As a result of President Trump’s tax reform, the following changes apply:
- Maximum refundable child tax credit has increased from $1,000 to $1,400 per child.
- 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.
Updated standard deduction:
* Individuals - $12,000
* Head of household - $18,000
* Married filing jointly- $24,000
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.
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.
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.