Per Diem Tax Question

[IFLYASA]

It's that time of year when we all have to calculate our tax returns. I have yet to get the same answer to this. How are you caculating your per diem on your tax return? I know there is a certain per day price in each city that's published on the FAA webiste. I've heard some guys saying it's legal to add around 45$ per day on average on every overnight, then some saying to only deduct the difference from what you are paid, even though the IRS does not know how much per diem we get over the year. Most people say, "Oh my CPA does that, I don't know". Can anybody enlightening me???

Thanks..

 

[PumpkinPony]

http://www.irs.gov/irb/2004-42_IRB/ar14.html

I think this bulletin explains it pretty well.

 

[Wankel7]

Huh, I was under the PerDiem I was paid is tax free....hummmm.....

 

[atrdriver]

It's that time of year when we all have to calculate our tax returns. I have yet to get the same answer to this. How are you caculating your per diem on your tax return? I know there is a certain per day price in each city that's published on the FAA webiste. I've heard some guys saying it's legal to add around 45$ per day on average on every overnight, then some saying to only deduct the difference from what you are paid, even though the IRS does not know how much per diem we get over the year. Most people say, "Oh my CPA does that, I don't know". Can anybody enlightening me???

Thanks..

I use the "normal" amount, which I think is $33 for a full day out, and .75 of that for each partial day out. Add all of them up, then suntract what you are paid per diem, and deduct the difference. You can use the amounts from each city, but that becomes a real PITA, that's why I just use the standard.

 

[Flash]

I was using the standard also but found that if I had a full day perdiem paid from my company 24 * 1.40 = 33.60, I ended up with nada for the taxes. I went on the irs site and looked up each city I went to and found the corresponding fed per diem. For a little extra work I was able to make a few more bucks on the tax return

 

[Medeco]

The latest ALPA magazine that came to my house yesterday actually has some very useful infomation about this exact question.

It gives you the breakdown of what you can and cant do, as well as the IRS website address for you and/or your accountant to reference.

Medeco

 

[TWA Dude]

Just FYI, my tax preparer deducts on average $60/night for all my layovers. The fact that I already get PD is irrelevant. He explains that it's a nice loophole for people who put "Transportation" in the box under occupation. He's done my taxes along with hundreds of other pilots for many years. Yes, he's been audited by the IRS and won every time so now they don't bother him. I know some other tax-preparers do the same thing so ask around. Oh, he charges $175 and is worth every penny.

 

[skiddriver]

Use Form 2106.

Add up your M&IE. I've found it useful to use the CONUS city specific rates as most of the places I went were in the higher expense category. You get 3/4 of a day's per diem for the first and last day of the trip, figured for the city you flew to (1st day) or flew from (last day). On the form, subtract out your non-taxable per diem reimbursement. As an airline pilot, this amount is reduced to 70% of the net unreimbursed expense.

Your other business expenses (unreimbursed medicals, books, unreimbursed qualified training, equipment, union dues etc.) are tallied in a separate column. They are added in at 100%.

Add the two together and enter it on Schedule A. On Schedule A, the amount that is in excess of 2% of your adjusted gross income is deductible as an itemized deduction. So if your unreimbursed expenses are $2000, and your AGI is $60,000, you get an itemized deduction of $800.

 

[Rottweiller]

Huh, I was under the PerDiem I was paid is tax free....hummmm.....

Only if an overnight away from base is involved. Perdiem on day trips are taxed.

I have used pilottax.com for years and they do a great job and you can even pay them out of your return so you don't have to anti up any $$ from the outset.

http://www.pilottax.com

 

[Wankel7]

Thanks for the website! That is good to hear...we hit the road for 19 days straight....