Using TurboTax, TaxCut, or TaxAct with EZPerDiem | Entering Per Diem Calculation (M&IE)

EZPerDiem.com gives pilots and flight attendants a tax tool that can instantaneously calculate their M&IE expenses. Using EZPerDiem.com greatly speeds up and simplifies the tax preparation process for pilots and flight attendants, and also gives pilots and flight attendants who itemize significantly more money back in their taxes. But, there is more to computing a pilot or flight attendant's per diem deduction than just using EZPerDiem.com. Unless you know what to do with the EZPerDiem.com calculations, the M&IE calculation is not going to help much. This article addresses how to use the M&IE calculation, and more specifically how to enter the per diem data into tax software, such as TurboTax, TaxCut, or TaxAct. After reading this article, we hope that you will be able to ascertain that the per diem deduction is properly calculated and IRS Form 2106 is filled out correctly via whatever tax software package you are using.

Many pilots and flight attendants use tax software to prepare their taxes. Tax software simplifies the complicated tax preparation process by guiding taxpayers through the myriad of tax situations they might encounter. With regard to the per diem deduction, tax software needs to know three important pieces of information. Those three pieces of information are:

1. Whether or not you are subject to DOT Hours of Service Limits
2. The M&IE expenses that you incurred
3. How much non-taxable per diem you were reimbursed

All of the per diem deduction questions should be found in the tax software packages under a category that addresses tax deductions for employee expenses. The employee expense section of a tax software package is what is used to generate an IRS 2106 form, which is also the form that is used to enter the meals and incidentals expenses, as well as other employee expenses you might incur.

It is important to note that each tax software package has own way of extracting the per diem deduction information. Furthermore, the questions they use to get the correct information change from year-to-year and service-to-service. Below are some general guidelines you can look for when you are entering your per diem deduction information into tax software.

Part 1. DOT Hours of Service Limits

Civilian pilots and flight attendants are subject to DOT Hours of Service Limits. This is important because it entitles pilots and flight attendants to a higher tax deduction for the nonreimbursed M&IE expenses than if they were not. As you enter your information into the employee deduction expenses related to your job as a flight crewmember, you might come across a question similar to:

Were you subject to DOT Hours of Service Limits?

For a civilian pilot or flight attendant, the answer to this question would be yes. By answering yes to this question, the tax software package you are using will know that you should get a higher percentage of the per diem deduction than a typical taxpayer.

Note: It is also possible that you might never be asked about DOT Hours of Service Limits. In 2008, TurboTax simply asked for you to enter:

Meal Expenses Covered by Department of Transportation Rules

Next to that question you can enter the M&IE number generated by EZPerDiem.com. That question lets TurboTax know two pieces of information via one question. It tells TurboTax that you were subject to DOT Hours of Service Limits and what your M&IE expenses were, simultaneously.

Part 2. M&IE Expenses

The M&IE Expenses are what EZPerDiem.com calculates. This number uses federal CONUS and OCONUS per diem rates to calculate the amount that the IRS says you should have spent on meals and incidentals expenses while you traveled for your aviation employment. Using EZPerDiem.com to calculate your M&IE expenses alleviates you of the responsibility of keeping receipts for those items, and with EZPerDiem.com, the calculation is as simple as entering your layovers into our online software.

 

When using tax software packages such as TurboTax, TaxCut, or TaxAct, it is important to know how they may ask for the M&IE data. Often they will ask one question for meals and entertainment and another for incidentals. This is a bit different than what we might expect. Remember that M&IE stands for meals and incidentals, not meals and entertainment. Incidentals and entertainment are two entirely different things. Incidentals refers to tips to porters and bellhops, hotel maids, etc. Entertainment refers to taking someone out on the town for business purposes. Pilots and flight attendants will almost never have any entertainment expenses, but they generally do have incidentals, which are part of M&IE.

There are two ways to handle this when you are asked about these expenses in your tax software package. You can enter the M&IE number where you are asked for meals and entertainment, and then leave the incidentals question with a $0, or you can split the M&IE number into its components (meals only and incidentals only) and enter each number in its respective spot in the tax software package. It shouldn't matter as long as you aren't entering M&IE for meals and entertainment and then also entering a number for incidentals because then you are double-dipping on the incidentals part since M&IE includes incidentals.

We recommend that you enter the EZPerDiem.com M&IE number if it asks for meals and entertainment and then if it asks for incidentals, leave the incidentals at $0.

Part 3. The non-taxable per diem reimbursement

Basically, the amount of M&IE expenses that you are entitled to write off on your taxes are the non-reimbursed M&IE expenses that you incur while on work-related trips that involve overnight travel. Of course, most pilots and flight attendants get paid per diem from their employer. The reason you benefit from the per diem deduction is simply because the per diem reimbursement from your employer is less than the M&IE expenses you incur. In other words, the IRS sees that you spent more on M&IE expenses than your employer paid you in non-taxable per diem.

Non-taxable per diem is a number that should be present on your W-2, Box 12, Code L. If it is not there, we wrote an FAQ titled, "What do I do if Box Code L is blank on my W-2?" Assuming that the number is present, you will enter it in tax software when you are asked about your meal reimbursement. In 2008, TurboTax asked for:

Reimbursements for DOT Meals and Entertainment

Again, there is no entertainment reimbursement, but the meals reimbursement is your non-taxable per diem. IMPORTANT: You are not going to calculate the difference between your M&IE expenses and the non-taxable per diem. The tax software calculates the difference when you enter each number corresponding to their respective question. While this article may seem to contain a lot of information, entering the per diem deduction into tax software is actually fairly simple once you grasp a few fundamental concepts:

1. The M&IE expenses are calculated by EZPerDiem.com and are used in lieu of keeping receipts for actual M&IE expenses
2. Civilian pilots and flight attendants are subject to DOT Hours of Service Limits, which increases this deduction
3. Generally, non-taxable per diem only partially reimburses you for M&IE expenses

Understanding those simple facts should ensure that your per diem deduction is done correctly.