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Common Tax Phrases for
Pilots and Flight Attendants
2% Limit
A.G.I. (Adjusted Gross Income)
Above the Line Deductions
Accountable Plan
Actual Cost Meal Deduction
Adequate Records
Alternative Minimum Tax
Below the Line Deductions
CONUS
CPA (Certified Public Accountant)
City-by-City
Commuting Expenses
D.O.T. (Department of Transportation)
Day Trips
Department of State
Displaced
Documentary Evidence
Domicile
Effective Date
Effective Tax Rate
Employee Business Expenses
Enrolled Agent
Expiration Date
General Services Agency
Gross Income
Hours of Service Limits
IRS
IRS Form 1040
IRS Form 2106
IRS Publication 1542
IRS Publication 463
IRS Publication 529
Incidental Expenses
Indefinate Duty
Itemized Tax Deduction
Itenerant
M&IE
Meals
Necessary Expense
Non Taxable Per Diem
Nonaccountable Plan
OCONUS
Ordinary Expense
Per Diem
Per Diem Calculator
Per Diem Deduction
Per Diem Rates
Personal Expense
Prorate
Recordkeeping
Reimbursement
Rest
Schedule A
Seasonal End Date
Seasonal Start Date
Special Per Diem Rates
Standard Deduction
Standard Meal Allowance
Standard Per Diem Rates
Substantiated Expenses
TDY
Tax Attorney
Tax Audit
Tax Bracket
Tax Credit
Tax Deduction
Tax Home
Tax Liability
Tax Preparer
Tax Software
Taxable Income
Taxable Per Diem
Temporary Duty
Transition Period
Transportation Workers
Travel Expenses

Gross Income

A taxpayer's gross income is basically his or her income before any tax deductions are taken.  The gross income might include income from W-2's, self employment, capital gains, or anything of value received by a taxpayer that cannot be excluded as income.  From TITLE 26, Subtitle A, CHAPTER 1, Subchapter B, PART I, Sec. 61, Gross Income includes:

(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust.

Gross income can be viewed as a starting point as a way of determining a taxpayer's tax liability for a given tax year.  It is also  important for determining the AMT (Alternative Minimum Tax), which may affect some airline crewmember's with higher incomes and many itemized deductions.

Assuming a taxpayer is not affected by the AMT, Gross Income leads to adjusted gross income, adjusted gross income Leads to taxable income, and taxable income leads to a taxpayer's tax liablility as follows:

Gross Income - Above-the-Line Deductions = Adjustable Gross Income

Adjustable Gross Income - Below-the-Line Deductions = Taxable Income

Taxable income is used to determine tax liability by looking at the tax rate tables for a given tax bracket.

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