You’ve probably heard others talk about the difference between itemized and standard deductions as a flight crew. This is a very good question, with a relatively simple answer.
The itemized deduction is a one option that calculates deductions that are allowed by the IRS. Deductions such things as your home mortgage, job expenses, real estate taxes, etc. You or your tax preparer will list these expenses separately that you accrued for the year. This method is usually the best method to maximize a return for flight crews. Itemizing usually results in a much larger amount as compared to the standard deduction.
The standard deduction allows you to deduct a predetermined amount that the IRS sets each year. It depends on which category you file in:
- Single or married filing separately
- Married filing jointly or qualifying widow
- Head of household.
The amount varies each tax season. The amount is based on normal or common expenses that an average taxpayer is expected to accrue each year.
Flight crews generally can deduct much more using the itemized method, however, if you cannot exceed the standard deduction, you or your tax preparer would default to the standard deduction.
