Tax question

[AlbieF15]

Any of you CPA types or guys who have already figured this out, here are my questions...

What airline job expenses are tax deductible, and how do I claim them (ie...which form, etc)

Here are some of my first year expenses I am wondering about....

Sim prep?
Interview suits?
Crash pad?
Crash pad car? Insurance?
Unreimbursed travel expense? (airline tickets? rental car to starting city?)
Unreimbursed uniform expenses?

Any data in this area or a good web or paper reference source would be appreciated.

Fly safe...

 

[FlyingDawg]

I hope your using the long form to take advantage of the deductions. If your doing your own prep I recommend one of the software programs like TurboTax to make sure the numbers are entered into the correct forms.

Sim prep- Deductible if you are looking for a new job in your present occupation. Not Deductible if you are looking for job in new occupation, if there was a substantial break between jobs, or if looking for first job. (Pub. 529)

Uniforms- deductible if you must wear them and they are not suitable for everyday wear. (Pub 529)

Interview suits- Not deductible because they are suitable for everyday wear. (Pub 529)

Crash pad- Not deductible (unless you own and pay mortgage interest). See explaination and examples under "Tax Home" in Pub. 463. Look closely at "Factors used to determine tax home" and "Travel to family home" under the "Tax Home heading."

Crash pad car and insurance- you cannot deduct commuting expenses (Commuting expenses are defined as the cost of transportation between your home and your main or regular place of work). (Pubs. 463 & 529)

Travel expenses- Some are, see Pub. 463. Take special note of the special meal allowance given to transport workers. Most workers are subject to a 50% limit to business related meal and entertainment expense. Airline crews fall under the "DOT hour of service" limits and are allowed a 60% limit (for 2001) and these increase over the next several years (to 80% in 2008). (Pub. 463)

These publications are available at www.irs.gov


Hope this helps and good luck!

 

[bobbysamd]

Tax deductions

Excellent advice and post above. I do have a degree in Accounting and prepared my own returns for years, mostly by hand, and for all the years I was flying airplanes and/or was employed in aviation. I am not a C.P.A., though, but . . . .

You can also deduct training costs as long as you are employed. E.g., you can deduct a type rating(s). It's a big misconception that new CFIs can deduct costs of obtaining CFI-I or MEI. All that is regarded as initial training needed to obtain employment. Some believe that CFI upgrades qualify under the lifetime education deduction, but I don't think so.

You can deduct travel expenses, including meals and lodging, to and from interviews. You can deduct moving expenses to the extent that they are not reimbursed. However, don't expect to get away with deducting moving expenses if you move only across town.

Hope this helps some more.

 

[AlbieF15]

Thanks to both of you. I'll follow the IRS link and start studying!

 

[Rick1128]

Other items you can deduct are your FAA Medicals. Required for continued employment.

Uniform cleaning and maintenance. You are required to present a clean, professional image.

Professional publications. All professional pilots are expected to continue their professional growth.

Professional tools. You by need the proper tools. When you upgrade to an ANR headset, etc.

Professional Association dues.

I have heard of pilots who deduct a portion of their cable tv bill (The Weather Channel) and Internet bill (company e-mail)

On per diem, there is a government PD rate chart. It is the rate PD is paid to government employees in various citys and countries. If this rate is higher than the rate give to you by the company you can deduct the difference. In some cities the daily rate can be over $100.

 

[FlyingDawg]

Everyone in my family gets luggage for Christmas. Instant tax deduction!

 

[Lindy]

Mileage

Don't forget the mileage....

If you drove to the sim prep; the interview; to the airport for the interview....it is all allowed. Albeit, it might not be very much, but if you are itemizing, everything adds up!!

All the aforementioned pubs are available at irs.gov!! Very thorough and lists what is and is not acceptable.

Additionally, there are a few tax services available for airline employees. Every airline has at least one (or two) accountants that the pilots like to use for tax season. (There is someone in California that specializes in Transportation...)

Wow...the early bird

 

[Hugh Jorgan]

Good stuff... what about state income taxes if you are a commuter? Which state do you pay income tax? The one in which you are living? The one in which you are domiciled? Thanks...

 

[Rick1128]

State taxes

I was told by a lawyer that workers involved in direct interstate commerce pay taxes in the state they declare as their residence. It goes back to the railroaders. Could you imagine what would happen if truck drivers had to pay state taxes in every state they worked in?

One note though. The IRS will send your Social Security number to the state where your return is sent. Not the state you claim. Be careful there.

 

[Lindy]

Which State?

There was a recent Tax Case involving a pilot. He filed his domicile as Florida for several years, alleging that he resided in that state. However, the Tax Court was able to prove that he resided in North Carolina (or was it South??); i.e., primary residence, children attending school, etc. He was found to be owing thousands and thousands of dollars based on his actual residence versus the Florida sham.

I'll try to find the cite -- not sure if it was a published case.