Can someone smarter than me explain this?

Discussion in 'Hangar Talk' started by Timbeck2, Mar 25, 2020.

  1. Timbeck2

    Timbeck2 Final Approach

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    I'm getting back into flying for Pilots n Paws and am exploring ways to claim the charitable donation on my taxes. On one hand, I've found that you can claim $1.27 per statute mile (which needs to be converted from NM) https://www.gsa.gov/travel/plan-boo...owned-vehicle-pov-mileage-reimbursement-rates and on the other, specifically on the form I need to fill out hourly costs. Which do I do? When I googled hourly cost for my plane I found this:

    https://www.aircraftcostcalculator.com/AircraftOperatingCosts/319/Piper+Cherokee+140

    I don't fly 450 hours per year so I'm wondering just how they got those numbers.

    Additionally - If I claim $1.27 per NM I can't include the fuel/hourly cost correct?

    Edit: after I calculated the annual fixed/variable expenses based on 70 hours per year of flying, I came pretty close to around $232 an hour. I just figure how they got the fixed and variable costs shown on that chart.
     
    Last edited: Mar 25, 2020
  2. timwinters

    timwinters Touchdown! Greaser!

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    It was my understanding that I could only write off my direct expenses. Fuel, oil, etc.

    Maybe I screwed myself all those years I flew PnP trips though!
     
  3. murphey

    murphey Final Approach PoA Supporter

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    I just use actual fuel and RT driving to the airport. But with the new individual deduction, it’s impossible for me to have more deductions.
     
  4. eman1200

    eman1200 Touchdown! Greaser!

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    I only read the thread because you asked for someone smarter than you.

    then I saw $232/hour for a Cherokee and thought, I'm clearly not smart enough to come up with the kind of math to justify those #'s.
     
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  5. Timbeck2

    Timbeck2 Final Approach

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    I have the break down and was surprised myself.
     
  6. FlySince9

    FlySince9 En-Route

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    I didn't do any P&P last year but I did have quite a bit of other charitable stuff but didn't see much relief with the new rules... If you're doing it for the deductions, you may be disappointed...
     
  7. Jumpmaster

    Jumpmaster Pre-takeoff checklist

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    I just use the cost of the actual fuel consumed and keep the receipts. Don’t believe the IRS Regs allow for a fully burdened hourly rate to be used but perhaps a CPA could answer.
     
  8. Timbeck2

    Timbeck2 Final Approach

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    Oh, I didn't even include RT driving to the airport. Good tip.
     
  9. lsaway

    lsaway Pre-takeoff checklist

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    I don't think this applies to you. I believe this is just for personal vehicles used on official government business by government employees or contractors.
     
  10. Timbeck2

    Timbeck2 Final Approach

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    It was a link provided by Pilots n Paws for calculating expense. No where on the form they provide for tax purposes does the mileage appear, however cost per hour does.
     
  11. lsaway

    lsaway Pre-takeoff checklist

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    Based on this logic, I once had a Cherokee that cost me $7700 an hour for the year. I only flew it 1 hour that year.
     
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  12. Timbeck2

    Timbeck2 Final Approach

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    Sounds about right. How do you figure your hourly cost?
     
  13. MooneyDriver78

    MooneyDriver78 En-Route

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    I don’t think you can count depreciation for charitable contributions, that’s only for a business doing taxable work. That’s how they get the rate, your donating your time and whatever vehicle time as well.
     
  14. Timbeck2

    Timbeck2 Final Approach

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    Thanks..that makes sense however, that's a lot of depreciation for a $21k airplane.
     
  15. Skywalker

    Skywalker Cleared for Takeoff

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    We only use the fuel for the taxes... but maybe we cheat ourselves out of greater tax relief?! :dunno:
     
  16. Timbeck2

    Timbeck2 Final Approach

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    I did too - on both counts. This is why I'm asking.
     
  17. flyingcheesehead

    flyingcheesehead Touchdown! Greaser!

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    Yup. With only 70 hours a year, your per-hour cost is going to be fairly high.

    If you want to deduct all of it, though, you have to do the thing you're never supposed to do (add up ALL your expenses on the airplane) and divide by the number of hours to get your hourly rate. Be ready to finally realize how much you spend on this hobby... It ain't pretty.
     
  18. Brad Z

    Brad Z Final Approach

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    I once knew a guy who had his plane in a LLC, and apparently personally rented the plane from the LLC at some rate, presumably market a rate. He deducted the cost of the rental for his PnP flights, rather than fuel and oil.

    I’ve always just deducted fuel and oil. Maybe my accountant wasn’t as good as his.
     
  19. flyingcheesehead

    flyingcheesehead Touchdown! Greaser!

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    That's frequently done to avoid sales tax as well. If the LLC "rents" the plane to you, then you pay sales tax on the rental rate instead of paying it on the full value of the plane when you buy it. This does vary by state, of course.
     
  20. Shawn

    Shawn En-Route

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  21. denverpilot

    denverpilot Tied Down

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    I’m amazed at how many people think they’re smarter than @Timbeck2 !

    Rude! ;) ;) ;)

    Y’all should have ignored him. :) :) :)

    (Hint: Thread title. Yeah I’m bored.)
     
    Last edited: Mar 28, 2020
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  22. NealRomeoGolf

    NealRomeoGolf Pattern Altitude

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    @Timbeck2

    I am a CPA but I do not practice. So take any of what I say with a grain of salt and please don't get my license yanked. I am speaking as SGOTI.

    Your participation in Pilots N Paws falls under IRS Publication 526 as providing a service to/for a charity. You may be reimbursed for out of pocket expenses in connection with giving that service. Transportation costs are allowed to a certain extent. They get very specific about car expenses and say this:

    Car expenses. You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. You can't deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. If you don't want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. You must keep reliable written records of your car expenses. For more information, see Car expenses under Substantiation Requirements, later.

    Obviously you want to know about airplane expenses. They would follow in the same spirit as the car expenses. However, I am not aware of a standard airplane rate like they have for cars above. Since flying airplanes is not as common, they don't have a standard for it. The $1.27 that you found is for allowing government employees to use personal aircraft to conduct federal business and to deduct it like the standard mileage rate for cars when getting reimbursed. The GSA rates have nothing to do with the IRS so they do not apply to charitable giving.

    So like the advice given by others above, you really can only deduct direct expenses for the trip you take - which is essentially fuel, oil and landing fees. You cannot use an operating rate because that would include maintenance, which is specifically not allowable under the car rule.

    You then must keep records of what expenses you incurred while performing your service for the charity. Sticking with the spirit of car expenses the publication says:

    "If you claim expenses directly related to use of your car in giving services to a qualified organization, you must keep reliable written records of your expenses. Whether your records are considered reliable depends on all the facts and circumstances. Generally, they may be considered reliable if you made them regularly and at or near the time you had the expenses. For example, your records might show the name of the organization you were serving and the dates you used your car for a charitable purpose. If you use the standard mileage rate of 14 cents a mile, your records must show the miles you drove your car for the charitable purpose. If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to a charitable purpose."

    Now I am sure someone will come along and tell us how he has a friend that deducts his annual and hangar because they do PNP flights once a month. I doubt that would ever stand up to an audit and they are just playing with fire.

    Anyway, hope that was helpful.

    Edit: added link to IRS Pub 526
    https://www.irs.gov/pub/irs-pdf/p526.pdf
     
  23. Timbeck2

    Timbeck2 Final Approach

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    Thanks Neal. It was helpful. What would be more helpful if someone (IRS) actually addressed charitable donations by private pilots in their own aircraft. On the Pilots and Paws flight form, it has a blank for "hourly cost" of an airplane and if you rent or own. This is my reason for asking in the first place.

    What I did was calculate all fixed expenses and variable expenses for a year with an average expense for fuel as a variable expense and divided by the hours I flew in that tax year. I came pretty close but not over the cost per hour listed in the table above. Hourly cost can be proven with receipts, bills, invoices and logged hours. There is more information on the Pilots N Paws site but nothing is definitive. There are a couple of letters from the IRS and the FAA and what they basically say is about that of any charitable expense in that if you spent it, you can claim it. Not going forward with any of this until I get the okay from my tax lady. She trained IRS agents in her day. I trust her.
     
  24. Dave Theisen

    Dave Theisen En-Route PoA Supporter

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    I’ve met Tim. I’m surprised that we aren’t on page 12 of this thread! :) :) :)




    Love ya, buddy! :)
     
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  25. Timbeck2

    Timbeck2 Final Approach

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    [​IMG]

    is it Dave or David?
     
  26. Dave Theisen

    Dave Theisen En-Route PoA Supporter

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    Lol
     
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  27. Rcmutz

    Rcmutz Line Up and Wait

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    “Obviously you want to know about airplane expenses. They would follow in the same spirit as the car expenses. However, I am not aware of a standard airplane rate like they have for cars above. Since flying airplanes is not as common, they don't have a standard for it. The $1.27 that you found is for allowing government employees to use personal aircraft to conduct federal business and to deduct it like the standard mileage rate for cars when getting reimbursed. The GSA rates have nothing to do with the IRS so they do not apply to charitable giving.”

    I am not a CPA, but I did fly for business as a DoD employee. I do believe the amount from the GSA is what the IRS allows. The amount for GSA and IRS was the same for car mileage, 57 cents per mile at the time. The car amount was for business not charitable which is much less.
     
    Last edited: Apr 1, 2020
  28. Timbeck2

    Timbeck2 Final Approach

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    I've moved on from the mileage thing. This thread was as a result of s l o w information being received on the other website.
     
  29. Timbeck2

    Timbeck2 Final Approach

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    Throckmorton Throatwarbler it is. ;)
     
  30. NoHeat

    NoHeat En-Route

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    I believe that's not for taxes.

    It's for reimbursement of travel expenses by federal employees and anyone else traveling on federal business whose expenses will be reimbursed by a federal agency.

    And moreover, when I've actually used it, I didn't get the full per-mile rate for my airplane, because the agency's reimbursement was the lesser of the GSA mileage rate or a govt-rate airline ticket, and the latter almost always is cheaper.

    Interestingly, the federal govt. classifies not just personal airplanes, but also motorcycles as "POV" personally owned vehicles, along with cars. You can ride your motorcycle on US government travel, and get reimbursed per mile for it.