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What do I do with my per diem reimbursement from my employer?
The per diem deduction for civilian pilots and flight attendants can be calculated by using EZPerDiem.com alongside of tax software such as TurboTax, TaxCut, TaxAct, etc. To have it properly calculated by tax software requires that the tax software you are using understands three important pieces of information:
- That you are subject to DOT Hours of Service Limits
- What your M&IE Expenses were for the tax year
- What your non-taxable per diem reimbursement was
Number 1: DOT Hours of Service Limits
This information is important because it determines how much you will benefit from nonreimbursed M&IE expenses. A typical taxpayer (not a pilot or flight attendant) who travels and incurs M&IE expenses is entitled to write off meals and incidentals just like pilots and flight attendants are, but because a typical taxpayer is NOT subject to DOT Hours of Service Limits, he or she is only eligible for 50% of the unreimbursed M&IE total. Civilian pilots and flight attendants, on the other hand, are allowed to write off 80% of the unreimbursed M&IE total.
WARNING: DO NOT ADJUST YOUR M&IE TOTALS IN TAX SOFTWARE. ENTER THEM AS IS AND LET TURBOTAX, TAXCUT, OR TAXACT CALCULATE THE 80% AMOUNT FOR YOU. JUST ENTER YOUR EZPERDIEM NUMBERS AS THEY ARE.
Number 2: The M&IE Expenses
The M&IE expenses come from EZPerDiem.com. Tax software changes every year, so entering the M&IE expenses into TurboTax, TaxCut, or TaxAct may not be as straightforward as we wish. For that reason, it is important to understand some of the different ways they may be asking for this number. You may see them ask for:
- Government meals and entertainment,
- Meals and entertainment,
- Meals subject to DOT Hours of Service Limits,
- Meals covered by Department of Transportation Rules,
- and many other possibilities
If they are asking for something like Meals covered by Department of Transportation Rules, then you are letting them know your M&IE number and that you were subject to DOT Hours of Service Limits via that one question.
Number 3: Your per diem reimbursement
Tax Software also needs to know how much your employer reimbursed you for your M&IE expenses. This amount is called non-taxable per diem. If you do not have a number for non-taxable per diem, you can learn more via this FAQ. If you do have a non-taxable per diem amount, then you need to know what to look for in tax software. Again, tax software changes every year, so this is hypothetical, but it may ask for:
- Reimbursements for meals and entertainment,
- Reimbursement for meals,
- Reimbursement for Government Meals,
- Reimbursement for DOT Meals and Entertainment,
- and many other possibilities
If they ask for something like Reimbursement for DOT Meals and Entertainment, they know that this amount offsets the DOT M&IE expenses.
If you have other questions about these numbers, use the links below this FAQ to help you.
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