Recent changes to the U.S. tax code could reduce taxes on service members and civilians who work for the federal government, Stars and Stripes reports.
Lt. Col. David Dulaney, the executive director of the Armed Forces Tax Council, told Stars and Stripes that this year's tax filing system, which began Monday, "marked one of the biggest changes in the tax code . . . since 1986."
Multiple bills, including the Tax Cuts and Jobs Act and the Combat-Injured Veterans Tax Fairness Act, have affected how members of the military community are taxed. Now, families that earn $165,000 or less could have a 3 percent overall reduction on their tax rate, and standard deductions and the child tax credit, now $2,000 for each child, doubled.
"The good news is that most of our service members should see a substantial reduction in their overall federal taxes for 2018, even if their itemized deductions were either suspended or capped because of the changes in the tax code. And the reason why that is because of the reduced tax rates," Dulaney said.
Civilians who work for the federal government will now have their moving reimbursements taxed, meaning that allowance will be counted with the rest of their taxable income.
"So, this is going to include in their taxable income anywhere between $25,000 and $40,000. And so that could potentially bump them up in a different tax bracket and see an increased tax liability because of that," Dulaney said.
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