Commentary Search

Preparing For Your 2018 Taxes

  • Published
  • 6th Air Mobility Wing Legal Office

MACDILL AIR FORCE BASE, Fla.--Tax season ended a few weeks ago, but you’re not done yet. Changes to the tax code will impact your income and taxes throughout the remainder of this year and are likely to impact the amount of your refund when you file your 2018 tax return.  Properly adjusting to the new tax code is essential to ensure that you get the most out of your money this year.  


Based on your annual income, you are subject to a defined tax rate. The new tax brackets reduce the tax burden for most service members.  As shown in the charts below, the new tax rates for most service members fall from 15-12 percent, 25-22 percent, or 28-24 percent.  The Internal Revenue Service takes a little money out of each paycheck to cover your tax burden over the course of the year.  The reduction of the tax rates means that less money will be taken out of each paycheck.  When you hear people saying, “Americans will have more money in their pockets,” this is what they are referring to.


Tax Year 2018


Tax Year 2017



Up to $9,525

Up to $19,050 (married)



Up to $9,325

Up to $18,650 (married)


$9,526 to $38,700

$19,051 to $77,400 (married)



$9,326 to $37,950

$18,651 to $75,900 (married)


$38,701 to $82,500

$77,401 to $165,000 (married)



$37,951 to $91,900

$75,901 to $153,100 (married)


$82,501 to $157,500

$165,001 to $315,000 (married)



$91,901 to $191,650

$153,101 to $233,350 (married)


$157,501 to $200,000

$315,001 to $400,000 (married)



$191,651 to $416,700

$233,351 to $416,700 (married)


$200,001 to $500,000

$400,001 to $600,000 (married)



$416,701 to $418,400

$416,701 to $470,700 (married)


$500,001 or more

$600,001 or more (married)



$418,401 or more

$470,701 or more (married)


Your income is taxed in each bracket, up to the total of your taxable income.  For example, if your taxable income is $50,000 in 2018, you will pay 10% on the first $9,525 ($952.50), 12% on the next $29,175 ($3,501), and 22% on the remaining $11,300 ($2,486).  Your total tax burden will be $6,939.50.  You are not taxed at the 22% rate on the entire $50,000.


Changes were also made to the Standard Deduction. Standard Deduction allows you to deduct a portion of your total income, which reduces the amount that is ultimately taxed. The lower your income, the less tax you will pay. A higher Standard Deduction, in addition to reduced tax rates, means you will get to keep more of the money you earn. However, this increase in the standard deduction coincides with the elimination of the personal and dependent exemptions.


Standard Deduction



Tax Year 2018



Tax Year 2017




Service members with children will benefit from the Child Tax Credit, which doubled under the latest tax law from $1,000 to $2,000.  The refundable portion of that credit is increased to $1,400.  Best of all, the earnings cap for eligibility more than doubled!  See the chart below for the new income limits.  There is also a $500 credit available for dependent children and adults over the age of 17.





Tax Year 2018



Tax Year 2017




Another important deduction for service members is moving expenses. This deduction was eliminated for most Americans, but not for service members. Moving expenses reimbursed by the military will not need to be reported as income, and expenses not reimbursed by the military will be deductible.


Finally, you may have heard about State and Local Taxes deduction.  In the past, taxpayers could deduct the taxes they paid to their home state from their income for purposes of their federal taxes.  Basically, the federal government would not double-tax you on state taxes. For 2018, the SALT deduction is capped at $10,000, which means if you pay $11,000 in state taxes, you will only be able to deduct $10,000 of that amount from your income when you file your federal taxes.


To better illustrate these changes, consider a basic example:  You are married with one child with a household income of $70,000 per year, including your spouse’s income, but excluding housing allowance and other non-taxable income.  Below is a chart showing how the new tax laws change your 2018 tax burden.  As you can see, the new tax laws not only affects your taxable income, but also taxes that income at a lower rate.


Tax Year 2018


Tax Year 2017


Taxable Income






Deductions and Exemptions



Standard Deduction



Personal and Dependent Exemptions






Income after Deductions and Exemptions






Initial Tax Burden









Child Tax Credit






Final Tax Burden



For the majority of taxpayers, the new tax code should result in a reduction in the withholdings from your paycheck and tax savings when you file your 2018 tax return.   Keep in mind the initial savings will likely be spread out over the year, but could total several hundred dollars.  It should also be noted that filing your taxes next year is likely to be much easier since a large portion of the population is expected to benefit from the increased Standard Deduction and will no longer need to itemize deductions to maximize their tax refund. 


Note: This article should not be construed as tax advice.  Not all deductions and tax situations were covered in this article. Consult a professional tax preparer if you have questions.