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5 Answers

What do I need as an independent contractor CFI?

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Flight Instructor

I am looking to work in Nevada as a 1099 CFI for a flight school. The FBO admin says he wants to charge the client for the plane and I take payment from the student for the flight training. I have CFI insurance from aopa and the plane has insurance With the school. I plan on making 20% quarterly payments to the irs. What else do I need to pay? Do I need to get a workers comp policy? Anything else to be legal?

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5 Answers

  1. Clark Hall on Apr 02, 2014

    Check on state taxes. In the case you describe you are not a 1099 for the school you are your own company. Check with your State Labor Commission on the workers compensation in some states you don’t have to buy it, but it is a good idea. You could call an accountant for advise.

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  2. Steve Butler on Apr 03, 2014

    Nevada requires a business license as does Clark County. If you are not from the Las Vegas area, you should check with that county. I believe that you can sign up for both on line. The state license is $200/year and you might try http://www.nvsilverflume.gov for more info or to apply.

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  3. Earl Kessler on Apr 05, 2014

    As an instructor in Nevada, I would recommend that you also set up an LLC and use a waiver of liability form signed by each student prior to the first lesson. If they are a minor, also have parental approval on the waiver. You are welcome to contact me if you wish to discuss how I do it in NV.

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  4. LTCTerry on Apr 06, 2014

    A 1099 is for payments from an entity to you. If your flight students/customers are paying you directly, then you will not get a 1099 from the FBO; the FBO didn’t pay you.

    A quick google search on the terms CFI independent contractor will take you a number of pages from reputable organizations that will help you understand the differences between an employee and an independent contractor. The FBO admin can’t simply say, “Oh, we’re going to call you an independent contractor.” If the FBO provides headsets, intercoms, hoods, business cards, or puts your name on a website without the words “independent contractor” then you are likely an employee. Do you have to hang around “in case someone comes in with a question?” You are an employee. Do you have to attend meetings? You are an employee.

    There are many good reasons for someone to want to be an independent contractor. However, just because the guy who owns the rental fleet says you are one doesn’t make it so. That’s actually illegal.

    In addition to income tax to the IRS, you will need to pay just over 15% in social security “contributions.” If you are self employed, you get to pay the employer’s part along with the employee’s part.

    By the way, the AOPA’ Training magazine page about independent contractors is incorrect when it mentions uniforms. Any uniform worn instead of regular clothing is not deductible. An airline pilot cannot deduct the cost of a uniform other than the cost of the braid, wings, and other things that turn a suit into a uniform. An example of how strict the IRS is on uniform deductions, active duty soldiers cannot deduct the cost of uniforms because they are worn in lieu of what would be non-deductible clothing for a civilian job. Reservists are required to have uniforms IN ADDITION to the civilian clothing they wear to work Monday to Friday, so their uniforms are deductible.

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  5. Sam Dawson on Apr 07, 2014

    In most states an LLC will do nothing for you except cost you money. You are still in the eyes of the law a sole proprietor and, as such your assets (with some exceptions), are still “fair game”. Where an LLC can help is in situations where there is a true “corporation”, say a number of CFI’s. If one CFI does something the other CFIs are protected.
    I am not a lawyer, so maybe someone like Mark will chime in.

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