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Old 04-02-2019, 06:24 PM   #1  
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Default Per Diem and Tax

Can anyone explain to me how taxes work with per diem? A few questions I have specifically:
-Do I have to keep track of receipts spend on M&IE throughout the year?
-If I receive non-taxable per diem, is it still withheld from my check (only to get it back when I file a return)?
-Is there a limit to non-taxable per diem per year? (I had read something indicating this was the case, but could never find a dollar value).

Pretty much if you could share anything I need to know so I don't have any surprises at the end of the year.

Thanks!
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Old 04-03-2019, 06:31 AM   #2  
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Originally Posted by arthur106 View Post
Can anyone explain to me how taxes work with per diem? A few questions I have specifically:
-Do I have to keep track of receipts spend on M&IE throughout the year?
-If I receive non-taxable per diem, is it still withheld from my check (only to get it back when I file a return)?
-Is there a limit to non-taxable per diem per year? (I had read something indicating this was the case, but could never find a dollar value).

Pretty much if you could share anything I need to know so I don't have any surprises at the end of the year.

Thanks!
The per diem tax deduction is no longer allowed under the new tax law starting in 2018.

Your non-taxable per diem is just that - non-taxable. Nothing is withheld from it when you receive it.

If you received more per diem in a year than someone flying the same trips getting the government rate, then the excess would be seen as taxable income. Given historical airline per diem rates, this is rarely an issue.
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Old 04-03-2019, 09:38 AM   #3  
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Question So is there any reason to use an aviation tax

So is there any reason to use an aviation tax attorney anymore?
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Old 04-03-2019, 10:11 AM   #4  
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So is there any reason to use an aviation tax attorney anymore?
Probably not. The new law pretty much put companies like Pro-Diem out of business with the stroke of a pen. Un-reimbursed employee expenses (that exceed 2% of gross income) are no longer a deduction as they have been in the past. So, things like uniform expenses, professional subscriptions, union dues, tax prep fees, etc. that an aviation CPA or tax expert used to be able to find for you to deduct are gone.

If you're married, filing jointly, the standard deduction is now $24,000 ($12,000 for a single filer). The only reason I exceeded that limit on my 2018 taxes was due to $20K in monetary charitable donations. If I hadn't done that, I would have been well under $24K and not even itemized.

In a way, it's a huge improvement. You can't claim any of the old deductions, but now you get a higher standard deduction that probably exceeds any of the old itemized totals one used to come up with. Simpler, easier return.
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Old 04-04-2019, 01:04 PM   #5  
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So is there any reason to use an aviation tax attorney anymore?
If the California Franchise Tax people are coming after you.
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Old 04-13-2019, 09:32 PM   #6  
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If the California Franchise Tax people are coming after you.
How did you know that I lived in Cali? Officially in NC now....
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