If you operate a business, then it may be possible for you to claim a private jet as a deduction on your annual taxes. This can be a particularly useful write-off for self-employed individuals or individuals who run a business. To ensure that you can use this deduction, it is important that you use the plane in the course of business operations. You will only be able to claim a certain portion of the expenses associated with the private jet as a write-off.
Calculating the Amount for Deductions
When you want to claim a private plane as a deduction, it is important that you accurately determine the price of the airplane and actual amount of time it is used in the course of business. The IRS scrutinizes tax returns that utilize the private plane write-off, and it is important to make sure that you are completely forthright in the information that you provide. Ideally, you should try to keep a record of the dates in which you use the private plane. The expenses associated with maintenance of the private plane should also be recorded.
Another benefit of using the private plane deduction is that you can claim depreciation. As the jet depreciates in value, you can claim this depreciation on your income taxes. You should gather all of the required paperwork for claiming the deduction. This includes the sales receipt for the purchase of the airplane and last year’s profit and loss statement.
Using Form 4562
When you want to use the private plane deduction, you will also have to use Form 4562. This form can be found on the IRS website. The next step required for filling out the form is choosing the method of depreciation that is most useful for your business’s finances. These methods include Section 179 and the modified accelerated cost reduction system. If you choose Section 179, then you will only be able to claim a deduction for the year in which you purchased the airplane. If you choose the cost acceleration process, you will be able to claim depreciation over an eight-year period.
It is also possible for CEOs to use the private plane deduction as a measure of “private security.” If the jet is used for security purposes, then the owner may owe a reduced amount of taxes. Many CEOs take advantage of the aircraft charter deduction and may be able to pay little to no taxes as a result.
When planning your taxes, it is important to consider all of the deductions available to you. The aircraft charter deduction is one example of a deduction that can significantly reduce your total tax bill.