Do you calculate my per diem expenses?

By Jason Watson (Google+)

Yes, WCG (formerly Watson CPA Group) takes care of this hassle for you. We take your schedule and input that into our free online per diem calculator to determine your per diem allowance. We subtract the non-tax per diem paid to you by the airline, then multiply the difference by the DOT standard of 80% (as of 2013). This figure is entered on your Form 2106 (Unreimbursed Employee Business Expense) and ends up on your Schedule A (Itemized Deductions).

Some airlines such as United, Delta or Frontier, or those who use Sabre as their crew scheduling backbone can provide a report detailing your overnights and the associated per diem allowance (such as a FLICA or FlightLine report). We are generally comfortable with their calculations and will use the computed per diem allowance amount. In these situations, our fee will reduced by $10 for domestic crewmembers and $25 for international crewmembers.

Myth Buster: Van driver tips are not deductible. Do not believe the hype! They are considered incidental expenses and have been accounted at $5 per night in your per diem allowance. We wonder how long it will take the IRS to realize that pilots and flight attendants only spend $2. Mum’s the word. Yes, other tax accountants continue to deduct van driver tips. Yes, your chances of being audited are low. Yes, our firm is bound by law and ethics to not deduct it- sorry.

For more information, the scope of “incidental expenses” were issued October 22, 2012 by the IRS. As such incidental expenses as a part of your per diem allowance include only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. See IRS Revenue Procedure 2011-47 for your own edification. Grab a Red Bull!

Want to see a comparison between city by city and standard daily rate? Check out the KB article on that.

Want to see how the per diem allowance and reimbursement work together on your tax return? Check out the KB article on that.

There is also the potential for massaging the per diem calculations for those who fly continuous duty overnights (CDOs), standups or highspeeds. Back to back CDOs need manipulation since the backside of one is the frontside of the next. FAR 117 is making this moot by creating the split duty overnight.