nwa757

A tax question from a new guy in the regional airline world.

Folks have told me that I can 'write off' all work related expenses. This includes all meals on the road, hotels that the company doesn't pay for, uniform costs, dry cleaning, etc.", correct?

At the end of the year, what will all the write-offs do for me? [Again, I am new to all of this]. Will I get that amount, back, from the taxes paid in? All of it? Some of it?

Also, can a phone that is required by the company (i.e. cell phone number for reserve, if I don't have a land line) be written off?

Any advice is appreciated, thanks a lot!

FlyerJosh

Your best bet is to find a good aviation tax guy and let them do it for you... there are often flyers hanging in crew rooms around tax time for CPA's that specialize in airline employee taxes.

Some things can be deducted in full, others in part, and some not at all. In addition, if your company pays per diem, there are rules that permit you to deduct the difference between what you get and the standard govt day rate for each city you spend a night in (it's a bit more complex than that...), but can be quite significant, especially if you fly internationally a lot.

ImperialxRat

I was hoping that somebody could elaborate a little on the per diem write off deal.

I have a credit card that I don't use at all, that I was considering using for my meals/snacks/beverages (non-alcoholic) that I purchase while on the road. This way I would have a paper record of it and can easily see an itemized listing of these expenses, as well as a monthly report. (I would save my receipts too)

Now my question is...I receive $22 / day per diem, everyday.

Would I need to find out what the per diem rate in the city im in is, then keep track of that as i travel all over?...This seems extremely tedious, especially for you regional guys.

Thanks in advance. I understand that asking an aviation CPA would yield more information, however im trying to just get an idea of how it works.

-Imp

FlyerJosh

Yup, that's what you have to do. Some companies have crew trac set up so that you can print out an analysis of your overnights for the year. You might ask your CP or admin/payroll department if that function is available at your company.

ImperialxRat

Oh its definitely not. My company is really unorganized. But thanks for the good info!!

=)

kronan

The source document is pub 463. http://www.irs.gov/pub/irs-pdf/p463.pdf

You can document your meals one of two ways. either actual expenses, or you can use the standard meals rate. If you are laying over in a huge city where everything is expensive (e.g. NY), it might be better for you to take the time to look up the standard rate for NY (64$ versus a conus standard of 39$). Or, you can just go with the Transportation industry rate of 52$....again, likely the local standard rate might be higher....and if you use the transportation rate for even one trip, then that is the rate that you have to use for the entire year.

If you use the standard rate, doesn't matter how much you pay for meals.

If you elect to go with actual expenses, then you don't need a receipt if the meal is less than 75$ (page 26). What you do need is "adequate records" such as an account book, diary, statement of expense, even a computer file, or logging it in a pda. What it needs to show is the amount, date, place. And you are good to go.

And, you have to remember that whichever method you choose. You do have to report the amount your employer reimbursed you.

Other things to know, if you don't have enough tax deductions to exceed the standard deduction, may not do you any good to keep track of all the info. (one exception is for ANG/Reserve folks since the travel and per diem comes out earlier in the tax form in appreciation of your service)

If your situation is complex, look for an aviation accountant. If it is relatively simple, and you take the time to look at the tax pubs yourself, not that tough to do. I use turbo tax and have never had a problem setting it all up.

Great source for deduction ideas and have heard good things about them from other folks.
http://www.pilot-tax.com/

ImperialxRat

So if I started using a separate credit card for all meals while im on the job, or on the road, then that credit card statement would suffice as "adequate records"? It would list the amount, date, and place.

And then I guess just get an aviation CPA to work out the other stuff? Or is it something you think I should be aware of as I go city to city?

Also, what is the "conus standard" your referring to?

kronan

In my opinion, a separate credit card would work great. Especially if it is one that produces an itemized annual summary for you....or, you could just track it in quicken or microsoft money.....any written (or computer generated document) is better than a memory.

since you don't seem comfortable with trying to decipher the info out of the tax pubs yourself, you might be better off going with one of the tax pros out there. Just grab a copy of the pilot tax websites numerous organizing logs to see the industry standard deductions.

conus standard is the standard meal rate for the continental united states and is currently 39$. The transportation industry standard rate is 52$. If you use the standard rate, the first day and last day of a trip have to be prorated by any method you consistently apply, or you could use the IRS standard of 3/4 of the standard meal rate.

There are a couple of businesses that will take your schedule and determine the standard meal rates for the locality for you. In my opinion, unless you are always laying over in a small city, you are better off figuring out the standard meal rate for where you are rather than using the transportation industry standard. However, it is much easier to use the transportation standard and much less documentation is required if you do so.

ImperialxRat

Thank you kronan =)