How to tax deduct training or type rating?
 

Working on ATP - probably can't deduct that.

But next would be cfi - Probably can't deduct that but..... if I get a cfii and MEI would that not be continued study and increase of capabilities for a specific profession?

Also would a type rating after the cfi be an additional improvement in skills re: what you can train people on? Thus be tax deductable?

If anyone knows how to do it please let me know, or do I just go straight to jail on this line of thinking ;)

thanks

You have to be already employed in the field to get those deductions.

So, if you were a CFI, you could deduct your ATP and follow on ratings.

Precisely.

In general you must be employed as a pilot already to deduct costs for additional ratings.

One notable exception is that is that a teacher could deduct the costs of becoming a CFI, because that would be still staying in the field of teaching, but even there the costs for a private license would not be allowed.

Joe

Thanks - Looks like I am Mr. Backwards.... again ;)

I doubt any flight training qualifies for tax deductions whether you're working as a pilot or not. Maybe your uniform, but that's about it.

Source, I'm an accountant. Though I don't deal with taxes beyond my own.

Cool. This is wrong. Flight training certainly qualifies as tax deduction, provided the previous guidance is applied. There are hundreds of thousands of cases of precedent.


Sent from my iPhone using Tapatalk

There is one thing I know for sure: there are certainly not "hundreds of thousands of cases of precedent".

In any case, here is what AOPA has to say:
The Pilot's Guide to Taxes - AOPA

Again, in most cases, I doubt any tax deductions will be possible. Check with your CPA to be safe.

I am a military pilot, qualified to operate in the FAA Airspace. I paid for and took an ATP/CTP class this year to be eligible to take the ATP written exam. I then paid for and flew my ATP practical exam with a local flight school. Are my expenses tax deductible? I ask because my total cost out of pocket was significant. I'm sure it will attract attention when I file my taxes.

I believe they are because I paid for the training to meet the requirements of an employer.
"An individual is considered to have undertaken education in order to meet the express requirements of his employer, or the requirements of applicable law or regulations." In this case for me to seek employment with an Airline I must have an ATP Certificate as required by law.
-----------------------------------------------
26 CFR 1.162-5 - Expenses for education
(c) Deductible educational expenditures
(1) Maintaining or improving skills. The deduction under the category of expenditures for education which maintains or improves skills required by the individual in his employment or other trade or business includes refresher courses or courses dealing with current developments as well as academic or vocational courses provided the expenditures for the courses are not within either category of nondeductible expenditures described in paragraph (b) (2) or (3) of this section.
(2) Meeting requirements of employer. An individual is considered to have undertaken education in order to meet the express requirements of his employer, or the requirements of applicable law or regulations, imposed as a condition to the retention by the taxpayer of his established employment relationship, status, or rate of compensation only if such requirements are imposed for a bona fide business purpose of the individual's employer. Only the minimum education necessary to the retention by the individual of his established employment relationship, status, or rate of compensation may be considered as undertaken to meet the express requirements of the taxpayer's employer. However, education in excess of such minimum education may qualify as education undertaken in order to maintain or improve the skills required by the taxpayer in his employment or other trade or business (see subparagraph (1) of this paragraph). In no event, however, is a deduction allowable for expenditures for education which, even though for education required by the employer or applicable law or regulations, are within one of the categories of nondeductible expenditures described in paragraph (b) (2) and (3) of this section.

Yes, your expenses are tax deductible. What do they qualify under? That's a good question. As a military pilot, you would likely be able to claim it under the lifetime learning credit, but that is income dependent. However, you may have a hard time claiming it under any other clause. An ATP is not required to be a pilot in the military. You might be able to justify it under the clause of maintaining or improving skills in the same field of work.

For me, it was a no brainer. My company flies jets and light turboprops. Without an ATP, I would never be eligible to fly the jet as a captain. That would be the express requirements of my employer. When I had my CFI in a helicopter, deducting my expenses to become a CFI in airplanes was valid because I was improving my skills in the same field.

Will it attract attention? Maybe. I feel confident in the defense of my tax return, so do the same if you feel the same confidence.

If you can put "Pilot" as your job description you should be able to deduct any additional ratings or training as a job related education expense. It goes on form 2441 and is subject to the 2% floor.