LAFAYETTE, La. — It's no secret tax time can be confusing, even stressful.
"I can't imagine anybody likes it," James Quinn, owner of a local construction business, tells me. "I mean unless you're getting a refund, which I typically do not."
Others say they simply grin and bear it.
"There's no sense in fighting it, you have to pay it, and there are many amenities we have that a lot of countries don't have because we do pay taxes," says Dr. Sydney Crackower, a family physician in Lafayette.
With tax legislation that could provide added tax breaks to low-income families and small businesses stalled in the Senate, you may be wondering if you should file now or simply wait.
Experts say this year is the most normal filing year since the COVID-19 pandemic, but there are some major changes on the table with the potential to retroactively affect your refund.
They're part of a bill called the Tax Relief for American Families and Workers Act of 2024. Sponsored by Republican Rep. Jason Smith of Missouri, it would be the catalyst for the following:
- Increasing Child Tax Credit for low-income families dealing with inflation
- Providing several business breaks to stimulate economic growth and job creation
- Giving tax relief to individuals and businesses affected by natural and man-made disasters
- Addressing the shortage of affordable housing with the goal of financing more than 200,000 homes nationwide through adjustments to the Low-income Housing Tax Credit that expired in 2021.
Passing the House on January 31, it's all paid for by changes to the pandemic-era Employee Retention Tax Credit. As it awaits Senate action, the IRS reports a slow start to the 2024 tax filing season. While local tax filing experts say it's understandable to feel like you may want to wait and see what happens in Congress before you file, they tell me the majority of us shouldn't.
"I wouldn't encourage anyone to wait to file," says Brandon Gardner, a licensed CPA with Arsement, Redd and Morella. "The IRS has already said if they make legislation that's retroactive to 2023, they'll file the correction on their own and issue any refunds due for child tax credits, so they're advising no individuals to hold off."
For businesses, however, Gardner says it's a different kit and caboodle.
"There's huge depreciation deductions on the table that could increase the depreciation you take for certain assets in 2023," he tells me. "The IRS hasn't given us much guidance on that yet, we don't know if they're gonna do anything retroactive or allow us to do quick corrections, so we're holding off on filing those business returns until they can make those decisions."
This year's average refund sits pretty at about four percent higher now compared to this time last year, according to the latest IRS data. The agency attributes this to historically large inflation adjustments made to the 2023 tax brackets, to the tune of about seven percent across the board.
A reminder: Tax Day is April 15 and filing for an extension gives you until October 15 to submit your return, but those requests by either a Form 4868 for individuals or Forms 7004 and 1138 for businesses must be filed by that Tax Day deadline to get approved.
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