It is hard to believe, but year-end is almost here. As we count down the last couple of weeks of the year, there are a few things you can do to prepare your aircraft records for income tax reporting in the spring.
As mentioned in previous articles, the IRS record-keeping requirements for business aircraft include detailed flight logs and supporting documentation to substantiate business use. Now is a great time to review your current-year information and gather any missing flight details or documentation. The longer you wait, the harder it gets.
If you are planning on bonus depreciation this year, or have taken bonus or accelerated depreciation in the past, review your usage to make sure you have met the minimum Qualified Business Use (QBU) requirements. Ideally, this has already been addressed, but there may still be time to fit in additional qualifying business trips if needed.
Having your information ready early in the year can be a significant advantage. CPAs are generally more available immediately after year-end, before client information begins to pour in around mid-to-late February. After nearly 20 years as a practitioner, I can attest that turnaround times increase significantly as you move deeper into tax season.
Aircraft information is usually just one part of a much larger return, so the sooner that piece is complete, the sooner the rest of the return can move forward.
Maintaining your records throughout the year and conducting a focused review at year's end will help you prepare for filing season and bump you to the top of the list with your tax team.