Many RV owners aren’t aware of the potential tax savings they may be eligible for when they purchase an RV. Sure, a recreational vehicle is a great way to travel and see new places with your family, but don’t forget that it may give you some relief from your taxes as well. Check out these five ways you can get tax breaks as an RV owner.
- Did you know that owners of second homes are able to deduct the interest portion of payment on a second dwelling as well? Your RV may qualify as a second home if it has cooking, sleeping and bathroom facilities. Nearly all RV types including class b motorhomes, travel trailers, fifth wheel RVs, already have or can be equipped with these types of facilities.
- RV owners may be able to deduct a portion of the sales tax that was paid on a new motorhome or RV trailer if it was purchased within the past year. Look for a worksheet on your tax form that will determine how much you may be allowed to deduct. While this type of deduction is a one-time deduction, given the sizable investment of an RV, sales tax often means a substantial dollar amount. If you are eligible to get some of that money back come spring, it only makes sense to take advantage of it.
- If you have a loan on a travel trailer or fifth wheel RV, your loan may qualify for the interest deduction. However, the loan on the truck or vehicle used to tow it does not. It appears that Uncle Sam doesn’t see the point in moving your second home to various different locations.
- Part of your RV registration can be another way of saving on your taxes. In some states that don’t have personal property taxes, your annual vehicle registration contains both a portion based on the weight of the vehicle and a portion based on the value. The portion that relates to the value is a tax-deductible expense.
- If you are a business owner (even a small home-operated business), and your business requires you to travel or work out of your RV on a regular basis, then you are eligible for tax deductions that may classify as business expenses. Do you use your RV to entertain and build relationships with other businesses? Or to transport your company’s staff from one job location to another? If so, you may find at least some of the cost of owning your RV can be classified as a business expense. Just keep in mind that any percentage of its use that is personal in nature won’t be an allowable deduction.
While we have provided you with a few examples of expenses that you may be able to deduct, always be sure to consult with your accountant or a tax specialist to find out if there are any other areas where you may qualify for a tax break. More and more RV owners are finding ways of turning the RV lifestyle into a profitable business as well. If you are considering a pre-owned motorhome purchase or selling an RV on consignment, call Easy Escapes RV at 239-302-3789.