It's that time of year again so lets talk about taxes. I've already heard several people in the crew rooms etc. making the huge mistake of saying "I'm just going to take the standardized deduction because I won't go over that amount". If you're flying 121 and aren't home based then this is already a false statement. I showed them some examples of what you can deduct and they soon realized how much you really can save. I'm not promoting something because I have anything to gain from it but you need to try Ez perdiem. It's very easy to use and takes only a short amount of time.
It's true you can't deduct per diem since you weren't taxed on it to start with however you can deduct the difference. IE: You get $30 of per diem from your company while you overnight in LGA but the government per diem rate for LGA is $64. Now you can deduct the difference.
So $34 you don't pay taxes on. The captain I was flying with on this last trip was one of the ones saying he'd just take the standard deduction. I told him he wasn't maximizing his money back so when we had a 3hr sit we went through some numbers. Within about 45 min we had all of his per diem figured out. He was around $7.5K in govt. per diem yet only received around $4k from the company. That was an instant $3.5k he is able to write off. So within 45min he just saved himself a little over $1k.
I'm no accountant so hopefully others can add to the list but there are other things many seem to overlook when doing their taxes.
1. If you've already paid tax on it once you don't have to pay taxes on it a second time.
--Keep every receipt of everything you buy. I shove them in the top of my suitcase. When I get home I put them in a box until its tax time. You can deduct ALL sales tax on items. Doesn't matter if it's $.50 on a 12 pack of sodas or $2k on a purchased car. Sure that receipt might only show $.25 of sales tax but it only takes a second to punch in the calculator and it does add up
VERY fast.
2. Pull your credit card statements, student loans, mortgages, auto loans, etc.***Special conditions apply***
See:http://www.smartmoney.com/debt/advic...tory=debttaxes
How to deduct student loans:
http://www.irs.gov/taxtopics/tc456.html
Deducting Interest Expense:
http://www.irs.gov/taxtopics/tc505.html
Take the time to check and see if meet the criteria to take advantage of these valuable deductions.
3. Get all your bills. If you've already paid taxes, which you have, on your bills then make sure you deduct that amount.
--On my cingular bill I get $10.94 in government fees and taxes. That's $131.38 I deduct or roughly $45.98 I don't have to cough up in taxes. Now take a look at water, electric, gas, cable, etc.
4. Deduct what's required for your job.
--Haircuts, clothes, union dues, bags, headsets etc.
5. Depreciation of your vehicle.
--Take the time to go look at how many miles you have on your vehicle. Use TurboTax to plug these numbers in. It will take into account the vehicle type, age, and mileage.
6. Donated items
--Have an old junk computer laying around? Might be junk to you because its hard drive is small or doesn't have the performance to run the "latest and greatest" software but that doesn't mean it can't be used elsewhere. Most people just use a desktop for a few years then "upgrade" by purchasing a new one. Instead of letting an old PC collect dust take a little time to clean it up and take it to a non-profit group. My college desktop, which was 6yrs old, received a $300 deduction since I donated it to the Boys and Girls club. You can donate just about anything. Moving and don't want to lug everything around? You can take your old beds, dressers, TVs, chairs, couches, appliances, etc. to your local non-profit organization. I didn't want to have to rent a storage room so I took several items to a local non-profit group I had found, community service
, that sells the items and uses the money to help animals. The amount I'll save in deductions will probably be higher than had I actually gone through the trouble of selling the items on my own.
That's all I have for now. I'm sure once I start running through my taxes I'll come across all sorts of additional things. I'd also like others to respond with any addons. I want to make sure I do everything I can.
Tax evasion is illegal, tax avoidance isn't
Those loopholes exist for a reason.
Few questions I have for someone that might be an actual accountant. I've been looking around but haven't found anything yet.
--When hired by my new company, RAH, we were paid $400 per week during training. The $400 was tax free. Can I find the govt rate for Houston/Indy and deduct the difference?
--Prior to this year I was self employed. I was able to deduct the $.48 per mile(maybe it was $.52). Now since I'm working for RAH I can no longer act as a contractor and deduct my mileage. However, may I deduct the taxes on the fuel I purchase? The Oil companies are not the only ones making record amounts money. The US govt puts an average of $.47 of tax per gallon of gas. Since I obviously paid the tax pulling it out of the pump I figure the same rule applies as on sales tax; you don't have to pay tax on a tax. The government actually makes more on oil than the oil companies do. From 1977-2004 the major oil companies have posted $643 billion in profit. The US govt during that same time period made $1,343.1 billion
