Would Buying a Corporate Jet Make Sense for You?
By Alan Olsen
One of the most common aspects of the business world is
People come and go every day for all kinds of reasons and to all kinds of
locations worldwide. While most air travelers
typically do the bulk of their traveling
with commercial airlines, there are many major
corporations that have their own private company
In addition, there are some ultra-wealthy
individuals that own private jets
and use them as part of their business
endeavors. There are several advantages to owning a corporate jet,
including some tax breaks
that you might not be aware of.
It’s All About Time
But first, what are the practical advantages of owning a
The main advantage is that you save time.
In the business
is extremely valuable, or in other words, time is
money. When you travel in a
you don’t have to spend nearly as much time on
the ground on either end of your trip. You also have a lot more airports to
choose from when you fly a corporate jet so
you won’t face as much congestion, either. You get to skip long check-in lines
as well as TSA so that saves huge bundles of time.
You also get to fly exactly when you want instead of being tied to the
airlines’ and airports’ schedule. You’ll likely fly direct without layovers or
connecting flights, either. There’s no question that you can save a lot of time by
flying private. You don’t have to fight with other passengers for space, which
is also a big plus.
Big Tax Savings Available
So besides the obvious advantages of saving time
and enjoying a much more relaxed and comfortable ride, there are some big tax savings
available to companies
that own corporate jets.
Of course, purchasing a private jet
can be expensive. Entry-level models typically start between $4 and $8 million,
while the more expensive ones can even reach hundreds of millions of dollars.
However, thanks to the IRS’s
depreciation policy these high-flying shuttle buses practically pay for
themselves in just a few years’ time.
Because the IRS
assumes a corporate
investment has only a limited number of years of serviceable lifetime, a business can
actually recoup the entire purchasing expense of the asset many years before it
actually runs out of value. Companies
can write off 70 percent of their cost of a private jet
within the first three years of service and the IRS has
determined that corporate jets
have a useful life span of five years.
Don’t Forget Bonus Depreciation
These days, bonus depreciation also exists, which helps businesses even
more. This bonus was first added to help stimulate the economy after the
recession in 2000. Currently, it hastens the depreciation rate by 50 percent.
While many in Washington would like to eliminate depreciation write-offs,
lawmakers have continued to renew them, including last year when they were
extended through 2019. However, the bonus percentage rate will drop from 50
percent to 40 percent in 2018 and to 30 percent in 2019.