CFI Tax Deductions?

[BoDEAN]

My instructor mentioned to me that by saving my receipts for flight training (towards my CFI) and the books that I have bought, I can use this as a Tax deduction come income tax time.

Is this true? If so, this could put an even bigger smile on my face come April

 

[jetdriven]

correct me if I'm worng but I used it as a Hope credit on my taxes last two years. The school has to be pt.141 to do that. It is treated like a college.

otherwise you could possibly deduct it as a business expense if you are furthering your career the catch here is you must be able to itemize your taxes, and with us not having any big deductions we could not. Single is about 4500$ threshold to itemize. the standard deduction was bigger for us.

any others with experience here?

 

[bobbysamd]

A lot depends . . . .

You cannot deduct costs expended for training for a career. E.g., you cannot deduct tuition, room and board, books and fees to earn your college degree. However, once established in your occupation, costs for continuing education and training can be deducted.

For aviation, let's say you have zero time. You write FlightSafety a $60K check, set up shop in Vero and, eight months later, you emerge with your Commercial-Single & Multi-Instrument and CFI-A-I-ME and your 300 hours. None of that is tax-deductable.

However, you go to work instructing and happen upon someone who will hire you but for a Citation type rating. You can pay Mike Pappas his $4K, go to Carlsbad, California, for a week, and come home with your type. That would be tax-deductable.

Some of the gray areas might be something like, e.g., if you earn all your single-engine ratings, go to work, are offered time in the twins as long as you obtain your multi and MEI on your own. You might be able to deduct that training because you are employed in your profession. But, I am less sure about that than my example above.

I don't wish to open another philisophical discussion about you-know-what, but it may be tax-deductable as long as you receive real, legitimate, permanent-hire type of employment out of it. Having said that, using Gulfstream as an example, most people there are really only temporary employees and not permanent hires. So, their training costs may not be deductable.

Once more, I am not, repeat, not, starting a P-F-T discussion. I'm using Gulfstream only as an example for this discussion.

One other thing is the IRS considers these situations on a case-by-case basis. I am not a C.P.A. or a tax lawyer (though I have an accounting degree and did my returns myself for many years, including my aviation years). I am just providing comments based on general principles. The best thing you can do is discuss it with your tax advisor. He/she would have access to all the IRS Private Letter Rulings, which indicate which way the wind blows on these situations.

Hope that helps somewhat.

 

[BoDEAN]

Thanks

 

[airtoair]

gizbug,

Your title mentions that you're in Michigan. I would recommend you get ahold of Virginia's Tax Service. She is in Yipsilanti and is well known for doing taxes for aviators. She knows all the in's and out's for deductions in the career. Try calling her at (734)485-7554 (Hope she doesn't mind me advertising for her)

Best wishes,

J

 

[BoDEAN]

Thanks, yes, I am about 20 miles north of YIP.

 

[JetPilot500]

It has been a while, but I think this is what I did.

Non-Deductable:
Private
Instrument
Commercial Single Engine (initial)
CFI - A (initial)
ATP

Deductable:
Commercial Multi-engine (add-on)
CFI - I (add-on)
CFI - MEI (add-on)

Talk to your tax advisor to find out for sure. But if I remember correctly, you cannot deduct the initial certificate training. But an add-on to your Commercial or CFI is deductable, because you are "furthering" your career.

Also, as a CFI, if you work as an independent contractor you can deduct a ton of stuff. Personally, I paid very little income tax as a CFI. I did much better as an indedpendant contractor than I would have as an employee....tax wise. I would deduct milage to/from work, any books or materials I bought, FAA medicals, health insurance, etc. Pay a tax professional to figure this out for you. It may cost you $200 to have your taxes done versus $20 for tax software, but the CPA will save you that money and then some. And don't go to H&R Block, go to a CPA or someone who does it full-time for a living.

JetPilot500

 

[dav8or]

You can also deduct membership in proffessional organization. i.e. EAA, AOPA, NAFI

Did you go to Sun-n-Fun or OSH this year? They would qualify as a professional seminar and those expenses may be deducted.

 

[BoDEAN]

I am an active AOPA member.
You are saying my membership fee's can be deducted?

 

[starvingcfi]

wait. so if i go out and get my cfii and mei, i can deduct the cost? what about the cfii written? deductable? gimme some more info please.

starvingcfi

 

[dav8or]

I am an active AOPA member.
You are saying my membership fee's can be deducted?

yes

 

[bobbysamd]

CFI-I/MEI tax deduction

wait. so if i go out and get my cfii and mei, i can deduct the cost? what about the cfii written? deductable? gimme some more info please

This is sort of a gray area. Let's say you enrolled in a school or FBO program at zero time or close to it. You go through the program and emerge with all your Commercial ratings and all your CFI ratings, including your CFI-I and MEI. You can not deduct the CFI-I and MEI portions. In that instance they both would come under the heading of training for a job, which is not tax-deductable.

Where you might be able to deduct the CFI-I and MEI is if you went through training, came out only with your CFI-A, and went to work. You work, and then earn CFI-I and MEI so you can train those kinds of students. Then, it very well could be tax-deductable. Written included. I would even deduct the cost of books, King tapes or a weekend ground school if you go that route. The same rationale applies to buying a type rating.

It is hard at times to state absolutely if something is tax-deductable or not. There is no real case law that is authority or controlling. A lot depends. It's almost on a case-by-case basis. In fact, that's how the IRS will view it. Once more, your tax advisor should have IRS Private Letter rulings, which will give a general feel as to the IRS's position on issues.

Good luck with your training and with your 2002 tax return.

 

[bobbysamd]

Aviation organization tax writeoffs

I am an active AOPA member.
You are saying my membership fee's can be deducted?

Yep. For that matter, CAP as well (probably under charitable contributions because it is a non-profit).

Air, Inc. (FAPA) subscriptions would be tax-deductable. Avweb as well. Flight Crews International, etc., too.

I most certainly would deduct application fees as a business expense.