TaxCut Guide for 2008
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 2008.  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 CalculatorTM - Calculates a flight crewmember's M&IE expenses

  2. The Expense ProcessorTM  - Calculates a flight crewmember's other employee business expenses

The TaxCut Guide for 2008, when combined with the two tools listed above, allow for flight crewmembers to prepare their taxes using TaxCut very quickly and affordably.

If you have not yet used the EZPerDiem.com website, you can learn more via the following links:

NOTE:  This guide assumes you have finished all of the steps in the EZPerDiem.com Step-by-Step Guide for 2008 and have printed the results from the Per Diem Calculations and the Expense Processor.

You no longer have to go to the store to buy TaxCut.  TaxCut Online saves you the trouble of installing software on your computer and it also saves you the time of going out and buying software.  Because most of TaxCut is self-explanatory and beyond the scope of this guide, we are going to skim through generic tax topics until we get to the focus of this guide, which is Employee Business Expenses.

Personal Info:

You should probably begin with the free version of TaxCut.  This is for more basic tax returns, but it may suffice for some pilots and flight attendants.  If you end up needing a more powerful version of TaxCut, you can do so when it is necessary.  TaxCut asks you to upgrade as soon as you sign up.  The first upgrade they ask for is:

Upgrade to TaxCut Standard for only $14.95

It is up to you whether to upgrade at this point or keep the free version.  In making this guide, we are keeping the free version as long as possible.

The next page asks what type of return you wish to prepare.  We chose to prepare a federal return because that is the return that addresses the employee business expenses that affect pilots and flight attendants.  Initially you will be ask about your filing status.  Note: If your spouse was also a flight crewmember and you are filing joint, you will need to complete two employee business expenses forms (i.e. IRS Form 2106).  TaxCut will generate the 2106 form for you, but you need to make sure yours and your spouses expenses are kept separate when you fill out the employee expense questions in TaxCut.

Moving on, you will be ask a series of personal info questions, Enter applicable data.  The last page in this series of questions will bring you to Income.  You will have enter your income sources before TaxCut will let you enter deductions.  TaxCut does not appear to let user jump around.  As you enter your W-2 data into TaxCut, pay close attention to Box 12.  Box 12, Code L is the amount you were reimbursed by your employer for employee business expenses that you incurred.  For most, this will be your non-taxable per diem.

Once you finish the income section in TaxCut, you will move into Deductions and Credits.  This page lists:

The section that will apply to pilots and flight attendants specifically is:

Make sure that is checked.  TaxCut will guide you through you various deductions until you eventually arrive at the focus of this guide, which is Job-related expenses.

When you click on the deduction item called "Job-related expenses" you will see:

Employee Business Expenses Form 2106
Certain costs associated with doing your job as an employee may translate to tax-saving deductions. These expenses are normally considered miscellaneous itemized deductions.
Enter any job-related expenses that were not fully reimbursed by your employer(s).

There is a prompt to Add Expense

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

Enter the occupation for which the expenses occurred:  Type: PILOT or FLIGHT ATTENDANT as appropriate

Select the category that applied in 2008:

Of the choices below this that we noticed, the likely answer is "None of the above."

Note:  If you flew in the National Guard, do not combine Civilian and Military expenses.  Go through this once only as Civilian, then return to this form and enter expenses only as Military.


Employee Travel Expenses
Enter your expenses that did not involve overnight travel or commuting to and from work.

See the Expense Processor for details.  Note that the Expense Processor might differ slightly from the way TaxCut wants the data entered.  The easiest way to handle this is to print out the Expense Processor (Printer-friendly version) and mark off each expense as you enter it into TaxCut.

Parking, Tolls, Local Transportation:  Probably enter $0.00. 

Only flight-crew-related parking, tolls, and local transportation expenses that are Ordinary and Necessary for your job can be deducted.  Commuting expenses are never allowed to be deducted.

Enter your 2008 travel expenses while away from home overnight.

Enter any that are appropriate.  You might incur some of these, and travel expense that are less that $75 each do not require a receipt.  You still must record the expense, however.

Be careful with this one:  Lodging and incidental expenses.  The reason is that your per diem calculation generated by EZPerDiem is actually your M&IE expenses stands for meals and incidentals expenses.  If you enter incidental expenses on this line, make sure you do not enter M&IE later because you are essentially writing-off the same expense twice.  You can leave it $0.00 here and enter M&IE later.
 

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.

Flight Crews will be allowed to deduct 80% of their meal expenses, rather than 50% because they fall under DOT hours of service limits.  This is handled in tax cut a few lines down.

Were you subject to Department of Transportation (DOT) hours of service limits in 2008?  Answer YES for Civilian Pilots and Flight Attendants (no for military)

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.

Amount  Enter any deductible expenses from the EZPerDiem.com Expense Processor that were not already accounted for in TaxCut.  Examples might include union dues, the business portion of a cell phone bill, uniform expenses, flight cases, roller bags, etc.

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.

Note: When a deductible expense is partially reimbursed, only the non-reimbursed component of that expense is deductible.  Civilian pilots and flight attendants are generally reimbursed non-taxable per diem from their employer.  That amount offsets the amount of meals or M&IE expenses that can be deducted.

 

Choose Vehicle, Home Office, and Depreciation
Choose all that applied to your occupation.

You used a car or truck for business purposes. (rare for flight crews)
You had an employee home office. (rare for flight crews)
You need to depreciate business assets. (rare for flight crews)

This concludes the EZPerDiem.com TaxCut Guide for 2008.  If you need further assistance, you can submit a question here or log in to your account, navigate to your Settings Page, and submit a ticket.  Good luck.

- EZPerDiem.com management

 

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.