Recent statistics have revealed a 1.7% drop in the number of individual income tax returns filed as of March 1, 2024.
This decline, reported by the Internal Revenue Service (IRS), is believed to stem from an increasing complexity of the tax code, which may seem daunting to many taxpayers.
The ongoing pandemic-related economic issues have also contributed to fewer individuals self-filing their tax returns this year.
Consequently, taxpayers are shifting towards professional tax services to better navigate the intricacies of deductions, benefits, and potential tax liabilities.
Still, despite this decrease, IRS anticipates collecting nearly $1.9 trillion in individual income taxes.
The Federal Government is considering measures to simplify the tax filing process and inspire more individuals to file their returns.
The Government Accountability Office (GAO) is studying the situation and expected to propose corrective measures promptly.
Although concerning, experts anticipate the downward trend could be reversed through effective policy changes and better public education on tax filing.
Speculation suggests taxpayers are deferring filing in anticipation of the proposed Tax Relief for American Families and Workers Act, which aims to increase the child tax credit retroactively for the 2023 tax year.
Despite the potential benefits of this act, the delay in filing could further strain the IRS, already wrestling with backlogs in another complex tax year.
Staying informed about ongoing legislative development is crucial for taxpayers to maximize potential deductions and refunds.
Lively debates amongst lawmakers over the proposed act are ongoing, weighing its benefits against possible drawbacks.
As discussions continue, taxpayers are advised to keep regular contact with their tax professionals for the latest information.
President Joe Biden advocated for the expanded child tax credit in his State of the Union address, with Speaker of the House Nancy Pelosi holding a similar view in the hope of reducing child poverty.
However, concerns remain over the lack of focus on the Research and Development (R&D) credit which has played a pivotal role in America’s economic growth and tech advancements.
Meanwhile, bipartisan lawmakers plan to draft legislation to preserve the R&D credit, warning that neglecting this could hinder national innovation and impede global competitiveness.
Advocacy groups argue the child tax credit directly benefits countless American families, providing much-needed financial resilience.
Biden’s tax plan proposes to increase the average tax rate for billionaires to a minimum of 25%, promising no additional federal taxes for those earning below $400,000 annually and aims to eliminate certain tax loopholes.
Despite this, the actual impact on middle and lower-income households, as well as corporations, is still subject to intense debate.
Lastly, the enactment of these changes relies heavily on congressional support and the overall economic effect remains a contentious topic among experts.
The Departments of Justice and Treasury are planning to appeal against a ruling declaring the Corporate Transparency Act unconstitutional, sparking nationwide conversation on balancing public transparency and business privacy.
In the meantime, the National Small Business Association and other similar entities operate under the protection of the injunction, awaiting the final decision of the appeal.
