Ready To File Your Taxes? Wait for These Two Tax Breaks
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Josephine Nesbit
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Don’t file taxes just yet. Experts say Congress is currently negotiating a $100 billion bill that could offer tax breaks to parents and businesses.
According to The Washington Post, the bipartisan group led by Senate Finance Committee Chairman Ron Wyden (D-Ore.) and House Ways and Means Committee Chairman Jason Smith (R-Mo.) is working to extend some of Trump’s 2017 tax cuts that have begun to phase out in exchange for expanding the child tax credit.
Half of the $100 billion would go towards three tax breaks — bonus depreciation, research-and-development expensing and the net interest deduction — according to two Democrats and two Republicans familiar with the discussions. The other half would go towards the child tax credit, but Republicans are unwilling to make the credit available monthly or make it refundable, The Washington Post reported, but other options are on the table.
Wyden and Smith haven’t figured out how much revenue they’ll raise to pay for the bill or where they’ll find the money, per the outlet. One possibility is ending the employee retention tax credit, which is a pandemic-era incentive for businesses to keep workers on payroll. Lawmakers also haven’t decided whether they’ll try to pass the deal on its own or attach it to a larger must-pass bill.
In an email to The Early, Wyden spokesman Ryan Carey wrote that there’s optimism on both sides and the goal is to get it done in time for changes in the child tax credit to take effect in this upcoming filing season. The Washington Post noted that this would probably require a bill to reach President Joe Biden’s desk by early February.
“What I would do is hold off until February [to file taxes] to see what’s going to come out,” James Mohs, an associate professor of accounting and taxation from the University of New Haven, told the New York Post. “You always want to take benefits, deductions, credits and everything else into account. What’s going to benefit you the most? Whether benefits stay or not is another story.”
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