Per Diem Deduction is actually a bit of a
false name, a misnomer, that pertains to airline
pilot tax preparation and flight attendant
tax preparation. Per Diem Deduction is
not a term that pilots and flight attendants will
find in the tax code, yet this term describes a very lucrative
tax write-off for pilots and flight attendants.
A more correct name for per diem deduction
would be “meal expenses and incidental expenses
tax deduction” because the flight
crewmember's meals and incidental expenses are the actual tax deduction.
Essentially the per diem deduction is a
method that can be used by taxpayers (particularly flight crewmembers to account
for their meals and
incidental
expenses (M&IE) in lieu
of keeping records and receipts. It provides a much easier and more
lucrative tax deduction for flight crewmembers
than an
actual cost meal deduction approach would.
As the phrase implies, the
per diem deduction uses
CONUS and
OCONUS
per diem rates to
come up with a substitute value for what a flight
crew member spends on meals and incidental expenses while on
airline job related travel. The
per diem rates for each airport location are
calculated according to specific rules set forth in
IRS Publication
463. Once calculated, this value is used as a
pilot or flight attendant's M&IE expenses
which is the main component of the per diem
deduction.
The phrase per diem deduction
can also be a bit confusing because it sounds like
per diem is being
deducted. It isn't. Per diem from a
flight crewmember's employer simply
reimburses the crewmember for their meals. If the crewmember receives
less per diem reimbursement than the
M&IE expenses, then the flight crewmember
should be able to take advantage of the per diem deduction if he or she
itemizes.
EZPERDIEM.COM quickly figures out the
M&IE expenses for flight crews by using the
layovers for the airports the crewmember stays at.