Pilots Have It Rough

This job has the world's worst tax return - CNN Money

Take the example of an American expat pilot who flies a 13-hour direct route from Hong Kong to Los Angeles.

Money made during the three flying hours over Asia qualifies as foreign income, but payment earned during the remaining 10 hours over the Pacific Ocean does not. This means the pilot is liable for U.S. tax on about 77% of earnings during that flight.

Emphasis mine. The key word, here, is expat. U.S. citizens must report worldwide income. The upside to living in this country is, in this situation, you wouldn't have to keep track of all your foreign income. The downside is you have to pay tax on all of it.

On the other hand, if you can prove you live outside the United States, you can exclude a certain amount of foreign income on your tax return. That's where the definition of "foreign" comes in. Keeping track of where you earned your income can get onerous especially in the case of pilots and others who earn their income as they move about the globe.

If you think that's confusing, check the definition of "expat." Common usage of "expatriate" is a U.S. citizen living or working in another country. In fact, the word is really only in one section of the Internal Revenue Code ((877A(g)(2)) which says an expat is somebody that has given up their U.S. citizenship. So an expat within the IRC definition of the word would only have to report income earned while in the United States.

Anyway, you would think there'd be an app for that.