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Frequently Asked Questions: Adjustments to Income

Q: To deduct moving expenses, there are two tests to meet: One is distance and other is time. One must complete 39 weeks of work in a year from the date of moving. How rigid is this requirement?

A: Moving expenses are usually deductible because a person changed job locations or started a new job. In most situations, a person has obtained the new job before incurring the moving expenses. The "time test" is a requirement, and apparently its use is to restrict the deduction in cases in which it could be abused by people who relocate and do not have a new job or who are not actively seeking a new job. The government has chosen 39 weeks as the rule.

Q: My spouse is retired and had no earned income. I, however, did have earned income, and I participate in my company's retirement plan. If we file married filing jointly, is she eligible to make a deductible, traditional IRA contribution, based on my earned compensation?

A: She may use your earned income to make an IRA contribution as long as she has not reached age 70 1/2. She may make a contribution up to $5,500 ($6,500 if over age 50).  For tax year 2014, you may deduct her contribution as long as your joint adjusted gross income is less than $95,000. Between $95,000 and $115,000 the amount deductible phases out to zero. See the instructions for either Form 1040 or 1040A for a work sheet you can use to compute the amount that is deductible.

Q: My parents took out a student loan, but I'm now an independent taxpayer making the payments. Who can claim the interest deduction, me or my parents?

A: Neither you nor your parents are eligible for the deduction in this unfortunate "catch-22" situation. Even though you are making the payments, you did not take out the loan and do not have primary responsibility for repaying it. Your parents are not eligible for the deduction because they did not pay the student loan interest. Always remember that it is the taxpayer's responsibility to figure and claim the Student Loan Interest Deduction correctly.

Q: I make support payments to my ex-spouse for her and our two minor children in her custody. Are these payments deductible as alimony?

A: Child support payments to a spouse or ex-spouse are never tax deductible. Alimony payments you make to a spouse or ex-spouse are tax deductible. In order to determine whether you are paying alimony or child support, you will need to look at your divorce decree or separation agreement or court order that ordered the payments. Any payment that is specifically designated as child support or treated as specifically designated as child support under your divorce or separation instrument is not alimony. The amount of child support may vary over time. Any other payment may or may not be alimony. For example, it may be considered a property settlement and not tax deductible. You should discuss this issue with your attorney.

Through the AARP Foundation Tax-Aide program, AARP Foundation is providing online tax counseling as a public service, and cannot guarantee the accuracy of the information provided. Your taxes are your responsibility. You are solely responsible for what you do in your own tax situation.

The AARP Foundation Tax-Aide Program is a volunteer-run, free tax-preparation and assistance service offered to low- and middle-income taxpayers with special attention to those age 60 and older. Our volunteers are trained and IRS-certified to understand individual federal-tax issues. Our volunteers provide tax assistance as a public service and cannot guarantee the accuracy of the information provided.