CFI tax deductions

[DesertNomad]

I earned my AGI in January and started teaching ground school. I then earned my CFI two weeks ago and will be flight instructing. Does anyone know if the FAA will treat this as an expansion of one's teaching education and thus make the aircraft rental to earn the CFI deductible?

I gather that my FII test can be deductible toward my CFI-I and things like a flight bag and headset can be deductible, but not sure about the training required to add CFI to my AGI/IGI.

As I understand it, the IRS lets you deduct expenses related to bettering yourself in your current job. I added "flight" to my aviation instructor abilities. which prior to my CFI, were limited to ground instruction.

This would all be under Schedule C self-employment.

From a previous thread:

I wonder if becoming a CGI first would work to make CFI expenses deductible. The FAA's position is that a CFI is being paid to teach, not to fly; so a CGI who is clearly a teacher would simply be enhancing his or her ability to teach by obtaining a CFI. Same job, different classroom.

Thanks!

 

[Mtns2Skies]

I then earned my CFI two weeks ago and will be flight instructing.

Congrats!!! and welcome!

Does anyone know if the FAA will treat this as an expansion of one's teaching education and thus make the aircraft rental to earn the CFI deductible?

FAA and IRS don't talk to eachother - if you think you can make that argument to the IRS, then go for it!

 

[EdFred]

I earned my AGI in January and started teaching ground school. I then earned my CFI two weeks ago and will be flight instructing. Does anyone know if the FAA will treat this as an expansion of one's teaching education and thus make the aircraft rental to earn the CFI deductible?

I gather that my FII test can be deductible toward my CFI-I and things like a flight bag and headset can be deductible, but not sure about the training required to add CFI to my AGI/IGI.

As I understand it, the IRS lets you deduct expenses related to bettering yourself in your current job. I added "flight" to my aviation instructor abilities. which prior to my CFI, were limited to ground instruction.

This would all be under Schedule C self-employment.

From a previous thread:



Thanks!

Is CFI-ing your primary source of income or is it "hobby income" ?

 

[Vance Breese]

I feel it may be best to go to a tax professional for tax advice.

 

[Walboy]

It's a new certificate, so no it's not deductible. Continuing education to keep your CFI is deductible. Here's why (from IRS website):



I don't think adding instrument to your CFI certificate allows you to deduct those training costs either.

I think headsets and a flight bag are iffy, especially if they are not used exclusively for flight instructing.

CFI insurance, business cards, a website things like that are deductible.

 

[DesertNomad]

Is CFI-ing your primary source of income or is it "hobby income" ?

It's a second job. I am self employed as a software developer (my own products, not writing under contract for others), have rental properties which I self-manage and am an investor in a few other business. I do aviation instruction part time like all my other work.

 

[DesertNomad]

I think headsets and a flight bag are iffy, especially if they are not used exclusively for flight instructing.

Except they are. I have a headset and CO detector used only for my CFI work. I keep another headset permanently in my own plane which I do not use for instruction.

 

[Justin Brady]

Are you self employed or working for a flight school?
If self employed you shoudl be able to write it off without issue.

 

[EdFred]

It's a second job. I am self employed as a software developer (my own products, not writing under contract for others), have rental properties which I self-manage and am an investor in a few other business. I do aviation instruction part time like all my other work.

IRS will probably say no depending what percentage of CFIing is your income. IS it a good chunk like 30% or is it more like 2%? And have the costs exceeded what you've made so far as a CFI?

 

[Walboy]

Here's a flowchart from IRS Pub 970, Chapter 11.

 

[DesertNomad]

I guess the crux is if the CFI qualifies me for a "new trade or business". I was already an aviation instructor, but now I can teach in an airplane in addition to a classroom. To me, it is still aviation instruction.

 

[EdFred]

I guess the crux is if the CFI qualifies me for a "new trade or business". I was already an aviation instructor, but now I can teach in an airplane in addition to a classroom. To me, it is still aviation instruction.

And if the IRS defines it as a hobby based on the income. If you can deduct it, you won't be able to deduct it against your other income. So if you dropped 11k on your CFII, and only made 3k as a CFII, you'll only be able to deduct up to 3K. You can't count it against your rental or programming income.

 

[DesertNomad]

And if the IRS defines it as a hobby based on the income. If you can deduct it, you won't be able to deduct it against your other income. So if you dropped 11k on your CFII, and only made 3k as a CFII, you'll only be able to deduct up to 3K. You can't count it against your rental or programming income.

That is perfectly understandable as it is a separate business.