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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
Commuting Expenses
D.O.T. (Department of Transportation)
Day Trips
Department of State
Displaced
Documentary Evidence
Domicile
Effective Date
Effective Tax Rate
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
Per Diem Deduction
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

Tax Audit

A tax audit is a procedure used by the IRS to conduct a thorough inspection of a taxpayer's tax return.  The most important things an airline flight crewmember can do prevent tax audits and get through tax audit without penalties is:

  • Be honest - Do not try to write off expenses that are false or not allowed

  • Keep good records - Poor recordkeeping gives many taxpayers a problem during a tax audit

  • Don't make mathematical mistakes - Errors in a tax return can trigger IRS Audits

If an underpayment is discovered, penalties on the underpaid tax could be around 20%, plus interest on the underpayment could be due.  If the underpayment is due to fraud, a more serious course of action could result bringing the tax penalty up an over 75%.  The most serious case of fraud, tax evasion, could lead to legal trouble, including possible imprisonment.

Airline flight crewmembers can write-off many aviation expenses from their tax returns, but it is possible to go too far.  Certain red-flags can trigger a tax audit, though these red-flags are kept secret by the IRS.  Good judgment on the behalf of the tax paying airline crewmember is the best practice to avoid IRS tax audits, yet that alone won't necessarily prevent one.  If a taxpayer is audited, it is important to gather tax records and prepare for it.  It might be a good idea to seek the expertise of a CPA or Tax Attorney.

 

An IRS tax audit can be triggered randomly, or by an error in filing a flight crewmember’s tax return.  In recent years, the percentage of taxpayers that were audited is 1% to 2% of the tax paying population.  Some of the situations that might increase the likelihood of an audit are:

 

  • High Income (Greater than $100,000 increases the odds according to many experts)

  • High deductions (Take the deductions you are entitled to, but stretching deductions beyond what is reasonable can increase the odds of an audit)

  • Mathematical Errors (Mistakes on a flight crewmember's tax return can increase the odd of a tax audit)

  • High Charitable Contributions (When the amount donated to charity is significantly higher than others in the same tax bracket, a red flag could be triggered by the IRS)

The EZPERDIEM network is all about helping flight crewmembers simplify their airline related taxes.  While EZPERDIEM.COM cannot realistically prevent IRS audits for flight crewmembers, it can and does do everything it can to help flight crewmembers get the aviation tax deductions they are entitled to in an honest, simple, organized way.

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