As an RV owner in this upcoming tax season, you are probably wondering: “Are there any RV Tax Deductions available?” The answer is yes! There are RV Tax Deductions that might be able to save you some money on your taxes. Let’s take a quick look at the deductions you might be able to claim as an RV owner.
Is Your RV Considered a Home?
The first thing to ask yourself when looking for RV tax deductions is whether the RV can be considered a home. Read on to learn whether your rig counts as a primary or secondary home.
RV as a Primary Residence
What if your RV is where you live full-time? In that case, you can claim the RV home as your primary residence even if it does not have a permanent location, as long as it contains the required facilities. These include a place to sleep, a way to cook, and a place to use the restroom.
Why would you want to be able to claim your RV as your primary residence? Well, you likely already know about the home mortgage interest deduction, which allows you to deduct the interest paid on a home loan. If you have a loan on your RV and your RV is where you live, you can actually claim this deduction and deduct the amount you paid in interest on your RV loan over the course of the year. Depending on the cost of your RV and the loan you have, this might be a tremendous amount.
Besides the requirements above, the only other thing you have to make sure of in order to claim this deduction is that you have the correct kind of loan on your RV: a qualified loan. Basically, this just means the RV is used as collateral on the loan and could be repossessed should the loan go unpaid. Really, almost all loans fall into this category, so you should be good to go—but it is best to double check just in case.
RV as a Second Home
Clearly, the mortgage interest deduction can be taken on your primary home, but did you know you can also deduct interest paid on a second home? This is great news for nearly all RV owners, because while many RVers do not live in their rigs full time, most do spend a good number of days in their tiny-home-on-wheels throughout the year.
As long as you spend the greater of 14 days or 10% of the days that the RV was rented out to others in the rig, it qualifies as a second home. In this case, you can deduct the interest on your RV loan just as you would if your RV was your primary residence.
Notes About Claiming Your RV as a Home
While you can deduct interest paid on a motorhome or trailer, you cannot claim interest paid on your tow vehicle (truck, SUV, etc). Basically, if you don’t sleep, eat, and bathe in the vehicle, it cannot be considered a home.
That said, there is a credit you might qualify for if your RV counts as your primary residence or second home. If you installed solar panels on the rig in 2023, you might also qualify for the Solar Tax Credit. This is valid through 2032 and gives you 30% of the total cost of your solar install in the form of a refundable tax credit.
RV Sales Tax by State
Those who bought their RVs this year also might be eligible for the RV sales tax deduction. This is a write-off that allows you to deduct the amount you paid in sales tax when you purchased your rig. It can only be claimed the year you buy your RV and will only benefit you if your state is one of the 45 that do assess vehicle sales tax.
If you purchased your RV in one of the following states, sales tax was not charged and this deduction does not apply to you:
- Alaska
- Delaware
- Montana
- New Hampshire
- Oregon
Note: Sales tax rates vary from state to state (and some don’t charge sales tax at all), so be sure to find information on your state to know what to expect.
Home Office Write-Off
If you live in your RV full time and work while on the road, or if you use your RV as your office space, there is another write-off you might want to look into: the home office write-off.
You see, most people who travel full time are working from their home-on-wheels, and many of these individuals have a dedicated office space. In some cases, these tiny workspaces could allow RVers to deduct a portion of home expenses as business expenses.
Your RV workspace may qualify for the home office tax write-off if it meets the following criteria:
- You are self-employed or a contract worker (not an employee).
- The office is used regularly and exclusively as a place of business.
- The office is your principal place of business.
Do you have an RV home office that is used regularly and exclusively as your principal place of business, but your RV isn’t your primary residence? You might still qualify for this deduction, so be sure to look into it.
RV Tax Write-Off for Business Travel
Another way you might find tax write-offs through your RV? If you ever use your rig for business travel, you might be eligible to claim campground fees and other travel expenses on your Schedule C.
In this case, you’d also be able to write off your business mileage at a rate of 65.5 cents per mile for miles driven between January 1st, 2023 and December 31st, 2023. Beginning January 1st, 2024, this rate will jump to 67 cents a mile.
All that said, you will want to make sure any miles claimed were driven strictly for business. On top of that, if you live in your RV full time and your RV is your principal place of business, you will only be able to claim miles driven from the RV to carry out business, not miles driven from one campground to the next.
In any case, if you choose to write off business mileage, it is important to keep detailed records of where you went, when you went there, and how it relates to your business in case of an audit.
RV Tax Benefits for Your Rental Business
Do you rent your RV on RVshare? If so, you might just have some more RV-related write-offs to include on your Schedule C. These deductions can include things like the cost of the RV itself, insurance payments, repairs, and anything else related to running your RV business, but not all of these can always be claimed.
If your RV is only used as a rental and not for personal use, RV rental business deductions are very straightforward, as you can claim everything you spend on the care and keeping of your RV. That said, if you use the RV for family getaways from time to time, things get a little more confusing. In this case, only expenses related directly to the RV’s role as a business asset are deductible.
This article may help clear things up. That said, it’s best to hire a professional if you aren’t sure what to deduct, as RV rental business taxes can get pretty confusing pretty quickly.
Standard Tax Deduction for the 2023 and 2024 Tax Seasons
Business expenses related to business RV travel and an RV rental business will be listed on a Schedule C and you always want to deduct these. That said, sales tax deductions and RV loan interest write-offs must be listed as itemized deductions. In some cases, itemizing your deductions is great. However, there are many people who will save more by taking the standard deduction. The only way to know which option is best for you? Do the math.
First, it is important to know that the standard deduction for 2023 is $13,850 for a single person or $27,700 for a married couple. In 2024, this will go up to $14,600 for an individual and $29,200 for a couple filing jointly. Add up any itemized deductions you might be able to take. If these will be less than the standard deduction, it’s better to save yourself the trouble and some money by taking the standard deduction.
As you can see, there is a lot to know when it comes to RV tax deductions. Because of this, it’s almost always a good idea to hire a tax professional rather than trying to figure out complicated tax deductions yourself. This is especially true if you’ll be filing RV business taxes, as these can get really confusing really quickly, and taxes are one thing you really don’t want to mess up.
