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Flight Crew FAQs
 
document Why should I use a tax preparer that specializes in flight crew taxes?
By Jason Watson (Google+) Pilots and flight attendants typically have more expenses than other professions because of the large amounts of traveling. Most tax preparers and accounting firms are unfamiliar with the intricacies of per diem deductions, flight crew travel expenses and deductions,...
16 Oct, 2012 Views: 0 Comments: 0
document I have an LLC / small business / rental property. Can you prepare those taxes as well?
By Jason Watson (Google+) Yes. A lot of our pilot or flight attendant tax clients have side businesses- selling real estate, running a rental, doing photography, etc. We guess some of the down time of the airline biz lends itself to having a business. The Watson CPA Group is very familiar...
16 Oct, 2012 Views: 0 Comments: 0
document I got a huge refund last year. Can I expect the same this year?
By Jason Watson (Google+) Trick question. The amount of refund (or in some cases tax owed) is largely dependent on tax withholdings throughout the tax year in addition to various one-time tax credits. Yes, we maximize your deductions. Yes, we ensure that you are claiming everything you are...
07 Oct, 2013 Views: 0 Comments: 0
document What does itemizing my deductions mean?
By Jason Watson (Google+) The IRS provides a standard deduction of $5,950 for single and $11,900 for married taxpayers (for the 2012 tax year). This deduction reduces your gross income. However, if the total of the following deductions exceed the standard deduction, then you can “itemize”...
23 Oct, 2012 Views: 0 Comments: 0
document Does it make sense to keep track of all my expenses as a pilot or flight attendant?
By Jason Watson (Google+) Absolutely, as long as you can itemize your deductions (see previous frequently asked question). The IRS provides a standard deduction of $5,950 for single and $11,900 for married taxpayers (for the 2012 tax year). This deduction reduces your gross income. However, if...
23 Oct, 2012 Views: 0 Comments: 0
document Do I need receipts for my pilot or flight attendant expenses?
By Jason Watson (Google+) Receipts and recordkeeping are common concerns. It is your responsibility to prove your expense- in the absence of proof, the IRS and the Tax Court will allow some estimation but it is weighed heavily against the taxpayer. Here’s the skinny: you need a record...
26 Oct, 2012 Views: 0 Comments: 0
document What pilot or flight attendant expenses can I deduct?
By Jason Watson There are several expenses that are associated with your flight crew position that you are allowed to deduct. Please visit the Flight Crew homepage of our website, and click on the Flight Crew Expense Report. This is a comprehensive list of the expenses you may deduct. The IRS...
23 Oct, 2012 Views: 0 Comments: 0
document Can you just deduct the average expenses for flight crew on my tax return?
By Jason Watson (Google+) Nope. This doesn’t work for a few reasons. First, you always need to substantiate that you actually paid for an expense. Second, while we use guidelines for specific pilot and flight attendant expenses (such as home laundering for uniforms), there aren’t averages...
16 Oct, 2012 Views: 0 Comments: 0
document I live in California but commute to Denver. Which state do I file taxes in?
By Jason Watson (Google+) California. Generally your state of residency will generally tax you on 100% of your income. Theoretically there are situations where this might not be true. For example, you are resident of California and you work as a flight attendant primarily on flights between...
05 Sep, 2014 Views: 0 Comments: 0
document Can I deduct my cell phone?
By Jason Watson (Google+) Yes, and you have always been able to. However, the Small Business Act of 2010 removed cell phones as “listed property” and therefore the recordkeeping requirements have eased. Previously, each individual phone call needed to be logged, and the essential business...
30 Oct, 2012 Views: 0 Comments: 0
document Can I deduct my internet charges as a flight crew expense?
By Jason Watson (Google+) The Tax Court is continuously evolving. In the Continental Flight Attendant case, the Court denied internet expenses but they have since changed their position. Here is a snippet from a Tax Court Memo 2012-272 (not involving flight crew)- A taxpayer may deduct the...
30 Oct, 2012 Views: 0 Comments: 0
document Can I deduct shoes, make-up, haircuts, etc.?
By Jason Watson (Google+) With regards to shoes, make-up, haircuts, nails, etc. this is unequivocally a No. Sorry. The Tax Court has ruled that any uniform item that can easily be converted to personal use is not deductible (shoes, nylons, socks). Haircuts, make-up and manicures were also...
23 Oct, 2012 Views: 0 Comments: 0
document Can I deduct airport parking fees, tolls, crashpad expenses?
By Jason Watson (Google+) The short answer is No. These expenses including mileage are considered commuting expenses, and therefore are not deductible. We agree that airport parking fees and crashpads are common, and nearly impossible to avoid if you commute to your flight crew position....
16 Oct, 2012 Views: 0 Comments: 0
document Can I deduct my laptop or iPad purchase?
By Jason Watson (Google+) Yes, and No. We typically will allow a laptop / iPad deduction since the nature of working as a pilot or flight attendant requires access to the internet while away from home (checking schedules, bidding, online training, weather, etc.). In addition several flight...
23 Oct, 2012 Views: 0 Comments: 0
document Can I deduct my B737 type rating? Or my ATP rating?
By Jason Watson (Google+) Yes, but you need to position yourself very very carefully when you deduct this expense. Publication 529 from the IRS deals with miscellaneous expenses and specifically work-related education. Here’s the play by play- You can deduct expenses you have for education,...
23 Oct, 2012 Views: 0 Comments: 0
document Can I deduct my new hire training expenses?
By Jason Watson (Google+) Yes, if they are a condition of your employment. Note this subtle difference- a condition of your employment versus making yourself more marketable (think Southwest). Here is another snippet from Tax Court Opinion 2002-44 involving a new-hire pilot for Continental...
16 Oct, 2012 Views: 0 Comments: 0
document I know a guy who deducted all his cell phone, internet and cable charges. Why can't I?
By Jason Watson (Google+) Al Capone tried avoiding taxes too, and it didn't work out too well for him. We can deduct any expense, but in the event of an audit you will have a much HIGHER chance of success if you show reasonableness from the start. It is not our advice to deliberately deduct...
16 Oct, 2012 Views: 0 Comments: 0
document I've never heard of the Watson CPA Group- can I get references?
By Jason Watson (Google+) Of course! Because of privacy concerns and IRS disclosure laws, we cannot provide that information on our website. However, please call or email us, and we can send you our list of references. Please understand that because many of our competitors would like to have...
07 Oct, 2013 Views: 0 Comments: 0
document I didn't deduct my flight crew expenses before, what about my previous tax returns?
By Jason Watson (Google+) We will analyze your previous three tax returns for free, and determine if it makes financial and practical sense to file an amended tax return. Amended tax returns take a similar amount of time to complete as a regular tax return in this scenario because we have to...
16 Oct, 2012 Views: 0 Comments: 0
document Payroll Tables Gotchas
By Jason Watson (Google+) Payroll tables can be problematic in an insidious way throughout the year. There are two situations that you should be aware of- First, those of you that have large swings in compensation from check to check can find themselves unnecessarily giving money to the IRS...
16 Oct, 2012 Views: 0 Comments: 0

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