Aviation tax firm Wolcott & Associates, debuting as an exhibitor at the NBAA Convention, is showcasing its proprietary web-based Flight Tax Systems (FTS) software here in Orlando. FTS helps users identify, protect and preserve tax deductions for their aircraft, and this year a new data import function has been added to the software.
Designed by the firm’s aviation and aircraft tax experts to assist owners, operators and tax professionals with tracking the tax-related activities of their aircraft, FTS also includes: SIFL (standard industry fare level) reporting for employee use of company aircraft; cost disallowance calculations for entertainment use of company aircraft; primary purpose reporting for business use of individual-owned aircraft; and track leasing use for state sales tax reporting. The program also has individual modules for Florida, Texas and California state taxes.
Having such usage documentation is more important than ever, tax experts say. As the result of tracking and reporting rules the IRS codified in 2012, “the use of business aircraft have to be tracked a lot more closely than it used to be,” said Sue Folkringa, a certified public accountant (CPA) at Wolcott & Associates (Booth 652). “A lot of people don’t have accurate information on aircraft usage. In an audit situation, that’s what it’s all about: who was on the aircraft, where it went.”
‘Efficient, Time-saving Tool’
While some programs that track maintenance, pilot flight time and aircraft performance and scheduling also include a module for tracking expenses, “there’s no application like this that’s tax-centric,” Folkringa said. “This is developed by CPAs who work only in the aviation field, and that’s the strength of it.”
FTS is constantly updated and its capabilities expanded, Folkringa said. It can now track the days spent in states that levy sales tax on aircraft that exceed an annual allowance for transient aircraft. The tax software’s new data import features allows flight data to be imported into the software from a scheduler’s software download or Excel spreadsheet, saving time and reducing errors from manual data entry. Step-by-step instructions are provided to ease users through the process.
For aircraft weighing below 12,500 pounds, FTS is priced at $995 for one year’s service and $3,995 for aircraft of that weight and above (including multiple aircraft). For an individual owner in a fractional-share program, the price is $1,395. Purchasers also get access to Wolcott & Associates’ staff for answers to accounting questions pertaining to the software or the expenses it tracks. Robin Welch, CFO at JPS Aviation in Monroe, La., has been using FTS for two years and calls it “an efficient, time-saving tool for tracking aircraft usage and completing the related tax calculations.”
FTS had its genesis in a spreadsheet company founder Jed Wolcott developed to help prepare clients’ taxes. Seeing the need for an automated version, the firm, founded in 1984, developed the software for in-house use and in 2013 established its eponymous Flight Tax Systems division to market and sell the software to aircraft owners and operators. Wolcott & Associates is now “on the cusp” of offering a licensed version of the software, according to Jed Wolcott, the firm’s founder. “We believe it will be very popular with CPA and law firms and other tax professionals that have clients with aircraft,” he said. No price has been set, yet.
In addition to FTS, the Fort Lauderdale, Fla.-based practice offers a complete suite of aviation tax solutions, including tax-return preparation and consulting and offers online CPE and CLE educational opportunities through webinars on current tax-related issues and regulations. Here at the show, the firm’s staff is “happy to talk to people about tax and financial reporting needs,” Wolcott said. “Aircraft are big-dollar assets, they’re almost businesses in themselves, and it takes a lot of money to keep them going.”
Asked about the impact that declining aircraft values have on an owner’s tax-reporting requirements, Wolcott said tax-wise, the aircraft value comes into play only when it’s sold. And when that time comes, “we can help [owners] find the best tax approach, whether to sell or trade or do a tax-free exchange, and certainly one of the factors we take into account is the market value.”
Wolcott has been a member of the NBAA’s Tax Committee for 15 years and was among the instructors at the convention’s annual two-day pre-convention Tax, Regulatory & Risk Management Conference.
