Determining the net eligible income for moving expenses involves calculating the income eligible for deduction after considering necessary expenses. For instance, if an individual’s moving expenses total $5,000 and their reimbursement is $2,000, their net eligible income would be $3,000, the deductible amount.
This calculation is crucial for minimizing tax liability and maximizing relocation deductions. Historically, the Tax Reform Act of 1986 changed the rules for deducting moving expenses, making them less favorable for taxpayers.