TurboTax Guide for 2008
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.

This guide is intended to help EZPerDiem.com users enter the flight crew tax data generated by the EZPerDiem.com website into TurboTax 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 TurboTax Guide for 2008, when combined with the two tools listed above, allow for flight crewmembers to prepare their taxes using TurboTax 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 TurboTax.  TurboTax 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 TurboTax 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 TurboTax.  This is for more basic tax returns, but it may suffice for many pilots and flight attendants.  If you end up needing a more powerful version of TurboTax, you will be prompted to change in the middle of your return when it becomes apparent that the free version will not suffice. All of the data you have entered up to that point simply transfers to the enhanced version. When you begin you will be asked:

Let's Work on Your Personal Info

The thing to note in this section is where you are asked your occupation.  Enter pilot or flight attendant as applicable.

Complete the page and hit:

CONTINUE

Answer subsequent sections.  When you finish the Personal Info part of your tax return, TurboTax should know your filing status, name, address, and other pertinent tax information so your tax return can be prepared.  The last page in the personal information section will summarize the data you supplied for you to review.  Make sure it is correct and hit:

DONE WITH PERSONAL INFO

Income:

You will be asked a few follow-up questions.  One of them says:

Let's Work on Your W-2

Having your W-2 available, enter the data that you are asked to enter from the W-2.

NOTE:  The amount of nontaxable per diem you received from your employer should be on your W-2 Box 12, Code L.  This is the amount you were reimbursed for M&IE expenses.  You can also look for your nontaxable per diem reimbursement on the last paycheck stub you received for 2008.

Once the W-2 Data is entered, you will be given the opportunity to enter other income sources.  At the bottom of this Income Summary Page is a button that you can click that says:

DONE WITH INCOME

Deductions:

When you begin entering deductions, you may notice that TurboTax introduced a new feature.  It is a simple form that asks:

Estimate How Much You Had for Each Item This Year

Simply fill in the applicable data.  Basically, TurboTax is trying to determine whether or not you are going to itemize.  This is important because if you do not itemize, the employee business expenses that EZPerDiem.com helps you calculate will not increase your refund.  You have to itemize in order to benefit from EZPerDiem.com.  The topic that pertains directly to flight crews here is:

Job-Related/Seeking Expenses

To estimate the Job-Related/Seeking Expenses, simply add the totals from the Expense Processor and add the M&IE expenses from the per diem calculations minus the amount on W-2 Box 12, Code L (your per diem reimbursement from your employer).

Expense Processor + (M&IE Total - W-2 Box 12, Code L) = Job-Related/Seeking Expenses

While this is not exact, this rough calculation will suffice for this particular section.

Assuming you will be itemizing, when you finish the "Estimate How Much You Had for Each Item This Year" section, TurboTax will tell you that itemizing will save you the most money and ask you to hit:

CONTINUE

The page that should be displayed next will ask for:

Your Deductions and Credits

It should list:

  1. Your Home

  2. You and Your Family

  3. Donations

  4. Cars and Things You Own

  5. Education

  6. Medical

  7. Taxes Paid

  8. Retirement and Investments

  9. Employment Expenses

  10. Other Expenses

While many of them may apply, the one we are going to focus on is #9 above, Employment Expenses.

Employment Expenses

Teacher Expenses:

Tell Us Your Occupation

You were not a teacher, so you will click NO at the bottom. 

Note:  If your spouse was a teacher and you are filing jointly, you will visit this page once for yourself and click NO to the teacher question and once for your teaching spouse where you would answer YES.

Unreimbursed Work and Job-Seeking Expenses

Likely answer is YES

Did You Have Any of These Expenses?

These expenses are directly related to a job where you're employed by someone else and receive a W-2 from them.

Likely answer is YES

If you had expenses related to a different job from last year, we'll help you enter those later.

Enter pilot or flight attendant as applicable.

Note to reservists.  If you flew in the military, you will like have two separate IRS 2106 forms, which means you will answer something like "Airline Pilot" via this guide and "Military Pilot" the second time according to TurboTax and applicable IRS Publications.  In other words, you are probably going to separate those two jobs because the expenses associated with them are significantly different between the two.  Don't combine the civilian and military jobs.

Tell Us About This Job

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

You worked on a fee-basis for a state or local government.
You are in the transportation industry.
Your job is located in a Qualified Disaster Zone.
The assets you used in this job are Indian reservation property.
The assets associated with this job that were acquired after May 4, 2007 are qualified Kansas Disaster Zone property.
The assets associated with this job that were acquired after August 27, 2005 are qualified GO (Gulf Opportunity) Zone property.

Civilian pilots and flight attendants should check next to You were in the transportation industry.

Home Office Expenses

Probably click NO

Did You Have Any Vehicle Expenses?

Few flight crewmembers will have vehicle expenses.  Possibly driving for a medical or driving for union purposes will help, but for the majority of flight crewmembers, this will be answered NO.

Any Equipment Expenses?

This section will address expenses for computers and cell phones.  This is somewhat complicated because you will likely be depreciating those items, should you choose to deduct them.  Furthermore, you are only able to expense the business portion of those amounts when you depreciate them.  This typically results is a relatively low tax refund increase because of these items, it complicates your tax return, and it may even create a red flag by the IRS.  Due to this, most are better off simply ignoring these types of equipment expenses for pilot or flight attendant employment.  If you own a business or some other endeavor that justifies the equipment expense more than your aviation employment, you are probably better off deducting it using those other venues.

Probably NO

Any Other Expenses?

Enter the following expenses that you had in this occupation.  The Expense Processor Printout will itemize the amounts for you, so you can easily transfer them into TurboTax.  Those expenses are also found in an EZPerDiem.com article titled, "Airport Employee Business Expenses Listed and Explained."  Some of them include:

Tell us about reimbursements

It is important to note that only unreimbursed expenses are deductible.  For example, the per diem deduction is first determined by calculating your M&IE expenses using the EZPerDiem.com Per Diem Calculator.  Once that is complete, you determine the amount that your employer reimbursed you in the form of nontaxable per diem.  That amount is likely found on your W-2, Box 12, Code L and also on your last paycheck stub for 2008.  When you locate your nontaxable per diem reimbursement, you enter that where you are asked to enter:

Reimbursements for DOT Meals and Entertainment

It is important for civilian pilots and flight attendants to choose Reimbursements for DOT Meals and Entertainment, because the DOT Hours of Service Limits apply to them.  This increases your deduction because on IRS Form 2106, the amount of your M&IE expenses that are deductible are either 50% or 80% of the M&IE total.  If you were subject to the DOT Hours of Service limits, then you are entitled to 80% of the M&IE total.

You may also have to choose:

Reimbursements for Other Expenses

For example, assume you spent $400 in uniform and upkeep expenses, but your employer reimbursed you $250 for the uniform.  You would simply enter $400 next to Uniforms and their upkeep expense and $250 as the Reimbursements for Other Expenses.  TurboTax would see this as a net expense of $150 ($400-$250).

This concludes the EZPerDiem.com TurboTax 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 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.