Can I Write Off My RV On My Taxes?
When you think about RVs, you probably think about fun, freedom, and adventure. And the least fun, free, and adventurous thing you can think of is probably taxes. But there is an interesting question here: are RVs tax deductible?
In fact, there are a few ways you can use your RV for tax deductions. If you:
- Bought your RV in the current tax year
- Use your RV as your primary or secondary home
- Use your RV for business purposes
Or if you have any combination of these, you may be able to make some deductions on your taxes. Let’s look at all the different ways this is possible.
Deducting sales tax on your RV
RVs are a very large purchase that can cost tens or even hundreds of thousands of dollars. And like most large purchases, you can deduct the costs of sales tax paid from your taxes.
When you title and register your RV, some states will require you to also pay a tax based on your RV’s value. This is what’s known as an “ad valorem” tax. If you have to pay an ad valorem tax, you can also deduct this from your taxes.
Of course, these are only one-time deductions. You can only take advantage of them in the tax year you buy your RV.
Deducting interest on your RV loan
If you took out a loan on your RV, you may be able to deduct the interest on it.
To do this, your RV will need to qualify as either a primary or secondary home. Then, your RV loan is treated as effectively the mortgage on your home. This qualifies you to deduct the interest that accrues on your RV loan.
Most RVs meet the requirements for a home defined by the IRS. As long as it has sleeping, cooking, and toilet facilities, your RV counts as a home. However, smaller RVs without toilet facilities won’t qualify.
You’ll also need to have a secured loan. That is a loan where your RV is the collateral. If this isn’t the case, you won’t qualify for the deduction.
Deducting RV business expenses
Is your RV tax-deductible when you use them partly or entirely for business? Yes! If you use your RV for business, you might be able to take advantage of various deductions.
RVs used only for business
If you use your RV only for business, and not as a residence or for personal use, you can deduct a wide range of business expenses. For example, renting out your RV, or using it as a mobile office.
Be careful, though. If you use your RV for personal use as well as business, this may disqualify you. So, it’s highly recommended you meet with a tax professional before trying to deduct RV business expenses.
Renting your RV part-time
Do you rent out your RV part-time and use it yourself the rest of the year? You can still qualify to deduct various related expenses such as rental listing fees and insurance costs.
But, you’ll need to be careful when calculating these deductions. You’ll need to calculate what percentage of the time you used your RV for business and for personal use. You’ll use this percentage of your expenses for deductions.
These calculations can get a little complicated. So, it can be a good idea to meet with a tax professional for help.
Should I itemize my taxes?
So, are RVs tax deductible? As we’ve seen, yes, but only if you itemize your deductions.
An itemized deduction is the alternative to the standard deduction, and you can only choose one. The standard deduction is more or less the same amount for everybody. An itemized deduction, meanwhile, lists out all the expenses that you’ll deduct.
In many cases, an itemized deduction can save you money, but it’s not guaranteed. You’ll have to sit down and do the math yourself or meet with a tax professional to be sure.
The standard deduction for 2021 is $12,550 for individuals and $25,100 for married couples. The amount generally goes up every year.
If this is more than your itemized deduction, save yourself the time and effort and go with the standard deduction. Not only will it save you the most money, but the standard deduction also gives you the least amount of paperwork.
So, now you have the answer to the question “are RVs tax-deductible?” In fact, there are lots of ways your RV can save you money on your taxes.
An RV is a big purchase with some big expenses attached. It’s not as fun as a road trip, but deducting those expenses can lead to savings at tax time. And what’s more fun than saving money?
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Jennifer lives with her husband and their two cocker spaniels in a 29′ trailer in Mexico. She is one half of DashboardDrifters.com and the founder of RVSpotDrop, a web service for full time RVers.
Donald N Wright says
I took a home improvement loan, bought the Airstream, and am waiting on the supply chain to resupply before remodeling the home.
You missed one BIG item: you can only deduct a maximum of $10,000.
The ad velorum tax that you mentioned was over $15,000 for us last year. That plus everything else still did not equal the $29,000 standard deduction.