Owners of towable RVs—including travel trailers and fifth wheels—can no longer write off the interest on their RV loan as a tax deduction.
Owners of fifth wheels and travel trailers can no longer write off their RV loan interest. Photo via Phillip Stewart
In December 2017, the House passed a new tax reform bill that will benefit the growing RV industry. However, the bill modified the definition of motor vehicle by taking out specific references to automobiles, trucks, RVs, and motorcycles. These were replaced with the phrase “any self-propelled vehicle designed for transporting persons or property on a public street, highway, or road,” which technically removed towable RVs from the definition.
The new bill allows deduction of interest on mortgages up to $750,000 for first and second homes, which can include motorized RVs. According to the Recreation Vehicle Industry Association (RVIA), the new bill will also:
- Cut the top corporate tax rate to 21%, beginning with the 2018 tax year.
- Allow all floorplan financing interest charges on motorhomes to continue to be a deductible expense (floorplan interest on towables will be subject to a 30% limitation on interest expenses based on earnings before interest and taxes).
- Lower individual tax bills for 95% of all filers, leaving more money in taxpayers’ hands.
- Lower the tax rates to 20% for qualified business income of certain small businesses that pass on profits to owners and are taxed at individual tax rates.
RVIA said they will be working with the House Ways and Means Committee and the Senate Finance Committee to correct the definition in a technical corrections bill. Until then, if you’re thinking about buying a towable RV, keep in mind you won’t be able to deduct the interest on your loan. If you have a fifth wheel or travel trailer and already deduct the interest on your loan, contact an accountant to learn more about how this new law will affect you.
Source: Recreation Vehicle Industry Association: Tax Reform Bill Will Benefit The RV Industry
The loss of the tax deduction won’t affect too many people. Unless you have a VERY High Interest Loan and pay allot of interest it won’t affect most people. Or unless you have allot of itemized deductions, this change in the Tax Laws won’t affect too many people. This is NOT a BIG DEAL!
I travel for work and itemize, so yes, this will impact me along with many others!!!!!!!!
And how many here are thinking THIS IS WHAT I VOTED FOR!! No, this should not have to be a thought. We were sold a bill of goods on this tax scam, and this is only one of HUNDREDS of ways it impacts us. Rammed thru, no oversite, no vetting if you will— How many of us BEGGED our Reps- Dem and Rep— to NOT pass this??? It will also affect our SOCIAL SECURITY- and MEDICARE— Cause how ELSE is Ryan gonna pay the minimum towards giving yuge tax breaks to business pass thrus and corporations and the 1%? So please- remember- we can FIX THIS— Vote in our best interests in November, your life may depend on it.
Get a towel to cry on. Everyone yes everyone got some benefit from the tax bill, unless your stinking rich and in that case you might have stayed the same. Look at the deduction increase for single and married it doubled yes doubled that in its self is a tax break for everyone!
This article is false! In fact, I personally wrote to the RVIA and got in touch with the government representative, Mr. Jay Landers. He specifically states that the deduction for RVs, including towables, is allowed up to $750,000. They are treated as second home mortgages.
A self propelled vehicle as it states would not be a towable RV. Therefore the new bill would not change any deduction unless you have a class C or A. This is my understanding of self propelled.
Some folks may not think it is a big deal but I would just as soon have the $1000/yr. or even $100/yr. in my pocket as giving to the government to waste.
The money lost from this deduction doesn’t go to the government, it goes to the top 1%, who control the GOP that wrote this tax bill.
LOL who do you think will use it more wisely? Government consumes money, but does not produce wealth.. It is only the private sector that produces wealth.
How do you not take something and then give it to someone else?
that top 1% includes the majority of both democrats and republicans, not just republicans. Nancy Pelosi, one of the loud whiners is filthy rich.
Do you know that for a fact or just shooting from the hip?.
Want to live where the government doesn’t take your money? Move to Somalia. They don’t have a functioning government. They also don’t have water that’s safe to drink, functioning police departments, schools, roads, fire departments, health departments (to ensure that the food you buy won’t kill you), building codes to ensure that the structure you might be standing in won’t collapse and kill you, a military to keep warlords from kidnapping or killing you. The list goes on and on. Stop whining about paying your fair share.
THANK YOU!!!! EXACTLY. And for those of us getting Social Security, or Medicare, those will be gutted as a hand out to those same 1%’er’s. Sad. We can fix this— Vote as if your life depended on it, because it just might.
Yea you un informed people put Pelosi back in control and, already they are jamming up the country and looking for more TAXES.
BOY YOU SURE CUT OFF YOUR NOSE TO SPITE YOU FACE!
Concur with Jeff, the higher standard deduction will also help offset. We need to make our tax code simpler and remove a lot of the current deductions.
I’m the owner of a mid-sized Class A and considering stepping up to something larger in the future.
It seems that one of the negative aspects of NEW vehicle ownership is the high “entry” price, especially in states where sales tax is charged and the individual also pays substantial property taxes. Under the latest tax reform, a cap on the sales tax deduction means that some portion of higher end recreation vehicles may go unused.
I would hope that recreation industry vehicle manufacturers would also consider lobbying for a “carry over” provision so that any “un-used” sales tax could be carried over into subsequent years rather than lost altogether.
Wrong fellows. The larger standard deduction is gone in 5 years. Your tax preparation fee as a deduction is gone now too. Have a casualty loss when you RV is damaged? Well no longer can you take a deduction on your personal tax return. Ask a tax pro, they will tell you how screwed we will be.
you can thank the minority party for making it temporary…
I agree, however every tax change is temporary until the next time the party in charge has a reason to change it.
“you can thank the minority party for making it temporary…”
Why be so dishonest? The minority party has no power and had no input into this tax bill, of and by the GOP and for the top 1%.
Actually in order to make it permanent 60 votes were needed the GOP has 53(?)…Look it up,,,same reason DACA became a temporary EO, not enough votes to support it…politics is played by both sides…
HA HA HA HA HA HA HA HA HA HA get the message!
The minority had no say in the Tax cut for the Rich
Actually in order to make it permanent 60 votes were needed the GOP has 53(?)…Look it up,,,same reason DACA became a temporary EO, not enough votes to support it…politics is played by both sides…
Thanks, GOP!
Clear thinking causes one to see that lower taxes is good, higher taxes bad. Simple.
The tax code is set up to stimulate or shrink the economy. Higher tax causes shrinkage. 1st grade math.
it favors 95% of Americans including the rich…. people tend to read and retain what they want not what is written.
So I guess a slide in pick up Camper will still be deductible. Right?
So the middle income “joe plumber” that can only afford a $10k travel trailer is screwed while the person that can afford the $300k diesel pusher gets a tax break?
A lot of us – but not all are retired folks that should be past the point in our life where we are financing our toys.
Mine is not a toy. I live in and travel in my 5th wheel. This is my 2nd home and I’ve been screwed. Yes, I had to finance. I never had a 6 figure income so a $300,000 motor home would have still been out of my reach. I’m just an average person who made an average paycheck. Maybe if I hadn’t become disabled and needed to use my savings during my 2 year wait I would have had more money down. But life doesn’t always deal you a higher hand or high paying job. None of this benefits me. I’m not in the high class rich category.
A lot of folks do fall under the “but not all” side of my statement. Anyone that can afford a second home is not in too bad of shape.
Thanks for posting this, Dot. We travel in a small teardrop and know many fulltime Rvers who, like us, will be screwed by this tax bill. It favors the rich in almost every aspect and screws those of us who work for a living and have a “mortgage” on our camper. Why favor the high end RVs over mine and Dots? Disgusting.
I totally agree with Dot. Life isn’t always fair for everyone. Assuming that once a person reaches retirement age they should be financially in a position to no longer need to finance an RV is being totally naïve and living in a fantasy.
refinance the home and payoff the 5th wheel and you are then taking the interest off the 5th. but it all depends if you have a home that can be refinanced and what the interest on the loan in the firstplace
With interest rates so low I’ll keep my money to pay me interest. and dividends And make the payment with that.
What does this mean for the people that have a paid off fifth wheel and live in it full time?
I’m glad ya’ll can afford those toys, but some of us have to use them for temporary residence when we travel to work. Yea, wish I could afford the Lear jet, then I could write off the travel expense.
…..and they wonder why people go on welfare!
There are many full-timers who will be impacted by this; just because you don’t feel it’s a big deal doesn’t make it any less of an issue.
Amen Troy, It may not be hurting me or you but it could be hurting my fellow camping trailer Americans.
The change should not impact full timers as your RV is your primary home and not a second home.
It doesn’t matter if its you only home you can’t take off the interest. Its only for motorized homes that you can take it off. Mine is my main home, the sticks andbricks is now a rental because the worth has not come up far enough in our area to sell it. The rent pays my payment and remaining mortgage. Just because I have both doesn’t mean I’m well off. Because of my disability living in my 5er is much easier for me physically. If the market comes up in out area we will be happy to sell the house. We don’t live in a big urban area, just a small town. So I’m screwed.
Those 3 steps up and then 3 steps down are getting to my knees.
This is going to be hilarious to see all the stressed out comments about taxes.
I really don’t think it’s hilarious that a group of old rich guys voted against the interests of 99% of the country, to a 80% DISAPPROVAL rate on a Bill no one but them got to see, amend, or have ANY input on. That also will cause gutting of Social Security and Medicare and other programs WE PAID INTO OUR WHOLE WORKING LIVES to placate their donors. What exactly is so funny about this?
ANGER MANAGEMENT might be the answer for you!
The doubling of the standard deduction will offset the lack of deductions for most lower to middle income taxpayers and prove to still be beneficial to most, but of course, not all.
I seriously doubt this will affect all but a few people BUT if it affects you the easiest way to get around it is to just finance your rv by taking a home equity loan on your primary home.
That is still deductible.
If you don’t have enough equity in your primary home perhaps you shouldn’t buy the rv….
Actually, this is not true. Home Equity loans are no longer deductible under the new tax law.
https://www.forbes.com/sites/nickclements/2017/12/28/borrowers-lose-home-equity-tax-deduction/#4e7641d56cdf
Man chill out! U will die of a stroke worrying about this and then you won’t need to worry. But I did have a giggle about a year drop towable that is towed by a vehical that cost what 15 times the cost of a tear drop
What about truck bed campers, once attached to the self propelled vehicle?
I know many traveling medical professionals and construction workers who live in their fifth wheels. This is going to screw them big time. They itemize their travel and living expenses. Now all that is gone. I guess if it only affects “some” it makes it right or fair……NOT!!!!
Remember, as you do your taxes, this was passed in 2017, and thus affects your 2018 return next year. The tax preparation you are doing now for 2017 is not affected.
Dudes, why are you buying stuff you can’t afford in the first place ? I don’t understand, my mind is blown.
What you COULD “afford” using the pre- 2018 tax rules is NOT the same as what will be affected BY those rules. If you had it all worked out to use “x” deduction to make your finances work, or other tax related things worked out, and they no longer DO work out BECAUSE of the tax scam— whose fault is THAT? Not ours! We didn’t get to see or vote on it, and neither did HALF of Congress! My two Democrat Senators and my Rep ( Republican and LyinRyans lil Colbert word) voted NO— does that do ME any good? I will be screwed, probably lose health care, as a permanently disabled double amputee this affects me A LOT. As it does my husband. Our zip code house is being care taken by family, so no worries, but we are still responsible for taxes in a high tax state, in an area where houses are not moving, even much nicer ones than our modest single floor. This Tax Scam affects us ALL, while the Waltons and Drumpf reap MILLIONS we pay for it.
kai bot – Agree. Whoa is me, the sky is falling, I can’t deduct the interest on my 2nd home….gosh, just listen to me complain how life is not fair in that my 2nd home interest deduction me be affected. All I can say is Get Real – and go tell the homeless dude down the street how life is not fair….
Just Saying
This article wasn’t about fairness or personal finance The article was about how non-motorized RVs were left out of the language of the new bill. Personally, I think the POTUS should take ALL non-homestead mortgage interest deductions away including travel trailers, motorhomes, mountain cabins, Disney World condos and vacation homes – but that wasn’t the point of the article.
JS, I guess we flunked the test in regards to identifying the main idea of the essay – hope no one is offended by our lack of understanding but personally, i’m okay with no debt and living within my means while not having to worry about how old or new tax laws are going to affect something i can’t afford in the first place.. Pay as you go has always worked for me. Good luck everyone, we’re going to need it if things keep going the way they are.
We have no debt, own a 93 motorhome we paid cash for, and are living in full time, no outside work. Our family is looking after our ZIP Code home, which we also paid cash for 29 years ago, after we sold the only other house we owned, well, we and the bank owned it! Made enough after re- doing to sell for enough to pay cash for the house we own now. We pay cash for everything via debit account. We were “forcibly” retired after my husbands employer fired 3500 people in one day. Thanks to 401(k) and Social Security we can do this, and remove my breathing challenged husband does not have to end up hospitalized in the Minus 25 degree weather at our stick n bricks! We are also shopping for another place to locate the rest of our family, who want OUT of the snow and cold.
Why anyone would feel the need to be snotty about something that deeply could affect many peoples lives is beyond me. We had ZERO say in this tax bill, no matter who we called, wrote, protested at, tweeted etc. No input from half of Congress was allowed. Just sops thrown to big money donors, vs the ordinary Americans affected.
Sounds like you’ve been successful in life, whats the problem with paying a little tax?’
How does the irs know if you have motor home or fifth wheel?
Beth, The IRS knows everything about everyone – Don’t mess with the IRS !
So, the “technical language” of the bill is going to be addressed so that this deduction will come back. Anyone know if, or when, that MIGHT happen?
KellyAnne Conway Trump,s “advisor”. Said Trump is the Ultimate Con man when she was Lyin Ted’s campaign manager. Trump said, if he ever ran for US president he would run as a republican because people who vote republican are more “gullible and fooled easy” because they can be easily manipulated. Trump’s billionaire tax scam includes big deductions for private Jets, build more useless golf courses and does not tax “pass thru interest” as promised in Trump’s Wall Street Bashing”, lie after lie. Google YouTube for these video’s to see and hear the Lies by these people in person ! Truth hurts. By the way it’s 1/10 of one per cent who benefitted from Trump republican tax scam and add 2 Trillion more to your children/grandkids national debt borrowing to give billionaires/millionaires more play money. Makes no sense.
Thank you! I so wish this admin had not made many into enemies, and declared WAR on any one who does no uphold them! And why we are being bashed for daring to say— This affects MY LIFE!! We scrimped and saved and put off other things to do this, and we were NOT counting on “deductions” to fund this, but for many this WAS a factor. They had no say in what was traded away. And this “Dear leader should do—” is disturbing, he is not ( yet) a dictator!!! Sad.
No American president has been scandal free. Do Americans actually believe that there is a perfect person out there with no prior history and is also up to the job of being president ? Yeah, right ! Criticisms of either the current president or the 2016 democratic candidate by anyone quantify the fact that Americans are clueless about their own history. Give me a break !
Obama was SCANDAL FREE. Not only he himself, but his wife, his children, his mother in law and other relatives. And he was— by certain types of people— despised. Why? His admin also was SCANDAL FREE. No one was charged, jailed, or had any other legal investigations. I don’t care if you like him or not, please don’t lie!!!
You Americans make me laugh. Up here in Canada the interest on any loan is NOT tax deductable and hasn’t been for as many years as I can remember.