Lots of Entry Level Survey Jobs (CSEL w/ Instrument Rating to fly 172s for Pictometry)
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frankgh
Well-Known Member
You can not deduct food, hotels and rental cars if you were paid per diem to cover those expenses. That is why per diem is tax free.
It's a bit different as it's not really per diem as I understand it, even though they sometimes refer to it as one. I like to think I wasn't too generous with the deductions, but it differs from every pilot. I really appreciate what Skylens is doing and as cool of a place as AA is they can certainly up their pay as the expenses have gone up, but the pay hasn't in like 7 seasons.
Hiboglossi
The Most Depressing Person
Although Air America pays their pilots "Per Diem", on the 1099 statement they give you for taxes (in lieu of a W-2) lists your total pay (both flight pay and per diem) in one big amount, labeled "non-employee compensation". So it's a bit different from Per Diem at a legitimate employer, and is taxable. Just another lovely benefit of 1099 status.
I suppose an AA pilot could theoretically only report the flight pay as income, but it would be hard to prove the Per Diem was actually Per Diem since it's all lumped together on the 1099, and doing so would surely raise a red flag at the IRS. At any rate, the fact that AA pilots are legally "Self-employed" likely means that AA "Per Diem" isn't true per diem like at a W-2 company.
I think you could deduct what your per diem should have been based on what the IRS publishes for the locality while listing the entire lump sum as income.
If you only report what you considered the actual pay, and the 1099 says something different, that sounds like a recipe for a red flag
av8tr1
"Never tell me the odds!"
What AA and any pilot who flies for them is most likely not in conformity to what the IRS accepts as independent contracting.
Under common-law rules, anyone who performs services for for a company is your employee if the employer can control what will be done and how it will be done. They provide the aircraft and all tools for the job, You have to use their tools you can't provide your own aircraft. They provide the work assignments, they provide the rules you work under. That makes you an employee not an independent contractor.
Here are the rules direct from the IRS.
https://www.irs.gov/businesses/smal...ependent-contractor-self-employed-or-employee.
Likely the only reason AA gets away with this is the IRS is understaffed and does not have time to go after them or the amount recoverable is likely not worth the budget that would be spent to investigate. Government agencies have the same issues as a business in operating. The have to keep in a budget. Unless there is a significant reason, if the money isn't there to recover then the company on the target list will be low.
Keep in mind just because the company gets away with it, doesn't mean you will. You as a contract employee are as responsible for taxes as the company. And the IRS will go after you as such. You may get away with it but as some have pointed out some AA pilots have gotten caught. Fines and back taxes could be significant.
Tread lightly here and get some financial and legal advice before accepting a position here. I would be very surprised if any CPA or Attorney would say this is in line with IRS expectations.
Under common-law rules, anyone who performs services for for a company is your employee if the employer can control what will be done and how it will be done. They provide the aircraft and all tools for the job, You have to use their tools you can't provide your own aircraft. They provide the work assignments, they provide the rules you work under. That makes you an employee not an independent contractor.
Here are the rules direct from the IRS.
https://www.irs.gov/businesses/smal...ependent-contractor-self-employed-or-employee.
Likely the only reason AA gets away with this is the IRS is understaffed and does not have time to go after them or the amount recoverable is likely not worth the budget that would be spent to investigate. Government agencies have the same issues as a business in operating. The have to keep in a budget. Unless there is a significant reason, if the money isn't there to recover then the company on the target list will be low.
Keep in mind just because the company gets away with it, doesn't mean you will. You as a contract employee are as responsible for taxes as the company. And the IRS will go after you as such. You may get away with it but as some have pointed out some AA pilots have gotten caught. Fines and back taxes could be significant.
Tread lightly here and get some financial and legal advice before accepting a position here. I would be very surprised if any CPA or Attorney would say this is in line with IRS expectations.
Hiboglossi
The Most Depressing Person
You are correct, you can deduct the actual expense, or in the case of meals and incidentals, the per diem rate for the location.
My understanding is that the IRS receives a copy of every 1099 and W-2 form, so when you file they would likely check your reported income against the "Non-Employee Compensation" amount on the 1099, and it would definitely look bad if the former was less than the latter. I would think you'd pretty much be guaranteed to be audited or charged with tax fraud if you did this, and I haven't heard of any AA pilot not reporting "per diem" as income.
All very much correct, and aside from the no Worker's Comp issue, this is exactly why I now tell pilots looking for jobs to avoid Air America. I don't know if any AA pilots have been audited, but that doesn't mean it won't happen in the future. I know one former AA pilot has posted on this website saying that, even two years after leaving Air America, he receives occasional correspondence from the IRS insisting he underpaid and demanding more tax money.
@Yakob I agree, it might not be a bad place to work, but I prefer to keep my headaches to a minimum when it comes to interactions with federal alphabet agencies. Why would you want to potentially deal with this nonsense, 6 years down the road when you've forgotten most of it, for a little more in perceived pay
Did anyone ever hear the outcome about the poor guy that crashed their skyhawk? I'd pay very close attention to how that pans out if you're considering working for them
Did anyone ever hear the outcome about the poor guy that crashed their skyhawk? I'd pay very close attention to how that pans out if you're considering working for them
av8tr1
"Never tell me the odds!"
Eventually that will turn into a enforcement action, not "IF" but "WHEN". If the IRS already is sending correspondence then unless you pay what is owed or can prove you don't owe it you are going to find your bank accounts frozen one day at the most inopportune time. And your finances will not be unfrozen until it works through the system and nothing the government does is fast.
Hiboglossi
The Most Depressing Person
I would recommend anyone looking for a job avoid dealing with this nonsense, and avoid AA and any other companies that pull the 1099 scam. Air America wasn't a terrible place to work necessarily, and for the most part I enjoyed my time there, but that's not worth potential dealings with alphabet agencies as you call them.
When I was hired at Air America, I did not realize the 1099 system was technically illegal, nor did I appreciate the potential dangers. In fact I didn't even know I would be a 1099 until I received the contract, at which point I had already signed a contract promising to accept a position at AA if offered (which they require if they provide an airfare to the interview) Obviously that is my fault for not researching the issue more thoroughly. However I figure many prospective AA pilots will be in the same situation nowadays, which is why I always recommend against working there whenever they are mentioned on this board. Hopefully there will be more information available to prospective Picto pilots about this issue now.
I haven't heard anything more about the pilot of 21767 since July. I don't know if anyone else has heard anything?
I don't know for sure if this is what cause the accident, but Air America tended to be very penny-wise and pound-foolish when it came to maintenance, so it would not surprise me at all if shoddy maintenance was a factor. Based on how the company responded to that Aztec gear-up landing, they probably docked the pilot's outstanding pay to cover their insurance deductible, and might even sue for the rest. As a 1099 contractor, he is probably not eligible for worker's comp, and the medical bills will likely be 6 figures. Also, when I was at Air America, Jake warned that the insurance company might sue the pilot of a damaged aircraft to recover claims they paid out, so there is a good chance that could happen as well. Keep that in mind if you are considering Air America: if you get in an incident or accident, even if you survive, you may well be financially ruined for life.
the boss said this, folks. Why would anyone want to put up with this crap for how little you really get paid in the end?
Past performance is not indicative of future results. I know quite a few guys here worked for Air America, I do not want someone to get burned and ruined financially for something the company should have been fixing.
This mentality can translate over to the regionals as well. Work rules can be just as important, if not moreso, than pay rates.
That policy is horrific and entirely unacceptable as a former AA pilot and someone with a clean aviation record. I've only heard it once though and I like to believe that's not a policy of theirs, but if it is I hope it makes some pilots reconsider. That said a lot of guys at 200-300 hours feel virtually unemployable and will agree to anything. Relative to a lot of other shady outfits AA still isn't terrible, but hopefully they like the rest of the industry realizes that they need to treat their pilots better.
How was your time at Keystone? I probably should've mentioned them in the initial post as they take low-timers even though they aren't Picto.
It wasn't bad at the time, extended deployments but not as bad as picto. Better pay and PD, company paid hotel and rental car/gas. But from what I hear management has instituted some new policies that are not very pilot friendly.
@Tyler Pinkerton would be able to give you some more insight into the current environment
Hiboglossi
The Most Depressing Person
It's not an official policy per se, but the pilot contracts for last season stated that Air America "strongly recommends" that pilots purchase renter's insurance. Around the start of last season, I asked Jake about the need for renter's insurance, and he said there was a good chance the insurance company would pursue subrogation to recover a claim they paid out. He said it was a recent trend in the insurance industry, and recommended renter's insurance to insulate from this risk*.
Now, for the last paragraph of my last post, I don't know for sure if Air America has taken these actions after the accident, but it seems likely that they will since that's how they have handled previous incidents. I know for a fact that when an Aztec was landed gear-up in Fall 2015, the company docked the pilot's pay $5,000 to cover their deductible.
*Most renter's insurance policies do not cover commercial operations, so renter's insurance probably wouldn't do any good in this situation anyway. For this reason I believe it is highly dishonest of Air America to recommend it.
That seems borderline criminal. Was the gear warning horn functional? I know a former pilot and current Picto employee got pushed off a runway while taxiing after landing due to some freak winds. He was later found not at fault by the FAA as he'd had a briefing and everything, but what if he hadn't? I always was incredibly grateful for a vet that helped me on my first ever deployment at AA as I never thought to look for the cone 7' in front of the plane on a walk around, but thank god he grabbed it and shot me a knowing smile that I •ed up. A lot of • can happen when you're a low-time pilot and when it comes to the Aztecs I've talked to a lot of the pilots even when I worked their about the limited training that some of the pilots received before they cut them loose.
av8tr1
"Never tell me the odds!"
A rental policy WILL ABSOLUTELY NOT cover this. You would be throwing money down the drain if you purchase a rental policy to cover a commercial op in this fashion.
It is beyond disingenuous and deceitful that the company would suggest this to their pilots.
Hiboglossi
The Most Depressing Person
Not sure if the gear warning horn was functional, or if it even had one. It was one of the oldest, sketchiest Aztecs in the fleet so it wouldn't surprise me if it did not have a working gear horn.
The training for the Aztecs was pretty sketchy during your time at Air America based on what I heard. It got slightly better under Jake as he did all the Aztec training himself once he became Chief Pilot, but still was probably inadequate. Then there was the fact that the company deferred most Aztec maintenance issues to the annual, so the Aztecs were often flying around with dozens of squawks, some of them fairly serious. One Aztec had a failed airspeed indicator, and the director of maintenance asked the pilot if he could make do without it until a replacement could be ordered.
Docking an employee's pay to cover accident expenses is likely illegal, although the fact that AA pilots are 1099 may change that.
Tyler Pinkerton
Well-Known Member
Don't even get me started right now...