Personal Exemptions: The deduction for all personal exemptions is suspended (reduced to zero), effective for taxable years beginning after December 31, 2017, and before January 1, 2026.
Standard Deductions: The standard deduction for taxpayers who do not itemize deductions on Schedule A (Form 1040) has increased. The standard deduction amounts for 2018 are:
$24,000 – Married Filing Jointly or Qualifying Widow(er) (increase of $11,300)
$18,000 – Head of Household (increase of $8,650)
$12,000 – Single or Married Filing Separately (increase of $5,650)
State & Local Tax Itemized Deduction: If you are itemizing your deductions, rather than utilizing the standard deduction, there is a combined limitation for an individual of $10,000 ($5,000 if Married Filing Separately) on real property taxes, personal property taxes, and income taxes or general sales taxes that are unrelated to a business.
Mortgage Interest Itemized Deduction: The deduction for home equity debt is disallowed as a mortgage interest deduction unless the home equity debt was used to build, buy, or improve the taxpayer’s qualified residence. That means that if you used a loan secured by your home to pay personal expenses, such as credit card debts, or buying a boat or car, the interest on that loan is not deductible. The total amount allowed as a deduction for home mortgage interest is limited based on home acquisition debt of up to $750,000 ($375,000 if Married Filing Separately).
Child Tax Credit: The maximum credit per qualifying child is $2,000 (increase from $1,000). A new credit for other dependents of up to $500 is available for each dependent who doesn’t qualify for the child tax credit. The taxpayer must still include a valid Social Security number (SSN) for each qualifying child for whom the maximum $2,000 credit is claimed, and that SSN must also have been issued by the due date of the tax return (including extensions). A qualifying child who is ineligible for the child tax credit because that child did not have a valid SSN, or did not have a valid SSN by the due date of the tax return (including extensions) may still qualify for the non-refundable $500 credit.
Alimony: For any divorce or separation maintenance instrument executed after December 31, 2018, (or executed on or before December 31, 2018 and modified after that date if the modification expressly provides that the amendments made by the Tax Cuts and Jobs Act, Section 11051, apply to such modification), alimony and separate maintenance payments are no longer deductible by the payor spouse. Additionally, alimony and separate maintenance payments will no longer be included in income by the recipient of the payments.
• If your duty post is outside the United States or Puerto Rico, you qualify for an automatic two-month extension without having to request an extension via IRS Form 4868. To receive this extension, you must attach a statement to your return explaining your situation and how you qualify for an extension. If you can’t file your return within the two months, you can request up to another four-month extension. If you owe taxes, your interest will start accruing from the date the payment was originally due (15 April).\
A late filing penalty is usually charged if your return is filed after the due date (including extensions). The penalty is usually 5% of the amount due for each month or part of a month your return is late. The maximum penalty is 25%. If your return is more than 60 days late, the minimum penalty is $210 (adjusted for inflation) or the balance of the tax due on your return, whichever is smaller