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By Lois Sullivan
RVs can cost tens of thousands of dollars, if not hundreds of thousands. For people of all ages, an RV can be a home on the road, a place of business, and more. Why not save as much as you can for having an RV and put it toward your money goals? If you're going to try to get RV tax benefits and save money, we suggest studying how the tax rules work for these vehicles.
Saving more money when you file taxes can help you cope with financial stress or unlock a little extra cash to use as you wish. Here's everything you need to know about RV tax savings. You'll see how to get more money back for owning and using an RV.
In many cases, yes. The three main factors that allow someone to get an RV tax break are:
If several of the above are true, you could get an even greater total deduction on your taxes. For example, in many states, you might be able to claim certain kinds of deductions if you use your RV as your home for half the year and then rent it out for the other half.
You may get a tax deduction that reduces how much tax you owe based on what you paid for your RV. Some states require paying a tax based on the vehicle's price when you title and register it. In that case, you've paid taxes on it already and could get a corresponding deduction on annual taxes.
You won't be able to do this in the following years after you bought the RV, so be sure to do it in the same tax year.
As with many loans, interest payments can be deducted from your taxes. You might be able to claim the interest you paid when doing your taxes and get a deduction. This requires you to have used the RV as a primary or secondary home.
A mortgage is a loan taken out to buy a home, such as a house. However, if you took out a loan on an RV that you use as a place to live, the IRS considers that a home mortgage. You may be able to deduct your RV loan's interest if you use it as a mobile home, even if you don't live there all the time.
While loans for RVs can be viewed as mortgages, there are a few important factors that may determine your eligibility for tax-deductible interest.
Almost anything you use to do business and obtain an income might qualify you for a tax break. If you used your RV partly or entirely for business, you may be able to claim a few tax deductions.
These are best split into two types: deductions on RVs that were used entirely for business and deductions on RVs that weren't.
Tax breaks for a business-only RV depend on how you used it. If you used an RV as a rented home for someone else entirely, you may be able to deduct expenses related to it as a rented property.
Even if you used it recreationally or for other non-business reasons, plenty of tax breaks are still available, such as deductions for a mobile office. If you used the RV personally but also rented it for other parts of the year, you may be able to deduct common renting costs, such as listing it online, paying insurance, and repairing renter-caused damage.
Remember, before assuming what kind of deductions you can get, consult with a qualified tax advisor.
When you do your taxes, you must pick between the standard deduction, or an itemized deduction. The latter could get you higher RV tax benefits and save more money.
A standard deduction is the default amount that gets removed from the taxes you owe. Standard deductions are an average the government raises slightly every year. There are two types of standard deductions: filing as a single person and filing jointly with others, such as a spouse or family. Most people use the standard deduction to save time and file less paperwork.
If you itemize deductions instead of taking the standard, you list out every expense and add them together when filing your taxes. Someone with a lot of expenses, or many types of expenses, could get a bigger deduction this way.
Whether an itemized deduction would save you money on taxes depends on your expenses. We recommend keeping a log of all your expenses with receipts and other proof, as soon as you first purchase an RV. Not only does it save a tax expert time, but it backs up your story just in case you receive an audit.
You could pay less in taxes thanks to your RV. All you have to do is double-check with tax experts so you have the required paperwork when you file. Contact Alliant Credit Union for all the banking assistance you need to save money on your RV.
Some people use an RV to live the mobile lifestyle of their dreams. For others, it's an exciting new addition to the family, or even the start of a business. Whatever you use an RV for, there are probably ways to save money on taxes that you haven't found. Get all the tax breaks you qualify for and focus on what RVs are all about: adventure!
Want to learn more about RV financing and taxes? Check out these other articles:
While the information provided is based on our understanding of current tax laws, and has been gathered from sources believed to be reliable, it cannot be guaranteed. Federal tax laws are complex and subject to change. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
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