Tips to Tackle Tax Season Uncertainty

Take Charge of Your Taxes and File with Confidence

With the federal government shutdown and changes to the tax code, we know there’s a lot of uncertainty about taxes this year. Here are some ways you can take charge, as well as new developments you CAN count on.

The Government Shutdown

The longest shutdown in history raised a lot of questions, including whether the IRS can continue business as usual. Congress has passed a temporary bill to reopen the government, which is encouraging, however, there’s no certainty that it will remain open once funding expires again on February 15. Filing taxes is never fun and something that’s easy to put off. We can’t tell you what the government will do, but we do recommend you file as soon as you can this year.

Action: If you haven’t already, file your taxes now. The sooner you file, the sooner it will be processed, and the sooner you’ll get your money. Check out the FREE RESOURCES below if you need help getting on top of this.

New Tax Code

The government signed the Tax Cuts and Jobs Act into law in December of 2017, and this is the first year it will affect individual income taxes. There are a few key takeaways for military families to keep in mind.

You likely received a tax cut. With the adjustment of the overall tax brackets, most military families will see a 3 percent reduction in their tax rate.* If you did not take action in 2018 to lower your withholdings, you can probably expect a bigger tax refund.

Action: Take the opportunity now to make any changes for next year.  You can adjust both state and federal withholdings in the myPay section of DFAS, or talk to your financial advisor for more information.

The standard deduction has increased. If you’re a head of household, the standard deduction has doubled this year. It was also increased for joint filings and single taxpayers.

The child tax credit has increased. Families with dependent children can claim $2,000 for each child, which is twice as much compared to last year.

There’s good news for spouses too! Another bill, the Veterans Benefit Transition Act of 2018, enacted a significant change to how spouses file their taxes at the state and local level. Previously, spouses were treated like civilians and had to file in the state in which they lived. The new law allows spouses to elect the service member’s state of legal residence instead. There are seven states that don’t have any state income tax for service members.

Lastly, if you have moving expenses from a PCS or DITY move in 2018 that never got reimbursed, they are still tax deductible for service members. The same cannot be said for your civilian counterparts, who can no longer deduct job-related moving costs.

FREE RESOURCES

If you’d prefer not to even think about your taxes, you may have access to an IRS-certified expert through the Volunteer Income Tax Assistance program (VITA), who can help you file for free. All active-duty and retired service members and their dependents are eligible.

If you’d prefer to do it yourself, check out the free MilTax filing service at Military OneSource.

*According to MilitaryTimes.com

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