Should You File Tax Return? Learn how the 2024 tax law changes, including the Child Tax Credit updates, can impact your tax filing strategy and potential refund.
TAX FILING UPDATE | Child Tax Credit 2024
“Should you file your taxes now or wait?” This is the crucial question on the minds of taxpayers everywhere this season, especially with potential changes looming on the horizon. In today’s video, we’re zeroing in on these changes, with a special focus on the Child Tax Credit and the significant $78 billion tax-break bill.
Child Tax Credit Update
Firstly, for those of you with children, here’s an essential update: you may have been considering waiting to file your tax return, or until there was more clarity on some key political decisions regarding the Child Tax Credit. The situation, however, has evolved, and there are new opinions to consider.
Recently, IRS Commissioner Danny Werfel made a significant statement. He advised taxpayers now not to wait for Congress to enact changes to the child tax credit but to file when they’re ready. The IRS plans to ensure that taxpayers who file their returns before any legislation is enacted will receive the payments they’re eligible for without needing to take additional steps. This is an important consideration as it suggests a more streamlined process for early filers, should the legislation pass.
The $78 billion bipartisan tax-break bill, under consideration, would expand the child tax credit, potentially lifting as many as 400,000 children above the poverty line in the first year, as analyzed by the Center on Budget and Policy Priorities. A full House vote on this bill is expected soon.
However, National Taxpayer Advocate Erin Collins has cautioned that any legislation during the filing season could delay refunds, potentially until late in the year. House Ways and Means Republicans have mentioned that the IRS is prepared to update its systems about six weeks after the enactment of the bill. This is crucial information as it gives us an idea of the potential timeline for changes to take effect.
As of now, the IRS expects more than 146 million individual tax returns to be filed by the April 15 deadline. With this in mind, Commissioner Werfel’s advice is clear: “Taxpayers should file when they’re ready to file and as soon as they believe that they have a complete and accurate return, they should file.”
What should Parents do?
So, what’s the takeaway for parents? While it’s still worth keeping an eye on the developments, you might want to consider Commissioner Werfel’s advice and file when you’re ready, especially if you have all the necessary information for a complete and accurate return. However, it may still be worth waiting a bit before filing your tax return to see how this develops, and to make sure you don’t have to amend a return later.
If the bill doesn’t affect you, you may file your tax return now. This includes those already receiving the full child tax credit of $2,000 per child and those without qualifying children or dependents.
If you might benefit from the bill, then you need to decide what to do based on your own situation. Filing now risks missing out on potential immediate benefits if the bill passes. Waiting, on the other hand, could delay your refund unnecessarily if the bill doesn’t pass.
That’s the latest for now. I hope this information helps you make a more informed decision about your taxes this year. Remember, staying informed is key, especially when it comes to financial matters.
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Money Instructor does not provide tax, legal, or investment advice. This material has been prepared for educational and informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or investment advice. You should consult your own tax, legal, and investment advisors regarding your own financial situation. Although the information has been researched and vetted beforehand, it may not be current at the time of viewing. Please note, the context of financial investments can be complex and dynamic, necessitating professional advice tailored to your unique circumstances.