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....

 

[RJET]

rotweiller,

on the average how much does pilottax charges you?
THanks

 

[dalegribble]

Pilot Tax is expensive maybe ~$500 Do a great job, extra writeoffs etc.

I never pay USam at the end of the year

 

[Rottweiller]

rotweiller,

on the average how much does pilottax charges you?
THanks

Last year they charged me $159.00 for the federal 1040 with itemized deductions ($99.00 if you don't want to claim itemized stuff) plus $30.00 for the State return. All filed electronically and I got my return in my account 8 days after they filed and the above amounts were paid from my return. PilotTax take care of all the per diem calculations and will work out the best of either what the company paid or the standard deductions, (some overnights we had were paid higher that standard). The work sheet is pretty self explanatory and even tells you what you can claim and how much for the categories and which you don't need to show reciepts for so you can claim the max there!

The previous year I went to H&R Block (not again!!) and managed to get me an extra $400+ than H&R.

The 2004 organizer from PilotTax will be out in Jan so you can get your hands on YOUR $$ late Jan early Feb.

 

[SneakyJake]

Request the paperwork from pilottax.com and then just apply it to Turbotax, etc.

The paperwork at least shows you what is a legal deduction and what is not based on their audits.

 

[CLE145CA]

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.

The standard M&EI rate for tax years 2004 and 2005 is $41 for cities in the continental United States and $46 for cities outside the continental United States.

 

[typhoonpilot]

First off, HAPPY NEW YEAR !!

I use a guy who is very aggressive where this is concerned and will back it up if you happen to get audited. As an example, in 2002 ( the last year I flew in the U.S. ) I had, " Pilot travel costs per OCONUS and CONUS rates " of $10,218 versus " employer provided reimbusements of $4282. One of the good things he does is provide a huge printout of the computation and supporting tax law that goes along with your return so that the flunky who processes it will think twice about questioning it. He won a court ruling a few years ago that allows up to $75.00 per meal deduction with no receipt. Some people actually push it that far, I wouldn't but that is the current limit of the "envelope".

I've used the is guy since 1997. He has become very busy and there is less of the one-on-one chatting we used to do, but the results are what counts. He isn't cheap but he will do the Per Diem computation only if you want for a lower fee.

www.pilotax.com

slightly different from the above pilot tax.


Typhoonpilot

 

[sgwabd]

The best advise i ever received was from my friend Doug who said to use his TAX guy. There are manny passages that will mark your maturity from a young high school kid to professional adult. The obvious ones are moving out of your parent's house, buying furnature, buying sugar and other condiments. The most important is a tax guy. The money spent on a tax guy is pricessless

 

[Gorditas]

Hello,

I have Pilot-TAX do my per-diem and professional deductions for $79 and then put the info that they give me into Turbo Tax. They give you a nice bound summary that should explain everything to the IRS should you get audited. For me this method is the best comprimise of DIY and paying a professional. Turbo Tax takes care of everything else, I personally can't justify paying someone to do what I can do quickly myself on Turbo Tax.

Good luck

 

[Clyde]

Hope this helps

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..

There is a place near Dallas called Pro-Diem. Unfortunatley I don't have their address handy, but I've used them in the past. The cost is around $50.00. You send them copies of all of your company pay statements that list cities and per diem and they figure everything out for you, including filling out the tax form for you. The fee is deductible on your taxes too.

Being domestic, here is what I do. I record the sum of the meal purchases for each day in my small logbook. At the end of the year, that amount is compared to the amount I was paid in per diem for the year. Usually, the amount I was paid is less than what I was able to earn. That difference is compared to how much I spent. My CPA can figure out which is more adventageous (how much I spent or I how much difference in earned vs earnable) and uses that figure.

When I flew international, I traveled to 17 different countries in one year. Pro-Diem easily calculated everything I needed based on the per-diem records and time spent in each city around the world. I'll use them again next year when I go back to the international side.

 

[49W]

I'm using Turbotax and was wondering where I enter the deductable per diem. Do I enter it in the job related expenses section?

 

[IanSaw]

It's tricky to find it.