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Per diem is deductible from income as an employee/business expense. This option is available to anyone when they file state taxes in Alabama, Arkansas, California, Hawaii, Iowa, Montana, and New York, for those that choose to itemize. Deductions are also allowed locally in most cities/towns in OH and PA. When itemizing one's deductions, adding in the Meals and Incidental expenses, of one's layovers, can make a significant difference on one's taxable income. The GSA as well as the State Department, set rates for particular locations within the United States. These rates vary and can range in amounts. The deductible part of your income comes into part with the difference between the flat rate your company pays, and the set rate of that location. Rates for different cities in the US can be found on the GSA website.
The 2023 Per Diem Calculator is now available. You can find it here!
When it comes to this question, you have several different options.
We have created a form, which will calculate your per diem for you. This calculator is formated as an .XlSX file and can only be access using Microsoft Excel. We do not recommend Google Docs, as it can change the formulas and give a false output. Because of the restriction with this form, we allow those able to use it, to have it for free. So yes, even if you don't use our services to file your returns, you can still have access to this calculator.
An alternative option is to have us calculate your per diem for you. We offer two prices for this service. To obtain only your amount, the charge is $10. The amount can be used if you are doing your own taxes with your own preparation program. Again, this calculation in 2021 can only be used for the above stated States itemized tax returns. Employee expenses are no longer a valid deduction on Federal Returns.
The calculator was created to be very user friendly. The best way to know if it works for you, is to try it out. It will cost absolutely nothing for you to do so. The form comes with instructions, and we are also available to answer all of your questions via email at AviationTax@gmail.com.
The first step will be to obtain your schedules for the year. Each airline is different, and the best practice for this is to keep records all year. Once you have obtained your schedules, you will simply enter each layover into the calculator and it will compute your total Meals and Incidentals cost for the year.
You can find two examples below:
The form is very intiutive and will be able to conform to the needs of any US carrier or DOT employee.
Under Publication 463, the IRS dictates that a taxpayer can calculate their Per Diem via two different methods. The first is known as the 75% percent method, and it is what our calculator is based off of. The 75% method, or the 3/4 method states, "on the first day of travel, and on the last day of travel, only 3/4% of the daily rate can be deducted"(this is the required option for any federal employee). The second option given by the IRS is that a tax payee, may prorate using any method that is consistently applied and that is in accordance with reasonable business practice. The Publication can be easily read here.
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