President Joe Biden will find it challenging to implement all of the sweeping tax overhauls he favored on the campaign trail — at least the ones that involve hiking tax rates while the economy is still weak from the coronavirus pandemic.

Instead, Americans are likely to see the Biden administration focus on getting some of the tax breaks and credits passed that they’ve recently touted, mainly changes to the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC), to provide hard-hit families and households with additional financial help. Lawmakers are already sneaking some of them into the next $1.9 trillion relief bill.

Taxpayers, however, might not be entirely off the hook. Later this year, experts say that Biden might start to consider increasing corporate taxes and the top-line income tax rate, especially if the U.S. economy bounces back stronger than expected.

Those proposals could potentially sail through a Democrat-controlled Congress, especially because they could be passed without Republican support through budget reconciliation. They could also be incorporated in the forthcoming massive infrastructure bill to offset costs and gain lawmakers’ support.

“We saw this with the Biden proposals, when they paired a tax increase with associated spending,” says Garrett Watson, senior policy analyst at the Tax Foundation. “It will be a tricky balance, and a lot of it will hinge on where the economy is and where the reopening is. We don’t want to be overzealous with tax increases that undermine the recovery.”

Here’s what you should expect with your taxes now that the Biden administration is officially in charge with a Democrat-controlled Congress, including how to prepare your wallet for such changes.

Tax breaks and credits Americans can expect

When it comes to your taxes, so far the most impactful proposals in the $1.9 trillion relief bill is the proposed expansion to the EITC, CTC and the Child and Dependent Care Tax Credit (CDCTC).

All in all, it means eligible taxpayers would receive more help than just a $1,400 stimulus check per each adult and child in their household.

1. Child Tax Credit

In the text of the $1.9 trillion relief bill being drafted, legislators on the Ways and Means Committee propose expanding the CTC to send families $3,600 per child under age 6 and $3,000 per child between ages 6 and 17, while also making it fully refundable. That expansion mirrors proposals from Biden’s American Rescue Plan.

Most notably, the credit would function in part as a monthly payment (or as frequently as feasible) between July and December, rather than a lump sum collected at the end of the year on a tax return. That means families could earn at least an extra $300 or $250 per child for six months, and at that disbursement schedule, they’d receive half of the credit in advance of their tax return. The increase, however, would be temporary and just for 2021, though some Democrats are pushing to make permanent changes.

Legislators are proposing that the Treasury Department and the Internal Revenue Service (IRS) handle disbursing these payments but the Social Security Administration (SSA) might be better equipped, Watson says, particularly in light of disruptions that delayed how quickly Americans got their first and second stimulus checks.

The SSA delivers “70 million social security checks a month,” Watson says. “There will be growing pains. If you want to make this immediate relief in the context of COVID, it’s going to be tough to do that well in the coming months. But of course, in the package, there are other elements of aid.”

The increase in the maximum amount would begin to phase out for individuals earning $75,000, heads of households making $112,500 and married couples making $150,000.

Currently, taxpayers can claim up to $2,000 per child under age 17, and the credit is reduced by 5 percent if an individual makes over $200,000 or $400,000 as a couple. But the refundable part of the credit is worth up to $1,400 for each qualifying child, meaning if the credit exceeds taxes owed, households wouldn’t receive the full amount. Individuals also currently have to make at least $2,500 a year to get the refund.

But the expansion would come with a cost: reducing federal revenue by $109.5 billion, according to the Joint Committee on Taxation.

Missing from the proposal is also whether Americans will have to calculate their eligibility for themselves by forecasting their income, marital status and filing status for the year. That could potentially pose challenges down the road, such as forcing some Americans to pay the credit back if they underestimated how much they’d earn.

According to the draft of the bill, taxpayers who receive an overpayment of the advance credit will be protected from repaying up to $2,000 in overpayments per child that was incorrectly taken into account.

“It’s very complex and very easy to get it wrong,” Watson says. “The last thing we want is for a lot of folks claiming a monthly credit having to pay it back after it’s already been spent.”

2. Earned Income Tax Credit

Lower-income earners who are considered “childless” adults could also receive some relief under a proposed enhancement to the EITC.

Legislators want to raise the maximum credit to about $1,500 from its current $543 level. The income cap would also be raised from $16,000 to $21,000 per year. Younger adults between the ages of 19-24 would also be included, as would adults older than 65. Currently, those age ranges are capped at 25-65.

Those changes would reduce revenue by about $26.2 billion, according to the Joint Committee on Taxation.

3. Child and Dependent Care Tax Credit

The bill would also expand a tax break to help offset half of households’ care costs.

As part of those changes, families with children up to 13 years in age could subsidize half of their child care costs, as long as it doesn’t exceed $8,000 (or $16,000 for two or more children). The CDCTC currently covers a maximum of $3,000 for families with one child (or $6,000 for households with two or more children).

Under Biden’s previous proposal, families making less than $125,000 annually would be eligible for the full 50 percent credit. After that threshold, a partial credit would be available to individuals whose incomes come in under $400,000. Taxpayers that make more than $500,000 wouldn’t be eligible.

Individuals who contribute some of their pre-tax wages to a flexible spending account to cover child care costs will also want to take note. The bill would increase employer-provided dependent care assistance from $5,000 to $10,500.

“Employers would need to work with their payroll software companies to allow individuals to increase their dependent care spending limits based on those changes,” says Mark Jaeger, director of tax development at TaxAct.

Tax hikes that could be on the way down the road

While a Democratic nominee, Biden was vocal about his tax stances, which included wanting to restore the top-line tax rate to where it was before the Tax Cuts and Jobs Act (TCJA) of 2017, raise corporate taxes, revamp the way long-term investments are taxed for the country’s highest earners, and introduce payroll taxes on wages higher than $400,000.

The coronavirus pandemic put a damper on Biden’s proposed tax hikes, and introducing any new increases may be counterintuitive as the president looks to stimulate the economy and prop up families’ finances through the continued hardship.

Americans have yet to see a broader tax legislation proposal, but that’s not to say one couldn’t come down the road, says Mark Hamrick, Bankrate senior economic analyst.

“Biden will need to attempt to make good on his campaign promises,” he says. But the proposal will likely “be viewed with a high degree of skepticism or outright opposition from Republicans.”

But if Biden’s going to introduce any changes, he’d most likely turn to his income and corporate tax changes first, Watson says, possibly by the end of this year.

1. Corporate tax rates

Biden previously floated boosting corporate tax rates from 21 percent to 28 percent. Before the TCJA, that rate was 35 percent.

Biden could choose to hike rates up to his proposed 28 percent or a lower number like 25 percent, depending on the appetite in a narrowly divided Senate, Watson says.

“The big question is, if there is one, how high will it go,” he says.

While it wouldn’t directly eat away at consumers’ wallets, research suggests that employees do end up enduring some amount of pain from it because firms might cut wages to reduce costs.

2. Top-line income tax rate

Leading up to the election, Biden proposed increasing the top-line income tax rate to 39.6 percent from 37 percent. According to the IRS’s 2020 tax brackets (which apply for taxes filed in 2021), the top-line rate applies to single filers who earn $518,401 or more and married filers who make $622,051 or higher.

3. Other possibilities: Capital gains or payroll taxes

A booming stock market and higher-income earners taking less of a hit from the pandemic might give Biden the wherewithal to revamp long-term capital gains taxes for high earners.

Biden previously floated charging those who earn more than $1 million annually a steeper capital gains tax on their long-term gains: 43.4 percent, versus the current 23.8 percent. That’s because their long-term gains would be taxed as income, similar to the way short-term capital gains are taxed.

Biden has also proposed eliminating a “step-up in basis” that allows descendants to pass those investments to heirs tax free.

But those increases were proposed as a way to pay for potential Social Security changes, which would need Republican support because it doesn’t qualify for budget reconciliation.

Biden also supported adjusting payroll taxes to apply to individuals who make $400,000 and up. Currently, individuals and firms split a 12.4 percent Social Security tax as long as they make $137,700 or less. As of late, however, administration officials haven’t commented on any such proposals.

Bottom line

Lawmakers have until Feb. 16 to draft stimulus legislation, and House Speaker Nancy Pelosi said at a press conference Thursday that she expects the next round of relief to pass by March.

That means Americans might not have much longer to wait for aid, but they should still take action with their finances in the meantime if they’re struggling to make ends meet.

One such step includes submitting your 2020 tax return as soon as possible, particularly if you never received your $1,200 (or more) first stimulus check and your second $600 (or more) payment. Americans can file for what’s called a “Recovery Rebate Credit,” which can help reconcile any of those missing payments. It’s not an opportunity to pass up. If you’re a married couple making less than $150,000 a year and have two children, you could receive up to $5,800 worth of stimulus payments.

When it comes to preparing for any tax changes, be sure not to make any knee-jerk reactions by jumping to make changes when the future is still uncertain. Consider working with a financial advisor who can help you craft a strategy particularly to your individual situation. What’s perhaps wisest right now is limiting your expenses as much as possible to ramp up your emergency fund.

Although still in the future, the midterm elections in 2022 are likely on Biden’s radar, particularly because losing either chamber of Congress would lessen the likelihood of introducing any of these more progressive policies.

“Biden will need to move fairly quickly in Washington, D.C. political time because the clock is always ticking toward the next election,” Hamrick says. “History suggests that the party in power stands to lose in midterms and Biden certainly doesn’t want to repeat the setback that President Obama suffered during his first term when Democrats lost the House to the GOP in 2010.”

Learn more: