[US Tax] Tax accounting information for an US individual taxpayer for 2017 and 2018

Tax accounting information for an US individual taxpayer for 2017 and 2018

☞ The following statement is about tax accounting information for an US individual taxpayer for 2017 and 2018, and is not legally binding.

※ For calendar year individual income tax returns and FATCA, FBAR reporting for 2017, the following due dates will apply.

Original due date: April 17th, 2018

Due date by automatic extension for expat: June 15th, 2018

Due date by application for automatic extension: October 15th, 2018

※ Failing to file an individual income tax return and report FBAR & FATCA

If a taxpayer does not file an individual income return and report FBAR & FATCA, the IRS can fine the taxpayer severe penalties and interests and the one can be sentenced in prison. In particular, there is no statute of limitation for failing to file an individual income return.

※ Tax reforms: Tax Cuts and Jobs Act

Some of Tax reforms are stated as follows for 2017 and 2018. It would be a good way to consider tax changes in advance to avoid taxes for 2017 and 2018.

Tax item	2017	2018
Medical expense deduction	Changed (Note 1)	Changed (Note 1)
Tax rates	No changed	Changed (Note 2)
Personal exemption	No changed	Changed (Note 3)
Standard deduction	No changed	Changed (Note 4)
Child tax credit	No changed	Changed (Note 5)
Non-child dependents credit	n/a	New
AMT exemption	No changed	Changed (Note 6)
Estate tax exemption	No changed	Changed (Note 7)
Moving expenses deduction	No changed	Changed (Note 8)
Alimony payments deduction	No changed	Changed (Note 9)
State and local tax deduction	No changed	Changed (Note 10)
Home mortgage interest deduction	No changed	Changed (Note 11)
Casualty losses	No changed	Changed (Note 12)
Miscellaneous items subject to 2% AGI	No changed	Changed (Note 13)
Charitable contribution	No changed	Changed (Note 14)
Overall limitation on itemized deductions	No changed	Changed (Note 15)
Kiddie tax	No changed	Changed

※ The provision for foreign tax credit, foreign earned income exclusion, and foreign housing exclusion remains no changed in order to avoid double taxation.

Note 1. Itemized Deduction—Medical expense deduction is expanded for 2017 and 2018. The threshold for deducting expenses is lowered from 10% to 7.5%.

Note 2. New tax rates (Decrease). 10%, 12%, 22%, 24%, 32%, 35%, 37%

Note 3. Personal exemption disappears.

Note 4. Standard deduction nearly doubles. For single filers, increases from $6,350 to $12,000. For married couples, increases from $12,700 to $24,000.

Note 5. Child tax credit doubles. Increases from $1,000/child to $2,000/child. Phase out range is more taxpayer friendly.

New. New credit for non‐child dependents (elderly parents).

Note 6. AMT exemption increases to $70,300 for single filers and $109,400 for married couples.

Note 7. Estate tax exemption doubles ($5.49 million for single filers and $10.98 million for married couples).

Note 8. No deduction for moving expenses, unless a military exception applies.

Note 9. No deduction for alimony payments, for divorce decree signed after 12/31/2018.

Note 10. State and local tax deduction capped at $10,000.

Note 11. Home mortgage interest deduction lowered to $750,000 indebtedness for new home owners.

Note 12. Casualty losses no longer deductible, unless linked to a national disaster (e.g., hurricanes Harvey, Irma, Maria)

Note 13. Miscellaneous items subject to 2% AGI repealed (e.g., tax preparation fees, union dues)

Note 14. Charitable contribution limit increases from 50% to 60%.

Note 15. Overall limitation on itemized deductions repealed