Tax deductions for offshore workers

[deleted account] ( 11 moms have responded )

My DH has been talking about some tax deduction that he has heard about (but doesn't know the name) that he says he would get to claim a certain amount for everyday he spends offshore. I have been searching the internet and I haven't found what he is talking about. If anyone has any clues I would greatly appreciate the help. He has made filing taxes this year a total PITA because he wants to be 'involved', lol.

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Cherie' - posted on 03/21/2012

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Amanda - the term you are looking for is "per diem rates" - there are flat rates allowed by the IRS for "travel" expenses so that your record keeping is minimal I'm a semi-retired tax preparer & am researching the oil field related industry for my son now. I already had some experience in this area for truck drivers as there are special rules for them as well. AND yes - there are different rules in different industries - so tax preparers who deal in the atypical Employee Business Expense form 2106 will not necessarily be knowledgeable of the unique & allowable items related to truck drivers, oil field workers, etc. There are clothing & safety equipment needs as well as many others which typical employees are not allowed to deduct - while truck drivers & oil field workers are allowed to deduct them. DO NOT use a "canned" national chain tax preparer for these types of returns. The per diem rates will vary based on whether the travel is in the US or foreign, whether lodging is being claimed (many lodging expenses are paid by the employer) or if Meals & Incidental Expenses are being claimed. Hope this helps - do a google search on "tax deductions for oil field workers.

[deleted account]

Get a professional - and a CERTIFIED CPA professional. We made the mistake of not doing that originally when my husband starting working overseas. Long story short - you get major tax deductions for overseas work, but the preparer screwed them up, and we got audited (as did EVERYONE she ever helped) for 2 years at once. MAJOR SCREW UP on her part, but because she is NOT a CERTIFIED CPA, she wasn't liable for anything, and when we asked for her help, she disappeared. $20k is NOT a joke!!! We now use a firm out of Houston that is connected to my husband's company - and his company recommended them cause they know what they are doing with the Oil field industry. Again...get a pro....and good luck.

Jennifer - posted on 02/05/2009

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Don't know names of deductions but we have a wonderful lady who does our taxes in Columbia, MS.  She helped us get more out of state taxes because we were paying both MS and LA but my husband was far enough out in gulf to be in international waters so we didn't have to pay both.  NOONE had ever told us this and we were able to go back 2 or 3 years and get money back.  We also get to claim all of his mileage which helps because he drives 3 hours to heliport for hitch but also has to go to Houston for meetings and training.  I know we claim work gear like steel toe boots & slicker suits. Hubby gets home today so if he has anymore info I'll post again.  Hope some of this helped!!



 

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Stephanie - posted on 02/12/2013

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Unless your husband's company is paying income taxes for him in a foreign country (which you can deduct from your taxes), then there is not much for the Gulf of Mexico. Itemizing mileage, etc., is up to you, but depending on his income level, may or may not be any different. Just have to try it out and see what works. Hubby's been doing this for a decade and the foreign tax angle is the only break we have seen.

CARLA - posted on 02/12/2013

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HELLO MY HUSBAND WORKS IN THE GULF OF MEXICO, 21 DAYS ON AND 21 OFF. DOES ANYONE KNOW OF SOMEONE THAT IS FAMILIAR WITH INCOME TAXES FOR OFFSHORE OIL RIG JOBS.

Ashley - posted on 10/08/2012

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Be carefull there is a lady in Columbia, MS that is claiming this Exclusion for people working offshore overseas. You have to becarefull of anythimg you sign and agree to.



I copied this right off the IRS web site.



Foreign Earned Income Exclusion - Tax Home in Foreign Country

Example 1:

You are employed on an offshore oil rig in the territorial waters of a foreign country and work a 28-day on/28-day off schedule. You return to your family residence in the United States during your off periods. You are considered to have an abode in the United States and do not satisfy the tax home test in the foreign country. You cannot claim either of the exclusions or the housing deduction

Cherie' - posted on 03/21/2012

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Income Tax Returns can be ammended for up to three prior years for anyone who did not receive the benefit of any missed deductions.

Stephanie - posted on 08/06/2010

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My most favorite tax situation occurs when hubby works overseas and company pays taxes to the host country. Taxes become a little complicated, but you get to deduct all foreign taxes paid on his behalf, EVEN WHEN HE DID NOT PAY THEM, from your tax liability. We had a stellar year the other year when we got a $14K+ refund.

Melissa - posted on 02/27/2009

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All of these posts are wonderful. My husband has been offshore for almost a year now 7on 7off. I was wondering about how the taxes worked since he works out of Louisiana and we are in Mississippi. Thanks for all the help.

Sarah - posted on 02/26/2009

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Hi. My husband works offshore too. We have started itemizing for the last couple of years, but I've never heard of an oilfield deduction. We are in Louisiana, and our tax preparer told us that as long as he catches out at 2 different locations in a year we can claim mileage (NOT eligible if you are reimbursed through his company). I think that as long as you keep receipts you could deduct anything he gets for work (from boots and slickers if they have to provide their own to shampoo and razors that are specifically taken to work).  My best advice is to ask a tax professional. We have used H&R Block here for years and they always help us with any questions or concerns we have. Good luck. :)

[deleted account]

I don't know if there's a "specific oilfield deduction" but my husband and I itemize our return rather than taking the standard deduction.  He works on a land rig, so we deduct his travel expenses, work gear (boots, protective clothing, etc), meal allowance.  Those things, along with our mortgage interest and other itemizable expenses, is always more than the standard deduction in our case. 

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