From the Atlanta Journal Constitution, 2018-02-12: TAX DEDUCTIONS THAT ARE GONE


This horse has been flogged before. The big one here is it appears union dues will no longer be deductible. Not sure about the perdiem deduction. With the individual deduction going up so much, I guess it is all moot anyway.

Pilot taxes just got a lot simpler.

Unless you are making over $200K (If married), it is doubtful you will itemize for the next 5 years. No business deductions unless you own your own business.

So no per diem, suitcase, headset, uniform, union dues, etc.

And of course, van tips, hair cuts, cell phone bill, TSA pre-check/GE/CLEAR, and internet bills won't be allowed, just as they are not allowable now. The new law may well save many pilots from some IRS fines.

I'd like to see the union negotiate a higher per diem, uninform allowance, cell phone allowance (im surprised this one is a bit of a grey area), etc. For example, I believe the per diem should now be $.25 higher. Government rate for M&I is around $59 I believe. We are only getting $43. We should get an additional 30%-35% or so of that difference which is roughly 25 cents extra per hour. Follow? After all, wasn't the tax bill sold as a way for corporations to pay more in wages and compensation and less in taxes?

Of course I don't want to get too worked up yet. don't want to get too political here, but I am not sure these changes will last much beyond the next major election...

I would rather them negotiate better pay rates so I can choose what I want to do with my money.

Well this is true, but I do appreciate the tax free nature of per diem.

Dead horse beat-down alert!!!!

I thought we had settled this, but then the horse woke up.

I know turbo-tax advises to not take a deduction for CLEAR, but I did bounce this one off my neighbor who is an IRS auditor. He says it was a valid deduction. Go figure? But now moot.

(painful whinny sound)

Standard M&IE beginning 1 October 2017 is $51.

Something will have to change. The M&IE deduction was a way for the company to pay us less than the government rate, but allow us to reclaim it on our taxes. Starting this year, we can no longer recoup that difference between company payments and the allowed rates.

LOL, we need to fly together. We can discuss it at 31,000 with no oxygen!

Here’s a good way to look at anything you are trying to deduct (used to own my own business). Is it REQUIRED by the company? If so, then maybe you can deduct it. But the IRS regs are clear on some things. Like driving to work. Or having a cell phone (not a legal way to notify you once you are on duty by the contract - see base manager and ACARS). Or personal grooming (even though EDV requires us to maintain neat haircuts. Same goes for military). Or... well, you get the idea.

And here’s another caveat about Pre-check... if you CAN deduct it as a business expense (must be used more than 50% for business reasons), then you must amortize the expense over the 5 years it is usable for. So that’s a whopping $17 you can deduct each year. And even if you are a high roller paying 12% ETR (doubtful, probably closer to 9-10%), that’s about $2.04 extra back on your taxes.

Even if it WERE legal to do, I wouldn’t mess with it, personally.

Talk to your your neighbor again, and make him or her understand it is NOT required by your company, PROVE to them it is used more than 50% for work, and that you DON’T own EDV. Then see what they say.

And as with anything tax-related... you can claim ANYTHING you want. Maybe multiple times. Up until you are audited once. Know a fella who got audited, and “won”. He was then audited many times over the next 20 years. Once you are on their radar, the IRS is relentless.

But audits are rare, actually: IRS Audits: These Taxpayers Are Most Likely to See One | Money

I believe it varies city by city too. Looked up Des Moines and it's $59 there. I imagine lots of the cities we overnight in on the 900 are more.

I will email my rep about this.

Absolutely correct, it varies by city. But unless you overnight a lot in NY or Canada, you may well not break the standard rate. I track both throughout the year so I know which is more advantageous for me.

As an example, doing the by-city rate, I was not paid $3769, and using the base rate, I was not paid $2502. (In 2016, the difference was only about $150). Obviously, I will file $3769 unpaid by EDV on my taxes if I am able to itemize. (This assumes I have at least $8931 in additional deductions as a married filer)

Not sure what you mean by emailing your rep?

You can check all city rates using: https://www.gsa.gov/travel/plan-book/per-diem-rates

I would post a list of all the EDV cities and rates, but it is subject to change, and I don’t want someone to stumble on it later on and have it lead them astray.

ETA: YYZ is $115. NY is over $70. You can really rack up if you stay at some of these. The average of all the EDV cities I have stayed in for 2017 is $62.28, so I would imagine many people would benefit from the by-city rate (again, assuming they can even itemize).

The “good” news is that for 2018, M&IE is not deductible. One less thing to worry about.