Has anyone here claimed their MECIR??
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Has anyone here claimed their MECIR??
Morning all,
Before i get told to search, i have!!
I am doing my tax return and the reply to the question of can i claim the MECIR is "its a grey area".
I am a multi IFR driver now but was working as an instructor at a flying school prior to this job. Whist i was instructing i was working part time for my current organisation on ground ops etc... I then began my MECIR and got it early this year. (my point being i was already employed at my current organisation BEFORE i began the rating). Since gaining the rating i have been driving the twin IFR and left instructing.
Now, according to the ETAX bit in the Deductions section:
"Remember, you cannot claim a deduction for your self education expenses if the course did not have a sufficient connection to your work activities even though:
but its even harder to find stuff than the bloody CAR's!!!! Now thats saying something!! 
I would just say bugger it and submit it but the difference in the return is quite substantial and i reckon the tax man might have a look at me!!
Cheers.....
K
Before i get told to search, i have!!
I am doing my tax return and the reply to the question of can i claim the MECIR is "its a grey area".
I am a multi IFR driver now but was working as an instructor at a flying school prior to this job. Whist i was instructing i was working part time for my current organisation on ground ops etc... I then began my MECIR and got it early this year. (my point being i was already employed at my current organisation BEFORE i began the rating). Since gaining the rating i have been driving the twin IFR and left instructing.
Now, according to the ETAX bit in the Deductions section:
"Remember, you cannot claim a deduction for your self education expenses if the course did not have a sufficient connection to your work activities even though:
- It might have been generally related to those work activities, or
- it enables you to get a new job "
but its even harder to find stuff than the bloody CAR's!!!! Now thats saying something!! I would just say bugger it and submit it but the difference in the return is quite substantial and i reckon the tax man might have a look at me!!
Cheers.....
K
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Try Googling your objectives and plenty will come up, below is one such example.
Occupational ruling summary 2002 - Airline employees
The reality here is the cost of your training is expensive and any opportunity to get one back from the government is worth the exercise. The trick here is to be able to interpret the legislation yourself and try for the deduction or get a tax expert to do this years tax for you and get a conclusive answer which is far safer if it proves wrong. Alternatively you can pick up the phone and anonomously explain your situation to the ATO and see what their thoughts are and if positive note the date, time and person spoken to.
For what it is worth had you been fulltime with this company as a pilot and they required a MECIR to further your employment your chances would be certainly good. The fact your were part time and in ground ops and did your training may lower your chances so I'd pass this one onto your tax agent and get a conclusive answer.
Occupational ruling summary 2002 - Airline employees
The reality here is the cost of your training is expensive and any opportunity to get one back from the government is worth the exercise. The trick here is to be able to interpret the legislation yourself and try for the deduction or get a tax expert to do this years tax for you and get a conclusive answer which is far safer if it proves wrong. Alternatively you can pick up the phone and anonomously explain your situation to the ATO and see what their thoughts are and if positive note the date, time and person spoken to.
For what it is worth had you been fulltime with this company as a pilot and they required a MECIR to further your employment your chances would be certainly good. The fact your were part time and in ground ops and did your training may lower your chances so I'd pass this one onto your tax agent and get a conclusive answer.
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Well i guess it is all in the interpretation then really. There was a period of time that i was actually full time for my current company BEFORE i did the MECIR and the rating WAS REQUIRED for me to fly but i guess the crux of it is whether or not i was a pilot for the company BEFORE i did the rating...... How do i prove this?? Bugger!!
Still, im very interested to hear anyone's experiences if they have them!!
Still, im very interested to hear anyone's experiences if they have them!!
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I claimed mine while working as an instructor. In this case it certainly is work-related as it will allow you to instruct IFR (either now or at some point in the near future) and if the company ever does IFR charters would allow you to do that too.
In my view it's fully tax deductible and in any case no different to what any one else does when they buy their endorsement at the time or prior to being employed by an airline.
It has never been tested, I suspect when there are sufficient numbers and the ATO is of the view there is a significant recovery to test this, they will.
It has never been tested, I suspect when there are sufficient numbers and the ATO is of the view there is a significant recovery to test this, they will.
Yeah but you can't deduct something that you need for a job directly. However if you are employed in the industry already then go and do a IR rating I believe that is OK I don't believe that Jet ratings are able to be deducted.
I am an accountant and have tested it in court when the ATO contested my claim in the early 90's for an instructor rating and an instrument rating. To keep it very simple if you earned assessable income as a pilot in the year you made the claim for your IR training and it can be used by your employer, you can claim it.
krankin
One other thing if you can get a letter from your employer that states that doing an IR enhanced your assessable income with that company it will make you bullet proof in terms of the validity of the claim.
One other thing if you can get a letter from your employer that states that doing an IR enhanced your assessable income with that company it will make you bullet proof in terms of the validity of the claim.
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One other thing if you can get a letter from your employer that states that doing an IR enhanced your assessable income with that company it will make you bullet proof in terms of the validity of the claim
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Ok just to clarify 404, I was not employed as a pilot at the time of the instrument rating (end of 06), subsequently finding employment in early 07, (which required MECIR for all operations, paid accordingly). As they are in the same financial year (06-07), I could have claimed the MECIR?
Too late for me now....
(hmmm need something stronger than beer at this moment).
But if it helps others, it's a small consolation.
Too late for me now....
(hmmm need something stronger than beer at this moment).But if it helps others, it's a small consolation.
krankin
Sorry. I should have been a little clearer. Red wine does that to me.
What I was trying to say was that if you got a pay rise after the training and the new qualification made you more productive ie useful to your current employer, a letter from them stating this would be a huge help in proving the self education costs are legit.
Sorry. I should have been a little clearer. Red wine does that to me.
What I was trying to say was that if you got a pay rise after the training and the new qualification made you more productive ie useful to your current employer, a letter from them stating this would be a huge help in proving the self education costs are legit.
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Got ya titan!! Thanks heapas for that. I have sent it off and i believe that if K Rudd comes after me i have a pretty stable defense!!
Thanks for your advice, great help!!
K
Thanks for your advice, great help!!
K
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I claimed for an rating last yr and I was questioned by ATO. Was let off the hook as had an agreement with my employer of the time that a position was available on compleation of the rating even though I never took up the position after the rating.
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Carbon, I think the point is that for you to be on sound ground to claim the tax deduction, you really need to be already employed as a pilot at the time you were training for your CIR.
If you say undertook the training in July/August 2006 and passed your test, then got a job as a pilot in say October 2006.....this would not allow you to claim your tax deduction. The trick is to be employed as a pilot, preferably fullitime, at the same time as you are doing your IR training.!
Hope this makes sense!
If you say undertook the training in July/August 2006 and passed your test, then got a job as a pilot in say October 2006.....this would not allow you to claim your tax deduction. The trick is to be employed as a pilot, preferably fullitime, at the same time as you are doing your IR training.!
Hope this makes sense!
More..
Krankin - Below are the basic principles of deductibility for self-education:
When you complete your tax return you need to indicate whether you are claiming under (a) or (b).
Although you may have found new employment after obtaining the endorsement, deductibility could still apply under (a). It would come down to your intent, and the ATO would not have any idea of your intent unless for example, they found out that you received an offer of employment from another company, and your appointment was subject to you obtaining an additional specific rating or endorsement.
If challenged, it would be quite reasonable to argue that your intent was to further your knowledge and increase your expertise, as well as perform your current work more effectively and safely.
Rgds
T
(a) A deduction is allowable for self-education expenses if the taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge
(b) A deduction is allowable for self-education expenses if the subject of self-education leads to, or is likely to lead to, an increase in the taxpayer's income from current income-earning activities
(c) Expenses related to improving knowledge or skills are not of a capital nature
d) A deduction is not allowable for self-education expenses if the subject of self-education is designed to get employment, to obtain new employment or to open up a new income-earning activity
(e) The intention or purpose in incurring the expense may be an element in determining whether the expense is allowable
(b) A deduction is allowable for self-education expenses if the subject of self-education leads to, or is likely to lead to, an increase in the taxpayer's income from current income-earning activities
(c) Expenses related to improving knowledge or skills are not of a capital nature
d) A deduction is not allowable for self-education expenses if the subject of self-education is designed to get employment, to obtain new employment or to open up a new income-earning activity
(e) The intention or purpose in incurring the expense may be an element in determining whether the expense is allowable
Although you may have found new employment after obtaining the endorsement, deductibility could still apply under (a). It would come down to your intent, and the ATO would not have any idea of your intent unless for example, they found out that you received an offer of employment from another company, and your appointment was subject to you obtaining an additional specific rating or endorsement.
If challenged, it would be quite reasonable to argue that your intent was to further your knowledge and increase your expertise, as well as perform your current work more effectively and safely.
Rgds
T
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Tax deductability of Instructors rating
I began training as a GA instructor immediately after gaining my CPL .
I completed the rating in April 07 and have been earning small $ as a GA instructor since then.
Without repeating the responses above, would any body care to suggest if the deductability of the Instructor rating is any different to that of the MECIR.
My issue is that i never practically earnt any $ as a CPL, prior to getting the rating. Hence it was virtually a new line of work, rather than a skills extension to the CPL ( it depends how you argue the case)
Im looking at the Tax rulings at present and trying to find a concrete example of the same situation.
If anyone has clearly got the deduction in similar circumstances i would love to hear from them.
Aeroguy - hobart
I completed the rating in April 07 and have been earning small $ as a GA instructor since then.
Without repeating the responses above, would any body care to suggest if the deductability of the Instructor rating is any different to that of the MECIR.
My issue is that i never practically earnt any $ as a CPL, prior to getting the rating. Hence it was virtually a new line of work, rather than a skills extension to the CPL ( it depends how you argue the case)
Im looking at the Tax rulings at present and trying to find a concrete example of the same situation.
If anyone has clearly got the deduction in similar circumstances i would love to hear from them.
Aeroguy - hobart
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well here's where my 'current' career comes into play (qualified chartered accountant and all) - the tax legislation refers to a 'nexus' ie. a connection with your employment. As long as you're currently earning a living from what you do ie. as long as you're EMPLOYED as a flight instructor at the time (and therefore getting paid for it as your main source of income), and doing your ME/CIR as well, in my view this establishes the required 'nexus'.
Take for example me as a CA - when I was a grad (ie. you as a CPL only), I started work at a Big 4 CA firm (you joining your flying school). I then proceeded to study for my Chartered Accountants qualification (which is a grad dip) which was tax deductible as it was incurred in relation to my employment - similarly for you, you're the instructor doing your ME/CIR which is in direct relation to your employment, therefore the connection is there. Mind you, my CA cost about $6k which is probably less than your ME/CIR.
If you have any issues, give the ATO a call - best to get it 'from the horses mouth'. Otherwise, pay $75 and get a proper tax accountant to do it for you - could save you thousands (in a refund or in avoiding a tax penalty for a false claim).
hope that helps. Now you see why I want to leave accounting and fly???
Take for example me as a CA - when I was a grad (ie. you as a CPL only), I started work at a Big 4 CA firm (you joining your flying school). I then proceeded to study for my Chartered Accountants qualification (which is a grad dip) which was tax deductible as it was incurred in relation to my employment - similarly for you, you're the instructor doing your ME/CIR which is in direct relation to your employment, therefore the connection is there. Mind you, my CA cost about $6k which is probably less than your ME/CIR.
If you have any issues, give the ATO a call - best to get it 'from the horses mouth'. Otherwise, pay $75 and get a proper tax accountant to do it for you - could save you thousands (in a refund or in avoiding a tax penalty for a false claim).
hope that helps. Now you see why I want to leave accounting and fly???
aeroguy, I believe it is most definately different. My interpretation of the ATO allowable self-education deductions is you can only claim the course as a deduction if it allowed you to be promoted within the company you where employed with at the time of study.
See this Airline employees
As you have to have a instructor rating to be employed as an instructor this course was taken to "get you a job" which is not deductable. If you worked for the flying school doing Ops before I believe you still cannot claim it as a deduction as it comes under income from a new-income activity?
I was able to deduct my MECIR which went through fine as I was employed with a Charter company flying Day VFR on a single went away and did my MECIR and am now flying twin IFR with the same company.
See this Airline employees
As you have to have a instructor rating to be employed as an instructor this course was taken to "get you a job" which is not deductable. If you worked for the flying school doing Ops before I believe you still cannot claim it as a deduction as it comes under income from a new-income activity?
I was able to deduct my MECIR which went through fine as I was employed with a Charter company flying Day VFR on a single went away and did my MECIR and am now flying twin IFR with the same company.