2018 Tax Update Affecting U.S. Expatriates

The Social Security Administration (SSA) and Internal Revenue Service (IRS) announced inflation adjustments for the following, which affect tax year 2018, on October 13 and October 19, respectively:

Earnings subject to the Social Security tax;
Tax provisions, including tax rate schedules and other tax changes (Rev. Proc. 2017-58); and
Pension plan and other retirement-related items (Notice 2017-64).

These adjustments are generally applicable to taxes to be withheld for 2018 and used on tax returns to be filed in 2019. To aid your planning for 2018 and the preparation of your 2017 U.S. expatriate tax return in the coming months, we have tabulated the key changes against the corresponding figures for 2016 and 2017.

In the event you expect a material change to your personal or financial circumstances, you should consider reviewing your taxes for tax mitigation opportunities, updating your tax withholding, and/or adjusting your estimated tax payments.

Tax Rate Schedules

Long-Term Capital Gains and Qualified Dividends – Tax Rates

Net Investment Income Tax (NIIT) ²

Foreign Earned Income Exclusion

Standard Deduction and Itemized Deductions

Personal Exemption

Education Provisions

Retirement and Employee Benefits – Contribution Limits and MAGI Thresholds for Phaseout

Alternative Minimum Tax

Employment Taxes – Rates and Thresholds

Expatriation to Avoid Tax

Gifts Reporting

American Expatriate Tax is a part of Contexo Global Mobility Solutions & Tax Consulting Ltd. registered in Hong Kong. Together, we help companies and individuals navigate through the complexities of global mobility and related tax issues. Here is where you will find a blend of expertise from Big 4 accounting firms and Fortune Global 500 companies but the attention of a boutique consulting practice. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.