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Military Federal Income Tax Guide

Adjustments to Income


Updated February 01, 2004
Adjusted gross income is your total income minus certain adjustments. The following adjustments are of particular interest to members of the Armed Forces.

Armed Forces Reservists

If you are a member of a reserve component of the Armed Forces and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct your travel expenses as an adjustment to income on line 33 of Form 1040 rather than as a miscellaneous itemized deduction. The deduction is limited to the amount the federal govern­ment pays its employees for travel expenses. For more information about this limit, see Per Diem and Car Allowances in chapter 6 of Publication 463.

Member of a reserve component. You are a member of a reserve component of the Armed Forces if you are in the Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service.

How to report. If you have reserve-related travel that takes you more than 100 miles from home, you should first complete Form 2106, Employee Business Expenses, or Form 2106–EZ, Unreimbursed Employee Business Expenses. Then include in the total on line 33 of Form 1040 your expenses for reserve travel over 100 miles from home, up to the federal rate, from line 10 of Form 2106 or line 6 of Form 2106–EZ. Write “RC” and the amount of these expenses in the space to the left of line 33 of Form 1040. Subtract this amount from the total on line 10 of Form 2106 or line 6 of Form 2106–EZ and deduct the balance as an itemized deduction on line 20 of Schedule A (Form 1040). See Armed Forces reservists under Miscellaneous Itemized Deductions, later.

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 during the year) 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 was covered by an employer-maintained 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 Retirement 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 more information on IRAs, get Publication 590.

Moving Expenses

To deduct moving expenses, you generally must meet certain time and distance tests. However, if you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you do not have to meet these tests. You can deduct your un­reimbursed moving expenses on Form 3903.

Permanent change of station. A permanent change of station includes:

  • A move from your home to your first post of active duty,
  • A move from one permanent post of duty to another, and
  • A move from your 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 Federal 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,
  • The member’s, spouse’s, or dependent’s home of record, or
  • A nearer point in the United States.
If the military moves your spouse and dependents to or from a different location than you, the moves are treated as a single move to your new main job location.

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