Many people have questions about the changes introduced in the 2018 tax year. The tax reform brought several updates, especially regarding the standard deduction and child tax credits.
There have also been common myths, such as the belief that individuals with a Tax ID (ITIN) cannot file taxes. This is not true.
👉 Anyone who earned income in the United States must file a tax return, whether they have a Social Security Number (SSN) or a Tax ID, according to the Internal Revenue Service (IRS).
Below are some of the most significant changes for the 2018 tax year.
1️⃣ Standard Deduction Increased
The government allows taxpayers to exclude a portion of their income from taxation. The amount depends on filing status:
- Married filing jointly: $24,000
- Married filing separately: $12,000
- Single: $12,000
- Head of household: $18,000
Example:
If a married couple earned $53,000 in 2018 and filed jointly, they would not pay taxes on the full amount.
They would only be taxed on $29,000, since $24,000 is covered by the standard deduction.
2️⃣ Personal Exemptions Eliminated
Previously, taxpayers could claim personal exemptions for themselves and dependents.
👉 With the tax reform, these exemptions were eliminated for the 2018 tax year.
3️⃣ Penalty for Not Having Health Insurance
Any U.S. citizen or legal resident who did not have health insurance for at least 9 months in 2018 was required to pay a penalty when filing taxes.
📌 This penalty was eliminated starting with the 2019 tax year.
4️⃣ Child Tax Credit Increased
One of the most beneficial changes was the increase in the Child Tax Credit:
- Previously: $1,000 per qualifying child under age 17.
- For 2018: $2,000 per qualifying child under age 17.
🔹 Of this amount:
- $1,400 is refundable.
- $600 is non-refundable and can only be used to reduce tax liability.
File Your Taxes with Confidence
Understanding these changes helps you maximize benefits, avoid mistakes, and stay compliant with IRS regulations.
At Calidad Insurance, our trained tax professionals ensure your taxes are prepared accurately and responsibly, giving you peace of mind.
Do you need more information about any of our insurance policies? 👉 Follow this link