Is deducting per diem allowances really that important?
Yes! For most of our flight crew tax clients, correctly calculating and deducting your per diem will result in several hundreds of dollars in additional tax refund. Or if you owe taxes, then a per diem deduction reduces your tax due. You can see How does per diem affect your taxes? for some good examples. However, in a nutshell domestic crewmembers can see an extra $400 to $600 in refund. Southwest is a bit less since they are super-efficient with their trips and their per diem reimbursement is high compared to other airlines.
Also, once you get over the hump of the standard deduction with your per diem deduction, then you pile on all your flight crew and travel expenses. Conversely, if you have another source of deductions such as home mortgage or high charity, then you pile on the per diem deduction. Either way, it is a good thing!
This industry and career can be frustrating, at least take advantage of this benefit. And if you fly a lot of international trips, the per diem deduction can be quite large. If necessary, we can also review your last three tax returns to ensure your per diem allowance was properly computed and deducted.
Lastly, don’t forget about our free online per diem calculator–