Important Factors Considered By Professionals Before Aircraft Tax Planning

For private aircrafts operators, it is essential to retain the service of an attorney who knows about the aviation tax. It is equally important to retain the service of a CPA who knows about the federal tax or state tax pertaining to aviation. An aviation CPA and an aviation tax attorney can assist the aircrafts operators by limiting the liability exposure and through aircraft tax planning. It is essential for the businesses or the individuals owning aircrafts to limit the liability exposure alongside trying to reduce the tax liability through deductions, exemptions and benefits. The assistance of a tax attorney and CPA is essential in this scenario.

To limit the liability exposure, it is essential for the aircraft operators or owners to verify to the authorities that they have appropriate insurance coverage with sufficient limits. It is equally important for the aircraft operators to ensure that the insurance policy covers all relevant parties and all types of operations. It is important for an aircraft operator or owner to retain the service of experts for aircraft tax planning. An aviation attorney or aviation CPA can assist an aircraft operator or owner with state and federal tax planning. The aircrafts being used for business can be depreciated using two methods. The MACR method of depreciation is used for the aircrafts being used for business for a period of 5 years. If an aircraft has been used for air-transportation, then MACR is available for an aircraft of 7 years.

The MACR stands for Modified Accelerated Cost Recovery system which may be available for the new aircrafts. The ADS (Alternative Depreciation System) is for the aircrafts being used for trading or business for more than 6 years. If an aircraft is being used for air-transportation, then 12-year ADS is available for the aircraft. This is a straight-line depreciation. A tax attorney or a CPA has to consider the depreciation system during the aircraft tax planning.

There is limited option to depreciate an aircraft which is being used for personal reasons or being used by the related party of an owner or operator. The accelerated depreciation under the MACR system is available for the aircrafts which are being used primarily (at least 50% of the time) for business or trading for a taxable year. In this scenario, an aircraft can receive depreciation under the MACR system despite being used for personal reasons. Thus, an aviation CPA or tax attorney has to consider a variety of factors during aircraft tax planning.

An aviation CPA or tax attorney has to consider if an aircraft is used for entertainment before the aircraft tax planning. The non-business use of an aircraft by the owner or others is going to negatively impact the depreciation calculations and deductibility of the costs pertaining to an aircraft. For more information visit here: Advocate Consulting Legal Group, PLLC.

3 Business Problems That You Can Avoid With Accurate Aircraft Compliance

The aviation business is a challenging arena. You have to prepare yourself mentally and technically to face the challenges and find the best solutions to them. No matter what conditions triggered the problem, the nature of the issue is always related to three categories- People, Processes, and Systems. These elements form the “Golden Triangle” of the business. You will perceive the necessity of Aircraft Compliance once you can realize how compliance with the business standards can save you from numerous problems. The following discussion will help you to understand the problems better and find accurate solutions.

Challenges in Process

Many business owners tend to neglect the process problems in the business. But this can lead to further complications in the business. For instance, to maintain evidence of Aircraft Compliance, it is necessary to maintain the proper documentation of all business proceedings and transactions. Following the standard process is mandatory for any business operation related to the aviation industry. if there is no thorough documentation of the business operations, you can face legal problems anytime, and you will fail to show the compliance of the business operations to the standard requirements.

Issues associated with people

There must be many employees working with the company. Each employee has a role and set of responsibilities in the business. But do you have any process to monitor whether they are applying the right ways and techniques to do the job? The outcome of the task is equally important as the process of execution. Any defiance of the Aircraft Compliance guidelines will lead to serious issues. Try to adhere to a regular system of monitoring and discussion to remind the people of their roles and responsibilities. The early alignment will lead to a lesser chance of errors.

Updated technology

Even a few years back, the business owners in the aviation industry yearned for better systems and regulations that can help in the smooth operations of the company. But now, the clear guidelines about Aircraft Compliance along with the latest tools and technology are aiding the business owners to make better business and plan for higher revenue generation. Hesitation to change and update the system is common. But you need to overcome such obstructions if you want to utilize the better opportunities arising from the use and application of the latest technical updates including tax reforms.

Improve scope of success

Compliance with the standard rules and regulations of the aviation industry not only sets you a class apart but also helps people to rely on your service. Business growth is possible only when the clients and potential; partners will have enough proof that the business is compliant with the standard guidelines. Managing common problems will be easier when you have greater knowledge about the operations, issues, and ways to deal with the difficulties. Evaluation of the business is also possible when you know that the business sticks to the standards of the aviation industry. Thus, the compliance factor can play a critical role in the growth and expansion of an aviation company. For more information visit here: Advocate Consulting Legal Group, PLLC.