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

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 TurboTax 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 TurboTax, we recommend that you use the guidance supplied by TurboTax, applicable IRS Publications, or seek a qualified tax preparer.  Also, TurboTax 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 TurboTax.  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. 

The TurboTax Guide for 2007 is a summary of TurboTax that can help pilots and flight attendants use EZPERDIEM.COM or a related service along with TurboTax.  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 TurboTax don’t know where their tax data gets entered into TurboTax.  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 TurboTax 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 

TurboTax Online Begins with a choice among several versions.  Our example pilot or flight attendant only needs the cheapest.    This year it said it was free when we began to test it, but as we began to enter tax data, a popup soon informed us that to continue we’d have to pay.  The price was fairly reasonable (in the neighborhood of $10 to $15).  Also note that, when you use the online version of TurboTax, 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.

TurboTax 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, TurboTax asks you to enter income data (your W-2 forms and 1099s if you have them).  Then after the income is entered TurboTax 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

When you are ready to enter deductions, TurboTax will be give you two options:

1.      Guide Me Through

2.      Find Deductions Myself

The Guide Me Though method is probably going to be the most helpful because it will take you through each possible deduction step-by-step.  Because those are beyond the scope of this guide, we chose Find Deductions Myself for the purpose of explaining how to enter employee business expenses.

EMPLOYMENT EXPENSES

We’ll be more specific with these questions because these

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

The section is titled:

Employment Expenses

Teacher expenses, other job-related expenses

When you enter, you will begin with the following question:

Qualify for Teacher Deduction?

During 2007, did you purchase books, supplies, or classroom materials while employed at a school?

If you teach kindergarten through grade 12 in a public or private school and you personally pay unreimbursed, out-of-pocket expenses for books, supplies, and other materials you use in the classroom, you can claim a deduction for up to $250.

Answer NO 

Even if your spouse is a teacher, you would choose NO because you fill out a seperate 2106 for each occupation.

Unreimbursed Work Expenses

We'll help you claim work expenses you paid out of pocket. Explain This

This includes:

            -           Travel, vehicles and entertainment

            -           Your home office

            -           Continuing education

            -           Job-searches

            -           Union dues or professional subscriptions

            -           Uniforms and related maintenance fees

This doesn't include:

            -           Self-employment expenses

Did you have any unreimbursed work expenses in 2007?

Choose YES 

Pilots and flight attendants typically have many unreimbursed work-related expenses to choose from.  You can easily tally these expenses and find some you may never have considered using our Expense Processor^TM.  It will guide you through a series of worksheets that will uncover several airline-related deductions.  There is no additional cost for using the Expense Processor^TM.  It is simply an additional service we offer.

Any Job or Employment Expenses?

Did you pay any of the following job or employment related expenses?

            -           Vehicle See Examples

            -           Travel

            -           Meals

            -           Entertainment expenses

            -           Home office expenses

            -           Job-related equipment

Choose YES

Tell Us Your Occupation

What occupation did you hold when you had these job-related expenses?

Enter PILOT or FLIGHT ATTENDANT

Tell Us About This Job

Check any of the following that describe this job. (These are not common.)

Check (You are in the transportation industry.)

Any Home Office Expenses?

Did you have any home office expenses related to this occupation?

NO is the most likely answer.

Did You Have Any Vehicle Expenses?

You can use either the standard mileage rate or actual vehicle expenses, but not both.

Examples of actual vehicle expenses include:

            -           Gas and oil

            -           Car repairs

            -           Depreciation

            -           Section 179 deduction Explain This

            -           Auto lease payments

Did you have any vehicle mileage or expenses for your occupation?

NO is the most likely answer.

The EZPERDIEM.COM Expense Processor^TM does include a section for you to be able to deduct vehicle expenses, but rarely will a typical pilot or a flight attendant have any that add up to a significant deduction.

Any Equipment Expenses?

Did you buy or own equipment that you used on your job?

Select Yes only for job-related equipment (other than vehicles) that is useful for longer than a year. We'll ask you about equipment that's useful for less than a year later.

Examples of equipment that is useful for longer than a year include:

            -           Computers

            -           Office machinery

            -           Furniture

NO is the most likely answer.

Any Other Expenses?

Enter the following expenses that you had in this occupation.

Tell Us About Other Expenses

Enter the following expenses related to your occupation.

Enter Other Job-Related Expenses

Enter any other expenses related to your job that you haven't yet reported, such as expenses for:

            -           Equipment and tools that are useful for less than a year

            -           Union dues

            -           Uniforms and their upkeep

            -           Job-search expenses

Tell Us About Any Reimbursements

Did any of your employers reimburse you for your expenses?

Most Likely Answer is YES

The amount of nontaxable per diem you received from your employer reimburses you for you meals and incidental expenses.

Tell Us About Any Reimbursements

Did your employer keep meal and entertainment separate from your other job-related expenses?

Answer is YES or NO depending on situation

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!

Any Special Situations?

Did you have any expenses because you were any of these:

            -           Disabled

            -           A Qualified Performing Artist

            -           An Armed Forces Reservist

Answer is YES or NO depending on situation

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. 

This concludes the 2007 TurboTax 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 TurboTax 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.