please help with tax perdiem

[av8tor02]

Thanks in advance for whoever helps on the formula for the write off of our perdiem as pilots. I would appreciate it. Thanks

 

[Rez O. Lewshun]

Any trip without an overnight (daytrips) that you recieve per diem is taxable. Overnight trips per deim is not taxable.

I take the CONUS rates subtract the per deim and take the deduction...

 

[radarlove]

There is no write-off for per diem, it is by its nature tax free.

If you get less per-diem than the government allows (dunno the figure, around $30-40/day) then you can take a deduction for the difference between the government transportation worker per-diem allowance and what you got for your days on the road.

In the vast, vast majority of cases, folks get pretty close to exactly the government per-diem rate so you get to deduct zero.

Another way to do it is to add up all of your expenses, and if they are more than the per-diem you received, deduct the difference. Better have receipts.

Every year someone yaps about taking a deduction for every hour they're away from home and how they get a huge refund. Yeah, until you get audited. If you get per-diem it's really unlikely that there is any deduction available at all. I've never met anyone who, other than cheating (and not realizing it) actually got a significant deduction.

Here's how it works: the government, knowing that transportation workers have huge recordkeeping challenges, offers a way to simply use a per-day rate. Most airlines pay around this rate, so it's a wash--you get tax-free money the government says, "don't worry about keeping actual records" and there's no reporting requirements at all at tax time.

Some airlines pay more per-diem than the government rate--then the extra is taxable income and you get withheld for the extra.

Unless you have incredibly high expenses on the road, it is unlikely that there is any tax issue one way or the other for you to bother about.

Now, I predict someone coming on here and explaining that their accountant figured out every city they spent more than two hours in, and took the full-day per-diem rate for each of those two hours, then used this staggering high number by subtracting actualy per-diem paid and got a big refund.

Uh huh. The IRS knows how many hours there are in a day. Also, usually these accountants use the higher governement per-diem rate that includes hotel costs, however, unless you pay the hotel fee yourself, you don't get to deduct it.

So yes, there are guys that scam the system and take huge per-diem deductions, but if/when they get audited, the IRS sees the "per-diem" section on their payroll records and figures out that they're double dipping. It comes in already free of tax, end of story.

Remember, most filings don't get audited, so when someone gives you advice about being aggressive (read: cheating) and getting away with it, it doesn't mean that their method is approved, it just means that they haven't had to sit down across a table from an IRS agent yet.

I've actually done the math by counting up the days I was on the road, multiplying that by the transportation worker rate, then subtracting that from my per-diem earnings. It's always been a wash and hasn't helped at tax time.

 

[AQ PILOT]

I don't want to get on radarlove's bad side...he seems to have some strong opinions on this subject. But, I've heard all kinds of stuff for years on this issue. A lot like radar said. So I went to http://www.pro-diem.com/main.htm and filled out their forms. Cost me $50. My accountant told me it was money well spent but she has yet to give me the exact amount I saved. I know I was paid around $3,500 in per-diem and I could have been paid up to $7,500 at government rates...I think the difference, or some portion of it, was deductible...

That's all I know.....which in the grand scheme of things is really really sad.....

 

[GuinessGuy]

You're right dude, and that was the best $50 you ever spent. In many cases, there is a huge disparity between the gov rate and the rate your company pays. When I'm on a mil trip, my per diem is much more than an airline trip.

Mil trip------RON at HPN.......$70 perday
Airline trip---RON at HPN.......$30 perday

I have have done enough of both to see for myself that gov rate per diem is a much better deal than airline per diem.

I'll keep using the ratio (let my accountant use it) for all my airline per diem.

 

[SneakyJake]

Search the other tax posts on here, others have had great advice. Just get the paperwork from pilottax.com and do the work yourself on turbotax. They have been audited hundreds of time so you are safe to follow their guidelines. If your perdiem is less then $2/hour, you'll get money back for sure.

 

[radarlove]

Just make sure you're not using the hotel rate, which is closer to $70. A lot of accountants who don't realize that the hotels direct bill the company use this rate, but you can't, since you don't pay the hotel bill.

I don't disagree with the two previous posters, if you have a low rate of per-diem, then you can deduct the difference between the government and your own--but as the other guy said, unless you're getting less than two bucks an hour, it comes out as a wash.

 

[Hutcha]

Couple of things.

• You don't need receipts for expenses under $75. You just have to keep a written record of your expenses.
• The standard IRS per diem rate for transportation workers is $41/day
• You can claim $41 per day or the actual local rate where you spend the night (minus company paid per diem)
• Companies usually pay per hour away. You can claim per day (with an adjustment for the first and last day). Say you leave on a trip Mon at 1800 and return Wed at 1800. You spend 2 nights in Orlando ($47/nt). Your comp pays you $2/hr x 48 hrs =$96. Take 75% of $47 for Mon & Wed and $47 for Tues. $35.25+ 41 + 35.25=$117.50. You can claim the $21.50
• Don't forget van driver tips and your daily shoe shine.

GL

 

[FearlessFreep]

Just finished doing taxes for the first time taking into account per diem allowances.

I used the service provided by Pro-Deim. In their package they include instructions and advise on how to apply the data that they provide.

You do not actually claim as income the amount your company pays you for per deim but it is used in the calculation of just how much you can apply to your deductions.

One of the things to take into consideration is where you are getting laid over, the amount of time you are spending there, and the amount your company is "reimbursing" you on per deim.

My company's per deim rate is $48.00 a day domestic or international.

Just quickly looking over the rates where I was laid over the lowest rate was DFW at $43.00 a day, the highest was KIX (Kansai, Japan) at $170.00 a day. Obviously the DFW rate is lower than what I am paid & the KIX rate is substantially higher. Simple math. If you are mostly domestic and you get paid a fair amount for per deim it might not be worth it. Internationally you can obviously do much better.

You utilize Form 2106 for the following calculations. Basically you take the government allotted rate (you get this information most easily from Pro-Deim) and subtract what your company paid you for per deim (This amount is ONLY used for calculations purposes and does not effect your taxable income) then, depending upon different factors you multiply the difference by either .5 or .7 Add your other job related expenses - non reimbursed like laundry services, manuals, headsets, union dues, etc. and this amount is put on your Schedule A.

I do not make a lot of money and don't have a lot of deductions. If I filed a 1040A I would end up paying about $350.00 Filing the 1040 with the per-deim accounting I get a $900.00+ refund.

I hope that this answers your questions. I strongly suggest that you utilize Pro-Deim. They do all the calculations and apply all the rates for your cities. It would be worth the $50.00 just even as an experiment to see if it utilizing your per deim would be advantageous to the bottom line on your taxes.


Take Care & Good Luck To Us All!