When we began EZPerDiem.com, we did so to simplify the tax preparation process for pilots and flight attendants. As time passed, it became clear that many flight crewmembers were only vaguely aware of the tax deductions they were eligible for, and convincing them to take the time to examine these deductions each year would become one of our biggest challenges. But, why do tax deductions potentially worth thousands of dollars get left out of airline crewmembers' tax returns each year?
Below is a short list of the primary reasons we have discovered that many pilots and flight attendants are being shorted when it comes to their tax refunds:
No receipts You should be aware that receipts are not always necessary. For travel expenses less than $75 (there are exceptions such as lodging), receipts are generally not required; you only need a record that substantiates the date, place, amount, and business nature of the expense. The following is quoted directly from IRS Publication 463:
You should keep the proof you need in an account book, diary, statement of expense, or similar record. You should also keep documentary evidence that, together with your record, will support each element of an expense.
Documentary evidence. You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses.
Exception. Documentary evidence is not needed if any of the following conditions apply.
- You have meals or lodging expenses while traveling away from home for which you account to your employer under an accountable plan, and you use a per diem allowance method that includes meals and/or lodging. (Accountable plans and per diem allowances are discussed in chapter 6.)
- Your expense, other than lodging, is less than $75.
- You have a transportation expense for which a receipt is not readily available.
For many airline pilots and flight attendants, the largest employee business expense that does not require a receipt is your meals while on work related trips as long as you use the methods that EZPERDIEM.COM uses to calculate your meal expenses and incidental expenses (M&IE). If you are not familiar, the EZPERDIEM.COM Per Diem Calculator prints out your full government meal allowance for you. This is used in lieu of actual meal expenses that you incur, which is why you do not need a receipt for your meals.
My accountant said it wasn't deductible â€“ Non-aviation tax preparers, CPAs, enrolled agents, etc. generally have an immense amount of "general" knowledge of the tax code. They routinely deal with clients all over the spectrum, from a vast and wide variety of backgrounds. As a result, while they have seen many tax issues in their time, there is simply is no way that they could know the details of every type of tax law for every type of profession. They are only human.
The unfortunate reality is that many non-aviation tax preparers simply do not include aviation-related tax write-offs for a wide variety of reasons. Some truly believe you can't write off these expenses, while others just don't want to spend the time figuring it out. No matter what the reason, many of them have cost airline crewmembers thousands of dollars by not investigating these deductions fully.
Our advice to you - If you itemize your taxes and cannot get your tax preparer to agree that you are eligible for these deductions, GET ANOTHER TAX PREPARER.
Falsely believing your tax preparer is taking care of it - "My accountant does all that," is a common statement we hear from people.
We respond, "Does your accountant do a full city-by-city meal deduction?"
"I think so," they answer.
In almost all situations, they don't. Why? Because, if done properly, just doing a city-by-city meal deduction without the aid of EZPERDIEM.COM or a similar service, is going to take them several hours. Most accountants just do a simplified version of the meal deduction, if they do one at all. This typically costs the unknowing clients hundreds of dollars per year.
Not enough time - Going through the tax code isn't fun, and it isn't quick. Many pilots and flight attendants simply ignore aviation-related write-offs to save time. But honestly, it isn't as complicated as you may think. One of our biggest aspirations is to use articles and newsletters to educate pilots and flight attendants about these tax issues so it isn't so baffling every year.
Not enough understanding - It simply gets overwhelming for people to learn about these tax deductions. Not knowing where to start, people simply give up.
EZPERDIEM.COM is making it a goal to solve all of the issues above. By taking on this immense task, we hope to save airline pilots and flight attendants thousands and thousands of dollars over the course of their careers. One of our articles titled Crewmembers Can Save $200,000 in Tax Refunds shows how compounded interest can turn your annual tax savings turn into a big retirement fund.
Every year that goes by, EZPERDIEM.COM uses feedback to make the website faster, easier, and more useful so each tax season is better for our customers than the one before it. Why? Because we want the days of flight crewmembers throwing away tax money to become a thing of the past.
EZPerDiem helps pilots and flight attendants with their flight crew taxes by:
If you do not benefit, we will provide a 100% refund!