2008 Step-by-Step Guide to Flight Crew Taxes

Using EZPerDiem.com for the 2008 tax season couldn’t be easier. We have updated the entire website to make EZPerDiem.com more user-friendly and faster than ever! Nevertheless, we understand that the per diem deduction and other aviation tax deductions may be new to many of you, so this guide is intended to help you through the process of using EZPerDiem.com from start to finish.

Too many pilots and flight attendants falsely believe that their tax preparers are properly writing off their aviation crew tax deductions. The sad truth is almost none of them do this properly. Why? Because, to properly calculate the per diem deduction using the typically more valuable city-by-city method takes a lot of time. Tax preparers almost never spend that much time on one tax return, so they give most of their airline crewmembers a less valuable version of the per diem deduction, assuming that the client is probably not going to know the difference. This can cost the crewmember hundreds and sometimes even thousands of dollars.

What if their were an inexpensive way to get all of the calculations a pilot or flight attendant needs, along with detailed instructions on where the tax numbers go so they can simply be delivered to a tax preparer or entered it into tax software such as TurboTax or TaxCut?

The developers of EZPerDiem.com have spent thousands of hours designing a website that will not only help pilots and flight attendants take advantage of these lucrative tax deductions, but also ensure that they are done properly, accurately, and affordably!

EZPerDiem.com is the premier web-based tax software program that flight crewmembers may utilize to calculate the myriad of tax deductions that they are entitled to get. As we mentioned, EZPerDiem.com is a web-based program. That means there is nothing that needs to be sent via mail. All of the calculations are accurately performed instantly online. If you are wondering how it is possible to create an accurate software program that prints out all of the detailed tax information that a flight crewmember needs, we understand your skepticism. But, EZPerDiem.com works, and it works so well that even professional aviation tax preparation firms use it to speed up their own aviation tax preparation process. With over 12,500 airports linked to their CONUS or OCONUS per diem rates, EZPerDiem.com can generate all of the important tax information a pilot needs in less than one hour (sometimes even in minutes), not only accurately, but at a very low price (about half of what any mail-based competitors charge). The two main components of the EZPerDiem.com website are:

Together, the data you input into The Per Diem Calculator and The Expense Processor essentially generates everything you need to complete the aviation portion of your flight crewmember tax return. If you fly for the airlines, a corporate employer, or a fractional company as either a pilot or a flight attendant, you can likely benefit from EZPerDiem.com if you itemize.

The data from the Per Diem Calculator and the Expense Processor gets placed on IRS Form 2106. IRS Form 2106 is a special tax form that allows employees (including pilots and flight attendants) to write off expenses associated with their jobs. These expenses are referred to by the IRS as Employee Business Expenses. When you click the printer-friendly versions of The Per Diem Calculator or The Expense Processor, you will be shown where on IRS Form 2106 the calculated Employee Business Expenses go. If you are using either TurboTax or TaxCut, we also offer a TurboTax Guide and a TaxCut Guide to help you insert the EZPerDiem.com results properly into those two popular tax software packages.

It all begins with signing up. If you are not yet signed up, click the link on the left side menu titled Log In. Next, choose the option that says New User.

NOTE: If you leave the site after signing up, you will click the Already Registered link instead of the New User link.

On the Sign Up Page, simply fill in the form data accurately. Make sure your email address is accurate as it is an important component of the functionality of the EZPerDiem.com site. Also, if you were given a promo code, make sure that it is accurately entered when you first log in because it will not give you or the affiliate responsible for it credit otherwise. When you are finished, click SUBMIT USER DATA at the bottom.

The Per Diem Calculator is used to calculate your per diem deduction. Airline pilots, corporate pilots, fractional pilots, and flight attendants are entitled to write off many employee business expenses, of which meal expenses while traveling away from their tax home are a big component. Essentially, the so called "per diem deduction" is just a method of calculating those meal expenses you incurred while traveling for work, without you actually keeping meal receipts. Step 1 of using the Per Diem Calculator is simply getting a basic understanding of what it is you are actually deducting. Here are some links that will help you do that:

After you log in, you will be directed to a page that will ask you to choose which tax year you wish to work on. Remember this is the tax year, not necessary the current year, so for taxes due April 15, 2009, you would choose 2008 as the tax year.

Once that is complete, you will be directed to a page that allows you to begin entering your domicile(s) for the tax year you just selected (i.e. 2008). These are important to enter accurately because your domicile is most likely your tax home. The first domicile you are asked to enter is where you were based on the first day of 2008 (i.e. January 1, 2008). Type in the three-letter IATA code for that airport and click the green button that says ADD DOMICILE.

You will be directed to a similar looking page that asks for a base change. In other words, if your base changed on June 3, 2008, enter that date and the new three-letter IATA code for the new base and hit ADD DOMICILE. Repeat for as many base changes as you had during the year.

Once there are no more base changes left, click FINISHED at the bottom. At any time, you can click START OVER if you make a mistake. You can also change these in your Settings Page later if you need to.

NOTE: If you had a temporary assignment during 2008, you can simply alter your domicile choices to reflect your tax home based on the temporary assignment that you had. Just make sure you follow the IRS guidelines regarding a temporary assignment in IRS Publication 463.

After you have finished entering your domicile information you will be directed to a company information page. Check any companies that you worked for in 2008. If your company is not listed, enter the company name in the space allotted for “Companies NOT listed above only” Click SUBMIT COMPANY INFO when you are finished.

You should now be on the Airport Code Entry Page. This page should show the dates of tax year 2008 with a text field that holds a three-letter airport code. Initially, the dates should show your domiciles next to them. All you have to do is enter your layovers next to the applicable dates. NOTE: If you worked for Continental Airlines or ExpressJet, there is a Copy and Paste feature that allows you to quickly dump your CCS Final Pay Registers in one quick step. All other companies must currently enter their layovers manually. Copy and Paste Data Entry can be completed in less than 5 minutes for the entire year. Manual entry takes approximately 20 to 30 minutes depending on the amount of flying you did.

NOTE: Only enter layovers. You cannot enter day-trips. This is intentional because day-trips are not allowed to be included in your M&IE expenses.

Begin entering your layovers for January, 2008. Click the downward-pointing arrow that says “Forward One Month” to move to February and repeat the entire tax year.

NOTE: Notice that the first date is actually the last date of the previous tax year (i.e. New Year's Eve, 2007). The first layover you should enter in 2008 is actually your overnight on New Year’s Eve, 2007. That is normal because the New Year’s Eve overnight information is used for the 2008 per diem calculation.

You should see an UP ARROW (back in time one month), a DOWN ARROW (forward in time one month), and a month and year selector to let you navigate instantly to any month or year you wish.

NOTE: If you navigate to a year that you have not yet set your domiciles for, you will be prompted to enter them for that year.

Below the calendar date change navigation are links to several important EZPerDiem.com applications. These are as follows:

	The Calculations Page is where you get to view your per diem calculations (i.e. M&IE Calculations). There is a printer-friendly option on the Calculations Page that allows you to print those calculations out instantly for your records or your accountant. You must pay to view your calculations.
	The Expense Processor allows you to quickly calculate your other flight expenses. It is specifically organized in such a way that the data can be sorted right onto IRS Form 2106, so when you click the printer-friendly version of the Expense Processor, you will be able to instantly see where on IRS Form 2106 the numbers should go.
	If you need help at any point in the process, this is where we will provide useful help-related links.
	The Settings Page allows you to make adjustments to your account. It is a very important page. If you wish to change your proration rate, your domiciles, your user information, or find ways to earn promo credit, you can do all of this on the Settings Page.
	We built the AviationTaxGlossary as a stand alone tool as well as a help tool for the somewhat complicated terms that get thrown around this website. It is intended to have a "wiki" type feel so that you can look up terms quickly and also see related terms at the same time.
	This is an optional feature that speeds up data entry for certain employee groups. The Copy and Paste Page allows certain users to quickly enter their flight data. Currently this feature works for ExpressJet Pilots, ExpressJet Flight Attendants, Continental Pilots, Continental Flight Attendants. In the future, our goal is to create this popular feature for as many airlines as we can, but in order to do so, we need to get access to your employee account. We are offering you one year free if we can use your data. If you are interested in helping us and your fellow employees out by providing us the information we need, simply send an email to: ezperdiemhome@gmail.com and in the subject line, put COPY AND PASTE. In the email, include the airline you work for, your position (captain, first officer, flight attendant, etc.), and a phone number where you can be reached. Maybe next year you too will enjoy the benefits of Copy and Paste!

Enter your layovers for 2008. Again, only layovers get entered. Here is an example. Assume you are based in CLE and you started a four-day trip on January 8. Assume you overnighted in DCA on the 8th, you overnighted in LAX on the 9th, you overnighted in IAH on the 10th, and you returned to CLE again on the 11th where you went into days off. Initially, your Airport Code Entry Page would look like:

Notice that nothing changes initially. The data is not yet saved. It can be save by clicking any button on the page or simply clicking enter. If you do that, the next time you visit the page it will look like:

When you are finished entering your layovers for 2008, you can click the View Calculations button. Once you pay the low 2008 fee, your calculations will be visible instantly online. Navigate to the Per Diem Calculator Calculations Page by clicking the Calculations Page icon:

While the example above is for a 2007 calculation, the page will look the same in 2008. The columns that could appear in the Calculations Page are:

When you are finished with your entries on the Airport Code Entry Page and ready to print your results, click the printer-friendly icon on the Calculations Page:

When you click the printer-friendly icon, the page that opens contains the same per diem results as the previous page with bit more detail in the explanation for you to use in your taxes. It should look like the following:

You can change the layout by clicking the display option buttons if you wish. The default is M&IE because this is probably the only result you will need. When you have printed your results, click the button that says EXIT PRINTER FRIENDLY as shown below:

Congratulations! At this point, you are finished with the Per Diem Calculator and ready to begin using the Expense Processor.

The Expense Processor is designed to help you quickly find, calculate, and organize the tax deductions that flight crews may be entitled to.

NOTE: Just because an expense is shown in the Expense Processor does not automatically mean it is deductible. To learn more about how to determine whether an expense is deductible, click here.

Using the Expense Processor couldn't be easier. Begin by clicking on the first category, "Only Noncommuting and Nonovernight Parking, Tolls, and Transportation Related Expenses." This will open up a page that looks like:

Next, enter any applicable expenses that you incurred for the selected tax year. While you are unlikely to have much (if any) for this particular category, assume you had $100 in Bus Fare, $200 in Car Rental, and $300 in Parking Fees. Enter those as follows:

Then click PROCESS WORKSHEET to send the expenses you entered to the Expense Processor.

Repeat this for the remaining categories in the Expense Processor. Once complete, click the icon for the printer-friendly version.

The Printer-Friendly version contains information that shows you where the data goes on your IRS Form 2106.

To exit the printer-friendly version of the Expense Processor and to return to the Expense Processor Main Page, click the button the says EXIT PRINTER FRIENDLY VERSION.

At this point, you should have entered your layovers into the Per Diem Calculator (i.e. the Airport Code Entry Page) and entered your aviation flight-related expenses into the Expense Processor. The results of what you entered can be given either to a tax preparer that you like to use or entered into a tax software package such as TurboTax or TaxCut.

Many people have a tax preparer, CPA, or enrolled agent that they like to use. EZPerDiem.com is the perfect tool to use in conjunction with your own tax preparer because it makes their job so much easier and gets you back more money by performing the calculations that they are unlikely to do. Most tax preparers are not going to go through the trouble of looking up all of the CONUS and OCONUS per diem rates that EZPerDiem.com uses to give you the highest M&IE expense calculation that you are allowed to get.

If you use your own tax preparer, simply print out the Per Diem Calculator results and the Expense Processor results using the printer-friendly versions available. Your tax preparer should be able to easily use the data on them to prepare the aviation component of your taxes.

If you use either of these software packages, simply use the TurboTax Software Guide or TaxCut Software Guide to instruct you were to put your data.

EZPerDiem.com is designed to be as easy to use as possible, while still providing the power and flexibility of giving its users the features that are most needed. The Settings Page is where you might go to accomplish:

Copy and Paste is a feature that works for certain airlines and employee groups. It is a fast way to enter layovers into the Airport Code Entry Page (i.e. The Per Diem Calculator). The developers of EZPerDiem.com want to make data entry as fast as possible, therefore, we are hoping to build Copy and Paste programs for as many airlines as we can. Currently the following airline/employee groups can use Copy and Paste to enter their layovers:

If you work for another airline/employee group and wish to help us build Copy and Paste for you, click here.

In the dropdown menu, locate your airline/employee group combination and press the CONTINUE button.

NOTE: it is important you select the correct company AND position because the year-end-schedules sometimes differ slightly from one employee group to another, causing Copy and Paste to not function.

Instructions on the page should guide you through the Copy and Paste process. Basically, just copy your year-end-schedules for each month into the applicable green-bordered boxes.

If done correctly, all twelve months should be read by EZPerDiem.com, the layovers should be extracted, and your calculations can be viewed. Note that Copy and Paste only reads flying overnights. Layovers for PCs or recurrent training need to be entered manually.

If you used this feature in the past, you may like the fact that we added the ability to paste all twelve months with one click. This can allow users to finish an entire year in about 3 minutes if they are familiar with the process.

Date	The date that you had the layover
Airport Code	The IATA code of the airport where you had the layover
Location	The city corresponding to the airport (this may not be the city used for the per diem rate on the last day of a trip. On the last day of a trip, the city used for a per diem rate is the next to last overnight. Compare January 11 and January 18 above. Both show a layover in Cleveland, OH, which is this person's domicile (i.e. tax home). However, the per diem rates used are different because the rate used on the last day of a given trip is determined by the preceding day's layover. You don't need to know this, but we wanted to mention it so you didn't thing something was wrong.
Day Number	This is the day number of a given trip
City-by-City M&IE Calculation	If the city-by-city M&IE calculation is highest, this will be displayed and the standard per diem deduction will not. M&IE stands for Meals and Incidentals Expenses. Notice that this number is the sum of your meals only expenses and your incidentals expenses. If this is higher than the standard per diem deduction, then this is the number that should get placed on IRS Form 2106, Line 5, Column B.
Meals Only Calculation	This is the amount that the IRS says you spent on meals. NOTE: You probably won't use this number. The only way you will use this number is if you decide to keep actual receipts for your incidental expenses.
Incidentals Only Calculation	This is the amount that IRS says you spent on incidental expenses. NOTE: You probably won't use this number. The only way you will use this number is if you keep actual receipts for your meal expenses and use those in lieu of the much easier M&IE calculation.
Standard M&IE Calculation	This is the M&IE calculation using the special rate for transportation workers. It is usually lower than the M&IE city-by-city calculation. When it is lower, it will not be shown. If it is higher, both the city-by-city M&IE city-by-city and the standard M&IE Calculation will be displayed. We do it this way to alleviate clutter yet prove that the City-by-City is always being calculated.