Claiming Type Rating on Taxes?

[thebluto]

I got my type rating there last year, and I'm now wondering how to deduct the cost on my taxes. I didn't get any VA or WIA funding. It all came out of pocket. Do I have to itemize and claim it as a non-reimbursed business expense or is there some other way?

 

[bobbysamd]

Type rating tax deduction

First, you have to itemize your deductions. You would take it off as a business expense.

Compute your taxes using the standard deduction and by itemizing, and see which way gives you the higher deduction.

Hope that helps.

 

[Slug]

Education

I don't have my tax laws handy, but I did this in '99.

You can take it as an education deduction (assuming you are better off with the itemized deductions). It is continuing your education in your field of expertise, but not allowing you to branch out into another field. Just look through the IRS website on job education expenses. The IRS has tried to deny this cost, but it has been upheld in tax court on several occasions.

Slug

 

[RJones]

Talk to a tax professional about how to treat this expense on your return. It's worth the fee. I was able to do it, however, I consulted first.

Sorry Slug, but I wouldn't take anyones advice here.

RJ

 

[AKAAB]

I agree...get a tax accountant to help with this one.

With that caveat, the IRS is very specific about what is considered a deductible educational expense. As I recall, if you get education to qualify you for a new position, then you are not allowed to deduct the cost. On the other hand, if you are a CFI-ASEL and you add your CFI-MEL, then you are just training to improve you abilities as a flight instructor. In that case, it would be deductible.

If you are a commuter pilot and you pay for a 737 type rating, but your airline doesn't fly 737's, then you have an education expense to qualify you for a new job - and it's not deductible. (I would argue that it is a job-search expense since SWA requires a rating for the interview.) Again, see a professional.

I ran into this some time ago with my rotorcraft rating. At the time, that was the ruling.

Cheers,

AKAAB