Most service members and their families will see a reduction in their tax bills this year, but there are a number of changes in U.S. federal tax laws that they need to be aware of, said Army Lt. Col. Dave Dulaney, the executive director of the Pentagon’s Armed Forces Tax Council.
“The last tax year has been quite exciting with all the changes that were made,” Dulaney said. He noted that the Internal Revenue Service will start accepting tax returns Jan. 28 for tax year 2018.
A number of pieces of legislation affect military taxpayers, he said: The Tax Cuts and Jobs Act, the Veterans Benefits and Transition Act and the Combat-Injured Veterans Tax Fairness Act are just a few.
Tax Cuts for Troops
The Tax Cuts and Jobs Act will mean that most service members will see a reduction in federal taxes for 2018, he said. There is an overall reduction of 3 percent for most military families under this act, Dulaney said, in addition, the standard deduction doubled, as did the Child Tax Credit. “Because of these three things, most of our military families are going to see a substantial reduction in overall tax liability,” he said.
There are also some special provisions that apply to military personnel. Service members who served in the Sinai Peninsula since June 9, 2015, are now eligible for the combat zone tax…