TaxCut Guide for 2007
Easily Learn How to Enter Aviation Flight Crew Expenses into TaxCut

This guide is intended to be use by airline pilots, corporate pilots, fractional pilots, and flight attendants who pay U.S. Income Taxes and use TaxCut for their tax returns and EZPerDiem.com for their flight crewmember tax deductions.  This guide is not intended to be used by armed forces members because the method in which armed forces members enter their tax information is somewhat different than it is for civilian employees.  If you are a pilot who flew part time as a reservist and also flew professionally as a civilian airline pilot, you need to separate your expenses from those two jobs and only use this guide for the airline pilot component.  To enter the military expenses into TaxCut, we recommend that you use the guidance supplied by TaxCut, applicable IRS Publications, or seek a qualified tax preparer.  Also, TaxCut is not affiliated with EZPerDiem.com.  EZPerDiem.com simply provides this guide as an unofficial feature that might help flight crewmembers enter their data from EZPerDiem.com into TaxCut.  The fact that this guide is unofficial means that any instructions contained within it should not be taken as tax advice or substituted for IRS publications or the knowledge of a professional tax preparer.

This guide is intended to help EZPerDiem.com users enter the flight crew tax data generated by the EZPerDiem.com website into TaxCut 2007.  As you may already know, EZPerDiem.com is a simple, fast website that quickly helps pilots and flight attendants compute their employee business expenses and the lucrative per diem deduction.  EZPerDiem.com has two very useful tools that help flight crews quickly organize their taxes:

1. The Per Diem Calculator^TM - Calculates a flight crewmember's M&IE expenses

2. The Expense Processor^TM  - Calculates a flight crewmember's other employee business expenses

The TaxCut Guide for 2007, when combined with the two tools listed above, allow for flight crewmembers to prepare their taxes using TaxCut very quickly and affordably.  The TaxCut Guide for 2007 is a summary of TaxCut that can help pilots and flight attendants use EZPERDIEM.COM or a related service along with TaxCut.  If you are currently using EZPERDIEM.COM to help you organize and calculate your airline pilot or flight attendant related tax deductions, you are aware that we offer an easy way to calculate your meal expenses (i.e. per diem deduction) and organize your write-offs via our Expense Processor^TM.  If you haven’t yet used EZPERDIEM.COM, you can sign up by clicking going to http://ezperdiem.com/taxes/user_login.php. We created this guide because many pilots and flight attendants who use TaxCut don’t know where their tax data gets entered into TaxCut.  We hope this guide may help.  It is not meant to tell you what is or is not deductible.  Not all of the information will be applicable to every crewmember’s unique situation.  It is simply a tool that contains general information.  In that capacity, it should help many of you, especially if you use it in conjunction with the services provided by EZPERDIEM.COM.  It is important to note that you are ultimately responsible for determining whether or not something is or is not tax deductible.  This guide is provided to you free of charge, only to assist with very general information and streamline the TaxCut process for pilots and flight attendants.  The Per Diem Calculations and data you get from our Expense Processor^TM are only as accurate as the data you enter in them, which you are also responsible for. 

As we wrote this, we imagined a typical pilot or flight attendant as an example.  Also, we will skip over many entries so we quickly get to the main focus of this guide, which is IRS Form 2106 (Employee Business Expenses which can be organized using EZPERDIEM.COM’s Expense Processor^TM) and your meal deduction (i.e. The EZPERDIEM.COM Per Diem Calculation^TM). 

LET’S BEGIN 

TaxCut Online Begins with a choice among several versions.  Our example pilot or flight attendant only needs the cheapest.    When you use the online version of TaxCut, you do not have to pay up front, so you can enter your data without having to fork out any money until the end of the tax-entry process.

TaxCut guides you through the tax process in a very logical order.  It begins asking for general information about you (a series of questions about you and your employment).  Once complete, TaxCut asks you to enter income data (your W-2 forms and 1099s if you have them).  Then after the income is entered TaxCut moves on to deductions, which is where the focus of this guide will be.

There is one important note about entering your W-2s that we will mention now.  Box 12 Code L is for non-taxable reimbursements for employee business expenses.  This is typically your reimbursement for meals and incidentals on trips.  In airline lingo, this is your non-taxable per diem. 

Airlines typically pay per diem under an accountable plan.  Accountable plan is just tax lingo for how reimbursements are paid to you.  To understand this, you have to think of per diem as a reimbursement – not extra pay.  Per diem is reimbursing you for specific expenses you incurred while on trips, and those expenses are your meals and your incidental expenses or M&IE (the abbreviation for meals and incidental expenses).  If Box 12 Code L is blank, your last paycheck stub may contain the information you need about how much you per diem you were reimbursed for the year.  Just determine if the per diem you were paid was taxable or non-taxable because taxable per diem should already be included as wages in you W-2.

DEDUCTIONS

In TaxCut you may not initially see where to enter your employee business expenses because they are not included among Common Adjustments & Deductions.  To find where to enter employee business expenses, you should click Other Adjustments & Deductions and the check Job-related expenses.

We will skip straight to Job-related expenses because the other deductions are beyond the scope of this guide.  Our intent is simply to help pilots and flight attendants enter employee business expenses into TaxCut.

EMPLOYMENT EXPENSES

We’ll be more specific with these questions because these

are the ones that will pertain to airline pilots and flight attendants.

Employee Business Expenses          

Certain costs associated with doing your job as an employee may translate to tax-saving deductions. These expenses are normally considered miscellaneous itemized deductions.

Did you have any job-related expenses that were not fully reimbursed by your employer(s)?

Answer YES

Employee Business Expenses          

You told us you incurred business expenses while working as an employee.

Enter the occupation for which the expenses occurred

Enter Pilot or Flight Attendant

Select the category that applied in 2007:

            Qualified performing artist

            Impairment-related work expenses

            Minister, clergy member, or Christian Science practitioner

            Fee-based government official

            National Guard or Military Reserve

            Rural mail carrier

            None of the above

Choose None of the Above

Note that if you are in the Armed Forces, you should probably NOT include those expenses with the expenses from your airline occupation on the same 2106 form.  They are two different occupations and require two different 2106 forms. (If the jobs are related enough, it may not make any difference as to whether you lumped the expenses onto one 2106, but it is still best to separate them.)  By separating them you do not include Armed Forces Trips in the same EZPERDIEM Per Diem Calculation as your airline occupation.  You would use two separate per diem calculations in this case – one for your airline and one for your guard duty.  To do that you need to hit the red button at the bottom of your Settings Page, which will erase all of your calculations and your domiciles and allow you to start over.  MAKE SURE YOU PRINT THE RESULTS BEFORE RESETTING OR YOU WILL LOSE YOUR ENTRIES.  The same concept applies to all of your other expenses.  Guard duty expenses would be separated from airline expenses. 

Employee Travel Expenses

See Expense Processor^TM.  This is one of the categories we included.  Note that this is a little confusing because the title on the TaxCut page is Employee Travel Expenses, but then they are asking for expenses that did NOT involve overnight travel.

Please enter your expenses that did not involve overnight travel or commuting to and from work

Please enter your 2007 travel expenses while away from home overnight.

Meals and Entertainment     

Please enter your total business meals and entertainment expenses. Enter 100% of the expenses and we will calculate the deductible portion for you.

Note: Generally, meal and entertainment expenses are 50% deductible. This also applies if you are using the standard meal allowance.

As a pilot or flight attendant, you probably will not have any entertainment expenses, but, you likely will have meal expenses.  Your meal expenses are what is calculated with the EZPERDIEM.COM Per Diem Calculation.  In the meals total you can enter the M&IE calculation we provide because TaxCut does not ask for incidental expenses later.

Were you subject to Department of Transportation (DOT) hours of service limits in 2007?

Airline Pilots and Flight Attendants should Check YES

Other Employee Business Expenses           

Enter any other employee business expenses for your occupation not already entered, such as deductible education or uniforms and protective clothing.

Enter remaining items from the Expense Processor that have not already been included.

This is just a catch all for all of the remaining employee business expenses you may have.  Items like uniform, union dues, etc. all get summed up and included on this line.

Employer Reimbursements  

Enter any reimbursements received from your employer for employee business expenses. Do not include the amount in Box 1 of your W-2.

Employer reimbursed meals

Most likely your reimbursement will be found on your W-2 Box 12 Code L (or possibly on your last paycheck stub as non taxable per diem).  If you answer YES you will be asked to enter Reimbursements for DOT Meals and Entertainment among other items.  This is likely where you would enter your per diem reimbursement.  If you enter any other expenses that you were reimbursed for, you would be able to enter the reimbursement amount by choosing yes.  If you choose NO, you will simply be asked Reimbursements You Received.  This is where you would enter the per diem reimbursement.

Important:  DO NOT FORGET THE ABOVE STEP!

Employer-reimbursed entertainment

Most likely $0.00

Other employer-reimbursed expenses

Most likely $0.00

Employee Vehicle, Home Office and Depreciation

Please select all that applied to your occupation

It is not likely that these will apply to you

This concludes the 2007 TaxCut Guide for Pilots and Flight Attendants.  We hope this helps you with your taxes and we hope to continue to have you as an EZPERDIEM.COM customer in the future.

Disclaimer:

EZPERDIEM.COM is a first and foremost a per diem calculator and expense tracker intended for use by airline flight crewmembers. It is simply a tool to be used in adjacent with all of the other tax data availble to the general public.  It is not meant to give advice on tax deductions.  Currently, EZPERDIEM.COM is only an aviation-related website. Anyone not in the aviation profession will not benefit from the information provided by EZPERDIEM.COM. EZPERDIEM.COM does not do taxes, nor do we provide official tax advice.  EZPERDIEM.COM is not responsible for the data you enter into our website, nor do we check that data. The terms meal expense, standard meal expense, and per diem calculation are used interchangeably throughout this website. The word unofficial used throughout this text means that the information it relates to is not meant to replace guidance from the IRS or a Professional Tax Preparer, and that information must be verified by your own investigation. EZPERDIEM.COM gives some unofficial guidance for users of TaxCut and TaxCut tax preparation software. This unofficial guidance is so users can better learn where to insert the EZPERDIEM.COM per diem calculation (standard meal expense) and airline related tax expenses.  It is nothing more. For a pilot or a flight attendant to benefit from deducting meal expenses, that pilot or flight attendant must itemize their deductions on their tax return. If you are a pilot or a flight attendant who takes the standard deduction (does not itemize), the EZPERDIEM.COM calculation will not increase your refund. Before you will see an increase in your refund, you must also have enough employee business expenses to exceed the 2% limit as defined by the IRS. Information on the 2% limit is contained in various unofficial places within this website, but can also be accessed via links to the IRS website. You must also include the per diem you were reimbursed from your employer(s). The per diem reimbursement (commonly called nontaxable per diem) is up to you to find in your W-2, last paycheck stub, or other company pay-related documentation. If EZPERDIEM.COM provides guidance, it is only to give pilots and flight attendants ideas on what may be a deductible, and that guidance is unofficial. The determination on whether that deduction is legitimate rests with you or your professional tax preparer. EZPERDIEM.COM does not offer protection in the event of an IRS audit. You, the taxpayer, are ultimately responsible for verifying the accuracy of all tax information you include in your tax returns. While we at EZPERDIEM.COM work diligently to ensure the accuracy of all of our data and calculations, errors are always possible, especially when a very large amount of data is used and compiled. Government data is continuously being updated at random intervals, so we do not guarantee that the per diem calculation will exactly match the latest available from the DOT or GSA.  Normally such differences in a per diem calculation are very small and negligible.  You are encouraged to seek the knowledge of a certified public accountant or professional tax preparer if you have any concerns about the accuracy of the data EZPERDIEM.COM provides or if you have any confusion about how to enter the data into an online or off-the-shelf tax software program. EZPERDIEM.COM provides some links to appropriate IRS websites so you can personally verify the accuracy of all calculations or unofficial guidance we may provide. All per diem data used by EZPERDIEM.COM can found by accessing the IRS website. EZPERDIEM.COM recommends you save copies of all tax-related information we provide by printing a hardcopy because we do not guarantee that we will save your data.