Tax time

Windchill

Well-Known Member
It's that time of year again to file our taxes, and await those big checks back from Uncle Sam


For those educated on the subject, if you could shed some light as to what is/is not tax deductable when it comes to aviation related things [i.e. training]?
 

braidkid

New Member
Good question...
I filed my taxes the other night. As a general rule things that are deductible are things that you did to further your employment as a pilot. However, you cannot write off anything until you are in a position to be employed. For instance, you must have a commercial license before writing off your multi add-on. Also, you must have your instructor license before being able to write off CFII or MEI.

Deductions that I made were my commercial multi add-on/MEII, the multi hours I bought so that I could legally instruct in a multi and all books/supplies I purchased for instructing purposes.
 

stuckingfk

Well-Known Member
Here are some great articles that I think everyone should need. My parents have preached this information for some time and it can do nothing but help me. The only one I didn't know about till earlier this year was the SUV deal.

SUV and Full Size Truck deductions

Owning your own business

Owning your own home

Like Doug said, having a mortgage can allow you to deduct the interest paid on your loans each year. One thing I got from the pilot tax website, they way he portrays it, you can deduct your CFII, MEI, and any training to to keep you current or to qualify you for a better job in the future.
 

EatSleepFly

Well-Known Member
I'm just about done with mine (I do them myself...gives me something to do when the wx is crap). I went through and itemized everything that I could, and then went through and figured them again using the standard deduction. My itemized deductions added up to about $1000 more than the standard deduction for me, but the return ended up being the same (I get everything back, woo hoo!) either way, so I just used the standard deduction for simplicity's sake.
 

braidkid

New Member
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What about things like headsets, laptop computers, and cell phone usage?

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If they were expenses incurred to support your business (flight instructing) then you could write them off.
 

flyitup

Well-Known Member
Braidkid and other CFI’s,

If you’re a free lance CFI, are you actually registered with the county as a sole proprietor? Example… Braidkid-the-fly-guy, DBA?

Just curious, because if this was the case you would be eligible for a whole world of deductions… (like you said above)
 

stuckingfk

Well-Known Member
Flyitup,

It is my understanding that a free lance CFI can indeed have many deductions which makes it such an appealing deal.

The plane could get deducted, fuel, a car to and from the airport, home office computer to track students, etc.

Btw, where have you been, you always seem to come in spurts!!?
 

flyitup

Well-Known Member
Lucas,
Good thoughts... It seems to me that if you were interested in the instructing gig that it would make since to be a free lancer. The number of things that can be written off never ceases to amaze me!


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Btw, where have you been, you always seem to come in spurts!!?

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I know... it's terrible. There's sooo many posts these days on Jetcareers that I feel like if I'm gone for a few days I get way behind on the latest and greatest JC gossip!

I've been keeping myself really busy with school and preparing for the upcoming mowing season. I've decided to incorporate my business this year and bring on several employees. I'm really looking forward to it!

How are things going for you?
 

stuckingfk

Well-Known Member
Lets see, whats up with me. I am busy networking with accounting students around here at UND. This guy isn't paying taxes for a while. lol

Actually a turn of events happened. I was planning on graduating in May of 2005, but I could be done this August or December for sure. So I am trying to figure out what I'll do afterwards with a CFI ticket in hand. I am really considering buying my own aircraft and taking advantage of what Uncle Sam allows us to do.
 

flyitup

Well-Known Member
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I am busy networking with accounting students around here at UND. This guy isn't paying taxes for a while. lol

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Nice!



Good luck with your plan! What type of aircraft are you considering?
 

stuckingfk

Well-Known Member
Not sure, was thinking about an older mooney, maybe the ranger. There is a guy from my hometown who has owned 20 or so mooneys and he works on them so I am sure he can help me out. Or I'll just have to get a 172, 182, 177, or whatever works.

I am not worried about the insurance since it is deductable, but I would have to make money for the deductions to really work.
 

flyitup

Well-Known Member
How bout' an SR-22?


I may be able to swing payments on that bird if I had 100 partners...
 

stuckingfk

Well-Known Member
Actually I think Cirrus advertises being able to own that plane for $1100 a month. I'll wait a while before I step into that.
 

flyitup

Well-Known Member
$1,000/month??

Where do I sign??

That's unreal... is it some sort of lease program?

Of course, I'm sure there's quite a bit of operating expense not included in that figure... but still!
 

kellwolf

Piece of Trash
Okay, I think I read somewhere that you can deduct education if it goes towards a degree at an accredited college. ERAU even sent me a tax form stating how much tutition I paid last year. Sooooo, here's my question. Since I'm taking classes through Riddle's extended campus, I can send them copies of my ratings, then they give me credit towards my degree for them. Doing it this way, does that enable me to deduct at least SOME of my flight training? I don't have any receipts from 2003 (DOH!), so I'm mainly looking at this for next year. Those of you that go to Daytona Beach, Prescott, Purdue, UND or other accredited colleges with flight programs, can you guys deduct this as a tuition or book expense?
 

stuckingfk

Well-Known Member
It doesn't include hangar, fuel or all that stuff. I am pretty positive they are just loan payments through their lenders they have set up. I am sure the loan is for at least 15 years too.

But I actually think there is a niche here in ND for it. NWA is in 4 main cities here in ND, with United Express in a few others, but the ticket prices are awful. And there is plenty of businessmen/women that travel all around the state for hours driving when a plane could cut times by 1/4 to 1/2. There is plenty of business in Denver, Minneapolis too, but those ticket prices are astronomical at times. For example, Fargo is our state's biggest city and it is at least a 4 hour drive from my hometown. Plenty of people from my hometown go their on business and just drive the 8 hours total, but would only it would only be two by air with the SR 22.

Now that you have read my rambles that probably don't make sense, but I just think that the SR 22 could make a home here in ND if charter companies would pick them up and market it right. I would love to be that guy.
 

flyitup

Well-Known Member
[ QUOTE ]
Okay, I think I read somewhere that you can deduct education if it goes towards a degree at an accredited college. ERAU even sent me a tax form stating how much tutition I paid last year. Sooooo, here's my question. Since I'm taking classes through Riddle's extended campus, I can send them copies of my ratings, then they give me credit towards my degree for them. Doing it this way, does that enable me to deduct at least SOME of my flight training? I don't have any receipts from 2003 (DOH!), so I'm mainly looking at this for next year. Those of you that go to Daytona Beach, Prescott, Purdue, UND or other accredited colleges with flight programs, can you guys deduct this as a tuition or book expense?

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Steven,
Are you a free lance instructor using a legal DBA?

Here is my understanding on the subject...

Part of my motivation in wanting to set up a corporate entity for my lawn business is that, among other things, I can legally deduct my college expense. In so many words, the rule states: If you are an employee of the company (in this case I’m the CEO of my lawn biz…I know it sounds funny
) the corporation may deduct the expense of collegiate education providing that it is applicable to the type of business. So in my case, seeking a business degree will benefit the company, therefore it is applicable. However, this wouldn’t work if I was seeking a degree in aerospace unless, of course, I was an employee of an aerospace corporation.

The point I’m trying to make, is that unless you’ve actually incorporated your flight instruction business you can’t take a deduction for college expenses. This is the information I’ve discovered after researching the topic, however, I’m not a tax professional by any means of the word! So, that being said, there may be some little loop-hole out there in the complex world of IRS tax code that would allow you to do this.

Good luck!
 
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