4 Tax Tips for Fulltime RVers
Everyone’s favorite time of year is just a few days away — that’s right, Tax Day is April 17 (break out the party hats and confetti). We just wrapped ours up and thought it would be helpful to share a few surprising things we learned after buying our Airstream for those of you out there considering making the jump to the fulltime RV lifestyle.
Note: We are not accountants or tax experts. This post is about our personal experience, and you should always consult your own accountant before making any decisions that might have a big impact on your taxes.
1. RV Dealerships will say you can write off the interest on an RV loan, just like a home. But for a lot of us, there’s a catch.
Technically, this one is true — your RV is considered a second home, and you can deduct the loan interest (up to the $1 million limit in 2017, and the new $750k limit in 2018). But, and this is a big but, if you’ve sold your sticks and bricks home to hit the road, like so many fulltime RV’ers do, the interest on your loan likely won’t put you over the standard deduction amount, so claiming it on your taxes is a no-go.
Besides that, the math doesn’t really work out on this one — even if you can deduct it, you’ll probably wind up paying more interest over the lifetime of the loan than you’ll save in tax deduction. If you want to see some detailed examples, check out this post over on RV dreams.
As a side note, while the tax deduction isn’t a good reason to take out a loan, there may be other reasons to go with financing vs. purchasing outright. We did choose to finance part of the Airstream. It’s our only debt, and while we’d prefer to be debt free, we were starting a new business, which meant we wouldn’t get approved for other lending until we built up 2 years of work history with it. Even after that getting a loan can be trickier when you’re self-employed, so we wanted to keep more of our cash available for a future home or land purchase.
We're saving our cash for a cabin
Maybe... someday... Until then we just save a million of them to our Pinterest page so we can indulge in the fantasy. Hop on over there to catch yourself a case of cabin fever.
2. Planning on writing off your ‘home office’ in the RV? Hang on.
Back when we owned a house in Portland, we had a home office that Shoam used for his freelance business, and we were able to deduct a portion of our mortgage. In an Airstream, claiming a space that’s used exclusively for business doesn’t quite pan out — we work from the dinette, but we also eat there, watch movies, play cards (and constantly spill things on it) so we can’t claim it on our taxes. If you have a bigger 5th wheel or Class A with a garage area you can truly call an office that’s not used for anything else, you might have more luck on this one.
3. Consider travel expenses really carefully before deducting.
It might sound amazing to start a casual blog and write off all your travel expenses, since campgrounds and gas will probably be one of your major expenses. Unfortunately, business travel needs to be premeditated (i.e. you need to travel to your destination for the meeting/conference/whatever, not take a personal trip to Hawaii and then try to set up a meeting when you’re there to try to write off a whole vacation).
If we’re traveling through a city where we have a client, we get in touch with them first and plan to meet. If we take them out for dinner and drinks, we deduct the allowable part of that expense. If we have to fly somewhere specifically for business, we track and deduct the allowable parts of the whole trip. We don’t write off campgrounds or gas — it just gets too hard to track what portion was “personal” use and what was “business” on that front for us. And we don’t want to wind up like this guy who tried and failed to deduct $30,000 of travel expenses for his backpacking trip around Europe.
4. If you use an accountant, find one who gets what you do.
Now that we travel so much, we wanted to use someone who got that and would be used to communicating with us wherever we happened to be. We worked with Adam Nubern of Nuventure this year, and it’s been our smoothest tax time in years. As a fellow traveler, he’s super clear about his availability and when to expect to hear back from him, plus very proactive about reminding us what we should be doing by when.
If you’re looking for a new accountant for 2018, we’d highly recommend him. He’s not paying us, or providing any free services in exchange for us writing this — we just think he’s a great accountant and a good guy.
In case you missed it — Our shop is now open
Last week we officially launched our Shop, and it's loaded up with T-shirts, Hoodies, Pouches and Tote Bags for people who love the outdoors, camping and road trips. No... you probably can't deduct them from your taxes, but at least you can do your accounting in style, right?