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Common Tax Phrases for
Pilots and Flight Attendants
2% Limit
A.G.I. (Adjusted Gross Income)
Above the Line Deductions
Accountable Plan
Actual Cost Meal Deduction
Adequate Records
Alternative Minimum Tax
Below the Line Deductions
CONUS
CPA (Certified Public Accountant)
City-by-City
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D.O.T. (Department of Transportation)
Day Trips
Department of State
Displaced
Documentary Evidence
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Effective Date
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Employee Business Expenses
Enrolled Agent
Expiration Date
General Services Agency
Gross Income
Hours of Service Limits
IRS
IRS Form 1040
IRS Form 2106
IRS Publication 1542
IRS Publication 463
IRS Publication 529
Incidental Expenses
Indefinate Duty
Itemized Tax Deduction
Itenerant
M&IE
Meals
Necessary Expense
Non Taxable Per Diem
Nonaccountable Plan
OCONUS
Ordinary Expense
Per Diem
Per Diem Calculator
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Per Diem Rates
Personal Expense
Prorate
Recordkeeping
Reimbursement
Rest
Schedule A
Seasonal End Date
Seasonal Start Date
Special Per Diem Rates
Standard Deduction
Standard Meal Allowance
Standard Per Diem Rates
Substantiated Expenses
TDY
Tax Attorney
Tax Audit
Tax Bracket
Tax Credit
Tax Deduction
Tax Home
Tax Liability
Tax Preparer
Tax Software
Taxable Income
Taxable Per Diem
Temporary Duty
Transition Period
Transportation Workers
Travel Expenses

Adjusted Gross Income

AGI (Adjusted Gross Income) is an IRS term that is related to a taxpayer's gross income after certain adjustments have been made to a taxpayer's gross income. The adjustments that are made to gross income are called above the line deductions. Specifically,

Gross Income - Above the Line Deductions = Adjusted Gross Income

Adjusted gross income is important for airline pilot and flight attendant tax calculations because it is one of the variables used to determine the value of the employee business expense deductions for a flight crewmember. The reason employee business expenses are affected by AGI is primarily because of the 2% limit. Because only the employee business expenses that exceed a pilot or flight attendant's AGI times 2% are deductible, the higher the crewmember's AGI, the lower the benefit of deducting employee business expenses, though other variables such as the taxpayer's tax bracket also affect the tax benefit.

Employee business expenses are simply one component of a taxpayer's itemized deductions (below the line deductions). In this sense, think of AGI as the line. Any adjustments or deductions that occur to gross income used to calculate AGI are above the line deductions. Any adjustments or deductions that occur to AGI used to calculate taxable income are below the line deductions.

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