Teaching people to fly is a business. Your return should say so.
What an independent CFI can deduct, what usually gets missed, and why your home office might change your mileage. From an Enrolled Agent who is an instrument-rated pilot.
Who this is for
Independent CFIs and CFIIs who teach their own students, in the student’s airplane, a club’s or a rental. Instructors who teach alongside another job. Instructors a school pays on a 1099.
On a school’s payroll instead? Unreimbursed work expenses are no longer deductible on your federal return; the 2025 tax law made that permanent. California still allows them as an itemized deduction, above a floor, so the state return may be worth a look.
What you can deduct
The test is whether the cost is ordinary and necessary for instructing. When something is part business and part personal, only the business share counts.
Download the CFI Tax Deduction Checklist (PDF)One page of everything below, to keep with your records.
Keeping your instructor privileges current
The refresher course or other activity the FAA requires every 24 calendar months to keep instructing. Education you need to keep a status you already hold is deductible.
Insurance for the work
Instructor liability and non-owned aircraft coverage you carry to teach. Coverage for your own personal flying is personal.
Gear, by its business share
Headset, tablet, phone, and the charts and apps on them. Only the business share counts. Items up to $2,500 apiece can usually be written off in the year you buy them rather than depreciated, with an election on the return.
Software and subscriptions
Scheduling, billing, bookkeeping and flight planning tools you use to run the business.
Getting the word out
Business cards, a website, and flyers like the ones on the pilot lounge corkboard.
Professional dues
Instructor and professional associations. Dues to a club organized for recreation are not, and that can include a flying club.
Teaching materials
Books, charts, syllabi, logbooks and supplies for your students.
Driving between airports
Trips from one airport to another during a working day are business mileage. The drive from home to your usual airport is commuting, unless your home office counts as your principal place of business. More on that below.
Overnight trips away from home
Lodging and travel in full, meals at half, when the work keeps you overnight away from your tax home.
Your own airplane, if you teach in it
The business share of owning it is deductible, but an airplane falls under Section 280F, the tax code’s extra rules for things used partly for business and partly for fun. Business use has to stay above half of total use, or the faster depreciation goes away and some of it comes back as income. Your own flying counts against you.
What usually gets missed
These aren’t on Schedule C, which is why they get left behind.
Half of your self-employment tax
The employer-equivalent half is an adjustment to income, so you get it whether or not you itemize. Software does this, but only when the income is entered as self-employment in the first place.
Health insurance you pay for yourself
Premiums for you, a spouse, dependents and children under 27 can be deducted, up to your profit from the business, but not for any month you could have joined a subsidized employer plan, yours or a spouse’s or a dependent’s, even if you didn’t.
A retirement plan
A SEP-IRA or a solo 401(k) turns some of this year’s tax into your savings, and a SEP can still be funded after year end, up to the due date of the return, extensions included.
The qualified business income deduction
A federal deduction for a share of your self-employment profit, now permanent under the 2025 tax law. California doesn’t allow it.
The home office
Most instructors assume they can’t have one because they teach at the airport. Plenty can.
You teach at the airport. You might still have one.
A home office has to pass two tests. You use the space regularly and only for the business; a desk in the guest room the family also uses doesn’t count. And it has to be your principal place of business.
That second test trips up instructors who think it means where you do the teaching. It doesn’t have to. A home office counts if it’s where you handle the administration, scheduling, billing, keeping the books, planning lessons, and you have no other fixed place where you do much of that work. Answering a text in the FBO doesn’t disqualify you.
Why it matters more than the deduction itself: once your home is your principal place of business, the drive from home to the airport stops being commuting and becomes business mileage. For an instructor who drives to the field most days, that is often the bigger number. Either way, keep a log as you go. A record written at the time is worth far more than one reconstructed in April.
Two ways to figure it
Simplified: a flat rate per square foot, on up to 300 square feet. No receipts, no depreciation, and nothing to recapture for those years when you sell the house. Any amount you can’t use this year is lost.
Regular: the business share of rent or mortgage interest, utilities, insurance and repairs, plus depreciation if you own. Usually bigger, more paperwork, and the depreciation is taxed when you sell. Anything limited by your income carries forward.
Which one wins depends on the size of the room and what the house costs to run. I run both.
What usually isn’t deductible
- Training for your first instructor certificate. It qualifies you for a new line of work, and the rules exclude education that does that.
- Flying for fun, and most of the flying you do to stay current. Courts have allowed it only narrowly, tied directly to skills the work requires.
- Recreational flying club dues.
The keep-current requirement for an instructor you already are is the safe one. Everything that adds a new certificate or rating is a judgment call; see the first question below.
What you get
- Your Schedule C, prepared from records that tie to your logbook
- Quarterly estimates sized to what you are actually earning this year
- A mid-year projection and a year-end planning session
- Notice review: I read it, explain it, and tell you what to do
- Extension filing when you need it
What it costs
The Individual tax plan, $125 a month. Your return, the quarterly estimates, a mid-year projection and a year-end planning session, on one fee. If you only want the return, it starts from $650.
Questions people ask
- Can I deduct a CFII or MEI add-on?
- Maybe, and nobody can promise you either way. It improves skills in work you already do, which points toward yes. It also lets you teach what you couldn’t teach before, and courts have at times treated new ratings and certificates as qualifying pilots for a new trade, which points toward no. I don’t know of a case squarely on point for a working instructor. It’s worth deciding how to treat it before you pay for the training.
- Can I deduct the flying I do to stay current?
- Sometimes, and less often than pilots hope. Flying that keeps up skills the work directly requires has a case. Flying for its own sake is personal. Share your logbook with me, and we’ll go through it.
- A school pays me under the reporting threshold, so I won’t get a 1099. Do I report it?
- Yes. The threshold decides whether the school has to send a form, not whether the money is income. The same goes for payment apps, which now rarely send one at all. Everything you’re paid to instruct is income.
- Do I need an LLC?
- Not for federal income tax. A single-member LLC is ignored there, and you file the same Schedule C either way. California is different: an LLC owes at least $800 a year in state tax and files its own Form 568. Whether you want one for liability is a question for your attorney and your insurance agent.
- A school pays me on a 1099. Is that right?
- Maybe not, in California. Under AB 5’s ABC test, a contractor’s work has to be outside the usual course of the hiring business, and teaching people to fly is the usual course of a flight school’s business. If you’re really an employee under California law, the school owes California payroll taxes and should be withholding, and depending on the separate federal test it may owe federal payroll taxes too, which would change your return. That’s mostly the school’s problem to fix, but it’s worth knowing which side of the line you’re on. How this looks from the school’s side.
- I only teach a few students a month. Is this worth it?
- Possibly not, and I’ll say so. If instructing is a small sideline and your records are simple, a return once a year may be all you need. The plan earns its keep when the income is steady enough that estimates matter, or you’re looking at an underpayment penalty.
- Do you work with instructors outside California?
- Yes. The Enrolled Agent credential is federal and works in all fifty states. State returns differ, and I’ll tell you what yours needs.
Checked against IRS Publications 334, 463, 587 and 970, Treasury Regulation 1.162-5, Revenue Ruling 99-7 and the IRS’s 2026 guidance, as of October 2026. General information, not tax advice; your facts change the answer. The one-page checklist (PDF).
Book a Tax Intake
Free, 30 minutes, and the fee in writing afterward. Bring last year’s return, or the IRS letter if that’s why you’re here.