Last night, the House of Representatives passed tax legislation that would increase the Child Tax Credit for 2023, allow businesses to expense research and development expenses, tax relief for wildfires and the train derailment in East Palestine, Ohio, and some other provisions. This legislation is now in the hands of the Senate, and it’s possible it won’t go anywhere (or it could pass tomorrow). Issues that could derail the bill in the Senate include the SALT cap (the limit of $10,000 deduction on federal tax returns for state taxes paid), election year politics, and the fact that little has come out of the Senate. And if it gets amended in the Senate, back to the House it goes.
Let’s assume it passes; that would require the IRS to reprogram its computers. The IRS uses the best of 1959 technology, so this would take a month or so. Do we file tax returns for individuals (and businesses) impacted by this? If this passes, impacted individuals (and businesses) who file now might need to amend their returns. The IRS isn’t expedient in processing amended returns, so that’s not a great option.
Unfortunately, there is no best option. Each impacted taxpayer is going to have to decide whether or not to file now or extend. If we get an indication from the Senate whether this bill will pass or not, we may be able to make better decisions. Even though I reside in the capital of gambling and odds, I can’t provide you a quote of the chance this bill passes as written and gets signed into law.
I was hoping for a nice, simple straightforward Tax Season. Unfortunately, Congress had different ideas.
Tags: 2024.Tax.Season