Taxes

[radarlove]

Just one example is deducting the city based per diem as an expense, but then not including the per diem the company paid, BECAUSE that shows up on your paycheck, when you get audited they ask for your W-2.

That's nuts. What's the difference between that and tax fraud? I'll answer it: nothing.

 

[radarlove]

you may deduct commuting expenses the first 6 months when you experience an involuntary change in domicile. Specifically a job change that has you operating out of an airport other than where you live, or a displacement to a domicile other than where you live.

That's interesting, I didn't know that.

 

[herewego again]

....
union dues
pilot medicals
memberships to professional associations
continuing education/certification in your field (keeping that CFI current)
anything bought specifically for travel (suitcase, alarm clock)
telephone (% that is required by your employer)
bidding service
internet (are you required to do internet based home study?)

.....and regarding the perdiem, off the top of my head...... if you DO NOT use receipts, you are allowed to deduct 75% of the Federal MI&E for your overnight city, MINUS, what is already paid to you by your employer. If you are on the first day of a trip, it is only 50% of the city you first overnight in, and on the last day of a trip it is 50% of the city you just flew out of. If you have receipts, you can deduct up to 100% of the allowed rate (again, minus what you've already been paid).

Sharpen those pencils and keep good records...
herewegoagain

 

[radarlove]

Quite often itemizing those deductions (internet, etc.) don't add up to more than your standard deduction anyway, unless you have a mortgage.

That's why guys get so aggressive with their per diem deductions ("forgetting" to subtract what their company gives them). It's hard to make itemization work, unless you really have significant expenses.

If I were a CFI, I would set up a sole proprietorship (or whatever, LLC, etc.) and funnel every single one of my aviation-related expenses through the company, keeping everything seperate.

That way you get a K-1 and life is easier.

 

[Beaker]

For the itemizers...

How about a cell phone?

I also heard that you can deduct a portion of your cable for the weather info.

 

[unwashed]

www.pilot-tax.com I used them for years, great people and reasonable price.

 

[atldc9]

It is funny, every year we argue about the same deductions.

Irs publication 463 applies to Meals and Incidental expense. Check out the link:

http://www.irs.gov/publications/p463/

Also, people in the transportation industry can deduct 70% of eligible m & I expenxes for 2005 not 75%. It is scheduled to increase to 80% in 2006.

One last item, if you use the standard allowance for transportation industry workers, $41.00 per day for 2005, you msu use it all year, and would apply 3/4 of that to the 1st and last day of any trip. The days in the middle would get credit for the whole allowance.

 

[Thedude]

One last item, if you use the standard allowance for transportation industry workers, $41.00 per day for 2005, you msu use it all year, and would apply 3/4 of that to the 1st and last day of any trip. The days in the middle would get credit for the whole allowance.

Thats is not completely true. Every city has its own rate. Check IRS pub 1542 for current city rates.

 

[radarlove]

But how do you make it worthwhile to use p463 once you subtract your company per diem? I still don't understand that.

 

[atldc9]

You can use each city's individual rate, or use the average, your choice.

As for it being worthwile, only you can tell. It depends on how many overnights you had, what cities they were in, and how much per diem you recieved form the company.

Just remember, once you total up the amount, and subtract out the amunt of per diem recieved, you can then only caim 70% of what that difference is.