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US Income Tax Changes for Tax Year 2018

As a result of President Trump’s tax reform, the following changes apply:

  1. Maximum refundable child tax credit has increased from $1,000 to $1,400 per child.

  2. Personal exemption of $4,050 per person has been eliminated.For example, non-resident alien individuals are subject to income tax on all their US income with no exemption.

  3. Updated standard deduction:

    • Individuals - $12,000

    • Head of household - $18,000

    • Married filing jointly- $24,000

  4. Qualified Business Income - A deduction of up to 20% of income for sole proprietorships, partnerships and S-corporations on income from US based business activity.

  5. Global Intangible Low Tax Income- Beginning in 2018, US citizens and residents who own shares in a controlled foreign corporation (CFC) are subject to income tax on the CFC’s net profit in their personal income tax return.

  6. Increased penalties for failure to file information returns-

    • Non-resident aliens owning US domestic corporation or LLC - The penalty for failure to timely file Form 5472 increased from $10,000 to $50,000.

    • US citizen or resident shareholders of a CFC - The maximum penalty for failure to timely file Form 5471 increased from $10,000 to $50,000.


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