Some people are also waiting on Congress to determine whether to increase the child tax credit under the Tax Relief for American Families and Workers Act of 2024 as tax time approaches.
According to financial experts, the tax credit could result in practically $2,000 in tax deductions or refunds for each child.
According to Joyce James, the Middleburg Institute’s founder, knowing how to use the funds may help families overcome obstacles and advance toward financial security.
Since October, the volunteer organization has coordinated child tax credit knowledge seminars that included coaching on campaigning, financial education, mental health, and management. According to James, one of the goals of the plan was to assist residents in understanding the financial effects and advantages of tax credit policies as they become more prevalent in Louisiana.
“When people receive a tax refund, it can be used to put themselves in a better financial place,” said Garrett Ganucheau, vice chairman of business development at EFCU Financial.
Participants in the Middleburg Institute’s child tax credit knowledge battle in Dutchtown and Baton Rouge received economic training workshops from EFCU Financial. These sessions focused on overcoming obstacles to benefits, budget, and building a savings program.
How does economic security be obtained from tax refunds?
“Paying off debt is a key to monetary freedom,” said Ganucheau. “It may increase the person’s payment score.” He added that many people can benefit greatly from improving their financial health by using tax refunds to help them rebuild credit. He advises people to have a plan to rebuild credit after paying off debt or paying outstanding payments.
A share-secured credit card and a share-secured product are two strategies that can be useful. It is simple to use a part of a woman’s tax payment to start both items. Opening them and using them effectively can have a positive effect on credit scores, Ganucheau said.
He even advised attendees to begin saving. Gainsbourgeau even made mention of share certificates (or certificates of deposit) and high-yield savings accounts, which can be significant components of a savings plan. They provide higher income rates than traditional savings accounts, which means that a woman’s money is growing and becoming more financially independent. Whether that purpose is a lower pay for a house, emergency savings, a holiday, or setting money aside for their children’s education and future, large-yield savings products can be a fantastic vehicle to get them to their destination,” he said.
The Tax Act, which is up for debate in the Senate, was passed by the U.S. House of Representatives. As it stands now, working taxpayers—who earn up to $400,000 as joint filers or $200,000 as single filers—would receive a tax credit, or deduction, from the taxes they would otherwise owe, explained David Lindenfeld of the Together Baton Rouge Tax Fairness Team. Under current law, a child under the age of 17 can receive up to $2,000 in credit. For a family with two children, the credit could be as much as $4,000. Taxpayers are advised not to wait for the new bill to pass but to file according to these 2023 provisions, he said.