions of Americans are starting the process of gathering their documents to file their tax returns.
Parents across the country are wondering whether they should hold off on filing their taxes while Congress decides on a $78 billion tax bill called The Tax Relief for American Families and Workers Act of 2024.
Child Tax Credit Part of Proposed Legislation
The child tax credit, which is currently $2,000, could increase if the bill is passed, and the change would be retroactive to the 2023 tax year.
But IRS Commissioner Danny Werfel says that shouldn’t stop parents from getting their returns filed.
Taxpayers Should “File When They’re Ready”
“We urge and encourage taxpayers to file when they’re ready,” Werfel advised.
Tax Credit to Benefit Americans With Children
The extra credit could net some families an average of nearly $700 in tax cuts, which is no small amount for many Americans.
IRS Says Not to Wait to File
At this time, there’s no way to know if Congress will pass the bill. Werfel advises moving forward with filing taxes as soon as you’re ready to do so since the bill’s passage is uncertain.
“Don’t Wait on Congress”
“Don’t wait on Congress,” Werfel said, addressing reporters in a press call on Friday.
Congress to Vote Wednesday Night
Earlier this week, Representative Jason Smith (R-Mo) said that the vote would be taking place soon. Congress has just announced that the House will vote Wednesday night on the bill.
Mixed Advice About Whether to File Early
Some experts not affiliated with the IRS have suggested that it might be better to wait to file so that you don’t run into having to amend your tax return if the changes occur. But Werfel says that is a non-issue.
IRS Says Amendments Won’t Be Needed
If you do go ahead and file while Congress deliberates, you can rest assured that the IRS will apply any extra credits you qualify for and handle the change on their end.
Werfel says amending tax returns won’t be necessary for this change if the bill passes.
“We Will Make the Change”
“If there’s a change that impacts your return, we will make the change, and we will send you the update – whether it’s an additional refund or otherwise – without you having to take the additional steps,” Werfel said.
Tax Returns Should Be Accurate When Filed
Werfel did add a caveat: your tax returns need to be completely accurate in order for the IRS to be able to process any changes on your behalf.
House Committee Confirms IRS Responsibility
The Congressional House Ways and Means Committee released a statement that verified the IRS will take care of any changes without requiring amendments from taxpayers.
IRS Will Move “On An Expedited Timeline”
“The legislation instructs the IRS to update its systems and process any additional tax refunds on an expedited timeline,” read the press release.
Updates “Will Be Handled Within the Scope of the IRS’s Normal Operations”
It continued: “The child tax credit changes will require relatively few adjustments, which will be handled within the scope of the IRS’s normal operations.”
“Congress Has Already Engaged with the IRS”
“On a bipartisan basis, Congress has already engaged with the IRS so that updates to the agency’s systems will be streamlined and that taxpayers will not have to file amended returns to account for the child tax credit changes in the bill,” it read.
IRS Knows What It’s Doing, Commissioner Says
Werfel pointed to the IRS’s “deep experience in assessing and reviewing” updates to tax laws that impact prior years’ tax returns.
Johnson Praises Bipartisanship
Speaker of the House Mike Johnson praised the bipartisan effort that went into crafting and working on the bill.
Tax Bill Process a “Good Example”
“This bottom-up process is a good example of how Congress is supposed to make law,” Johnson said in a statement.
Vote to Be Held at 8 P.M.
The vote will take place at 8 p.m. Eastern Standard Time on Wednesday. Taxpayers who haven’t filed yet should move forward with filing their returns on time, regardless of the outcome of the vote.
Biden’s New 401(k) Rule: Employers Frustrated as Retirement Planning Responsibilities Shift
The latest Biden administration rule on 401(k) plans is reshaping how employers manage retirement plans. It’s a complex scenario requiring a fresh understanding of fiduciary duties and provider relationships. This rule aims to protect employees but also imposes new responsibilities on employers. Biden’s New 401(k) Rule: Employers Frustrated as Retirement Planning Responsibilities Shift
Elon Musk: New Immigration Bill ‘Enables Illegals to Vote’
Elon Musk is calling for prosecutions after the text for a new senate bill on immigration was released. Musk accused the new bill of “enabling illegals to vote.” Elon Musk: New Immigration Bill ‘Enables Illegals to Vote’
Colorado Officials Reject Sanctuary City Status, Warn Against ‘Dangerous Game’
With increasing numbers of migrants arriving in Colorado, public officials have rejected any notion of the state becoming a sanctuary for migrants and asylum seekers. Colorado Officials Reject Sanctuary City Status, Warn Against ‘Dangerous Game’
Disney Challenges DeSantis’ “Don’t Say Gay” Rule With a Hefty Lawsuit
Disney is set to appeal its refusal for a lawsuit against Ron DeSantis, who stripped the company of its rights for disagreeing with the Governor’s views on the teaching of sexual orientation in classrooms. Disney Challenges DeSantis’ “Don’t Say Gay” Rule With a Hefty Lawsuit
Trump on the Attack as 21 Million Americans Flock to Obamacare, Biden Pushes Forward
An unprecedented surge in health plan enrollments has reignited former President Donald Trump’s commitment to dismantling the program should he secure the GOP nomination once again. Trump on the Attack as 21 Million Americans Flock to Obamacare, Biden Pushes Forward
The post IRS Advice: Parents Should File Taxes Amid $78 Billion Legislative Limbo first appeared on From Frugal to Free.
Featured Image Credit: Shutterstock / fizkes.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
