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Personal Expenses

How do pilots & flight attendants determine if an expense is personal?

An expense is personal if it cannot pass the "what if" test. Ask yourself, "What if I didn't have this job? Would I still incur the expense?"

An item may seem to be a legitimate itemized deduction, but if it cannot pass the "what if" test above, then it is not allowed to be written off as an airline-related tax deduction on IRS Form 2106. EXAMPLE (haircuts or socks): One could argue that haircuts and socks are ordinary and necessary, but they do not pass the "what if" test above. They are therefore considered a personal expense rather than a legitimate employee business expense and cannot be deducted.

Does it matter if the flight crew member's employee manual has appearance standards listed?

One common argument made is that companies have uniform and appearance standards, therefore these expenses should not be considered personal.  BE CAREFUL.  The IRS looks at it differently.  They look at business expenses ONLY being suitable to the business purpose.  For example, if a t-shirt is purchased for work to wear under your uniform shirt, that t-shirt CANNOT be deducted because it is suitable to both work and outside of work.  This leads to many subjective gray areas and they could be scruitinzed in an audit.  The IRS does allow expenses that are partly personal and partly business to be deducted, as long as you properly allocate the business portion of the expense and do not deduct the personal component of the expense.

The best practice is to use your judgement and familiarize yourself with the allowed deductions under IRS Publication 463, IRS Publication 529, and IRS Publication 535.

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