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ANNOUNCEMENT- The U.S. Patent Office has awarded [7-20-2010] a SECOND U.S. Patent exclusively to our tax office.  See below for more information.

Our tax office receives a steady stream of commonly asked questions regarding commercial pilot  income tax travel deductions.  This website tries to provide general guidance to commercial pilots and their chosen tax preparers to commonly asked questions.  This website is not intended to be used as your exclusive “legal authority” for claiming incurred travel income tax deductions.  The legal authority for claiming travel tax deductions remains with the IRS and the U.S. Tax Court – not this website nor our tax office.  Click to read the IRS Publication 463 explanation of travel deductions . 

This website also tries to encourage all commercial pilots to select a tax preparer that is both knowledgeable about claiming available aviation related travel expenses and is also willing to (1) properly calculate and (2) then attach all the required paperwork to your tax returns.  While it is true the U.S. Tax Court has multiple times accepted my client’s legal rights to claim incurred travel deductions all without receipts, this website is not intending to suggest commercial pilots should only select our tax office to prepare their income tax returns.   While our tax office would be delighted to prepare your tax returns, other qualified tax professionals can also correctly prepare your returns. 

AGAIN OUR ANNOUNCEMENT- The U.S. Patent Office has awarded [7-20-2010] a SECOND U. S. Patent exclusively to our tax office.

Our SECOND U. S. Patent is titled "INCOME TAX PREPARATION SYSTEM FOR TRAVELING TAXPAYERS" [7-20-2010] discloses a system for the preparation of income tax returns for traveling taxpayers that now also includes the use of Global Positioning Systems ("GPS") derived information to properly compute allowable travel per diem deductions.  Any tax preparer using a system that includes all of the limitations of any of the claims of this patent may be infringing the patent and subject the preparer to liability under U.S. Patent Laws.  Likewise, any tax return prepared with such a system may also be an infringement.  If you wish to avoid legal problems of encroaching on our exclusively issued U.S. Patent, please call our tax office to determine if your tax preparer is properly licensed by our accounting office.

Our FIRST issued U. S. Patent was awarded [12-20-05] exclusively to our tax office. Our previously issued United States Patent also discloses a system for the preparation of income tax returns for travel taxpayers.  Any tax preparer using a system that includes all of the limitations of any of the claims of this patent may be infringing the patent and subject the preparer to liability under U.S. Patent Laws.  Likewise, any tax return prepared with such a system may also be an infringement.  If you wish to avoid legal problems of encroaching on our exclusively issued U.S. Patent, please call our tax office to determine if your tax preparer is properly licensed by our accounting office.

The U.S. Tax Court has again ruled (10-23-06) that another "Transportation Industry Employee" client of Martin Kapp, C.P.A., E.A.  can indeed legally claim daily incurred meal deductions for his traveling on behalf of his employer. 

 Pilots Unfortunately Tend to Elect to Prepare Their Own Tax Returns 

Common Misunderstanding

Better Approach

 

 

Many commercial pilots unilaterally believe that because they are "entrusted routinely with the lives of  hundreds of very trusting passengers while zipping across the world at 500+ mph"  they must also be equally qualified to prepare their own tax return using software like TurboTax. 

Self prepared pilot returns tend to fall into two distinct groups. "Group One" pilots tend to be way too aggressive towards claiming travel deductions while "Group Two" tends to be way too conservative and believes pilots cannot claim any expenses.  A quick pilot analogy.  Doesn't it bother you when you read about non-instrument rated pilots trying to scud run around mountains who "only missed" by a few hundred feet?

Documentation Required to be Attached to Federal Returns

Common Misunderstanding

Better Approach

 

 

Most paid preparers and self preparing taxpayers don’t typically spend the necessary time to properly calculate and then attach the required travel documents to a pilot's tax return.  Please heed this information.  The Tax Code, the IRS, and Tax Court all demand commercial pilots to attach all required paperwork to their federal tax returns. 

 

Knowledgeable preparers need to be spending the equivalent of 20 and 30 manual hours of professional preparation time just to (1) pull together the needed travel documents, (2) then calculate allowable per diem deductions, (3) and then assemble and attach these needed travel per diem documentation to a pilot's tax returns.  Read the Beech Trucking decision discussion of my client;s Marin Johnson Tax Court decision. 

If your preparer tells you they somehow "found a way around"  the requirement to properly calculate your travel and/or to attach your travel documents to your federal returns - find another preparer or give our office a call.

 This Means NO E-FILING for Pilots! 

Common Misunderstanding

Better Approach

 

 

Most preparers and self preparing pilots prefer to "E File" because this saves both time and paper. 

Commercial Pilots cannot currently "E File" their upcoming 2013 federal returns because the required travel documents are not currently allowed to be attached to "E Filed" federal tax returns.

Pilots Need to Timely Record Travel Expenses

Common Misunderstanding

Better Approach

 

 

My tax office routinely get calls or emails saying pilots do not believe they need to keep timely records of their travel expenses.

 

The Tax Court on 2/3/04 again reminds mariners & pilots to timely record your incurred travel expenses - including expenses under the $75/incident rules established by IRS Notice 95-50 and my client's Johnson decision.

Assigned to Work Out of One State and Live in a Different State?

Common Misunderstanding

Better Approach

 

 

Most commercial pilots choose to maintain their household in one given location while their employer routinely keeps changing their assigned airports to airports located in different states.  Unfortunately, most tax preparers and state taxing agencies incorrectly assume pilots need to file returns for the state of their assigned airport. After all, if your W-2 shows "NY Wages $90,000" shouldn't you be required to file a New York Return?   The answer is usually no - IF you are not a New York Resident.  

Federal law prohibits states and cities from taxing non-resident commercial pilots.  If this is happening to you or one of your crewmembers.

Self prepared pilot tax returns usually get this issue wrong and wind up incorrectly paying thousands in unnecessary state taxes or later find out their home state is going after them for unpaid taxes..

Getting Additional Type Ratings Should Qualify for a Continuing Education Deduction

Common Misunderstanding

Better Approach

 

 

Many already employed commercial pilots during their flying careers find it necessary to acquire additional type ratings to make themselves eligible to apply to better paying airlines  Unfortunately, most tax preparers tend to overlook these very large tax deductions.

For a better understanding of this often overlooked and not well understood tax deduction, click here to read my published ALPA article.

War Zone Exclusions Do Not Apply to Non-Military Commercial Pilots

Common Misunderstanding

Better Approach

 

 

While only a handful of civilian commercial pilots will ever fly into presidentially declared "War Zones," most affected pilots believe they too logically qualify for claiming a "war zone exclusion" - just like the military.   Wrong.

Contrary to popular belief, my tax office has never claimed a “War Zone Exclusion.”  The Tax Court on 2/19/04 again agreed with my understanding – No War Zone Exclusions for any civilian "transportation industry employee" - including pilots. 

Wonderful computer animation of air traffic across the U.S.  Watch & Enjoy.  Click here

Wonderful looking crosswind landings.  Enjoy.  Click here  or  Click here.    

"Easter Miracle - 2009"  passenger takes over King Air after pilot dies on departure.  Click here to listen to conversation between ATC and this passenger who only flies Cessna 172.  Very interesting!!

To hear the recordings between ATC & US Airways 1549 that ditched in the Hudson River - Click here

Please call our office for further assistance.

Click Here to Email Our Office or just call us at (310) 641-1040  - again, we are here to help you.

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