Training & Taxes
- Thread starter Skinnah
- Start date
Minnesota_Flyer
New Member
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Depends on what kind of school loans you have too! But for the most part your lender will send you a 1098 and you should always get the interest deducted.
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Be careful about trying to deduct interest on loans taken for flight training (and always check first with your preferred tax professional). Unless the expense is taken in connection with a business (making it a deductible business expense), loan interest generally is not deductible. The two big exceptions are home and student loans. Home loans are pretty self-explanatory, and generally won't apply to flight training (unless, perhaps, you take out a home equity loan to pay for the training). It is doubtful whether student loans taken for flight training would qualify for the student loan deduction.
Among other requirements, to be deductible, the student loan must have been taken out to pay for the "qualified higher education expenses" of an eligible student. "Qualified higher education expenses" include tuition, fees, room and board, and related expenses such as books and supplies. It is not clear whether aircraft rental, for example, would meet this definition. Further, the expenses must be incurred for education in a degree, certificate, or similar program at an eligible educational institution. I haven't researched the issue specifically, but it is my understanding that your average FBO would not be consider an "eligible educational institution."
At any rate, if you think you might be able to take a deduction, check with your tax preparer. The worst they can say is "no."
MF
Depends on what kind of school loans you have too! But for the most part your lender will send you a 1098 and you should always get the interest deducted.
[/ QUOTE ]
Be careful about trying to deduct interest on loans taken for flight training (and always check first with your preferred tax professional). Unless the expense is taken in connection with a business (making it a deductible business expense), loan interest generally is not deductible. The two big exceptions are home and student loans. Home loans are pretty self-explanatory, and generally won't apply to flight training (unless, perhaps, you take out a home equity loan to pay for the training). It is doubtful whether student loans taken for flight training would qualify for the student loan deduction.
Among other requirements, to be deductible, the student loan must have been taken out to pay for the "qualified higher education expenses" of an eligible student. "Qualified higher education expenses" include tuition, fees, room and board, and related expenses such as books and supplies. It is not clear whether aircraft rental, for example, would meet this definition. Further, the expenses must be incurred for education in a degree, certificate, or similar program at an eligible educational institution. I haven't researched the issue specifically, but it is my understanding that your average FBO would not be consider an "eligible educational institution."
At any rate, if you think you might be able to take a deduction, check with your tax preparer. The worst they can say is "no."
MF
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hmmm.... lets say a .. Key Bank Loan?
never received anything from them (yet i'm not in repayment).. anyone receive anything on their Key Loan?
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Well you do have to make payments in order to pay any interest.
I can't speak specifically for Key, but Sallie Mae sends you a 1098 that shows how much interest you paid over the course of the year. It is a top of the line deduction on your taxes. Key and Sallie Mae should be the same as far as taxes.
hmmm.... lets say a .. Key Bank Loan?
never received anything from them (yet i'm not in repayment).. anyone receive anything on their Key Loan?
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Well you do have to make payments in order to pay any interest.
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I believe that the program has to be a 141 program. Then there is the tax credit versus deduction issue. Any tax persons out there to help on this.
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My older brother is a CPA, senior manager, for KPMG and he has always done my taxes. I've always been in a part 141 program, received a 1098, and deducted the interest on my taxes(top line deduction). I'm not sure if it has to be part 141 cause I have some friends who went to ATP, part 61, and they received 1098s and deducted on their taxes. I'll ask my brother later on today and try to get some more good info and get back to you guys. Also I know if you go to the Sallie Mae website there is a little info there about it.
I believe that the program has to be a 141 program. Then there is the tax credit versus deduction issue. Any tax persons out there to help on this.
[/ QUOTE ]
My older brother is a CPA, senior manager, for KPMG and he has always done my taxes. I've always been in a part 141 program, received a 1098, and deducted the interest on my taxes(top line deduction). I'm not sure if it has to be part 141 cause I have some friends who went to ATP, part 61, and they received 1098s and deducted on their taxes. I'll ask my brother later on today and try to get some more good info and get back to you guys. Also I know if you go to the Sallie Mae website there is a little info there about it.
sixpack
New Member
I'm fairly certain that initial training is NOT tax deductable.
Recurrent training usually is, once you have established yourself into that profession. Once you get your commercial rating, then you have a fairly strong argument for writing off the rest of your training, but it will help if you can earn a few dollars as a professional pilot first.
Likewise, you can't write-off medical school, but once you become a doctor, you can write off just about any kind of medical training or conferences.
Note: You can probably write-off the interest amount (not the payments) on your student loan.
Recurrent training usually is, once you have established yourself into that profession. Once you get your commercial rating, then you have a fairly strong argument for writing off the rest of your training, but it will help if you can earn a few dollars as a professional pilot first.
Likewise, you can't write-off medical school, but once you become a doctor, you can write off just about any kind of medical training or conferences.
Note: You can probably write-off the interest amount (not the payments) on your student loan.
Minnesota_Flyer
New Member
But if a lender mistakenly sends you a 1098 for something that is not really deductible, YOU will be the one swinging in the wind with the IRS. The 1098 is not a get out of jail free card. In other words, don't blindly rely on the 1098; check to be sure the interest is actually deductible.