April 15 kicks off that bean-counting time of year. Either you submit the federal and state income taxes on that date that you may have been filing since January or February, depending on the scale of your finances. Or you keep working at them if the IRS grants you an extension. RV’ers are no exception.
In fact, the tax season is an opportunity for you to claim at least a few of more than a half-dozen deductions you are legally entitled to just because you are an RV’er. Imagine that. Let us explore your tax write-off options below:
1. Your RV as Home #2 for a Tax Deduction
The first one you can qualify for is the home mortgage interest deduction. You can use this deduction if your RV is your first and main home or if your vehicle serves as a second home at least a few times annually. You can subtract the amount of interest you paid on your RV loan throughout the year. This means you must have only used the loan to buy your motorhome or trailer. To qualify, your vehicle does have to meet particular rules.
Legally, your rig must double as a home that may be a house, condominium, cooperative, mobile home, house trailer, boat or a piece of property with cooking, sleeping and toilet amenities. Additionally, your loan must be the right kind. It should be secured by a qualified home. It can take the form of collateral on the loan and can be repossessed if the loan is not paid off. Most RV loans do qualify and but personal loans not used for your RV don’t.
2. Your RV Tax Deduction for Business Travel
You may also be eligible for a tax deduction based on business travel if you run your own enterprise, work from home or by remote in your RV and travel cross-country for this purpose. In some instances, you may claim campground fees and other travel costs, including the mileage, on a Schedule C tax form. In particular, you can only claim miles driven for business reasons and not only to move an RV from one campsite to another.
To make these claims, you should be able to document your expenses or travel activity year around so you can substantiate the sites you traveled to, the times and dates you arrived there and how it was business-oriented.
3. Your RV Tax Deduction for Rental Business
You can also claim RV deductions if you rent out your rig through RVshare. Again, you use Schedule C to write off expenses of your rental business and you must maintain documentation yearly with receipts and a record of physical damage to your RV after rentals. If you only use your RV as rentals, it is simple to calculate your deductions. Just about every cost ought to be connected to the maintenance of your RV. Your calculations only become complex if your RV has a personal use. Still, without question, you may only claim expenses for business.
4. Your RV Tax Deduction for State Sales Tax
Your vehicle may also be used to claim a state sales tax deduction. This applies even if you did not pay for your RV in cash and don’t pay loan interest. You deduct only the sum you paid in sales tax with your RV purchase. Only the year you actually bought your RV counts. In claiming this deduction, keep in mind that not all 50 states collect sales tax and laws are different from state to state. In particular, the states of Alaska, Delaware, Montana, New Hampshire and Oregon do not assess sales tax.
5. Standard Tax Deductions for RV’ers
To be claimed, both RV sales tax deductions and loan interest write-offs we pointed out to you above need to be itemized. However, there are instances where you do best to take the standard deduction for a single person or a married couple, depending on your marital status, rather than itemize these benefits. The amounts for both vary from tax year to tax year.
What works best for you should be determined after you have reviewed your finances, your income and performed the necessary number-crunching. If your itemized deductions yield less benefits for you, you may be much better off taking the standard deduction. To learn for sure, conduct financial due diligence and consult with a certified tax professional to maximize your benefit claims. You will need to do so because business taxes are complex and require guidance and instruction.