Above the line deductions are tax deductions or adjustments that modify a
taxpayer's gross income and are used to calculate a taxpayer's
Adjusted Gross
Income or (AGI). The so-called "line" is AGI (Adjusted Gross Income). Therefore,
tax deductions that occur before AGI is calculated are called above-the-line
deductions. Any deductions that occur after AGI is calculated are called
below-the-line deductions (either
itemized deductions or
the standard deduction).
Above the line deductions are used in the
following basic calculation:
Gross Income - Above the Line
Deductions = Adjusted Gross Income
Above-the-line deductions include a variety of write-offs that help reduce a
taxpayer's tax liability. Some of the above-the-line deductions that might
help pilots and flight attendants are:
- Rental Property Deductions (Schedule E)
- Alimony Payments
- IRA Contributions
- Schedule C (Business Losses)
- Student Loan Interest Paid
- Moving Expenses
- Stock Losses
Note that the employee business expenses that an
airline pilot or fight
attendant deducts are not above-the-line deductions.
Employee business
expenses are one component of an
airline pilot or flight attendant's itemized deductions,
and itemized deductions are below-the-line deductions.
