Business Expenses Deduction
02-01-2014, 06:01 PM
#3
Don't say Guppy
Joined APC: Dec 2010
Position: Guppy driver
Posts: 1,926
I think if you deduct business expenses, you are claiming that you are self employed. Not quite sure about that though.
Self-employed means you owe 15% self-employment tax.
The IRS audited a bunch of expat pilots this past two years including me. One of things they said I owed was self-employment tax, plus penalties and interest. There is a description in one of the IRS forms on what is, and is not, a self-employed contractor vs an employee. I printed it out, highlighted the section, and sent it to them with all my credentials from my foreign jobs, and the proof that I met the criteria of an employee.
They accepted it, and I won.
Self-employed means you owe 15% self-employment tax.
The IRS audited a bunch of expat pilots this past two years including me. One of things they said I owed was self-employment tax, plus penalties and interest. There is a description in one of the IRS forms on what is, and is not, a self-employed contractor vs an employee. I printed it out, highlighted the section, and sent it to them with all my credentials from my foreign jobs, and the proof that I met the criteria of an employee.
They accepted it, and I won.
02-01-2014, 10:12 PM
#4
Gets Weekends Off
Joined APC: Jan 2006
Position: 747
Posts: 356
Originally Posted by Probe
I think if you deduct business expenses, you are claiming that you are self employed. Not quite sure about that though.
Self-employed means you owe 15% self-employment tax.
The IRS audited a bunch of expat pilots this past two years including me. One of things they said I owed was self-employment tax, plus penalties and interest. There is a description in one of the IRS forms on what is, and is not, a self-employed contractor vs an employee. I printed it out, highlighted the section, and sent it to them with all my credentials from my foreign jobs, and the proof that I met the criteria of an employee.
They accepted it, and I won.
Self-employed means you owe 15% self-employment tax.
The IRS audited a bunch of expat pilots this past two years including me. One of things they said I owed was self-employment tax, plus penalties and interest. There is a description in one of the IRS forms on what is, and is not, a self-employed contractor vs an employee. I printed it out, highlighted the section, and sent it to them with all my credentials from my foreign jobs, and the proof that I met the criteria of an employee.
They accepted it, and I won.
However, business expenses are any expense that you incur while at work. In other words, if you have to pay for a hotel and are not reimbursed, that is a business expense. If you pay for your uniforms or their cleaning, that is a business expense. You don't have to be self employed to claim business expenses.
Again, if you are in doubt, contact a tax professional.
02-02-2014, 05:28 AM
#5
Gets Weekends Off
Joined APC: Apr 2011
Posts: 620
Originally Posted by jrmyl
So, as an expat pilot, are you paying US taxes? I work in Japan but am payed by an American company. So I have taxes deducted from my paycheck.
However, business expenses are any expense that you incur while at work. In other words, if you have to pay for a hotel and are not reimbursed, that is a business expense. If you pay for your uniforms or their cleaning, that is a business expense. You don't have to be self employed to claim business expenses.
Again, if you are in doubt, contact a tax professional.
However, business expenses are any expense that you incur while at work. In other words, if you have to pay for a hotel and are not reimbursed, that is a business expense. If you pay for your uniforms or their cleaning, that is a business expense. You don't have to be self employed to claim business expenses.
Again, if you are in doubt, contact a tax professional.
If you claim that you are a salaried employee, even then you can claim the all the expense/bills that were NOT paid for by the employer while on the road. Expenses such as hotel, uniform cleaning, meals, phone, Internet, roaming charges etc can de deducted as un-reimbursed employee business expenses by using Form 2106 on the tax return.
http://www.irs.gov/pub/irs-pdf/i2106.pdf
But tread carefully in what you choose to write off, specially if get a per diem...
02-02-2014, 01:12 PM
#6
Gets Weekends Off
Joined APC: Jan 2006
Position: 747
Posts: 356
Originally Posted by bcpilot
If you claim that you are a salaried employee, even then you can claim the all the expense/bills that were NOT paid for by the employer while on the road. Expenses such as hotel, uniform cleaning, meals, phone, Internet, roaming charges etc can de deducted as un-reimbursed employee business expenses by using Form 2106 on the tax return.
http://www.irs.gov/pub/irs-pdf/i2106.pdf
But tread carefully in what you choose to write off, specially if get a per diem...
http://www.irs.gov/pub/irs-pdf/i2106.pdf
But tread carefully in what you choose to write off, specially if get a per diem...
You are exactly correct. Not sure how anyone else does per diem, but the way I have done it is to deduct the difference between the published rates and what I have actually received. I use the M&IE rates published by the US State Department for OCONUS locations.
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