Who can use
the federal meal and incidental rates for their
The IRS has determined, through
Federal Revenue Procedures, that persons in the
aviation industry are allowed to deduct, without
receipts, an allowance for meals and incidental
expenses up to a specified maximum rate for each city
The Domestic and
International rates are usually much higher than you
were actually paid in per diem.
Because it is almost
impossible to keep receipts, using this method is the
best way for pilots and flight attendants to determine
how much they can deduct.
What kind of
information does Pro-Diem incorporate into a report?
report is a precise calculation of your maximum
allowed meal and incidental expenses based on your
flight times/ or duty times, partial days and
layovers. We give you an accurate detailed breakdown
for each trip, and a yearly reports broken down into
months. We also give you instructions on how to use
How can I
determine if using this method will help me save money
on my taxes?
Starting for the year 2006 flying, if you itemize on
your taxes you will want to have your per diem
calculated to save money. Domestic rates are up
making this no longer an exclusive deduction for
international crew members!
For the years 2003-6 and
on, if you flew overnight trips and already
itemize on your taxes, you are probably able to
benefit from our service. Because the domestic
rates have increased this deduction is no longer just
for international flyers! Naturally, if you fly
international trips your saving will be much greater.
As a rule, you must use schedule A (itemized
deductions) to use this as a deduction. If you
already itemize, this will help you tremendously.
If you don't normally itemize, and you fly
internationally, this deduction may help you to be
able to itemize, thereby allowing you to deduct your
union dues and uniform expenses, etc. This is
often the case for those who have not itemized in the
past but claim only the standard deduction for one
person and have no other dependents.
Where do the
rates come from?
Government rates are published each year for domestic
cities (CONNUS) by the IRS. The OCCONUS rates
(outside the continental United States) are published
once a month by the Department of State.
I saw a list of
rates at my base. Can't I just use that?
Unfortunately, it is not that simple. It is very
important that you follow the rules in the code of
Federal Regulations 41 and the most current Revenue
Procedures. One of the most common mistakes made is
using a rate that is not precise (i.e. an average or
lowest rate for that area). The Revenue Procedure is
clear that you must be consistent when using these
rates. The rates are constantly changing and often
change in the middle of the month. You have the
burden of proof if you are called into an audit as to
which rates you used for each leg of travel. One of
the major difficulties in doing this is calculating
precisely the number of hours and flight legs that
apply to a layover, not to mention taking into
consideration the very specific rules as to exactly
what constitutes a legal layover and the amount of
hours to be applied to partial days. Partial day
rules are very strict and drastically effect the
amount you are allowed on your first and last travel
My company pay
sheets show the allowable amounts based on the half
day. Can I use those amounts?
The answer is NO! The Revenue
Procedures have changed in recent years and you must
claim the partial day portion on the 3/4 day. The
Airline is actually allowed to pay on the half but the
employee MUST claim on the 3/4. If you use the half
day amounts you will be significantly over-claiming
what you are allowed. (For Example: Same 3 day trip
calculated on the 1/2 might show value of $220.00,
however, it may actually be worth $180.00. That is a
significant difference over the course of a year) It
is the taxpayers responsibility to claim the correct
We have had a tremendous
amount of new clients turn to us for help this
year because they used the 1/2 day amounts and were
Can my accountant
do this for me?
Though many accountants are familiar with this
deduction, they are not able to calculate your maximum
allowed meals and incidental expenses for you.
They realize, due to the
complex nature of the math calculations and the
ever changing legalities on how per diem must be
calculated for your taxes, it is truly a data
processing function. It would be a
monumental task to for them to try to do this by hand,
and would probably short their clients a tremendous
amount of expense money because they were not able to
calculate the amount accurately, not to mention
how time consuming it would be and entirely too costly
for their clients.
That is why many CPA's across
the nation agree that it is much better to have us
calculate this for you. In fatc, many CPA's
insist that their clients have their calculation done
by Pro-Diem, Inc. If your accountant is
not familiar with this deduction, we would be happy to
explain it to them or to recommend you to one who is.
Your accountant will be glad to have something solid
to use when calculating your taxes.
company that does my taxes said that I can just send
them the average number days I flew each month or the
% that my trip were international or domestic. I
think they may even have a sheet that lets me put the
days I flew to each city, what do you think about
calculating per diem that way?
We would NEVER claim your per
diem using anything but the LEGAL IRS published
method! A tax preparer using a method like
that either honestly doesn't understand the rules that
are specific to you being in the travel industry or
has motivations for doing so that are not in your best
interest. They have no business trying to do
Beware of the bait and switch
tax person cutting you a deal on your per diem just to
get your tax business. They are likely not only
costing you hundreds of extra dollars on you tax bill
but also setting you up to be disallowed in an audit!
Don't forget that if you are audited you will want to
provide documentation for each and everyday showing
how the calculation was derived. A magic number
will be hard to explain, you will want the IRS to be
able to verify that the rates used on a particular day
were the rates allowed for those days.
Even more important than what
we think is what the IRS says. We asked this
specific question to the current author of the Revenue
Procedure allowing this deduction for crew members.
His response stated that the Revenue procedures are
clear that you must substantiate Time, Date and Place
to calculate these amounts and 3/4 day portions MUST
Tell this tax person that you
would prefer to use Pro-Diem's calculation in their
What does the IRS
think about using this method?
have earned our excellent reputation with the IRS by
working hard to follow the Revenue Procedures to the
letter. We do not guess at your days and we are not
here to help you evade your taxes. We are in business
to help you claim the EXACT amount you should be
claiming on your taxes with accurate documentation to
make the IRS's job easier as well.
If you have had problems with
your taxes in the past, we invite you to use our
service to help you claim the right amount for your
expenses! We guarantee that you and the IRS will
We have spoken to the IRS
pertaining to the meal and incidental expense
deduction, helping those with audits, disallowance's
and inquiries with a 100% approval rate. We have
also worked with the IRS to improve specific parts of
our program and have been noted by individuals with
the IRS as being the best service that they have ever
seen pertaining to the meal and incidental expense
deduction and that there is no problem with approving
the expense figure calculated by us.
Can I use this to
amend my previous years taxes?
Yes! After seeing how much money our clients have
saved on their taxes, many have gone back and amended
tax returns from previous years. It is a simple
process and well worth doing it, especially if you
only claimed what you were paid in per diem. You can
generally go back 3 years. Please call our office for
help to see if you are within your time constraints.
How do I get
Just send your flight data in
the format required for your airline (see Airlines
served) a check for $59.00 for each year that you
would like for us to process along with your name,
address, email and phone number. It's that simple.
There is no need to bother sending information to us
monthly. Just send it all to us at the end of the
year and we will process it and have it back in the
mail to you in approximately 24 -48 hours
If your company does not
supply you with a printout of your flight data
we have an electronic log form we can take via email.
Again, see instructions listed for your airline.
You may also call us at (817)
PRO-DIEM if you
have further questions.