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Parents and businesses can take advantage of two soon-to-be introduced tax breaks before it’s time to file taxes.
Experts say it’s worth waiting to file returns until lawmakers have finished negotiating.
Republicans want the restoration of a number of Donald Trump’s controversial 2017 tax cuts, which will benefit companies.
Democrats are willing to negotiate in exchange for one of their priorities: bigger tax credits for children.
A bipartisan group of lawmakers, including Senate Finance Committee Chairman Ron Wyden and House Ways and Means Chairman Jason Smith, are negotiating a $100 billion bill.
Congressman Jason Smith (R-Mo) is negotiating a $100 billion bill that could see Republican demands for corporate tax cuts
Senator Ron Wyden (D-Or) is on the other side, negotiating a Democratic demand for higher tax credits for people with children
Half of that amount will go toward restoring three tax breaks prized by Republicans, and the other will go toward increasing child tax credits.
If the bills pass by the end of the month, Americans could take advantage of the credits before filing taxes.
“Discussions are ongoing and we continue to make progress,” Ryan Carey, a Wyden spokesman, wrote in an email to The Washington Post. “There is optimism on all sides, and the goal remains to get this done in time for the changes to the child tax credit to take effect in the upcoming filing season.”
This is what the two parties want….
DEMOCRATS HELP FOR CHILDREN
The child tax credit caps at $2,000 per year per child and Democrats want that increased to $3,600.
It was strengthened in this way in 2021, but the increase was canceled the following year after opposition from Republicans.
Democratic Senator Michael Bennetwho supported the policy, said: ‘The reality is a world where parents are scraping by every month – they can’t afford the rent in this wild economy.’
REPUBLICAN BOOST FOR BUSINESS
The three tax breaks Republicans want would help companies lower tax bills.
One of these, for example, would allow them to immediately spend all research and development expenditure.
Another, called “bonus depreciation,” meant companies could deduct the entire cost of new equipment, such as a computer or truck, as soon as they purchased it. Previously, they had to claw it back over several years as the equipment depreciated in value.
Republicans and Democrats are working on a bill that gives both parties what they want. Republicans want rules that reduce what companies pay, while Democrats want child tax breaks for parents
WHAT DOES THE PRESIDENT THINK?
President Biden appears to support the bipartisan agreement.
“The President strongly believes that any bill before Congress that certainly reduces taxes on big corporations should reduce taxes on working people and families with children, especially to reduce child poverty,” said press secretary the White House, Karine Jean-Pierre. Thursday briefing as reported in Business Insider.
The Washington Post first reported Thursday that a bipartisan group of lawmakers, including Senate Finance Committee Chairman Ron Wyden and House Ways and Means Committee Chairman Jason Smith, are negotiating a $100 billion bill.
