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Tax Code Changes Could Mean Bigger Returns for Service Members, Families

January 27, 2019

As troops sit down to file their 2018 income tax returns, the Defense Department wants them to know that some significant changes in tax law could put more money in their pockets.

But to maximize their refund, they should know about several new rules.

The Tax Cuts and Jobs Act of 2017, the Veterans Benefits and Transition Act, the Combat Injured Veterans Tax Fairness Act and DoD policy changes all have affected the tax code as it applies to military personnel, explained Army Lt. Col. David Dulaney, executive director of the Armed Forces Tax Council during a phone call with reporters on Friday.

The good news, Dulaney said, is that most service members “should see a substantial reduction in the overall federal taxes for 2018, even if their itemized deductions are suspended or capped because of changes in tax code.”

Increased standard deductions and reduced tax rates, introduced in late 2017 by the Tax Cuts and Jobs Act, affect nearly all service members, and a doubling of the child tax credit will help those with children, Dulaney said.

“Most of our military families will see a substantial reduction of their overall tax liability,” he said.

Several other changes apply to specific populations within the military community, Dulaney said. Here are some of the changes that apply:

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