One of the most common aspects of the business world is travel. 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 jets. 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 corporate jet? The main advantage is that you save time. In the business world, time is extremely valuable, or in other words, time is money. When you travel in a private jet 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.
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