Tax Deductible Flying Lessons

[dantanna]

Mornin' all,

Please don't laugh too loudly at me but an accountant recently told me in conversation that Flying Training is tax deductible for Air Traffic Controllers.

Can anyone verify this as accurate?
How would I find this out?

Cheers,
Dantanna

[RENURPP]

It used to be and may well be still deductible for most if not all in the industry.
I was employed as a baggage handler refueller and claimed mine. I was audited, found not elligible then appealed won the appeal.
This was all 20 yrs ago mind you.

[Keg]

I'd definately be after a 'private ruling' before running with that one. Having been nailed by the tax man previously, it ain't pleasant if you get it wrong- even unintentionally. Tax rules basically label you 'guilty until proven innocent' and it's up to you to do the hard yards to do it. I'd be getting second, third and fourth opinions on that bit of advice.

[404 Titan]

Dantanna

As an accountant in my former life, I can tell you first hand that you can only claim doing a CPL from scratch if it relates to your current job AND it is required by your current employer. If you can prove this and you have it in writing I would suggest you have a good case to claim the whole lot as a tax deduction. I would recommend though getting a second opinion before taking my advise (I have not been in the tax field for over 13 years and my recollection of the facts my be wrong) and that of your Tax Accountant.

[kreugers]

Having worked for AsA in the past I can assure you that a number of controllers were claiming the cost of flying training and ongoing costs thereafter. Quite a few operated their own aircraft and were claiming these expenses aswell.

In fact, I know a number of simulator training staff who continue to deduct their flying each year. From my experience tax agents have been divided in their opinions as to the legality of these claims, however, a friend (simulator operator) went the next step and obtained a private ruling from the ATO a few years back.

If you're in the game, go for it.

[Icarus2001]

1. Just because people have claimed it and got it, that does not mean they were eligible. Remember it is all self assessment, until desk audit time!

2. If an ATCO claims a deduction on the basis of his/her occupation, then the tax office may very well ask "do all your colleagues performing the same job also require a PPL/CPL?"

[Mr. Hat]

While we are on the topic - any ideas on what you can and can't claim guys/gals? I went to one accountant in Syd that said that you can't claim your medical!?!:confused:

[Keg]

Hat, I've had two different opinions on that. One said that I couldn't unless it was part of having spent greater than $1K-ish on medical expenses that year. The other asked me if I required it to fly and when I said 'yes' said that I could. I'm changing agent again and see my new bloke in a few weeks and I'll see what he says.

[Kenny Carter]

For airline employees, go to
http://law.ato.gov.au/atolaw/browse.htm?toc=03:RUL:Taxation
and go to 1995 folder for ruling TR95/19. This should give some info.

cheers
KC

[404 Titan]

Any tax agent that tells you that your medical isn't tax deductible isn't worth a pinch of salt. They obviously don't know what they are talking about. Your Aviation Medical is required by you to earn assessable income, therefore it is 100% deductible. If though your were doing an aviation medical at the same time as a general check up I would suggest only a proportion of the bill would be deductible. As a general rule of thumb, any expenses incurred in gaining assessable income that is required for your job, is tax deductible. I would suggest going and speaking to a reputable tax agent. I’m sure he would confirm what I have just said. Getting back to ATC personnel claiming flying lessons. They may have claimed them but I wouldn’t want to be in their shoes when and if the ATO audits them. Flying lessons aren’t required for them to do their job and their employer doesn’t require it. If it was they would all have a license and they don’t.

[RENURPP]

Timepieces


129. Deductions for the cost and maintenance of timepieces are not allowable under subsection 51(1) of the Act as the expense is considered to be private in nature.

130. In Case S82 85 ATC 608; 28 CTBR (NS) Case 87 , a nursing sister was not allowed a deduction for a watch that was used in the course of her employment. The Board's decision was that the watch was (ATC at 612; CTBR at 682):


'an item of a private nature...[and]...The use of a watch or other timepiece is important to most people in the community whether it be used...to ensure not commencing work too early or finishing too late; or to log overtime...'


131. In Case P71 82 ATC 338; 26 CTBR (NS) Case 3 , an ambulance officer was not allowed a deduction for the cost of a watch claimed under subsection 51(1) of the Act, nor was he allowed a deduction for depreciation under section 54 of the Act. It was decided that the expense was essentially of a private nature and not incurred in gaining assessable income. It was held by the Board of Review that (ATC at 341; CTBR at 17):


'The evidence does not provide any basis either for concluding that the taxpayer's employment would be threatened by his failure to own a watch and use it for official purposes, or that the level of income was improved by using it for that purpose...'


132. In N84 81 ATC 451; 25 CTBR (NS) Case 43 , a television cameraman was not allowed a deduction for the purchase of a watch which was used for work. The deduction was denied on the grounds that the watch did not possess any 'special attributes' and although it was used for work, this fact 'did not change their essential character as private expenditures' (ATC at 453; CTBR at 309).

A watch is a legal requirement for a pilot. Our employment would be threatened by our failure to own a watch and use it for official purposes,
with a watch the level of income was improved by using it for that purpose...' as without a watch we have no job = no income.

Any oppinions??

[HGNK]

I was recently told by someone, non-aviation related however, that you can only claim a "working expense" for tax, after you are employed - not before.

By this rational, maybe you could claim flying training/courses/endorsements after being employed as a professional pilot, providing they were a requirement of your employment?

[Speedbrake UP]

HGNK --------- You are correct that you can only claim a 'working expense' for tax after you are employed in the relating field. As an addition to this you must also have occurred the cost whilst working in this relating field. You can not claim any expense that occurred before you are put on the payroll. So the only time you can claim any flying as a deduction is if, for example, you are already employed as a pilot and obtaining an instrument rating will allow you to improve in that job (hence the ccompany must have positions that use the instrument rating) then the cost of the rating would be a tax deduction. Another example is a twin rating. You could only claim the cost of a baron endorsement if your employer has barons. If you are employed in a non flying capacity for the same company no flying could be claimed as a deduction. There must be some natural progression between the position you hope to obtain with the training and the position you currently hold. This is only touching the tip of the iceberg and I would recommend anyone to obtain a private ruling before embarking on anything with tax deduction in mind. Hope this helps. This all happened to me several years ago and I am still paying off the tax department!!!!!!!!!!!!:mad: Back to ATC -- I seem to remember in my searching through the ATD files that a ruling already exists for ATC employees. It would be worth the time searching through those. Good luck

[ferris]

As a general word of advice: The quality of tax agents/accountants varies enormously.

I have had guys give me terrible advice. I was eventually put onto a guy who was fantastic. Referred by a flight attendant who was (legitimately) claiming hairdressing, makeup, stockings, shoes etc. all with the relevent rulings duly noted. Two desk audits and not one cent disallowed.

Shop around, ask around.


(Although, I have found the ultimate way to beat those ATO blues;) :p :cool: :D )

[404 Titan]

Ferris I agree totally. Non residency is a wanderful thing. I never again intend paying Howard and his cronies a cent of my hard earned money so they can **** it up against they wall.