simple tax question

[cougarblue]

ok Ive got a simple per diem question that i need some help with!

If I have 40 4-day trips, I take the standard deduction of $52 (i think thats what it is) and was paid 4000 ntax perdiem. what is the actual deduction?

would you also include how you came up with your answer. Thanks

 

[Dashmonster]

The IRS language states that you have to use a "consistent" method to calculate your per-diem. I also used the $52 figure (dont know if it is right). Then I only multiplied by the number of hotels I stayed in (4 day trip = 3 nights). then multiply by 52 and in your case I got $6240. subtract the 4000 they paid you and you come up with a 2240 deduction.

If you want to get closer to an actual number take that extra day that you subtracted from the four day and multiply it by half of the IRS $52 standard. In your case 40 X 26 = 1040 then add that to your 6240 and get 7280.....Subtract the 4000 they paid you and use a 3280 deduction.

I am not an accountant and have done this method for four years now without incident. but from what I read in the tax code and from talking to other pilots about this i think the key is being consistant from year to year....you dont want to raise any flags on your return by having big differences from year to year.

Hope this helps....cheers

 

[captainv]

you can also use the specific M&I rates for individual cities, taken from the IRS chart. Most big cities will be more than $52.

 

[regionalcap]

The IRS language states that you have to use a "consistent" method to calculate your per-diem. I also used the $52 figure (dont know if it is right). Then I only multiplied by the number of hotels I stayed in (4 day trip = 3 nights). then multiply by 52 and in your case I got $6240. subtract the 4000 they paid you and you come up with a 2240 deduction.

If you want to get closer to an actual number take that extra day that you subtracted from the four day and multiply it by half of the IRS $52 standard. In your case 40 X 26 = 1040 then add that to your 6240 and get 7280.....Subtract the 4000 they paid you and use a 3280 deduction.

I am not an accountant and have done this method for four years now without incident. but from what I read in the tax code and from talking to other pilots about this i think the key is being consistant from year to year....you dont want to raise any flags on your return by having big differences from year to year.

Hope this helps....cheers

Remember..you can only claim 80% of the difference.

 

[SplitBar]

are you sure it is 80% ? That is the question I was going to post. I know you can't claim the entire difference but I thought it was 75%. Perhaps it got raised of I was using the wrong # all along.

Thanks for any insight

 

[NCFlyer]

It was 75% in the past, this year it was raised to 80% for transportation industry workers.

 

[Roger Dat]

If you use Turbo Tax, does it calculate the 80% difference for you????

 

[SkyNation]

ezperdiem.com will figure it all out for you for like 29 bucks.

 

[NCFlyer]

If you use Turbo Tax, does it calculate the 80% difference for you????

Yes.

It is figured while completing Form 2106 for business expenses.

TurboTax will ask you for your allowable M&IE amount. Which you will have to figure in what ever way you like. i.e. the standard $52 / night or each individual overnight city. It will then ask for any amount that you were paid by your employer. TurboTax will calculate the difference and then allow the 80% deduction.

It really isn't that complicated.

 

[Roger Dat]

So how would you compute a 4 day trip....3 nights at $52. Or do you do 2 full days @ 52, then partial days for the first and the fourth day....

 

[indianboy7]

read IRS publications 463, when it opens, search for "transportation workers". There are a couple methods you can use. The first one (the one I use) counts the first and last day as 3/4 days each. So a 4 day trip would count as 3.5 days.

Publications 463, 529, 1542 and Form 2106 all have references to what we do. It takes a while to sift through everything, but take the time to read it and do it right...

 

[Roger Dat]

OK thanks...So if you use the standard $52 / day calculation, a 4 day would be worth $182 and a 3 day $130....

Does that sound right???

 

[bluefly72]

OK thanks...So if you use the standard $52 / day calculation, a 4 day would be worth $182 and a 3 day $130....

Does that sound right???

That is correct, but then again I'm not a CPA

 

[vclean]

I may be wrong, but without looking it up, I believe you can only deduct the amount over 2% AGI (adjusted gross income). Same as medical expenses, uniforms, etc

 

[Nevets]

ok Ive got a simple per diem question that i need some help with!

If I have 40 4-day trips, I take the standard deduction of $52 (i think thats what it is) and was paid 4000 ntax perdiem. what is the actual deduction?

would you also include how you came up with your answer. Thanks

Day 1 $39
Day 2 $52
Day 3 $52
Day 4 $39
Total $182 per 4 day trip

40 4 day trips x $182 = $7280

$7280 - $4000 = $3280

$3280 x 80% = $2624

 

[Roger Dat]

How would you calculate a 2 day trip...$52 + $52 then 75% of the total

 

[IHateDaley]

I used a different method for calculating partial days. I claim 100% ($52) for any partial day where the trip begins before noon or ends after 5 p.m. This is permitted by publication 463 (I picked these times on my own though).

 

[IHateDaley]

Also don't forget to use $58 a day for any overnight outside the continental U.S.

 

[Nevets]

How would you calculate a 2 day trip...$52 + $52 then 75% of the total

The rate may be prorated using any method that is consistently applied and in accordance with reasonable business practice. For example, if an employee travels away from home from 9 a.m. one day to 5 p.m. the next day, a method of proration that results in an amount equal to two times the federal M&IE rate will be treated as being in accordance with reasonable business practice (even though only one and a half times the federal M&IE rate would be allowed under the Federal Travel Regulations).
http://www.irs.gov/pub/irs-drop/rp-08-59.pdf

Another thing to keep in mind, if you use the special rates ($52 CONUS/$58 OCONUS), the deduction may be somewhat less than if the standard M&IE rates are used, especially if you usually travel to higher-cost or international destinations.

Also, this is all only deductable to the extent that a pilot’s aggregate miscellaneous itemized deductions (including business expenses) exceed 2 percent of the pilot’s adjusted gross income.

 

[Nevets]

One last thing, things that are subject to the 2% limit other than per diem are, union dues and expenses; depreciation on a computer or cell phone your employer requires you to use in your work; dues to professional societies; job search expenses in your present occupation; legal fees related to your job; licenses and regulatory fees; medical examinations required by an employer; occupational taxes; passport for a business trip; subscriptions to professional journals and trade magazines related to your work; tools and supplies used in your work; work clothes and uniforms if required and not suitable for everyday use; and work-related education among other things.