Aircraft Tax Planning For One-Owner Business

Proper aircraft tax planning gives businesses the opportunity to purchase a plane for business use and personal pleasure. The various tax-reduction strategies ensure significant benefits associated with the charter, lease, or purchase of the business aircraft. The charter, lease, and ownership of the plane follow the rules of the listed property so without a business use log, deductions are not available. It is necessary to track the use of the aircraft based on the seat miles and seat hours occupied. No free rides are available for family members or spouses. There may be different aircraft uses so the aircraft tax planning depends on this factor:

•    Personal
•    Business
•    Employee
•    Business entertainment

Those using the aircraft for enjoyment trips should eliminate such use or make it secondary to the business trip. When entertainment is the part of the day it is necessary to conduct business for over four hours. This way enjoyment becomes the by-product of an otherwise productive day eligible as an entertainment deductible for business discussion. Business should form the primary purpose of air travel because this way traveling to and from the work location is part of business use. As part of the aircraft tax planning, it is necessary to account for each seat mile and seat hour used during flights.

It is possible to deduct the business travel for a dependent, spouse, or companion when they are an employee, travels for genuine business, or travel expense deductible otherwise by the passenger. For optimal plane, deductions make personal trips or make your spouse, companion, or dependent an employee of the company. In a proprietorship, hiring kids or spouses work to the monetary advantage because you can employ them without any payroll taxes. Wage relationships involving a kid and parent do not involve payroll taxes. Consider this factor for aircraft tax planning.

Avoiding problems with the entertainment facility is another part of proper tax planning. Traveling to and from corporate entertainment is a nondeductible use of entertainment facilities as per the tax laws. Such harsh rules allow zero deduction even with a single facility used for entertainment purposes. There is a break for the aircraft transportation facility. It is possible to protect the deduction from disallowance from the entertainment facility by keeping the entertainment use nearer or equal to zero. Deduct only the corporate percentage and when using the plane for entertainment purposes maintain over half company use percentage.

Aircraft tax planning with entertainment and business activities on the same day involves extending the business activities longer than the enjoyment part. This makes it a day for business. Sometimes the entertainment part is longer but the business part was critical like signing the contract making it a workday. Arrange the activities in a way that legally the day turns into a day for conducting business instead of entertainment. For more information visit here: Advocate Consulting Legal Group, PLLC.