It's TAX time!

[lucky81698]

Originally Posted by Tambralyn

Can you all explain the issue with the per diem to me? I did our taxes this year on Turbo Tax online. I only deducted mortgage interest, child care expenses and student loans. John was sure that there were other business expenses he could deduct, like his commuting costs, but I was under the impression that he could not. He also thought that he coudl deduct his meals on the road. I'm pretty sure he can't do that either. Also, on his W-2, there is a box for substantiated business expenses, which I assumed meant commuting charges and uniforms that he paid for through payroll deduction.

Am I wrong? Are there more thing that we can deduct that I should be looking at? Is it worth while to try and work it out and send in an amended return?

In the past we've only had the child care tax credit and student loans, so we've never had enough to itemize. I never worried about it before. But with all the the interest we had on our construction loan when we converted to a mortgage, we had to itemize this year.

I'l try to explain it the best I can. On the W2 forms in box 12c it shows money paid from the company as per diem. The govt allows a certain amount of per diem to pay depending on each individual city taht a person stays in while on business. Normally this amount is much higher than what the company pays. For instance if my husband had an overnight in DCA, the amount of per diem he would receive for that day is $44.40 (the max for a 24 hour period). Well the govt actually allows $64 per diem to stay there. So the difference would be deuctible. The govt says the average person would need to spend $64, but his company only gives him $44.4 so he would have to use his own money to make up the difference. It can get complicated to figure out each city because there are percent rules and such that can make it confusing. That's why I have a guy at CAL that does it for a $45 charge. You just let him access the info in CAL's crew computer, (you have to give him your password) he can see evey flight you did and where you overnighted. I would bet either someone at Eagle or someone at AA has a side business that does this too. I believe it is worth it to do this as long as you are itemizing your taxes, (own a house etc..)For instance, this service we used to figure out per diem says he should have been paid $7435 per diem as allowed by the govt. He was only paid $4455. Therefore you can use that as a deduction. You put the amount figured out on line 5 and 6, column B of form 2106. put the amount he was actually paid on line 7, column B. Put the difference on line 8, column B.

As far as other deductions for business, those go on line 4 line 6 and line 8 of Column A on the 2106. If using Turbotax, make sure to check the box when it asks if he is in the transporation industry. Just for examlpe, we came up with $1560 for business deductions. Uniform stuff, dry cleaning, union dues, andy charts books supplies, flightlog books, tips (we used a standard $3/day for each ovenight) any bidding services, FAA medicals, flashlight batteries, ink and paper for computer, a percentage of of our internet access charges, etc.

Then you multiply the difference between the per diem numbers on line 8 column B times .75 (this why you need to check the box on turbotax for transporation becuase other people mulitply times .5). Then you add the numbers on line 9 column a and B together to get your total allowable business deduction. This year ours was $3795. Without using per diem it would have only been $1560.

It sounds a little confusing but if you have someone that does the per diem for you and then use Turbotax, it does it all automatically.

As far as commuting expenses they are not deductible. (Seems stupid to me). There are certain cases where they are such as TDY and other training type scenarios, but it gets very grey there.

Hope this helps expalin things and wsnt too complicated.

[TheWife]

Can they do this as a CFI too? Like ded. the books and uniforms and flashlights and those kind of things you listed? Or do those not count when he's actually employed by the school, and isn't like a freelance/self-employed CFI? Is there a list some where of all possible things you could ded.?

[lucky81698]

Yes, if it is a part of his job requirements. I don't have a web address handy for a list of stuff you deduct, but almost every place that prepares crew taxes has what they sometimes call a Tax organizer, which lists a bunch of stuff like this. As long as things are used in his employment and not normally used elsewhere they are allowed. Like uniform shirts etc, you would not wear them on your days off.

www.aircrewtax.com has a downloadable tax organizer you can use.

[Tambralyn]

Thank you so much for all of this information. I downloaded the tax organizer you mentioned, and I'm going to spend some time on it this weekend. It certainly doesn't hurt to refigure our taxes, and if the difference is more than it will cost to refile, we definitely will be filing an amended return. This is so helpful!

[MNewby]

If it makes you feel better we paid $400 this year. I know it has a lot to do with the business but I was not venturous enough to do it on our own. We used a tax guy. In the past we have used Turbotax though and were pleased with it. It's fast and easy to use and enter your deductions.

[hink4687]

Originally Posted by Tambralyn

Thank you so much for all of this information. I downloaded the tax organizer you mentioned, and I'm going to spend some time on it this weekend. It certainly doesn't hurt to refigure our taxes, and if the difference is more than it will cost to refile, we definitely will be filing an amended return. This is so helpful!

I'd check out easyperdiem.com if you have a chance. Its a VERY easy way to calculate it and will save you a lot of trouble. After we added the perdiem into our taxes we got an extra 2k back so in most cases its definitely worth your trouble!

[lucky81698]

Originally Posted by hink4687

I'd check out easyperdiem.com if you have a chance. Its a VERY easy way to calculate it and will save you a lot of trouble. After we added the perdiem into our taxes we got an extra 2k back so in most cases its definitely worth your trouble!

The guy I used only does CAL and XJT that I know of, so he wouldn't be of use to you. I would recommend using this too, that way it saves you from doing all of the calculating yourself. Worth the $29.95!