Tax Question for Regional Pilots

[FirstMate]

Do a google search for "conus rates" and you will find how much per diem the govt standard is for certain cities. Hypothetically, lets say you have an 18 hr overnight in MCI at a company per diem rate of $1.50/hr. That is $27 in per diem. If the conus rate for MCI is say, $35, you can subtract the difference and deduct that amount if I'm not mistaken...does this sound right to anyone else??

Haven't actually done if myself. I was too lazy to go through my log book and match crew cards and what not for the past year.

 

[FirstMate]

woops, you beat me to it marycon

 

[NCFlyer]

Here is a simple explanation, (as simple as you can get with taxes).

No receipts required!

1. You have to figure how many nights you were away from your tax home (domicile).

2. You can either add up the per diem allowed for each city of your over night, or you can use the IRS average. $52 within or $58 outside the continental US.

3. You must pro-rate the day of departure and day of return. The IRS doesn't allow a full day's deduction for the 1st and last day of a trip. The IRS doesn't care how you pro-rate it, just come up with a way you can defend if audited. I use 75% of the allowable per diem rate for the 1st and last day.

4. At this point you can add up what is your total allowance for M&IE (meals & incidental expenses).

5. You must subtract any per diem that was paid to you from your company. This is the part that many of my coworkers seem to forget, based of the fact of how much they tell me they have deducted.

6. Then you can deduct 75% of that amount from your taxable income.

It will take a while if you are sitting down to do it all at once. I try to keep a running total for the entire year, updating it every month so there is much less work at tax time.

Be advised that the dollar amounts and percentages are for the 2006 tax year. If you are amending tax returns from previous years you must use the amounts & figures for that specific tax year.

Remember this is advice coming from a pilot with an interest in taxes, not from a tax professional.

Good luck.

 

[mosyslack]

What he said...NCFlyer. That's the explanation that I have been told and read from several sources and the tax code. The per diem deduction can add up to be quite a bit, especially if you're in the lower per diem rates.

 

[atpcliff]

Hi!

Where/how did u guys get the $52/day average rate???

I use the exact rate for each city, and it averages A LOT less than $52. If the $52 rate is allowed, it will help me A LOT!

Thanx 4 the assistance!

cliff
GRB

 

[XPOO]

So, atpcliff, who's that handsome man in your avatar?

And yes, atpcliff, $52 is the daily rate special for only transportation employees. you really need to learn what forms you need to fill out for this job. Start with 2106-EZ and then move on to Publication 535 Chapter 13.

 

[atpcliff]

Hi!

I found this:

Regular federal per diem rate. The regular federal per diem rate is the highest amount the federal government will pay to its employees while away from home on travel. It has two components:

1. lodging expense, and
2. meal and incidental expense (M & IE).

The rates are different for different locations. Publication 1542 lists the rates in the continental United States.

Internet access. Per diem rates are available on the Internet. You can access per diem rates at www.gsa.gov.

The above is what I do, use the exact rate for each city.

I also found this:

High-low method. This is a simplified method of computing the federal per diem rate for lodging and meal expenses for traveling within the continental United States. It eliminates the need to keep a current list of the per diem rate in effect for each city in the continental United States.

Under the high-low method, the per diem amount for travel during 2005 is $204 ($46 for M & IE) for certain high-cost locations. All other areas have a per diem amount of $129 ($36 for M & IE). The high-cost locations eligible for the $204 per diem amount under the high-low method are listed in Publication 1542.

Sorry to be a pain in the poopcha (Polish for U know what), but I can't find the justification for the $52/$58 average figures.

Any help with finding the "official documentation" on the $52 figure?

Thanks a TON!

cliff
GRB

 

[Airboss]

Here is how I figure it our (ASA based in ATL)

4 day trip Overnights HPN YYZ MLU ATL.
Per diem Rates
HPN 59
YYZ 109
MUL 39
ATL 49
75% of first and last day
(59 *0.75)= $44.25
+109 + 39 +
(49*0.75)=$36.75
Total=$229
Lets say company TAFB is 80 hrs. 80*$1.50(ASA company rate) = 120
$229-$120=$109 on ONE 4 day trip is tax deductable.
Add up the whole year's difference and multiply by 0.75 (transportation industry rate) and that is tax deductable.

 

[XPOO]

IRS FORM 463

http://www.irs.gov/pub/irs-pdf/p463.pdf

Page 6, Exact Middle, "Special Rate for Transportation Workers"

 

[atpcliff]

Hi!

B E A U TIFUL !!!!

Awesome! Thanx 4 the help!

I owe you a beer or if you don't drink alchohol, a "Snow Cap" root beer from the Titletown Brewery (a microbrewery in the old train station in GRB). It is the best root beer, in my opinion (I've tried at least 70 brands).

For a nationally available brand, I like IBC (Dallas, TX) the best. Barq's is the ONLY root beer with caffeine in it. I don't drink it since I stopped doing caffeine.

cliff
GRB