Fulltime RVing & Taxes – Making the Most of It
The middle of April is fast approaching. For most people around the world it’s a month of anticipation and hopeful touches of Spring, but for those of you doing US taxes it’s a big deadline that hangs like a lead weight over your head and reminds you the government wants its moolah.
Now, I’m one of those very strange people who do my own taxes and always have. Hubby and I have had some really complicated situations over the years with multi-residency changes, foreign earned income, foreign tax credit, options, MLP’s etc. and I’ve always felt more comfortable knowing all the details myself.
No country I’ve ever lived in has as complicated tax laws as the US (oh, what fondness to remember the 1/2-page tax form from Hong Kong), but with some study and time (and the magic of Turbotax) you can find your best deal. When we moved full-time into the RV, I immediately started looking for tax advantages that could help us out and found a few gems that I wanted to share.
Now, I must preface that I’m no tax lawyer and can’t give you specific tax advise, but there’s people out there who can. So, always do your own research and make your own conclusions. With that said here’s some ways full-time RVing can be tax-friendly:
1/ Establish Legal Residency in a Tax Free State – You can’t get away from paying Federal Taxes, but as a full-time RVer you can definitely break free of State Taxes, and it makes 100% sense to do so. We established legal residency (domicile) in South Dakota for exactly that reason. Texas is another popular spot. Choose your domicile carefully and make the changes to get you there.
2/ Deduct Interest on Your RV – If you took out a loan to buy your RV, you can deduct the interest on your taxes just like you would with a regular mortgage (IRS publication 936)
3/ Take the Solar Credit – If you got Solar Panels installed on your RV (like we did last year) the Federal Government currently offers you a 30% tax credit on the total installation costs. It’s a huge bonus and is definitely worth taking (IRS tax form 5695)
4/ Deduct Home Office Expenses – If you are self-employed and work from home in your RV, you can deduct a portion of your home expenses (incl. repairs, camping fees, utilities, registration fees, depreciation etc.). This is a great bonus for mobile RVers with a business, but you do need to treat it carefully. It requires you to have a qualified home office area used exclusively for business in your RV. (IRS form 8829)
5/ Benefit From a HSA – If you decided to opt for a high-deductable health insurance like we did, it makes alot of sense to set-up a Health Savings Account (HSA) and take advantage of tax-deductible contributions. Anything you pay in is a direct write-off against your adjusted gross income. (IRS form 8889)
Those are some biggies, but there are many more. Some other posts with great tips:
We finished our taxes a few days ago at the lovely Public Library in Junction, TX and are happily looking forward to another year of tax-friendly RVing.SPONSORED LINK: SPONSORED LINK: