RV Ownership and Taxes

by | Feb 7, 2020 | RV Owner's Guide | 0 comments

One thing we can’t avoid is doing our taxes each year. But, when you own an RV, you learn about a few benefits you qualify for that people without RVs simply can’t get. Doing your taxes definitely isn’t fun and can be rather stressful, it’s comforting knowing your weekend getaway vessel comes with a few hidden benefits you never knew you could receive.

There are a few questions to ask yourself before we get down and dirty about deductions. Does it matter what kind of RV you have? Does it have to have an engine like a Class A or can you claim your fifth wheel or travel trailer on your RV taxes?

Let’s take a look at some rules and limitations and a few other things to consider when it comes to claiming your RV on your taxes.

Your RV: A Second Home?

Like we said earlier, depending on the size and basic features of your RV, it might qualify as a second home. This will allow you to write the interest off on your taxes. This can come as a major blessing for part-time RVers. The rules for your RV to qualify as a second home haven’t changed over the years: it simply must have sleeping, cooking and toilet facilities. That’s pretty basic, so your RV more than likely does meet the requirements to be a second home!

While many RVs do qualify, most vans probably don’t, because many don’t come with a toilet.

If you’re a full-time RVer, worry not! You are still able to take advantage of a home loan interest without your RV being your backup home. If you’re living full time in your RV, it qualifies as long as it has the above requirements – sleeping, cooking and toilet facilities.

In other words, if you’re living in an RV with a sleeping area, a toilet and a place to cook, you should be able to write off interest on your taxes. There might be some small print and restrictions, so to be sure, consult with a tax professional before assuming your RV fits the requirements.

An RV Used for Business

It’s not common, but there are people who choose to use an RV as their business “office.” Not only is this unique, environmental, and pretty awesome, but they’re also able to get tax deductions if they use it in this way. You can write off lots of the expenses tied to it on your taxes. The whole RV may even qualify as a business deduction.

There’s a catch, here – be careful to never use the RV for personal use. Even just a trip or two a year could disqualify it from being considered a business. If you live full time in your RV and work inside it (we know many of you do), then it’s possible you’re able to deduct specific business-related expenses, depending on what they are and if they’re used strictly for the business. It can get sort of unclear and tricky here, so it’s best to reach out to a tax professional to see what qualifies.

Secured Debt

Another thing to consider is to qualify, your mortgage must be a secured debt. This means, quite literally, that your RV must “secure” the debt. If you don’t pay the loan, the bank might take your RV to pay the outstanding loan amount.

Not sure if yours is? If you chose to finance through a large or major bank, the loan is more than likely a secure debt. But, if you attained a personal loan to get the money, it’s not secure. In most states, you can tell if your RV is secured by the Certificate of Title from the local tag agent.

With all of this being said, don’t buy an RV just for the tax reduction. RVs are expensive and depreciate quickly. Any potential tax breaks you’ll receive simply won’t be worth it. But, if your main reason for buying an RV is because you want one, then you should definitely try to minimize the tax burden if you can!

We know it can be incredibly stressful and downright difficult to know what does and doesn’t qualify when it comes to taxes, but it’s critical to never make assumptions when handling any kind of taxes. Unless you fully understand the ins and outs of taxes, it’s a good idea to consult an accountant or tax professional to make sure you’re handling everything legally. There may also be recent changes to tax laws you’re simply unaware of, so that’s why it’s smart to work side by side with a professional.

As always, come back to the RVUSA blog for RV tips, exciting travel destinations, and so much more! Leave us a message below if you have any thoughts, memories or comments. We’d love to hear from you! If you’d like to receive our blog posts directly in your inbox, click here to join our free email list.

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