Filing Taxes, @@ content mentioned

[Jalapeñomel]

Are you filing your taxes now, or are you waiting to see what happens in Congress (in particular with child tax credit)?

[shauni27]

oooh good question and I know nothing about this. Can you expand on what they are deciding on? in layman's terms for a 10 year old to understand...

[clairebear]

I didn't even realize something was happening with the tax credit! After reading a bit I'm still going to file as normal. I always owe quite a bit and the proposed changes wouldn't affect me anyway. I also have no faith in the government passing it quickly. What a mess though. What happens to the people who file before it's passed if it does become law?

[lessel]

I've read a few articles about it and honestly cannot figure out if this would change my 2023 taxes. This is the clearest article I've read, but I'm still a bit confused: www.cnbc.com/2024/01/24/how-the-proposed-child-tax-credit-changes-could-affect-2023-taxes.html

I'm mid-way doing taxes in Turbo Tax and it looks like we're getting the full $2k per kid (so $4k total), so I don't think the change would change anything for us. I think it's a change for lower incomes (excerpting from that article):

"Up to $1,600 of the credit is currently refundable for 2023, meaning the credit could provide a refund even with zero taxes owed. This makes the credit harder to access for lower earners, who typically have little to no tax liability."

and

"The refundable portion of the child tax credit would increase to $1,800 for tax year 2023, $1,900 for 2024 and $2,000 for 2025 — and a new calculation would expand access."

[eddy]

I always receive some pertinent paperwork later and have to file close to deadline. So thankfully I am forced to wait it out to see if this comes to fruition.

lessel, thanks for posting this article. I have been surprised at how this isn't being covered. I would bet most people don't even know this is going on.

[noodleoo]

Yeah, the change will only really affect low income earners. If you are already getting the full $2K credit (per kid), there is no change for you. This WaPo article explains it well:

wapo.st/47Q4uiu (Gift link)

Taxpayers who are currently eligible for the current tax credit would continue to be eligible. The changes appear most beneficial to low-income parents with multiple children.

Currently, only middle- and upper-income families receive the full $2,000 credit per child. That is because the credit reduces taxes owed and is not fully refundable, meaning many low-income families who don’t earn enough to owe more than the credit is worth can’t take full advantage of it.

But under the agreement announced Tuesday, poor families would be newly eligible to receive the tax credit for every child — even if they do not qualify for the full $2,000 per kid.

...

Families that already receive the full $2,000 credit per child would see no change in their eligibility, though their credits would increase with inflation adjustments in 2025.

[archiethedragon]

Unless you are a very low income earner (somewhere in the $10k-$40k per year range), this change will not affect you. The change has to do with the calculation of the refundable portion of the tax credit. So if you pay no federal taxes, you will have the ability to get refunded a larger amount of the credit.

[waverly]

I was going to say no. But then upon reading the explanation still no, not planning to delay filing.

[agnes]

Besides the child tax credit and the increased standard deduction, are there any other changes that happened?

All I’m waiting on is a 1099-INT

[Susie]

I don't usually get my K-1 until March so I won't be filing until fairly close to the deadline.  I don't anticipate that the child tax credit changes will impact us significantly.  We're in the phase out range for the credit, so it's partial for us, and the extent of refundability won't materially affect us.

[jwright]

Jan 24, 2024 17:21:28 GMT -5 agnes said:

Besides the child tax credit and the increased standard deduction, are there any other changes that happened?

All I’m waiting on is a 1099-INT

If you own property or purchase a business vehicle, there are depreciation changes in the proposed bill that could effect how you file.  I believe there's also some wildfire/disaster relief in there but that doesn't effect my area so I don't know more.