Adjusted gross income is your total income minus certain
adjustments. The following two adjustments are of particular interest
to members of the Armed Forces.
Individual Retirement Arrangements
For purposes of a deduction for contributions to a traditional
individual retirement arrangement (IRA), Armed Forces members
(including reservists on active duty for more than 90 days) are
considered to be active participants in an employer-maintained
retirement plan.
Generally, you can deduct the lesser of the contributions to your
traditional IRA for the year or the general limit (or spousal IRA
limit, if applicable). However, if you or your spouse were
covered by an employer retirement plan at any time during the
year for which contributions were made, you may not be able to deduct
all of the contributions. The Form W-2 you or your spouse
receives from an employer has a box used to indicate whether you were
covered for the year. The "Pension Plan" box should have a mark
in it if you were covered.
Individuals serving in the U.S. Armed Forces or in support of the
U.S. Armed Forces in designated combat zones have additional time to
make a qualified retirement contribution to an IRA. For more
information on this extension of deadline provision, see
Extension of Deadline, later. For information on IRAs, get
Publication 590.
Moving Expenses
To deduct moving expenses, you generally must meet certain time and
distance tests. However, members of the Armed Forces who move because
of a permanent change of station do not have to meet these tests.
Moving expenses are reported on Form 3903.
Permanent change of station.
A permanent change of station includes:
- A move from home to the first post of active duty,
- A move from one permanent post of duty to another, and
- A move from the last post of duty to your home or to a
nearer point in the United States. The move must occur within one year
of ending your active duty or within the period allowed under the
Joint Travel Regulations.
Spouse and dependents.
If a member of the Armed Forces deserts, is imprisoned, or dies, a
permanent change of station for the spouse or dependent includes a
move to the place of enlistment or to the member's, spouse's, or
dependent's home of record or a nearer point in the United States.
If the military moves you, your spouse, and your dependents to or
from separate locations, the moves are treated as a single move to
your new main job location.
Reimbursements.
Do not include in income the value of moving and storage services
provided by the government in connection with a permanent change of
station. Similarly, do not include in income amounts received as a
dislocation allowance, temporary lodging expense, temporary lodging
allowance, or move-in housing allowance. Generally, if the total
reimbursements or allowances that you receive from the government
because of the move are more than your qualified moving expenses, the
excess is included in your wages on Form W-2. However, if any
reimbursements or allowances (other than dislocation, temporary
lodging, temporary lodging expense, or move-in housing allowances)
exceed the cost of moving and the excess is not included in your Form
W-2, the excess must be included in gross income on line 7 of
Form 1040.
Use Form 3903 to deduct qualified expenses that exceed your
reimbursements and allowances (including dislocation, temporary
lodging, temporary lodging expense, or move-in housing allowances that
are excluded from gross income.)
If you must relocate and your spouse and dependents move to or from
a different location, do not include in income reimbursements,
allowances, or the value of moving and storage services provided by
the government to move you and your spouse and dependents to and from
the separate locations.
Do not deduct any expenses for moving services that were provided
by the government, or that were reimbursed to you, that you did not
include in income.
Deductible moving expenses.
If you meet the requirements discussed earlier, you can deduct the
reasonable unreimbursed expenses that are incurred by you and members
of your household.
You can deduct expenses (if not reimbursed or furnished in kind)
for the following items.
- Moving household goods and personal effects, including
expenses for hauling a trailer, packing, crating, in-transit storage,
and insurance. You cannot deduct expenses for moving furniture or
other goods you bought on the way from the old home to the new
home.
- Travel and lodging expenses from the old home to the new
home, including automobile expenses (either actual expenses or 10
cents per mile) and air fare. You cannot deduct any expenses for
meals. You cannot deduct the cost of unnecessary side trips or lavish
and extravagant lodging.
You can only include the cost of storing and insuring household
goods and personal effects within any period of 30 consecutive days
after the day your things are moved from your former home and before
they are delivered to your new home.
Member of your household.
A member of your household is anyone who has both your former home
and your new home as his or her main home. It does not include a
tenant or employee unless you can claim that person as a dependent.
Foreign moves.
A foreign move is a move from the United States or its possessions
to a foreign country or from one foreign country to another foreign
country. It is not a move from a foreign country to the United States
or its possessions.
For a foreign move, the deductible moving expenses described
earlier are expanded to include the reasonable expenses of:
- Moving your household goods and personal effects to and from
storage, and
- Storing these items for part or all of the time the new job
location remains your main job location. The new job location must be
outside the United States.
Reporting moving expenses.
Figure moving expense deductions on Form 3903. Carry the deduction
from Form 3903 to line 26, Form 1040.
More information.
For more information, get Publication 521
and Form 3903
instructions.
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