SWA Per Diem tax question

[Jolly Roger]

I've done some initial research on per diem Fed Tax deductions. From what I have roughly figured ($41.00 standard daily rate - company paid per diem x 70%), I don't see how I will save much if any more tax $. ... Anyone out there able to save much money this way? Maybe I am figuring it wrong....

 

[lumax]

Don't forget that the daily rate varies per city. See this site for city rates.
http://www.gsa.gov/Portal/gsa/ep/contentView.do?programId=9704&channelId=-15943&ooid=16365&contentId=17943&pageTypeId=8203&contentType=GSA_BASIC&programPage=%2Fep%2Fprogram%2FgsaBasic.jsp&P=MTT
Also, if you are on a 3-day trip (2 overnights at other than you domicile), for day 1 you can only claim 75% of the deduction for that city, 100% for day 2, and 75% for day 3.

Example: based in ORD.

First overnight in MCO ($47/day) .75 x 47 = 35.25

Second overnight in DCA ($51/day) 1 x 51 = 51.00

Return to ORD on third day (use DCA per diem) .75 x 51 = 38.25

Total deduction for 3-day trip is $124.5

If you are using TurboTax, it will figure the 70% limitation for you.

The numbers that you will need for your return are what the Co. paid you in per diem. Usually found on box 12 (a) L in your W-2. And the total deduction you can take using the above example. Plug this numbers in form 2106 and voila!


I was on the phone with the IRS for over 1 hour and he agreed this was the correct way to do it

 

[Jolly Roger]

Thanks for the quick response, Lumax. Yes, I omitted the details of .75 of the first and last days. Also, I think $41.00/ day is a standard rate for ease of calculation, but specific cities pay more. It looks like once I take all of this into consideration and subtract the pay received from 12(a), it doesn't amount to much. Have you found this a considerable saving?

 

[lumax]

I will receive an extra $150.00 back form Uncle Sam.
When you figure about 1/2 hour to do all the necessary calculations, $150 is pretty good!

 

[Slug]

The best US city is $51. $51 x .7 = $35.7. At $2.15/hr x 24 = $51.6 I don't see how your city expenses exceed your employer reimbursment. This doesn't include the 3/4 for first and last days. I don't even consider trying to figure it out on my taxes. SWA more than recoups anything the government would let us take.

 

[OffHot]

Good luck, I was on the phone with the IRS one year and she told me that SWA actually pays us more than required, plus there is taxable and non taxable amounts which is why block 12 "L" exisits. Which means after you have added all your city pairs up you then must subtract the per diem given to you by the company plus blah blah blah blah, needless to say I gave up. Living near many pilots and many accountants I have seen those who's accountants don't break it down and those who do (primarily international guys). So good luck!

 

[atpcliff]

Hi!

From "trainer8" from a thread in the "Regionals" forum:

Transportation Industry Rate for 2005 is $41/day, but depending on your RON city, you may be able to do better doing the individual city rate, i.e., DCA is $54/day up to 9/30 and $64/day after that till 9/30/06.

As you can see, there are cities with quite high perdiem rates, but it still might not be enough to matter too much for SWA employees.

Cliff
YIP

 

[AdlerDriver]

I've done some initial research on per diem Fed Tax deductions. From what I have roughly figured ($41.00 standard daily rate - company paid per diem x 70%), I don't see how I will save much if any more tax $. ... Anyone out there able to save much money this way? Maybe I am figuring it wrong....

This really only becomes a factor if you spend your year flying internationally. Last year I had a $2700 deduction. If I had been flying domestically, it would have been 0 ($56/day from company).

If you're getting $51/day from SWA don't waste your time.

Since you have include cities that have a lower rate than your company in you calculations, in the US it is usually a wash. At $51/day, a larger percentage of city rates are going to be lower than that and you'll end up in the black with nothing to deduct anyway.

 

[Daddy]

Per diem tax hole is a dog with fleas...high risk/work and low return...you're better off stretching those goodwill donations with higher 'thrift shop values'

 

[Jolly Roger]

Thanks for the advice, guys. It didn't look all that viable as a tax break, just wanted to make sure I wasn't passing up something important.

 

[N tha jungle]

It's basically a wash if you're getting much more than 1.75-2.00 hour perdiem.

 

[Alcatraz]

This topic came up a few weeks ago.

The Meals and Incidental Expenses deduction for SWA pilots is near zero due to the great per diem rate we get.

However, if you were in new hire training in 2005, you weren't paid per diem, and THAT can be a ton of money to deduct! Using the standard rate for DAL, I may be able to get back from the government a considerable portion of what I actually spent on meals (and beer... mostly beer:beer: ) for the 45 days or so I was out there (and from the other airline's new hire class I attended in 2005).

 

[Slug]

Great point, Alcatraz. On that subject, if you drove to training don't forget you mileage to, from, and while you were there.

 

[TheBaron]

I'm probably being lazy, or dumb, or both...
Does anybody know where to find a list of allowed daily rates for international destinations. Does the IRS publish it? Probably 75% of my flying since coming on line has been international.

 

[AdlerDriver]

I'm probably being lazy, or dumb, or both...
Does anybody know where to find a list of allowed daily rates for international destinations. Does the IRS publish it? Probably 75% of my flying since coming on line has been international.

Try this link.
http://www.state.gov/m/a/als/prdm/

I went through all this last year. PM if you run into some questions.

 

[TheBaron]

Thanks. That was exactly what I was looking for. The international rates were certainly a lot higher then I expected, at least for the places I overnighted. That should make the deduction worth the extra effort.

 

[atpcliff]

Hi!

I just looked up the intntl rates yesterday. They're on the irs.gov site. The intntl are listed by country. The us rates have a map with a selection box for the year (2005/2006). U click on a state, and it tells you all the cities that have higher than the standard rate.

Cliff
YIP

 

[SWPA Pilot]

Also, if you are on a 3-day trip (2 overnights at other than you domicile), for day 1 you can only claim 75% of the deduction for that city, 100% for day 2, and 75% for day 3.

Does this only go by calender day? Or does it go by layovers? I'm flying at night and say I leave my base at 0300 local, layover in another city, and then back to my base at 2300 local the same calender day. Can I only claim 1 day with no 75% part of days.

 

[737tanker]

Does this only go by calender day? Or does it go by layovers? I'm flying at night and say I leave my base at 0300 local, layover in another city, and then back to my base at 2300 local the same calender day. Can I only claim 1 day with no 75% part of days.

The IRS divides the day into 4 periods. Midnight - 6 AM; 6 AM - Noon; Noon - 6 PM; and 6 PM - Midnight. In your case you would get the full day as you started in the 1st period and ended in the last.