I had a client that owned his own business and he wanted to buy an RV so he could go on vacation with his family. He wanted to know if he could write off the cost of the RV as a business expense if he put a sign about his business on the RV while he traveled around the country. The answer to that is a flat out no. The IRS is all over that idea and they don’t like it.
But, it may be possible to write of an RV as a business expense if you really do use the RV for business. For example, let’s say you have clients in another city that you regularly visit. When you are visiting those clients, you normally need to spend time in a hotel. So, maybe the RV might be a good choice for you. You could travel to the location in the RV and sleep in the RV instead of a hotel.
So I said you might be able to claim it—this isn’t a rock solid deduction. You’ve got to be able to prove it’s truly a business expense. There are a couple of things you must absolutely do.
- You must have a log of all of your miles you drive in the RV. Not one of those, oh I drove some business miles and write it down later—a very serious, a very real mileage log. Over 50% of the miles you drive must be used for business to try to take the RV as a deduction.
- You must also keep a log of all the nights that you sleep in the RV. Same rule—over 50% of your nights sleeping in the RV must be for business.
- You must also keep your business trips shorter than 30 days so that the RV counts as transient lodging. That means I can’t buy an RV and drive down to Florida for the entire tax season and spend my summers in Missouri. (Well I could, but I wouldn’t be able to write off the RV as a business expense.)
And the main point you must absolutely keep in mind—do not use the RV for entertainment. No business parties on the RV. The IRS is pretty strict about that. Entertainment facilities are not tax deductible (things like swimming pools, hunting lodges, and bowling alleys.) Make sure that your RV is for lodging or travel—not for entertainment.
So although my client with the sign idea couldn’t claim the RV as a business expense just for putting a sign on it, if he chose to drive the RV on his business trips and stayed in the RV overnight instead of a hotel—he might be able to claim part of the RV expenses for his business, as long as his business use was more than his personal use.
Remember, trying to claim an RV as a business deduction is kind of “out there” and highly likely to be audited by the IRS. You’re going to want to have really good documentation and a good accountant to back you up on this one.
Hi Stacy,
So you’ve got a business that’s being built around your campers, that’s a pretty cool idea. So you’re looking at deductible expenses – although with the campers, you may need to capitalize those expenses. I know that everybody wants to claim Section 179 deductions and write everything off all in the first year – but remember – if you discontinue the business, you’re subject to recapturing that write-off so you really want to think about that.
But here’s something else for you to think about. You’re going to be renting your campers out on a daily or weekly basis. So we’re not talking about “rent” income on a Schedule E, we’re talking about business income on a Schedule C – which is subject to self employment taxes.
I think you’ve got a great business idea, but I really think you should meet up with a tax professional and do a little planning to make sure you’re dotting those i’s and crossing those t’s and not getting too surprised come tax time.
if your office is in your home.
your first trip of the day is 20 steps.
All other trips REALTED TO BUSINESS
like going to a 1099 work site
IS TAX DEDUCTABLE TRAVEL.
Hi Jan,
We bought two towable campers with the sole purpose to rent out. With the camp and van life movement that’s been gaining in popularity, we thought we’d join in by offering campers one a daily, weekly or monthly basis. Can these be tax deductible as they would be solely for rental income? We also plan to rent out camping gear such as tables and chairs, lanterns, sleeping bags, tents, etc. as optional add on gear as a package. Is that all deductible?
Hi Ann,
First – what an awesome project! My husband and brother-in-law have this fantasy tavern idea that will probably never happen, so to see someone actually doing it is pretty cool.
Anyway, about the RV. I’m having a little trouble here deducting it as a business expense, maybe it’s because I’m missing some information, but let me explain my thinking.
1. Where does he live? Does he have another home? In order to the RV to be used as a business travel expense, he has to be far enough away from home that he can’t go home at night.
2. If he’s setting up a business that’s too far away for him to go home – why is he doing that? That doesn’t make sense to me. Unless he’s going to have someone else running, managing the tavern after it’s built.
3. I hear the security argument, but I’m not buying it. Not as a business deduction.
I think the best he could hope for is to claim the RV as his main home – or a second home – but the business portion would be stretching it in my book.
I have a friend that is buying commercial property w. a building on it that will be made into
a tavern. He is buying an RV to park next to it so he can sleep in it while painting it and
getting it ready, then will have to stay in the RV while he is running the business. He is setting up
a C Corporation for the real estate. He also has to provide security for the business
by being there when it is closed at night so it doesn’t get broken into.
Can he deduct the whole cost of the RV and depreciate it,
or a percentage of it? Would repairs on the RV be a deductible expense?
Hi Beth,
As I understand the new tax law, a small business owner may still deduct things like mileage and business travel – it’s only the employee who cannot claim the employee business expenses of which travel is a big part of that.
So, it all comes down to how much of your travel is for business. Then you should deduct the applicable percentage. Is it all for business? Maybe – but, if you’re older, and traveling from NY to FL for the winter – you’re going to have a more difficult time proving that all of that is for business and not for being a snowbird.
So, I’m going to sound like a broken record but – document, document, document. Every show – how long is the show, how much time did you need to be in that city for the show? Be ready to prove it. Don’t get greedy and try to write of days that are for vacation and you should be fine. And don’t try to claim a Sectiion 179 and write off the whole thing at once. Depreciate the percentage of use of the Minnie over 5 years.
Hi Marc, Hmmmm, that’s a tough one. Right now, since you have a home that you’re renting and live in, that would be your main home and your tax home because you run the business from there, even though you travel. So it sounds to me like right now, all of your RV expenses are business expenses.
But, you want to sell the mail home. Now – it’s different. Because the RV is no longer just for your business, it’s your main home also. And where will your tax home be? See what I mean? Before, if you were traveling in the RV – well it’s all business because you’re away from home. Now – if the RV is the home – you’re not away from home anymore. It makes it much tougher. You see, without having your home, you become in “itinerant” worker. And the whole RV deduction thing is for travel away from home. But if you have no tax home to travel from – oops, you lose the deduction.
I think you need to have someplace to be your tax home. Set up your business there. Have a reason to have to go back there for business. Pay state income taxes there, file your LLC papers there, etc. With no tax home, you lose the travel deduction. So even if you quit renting the place where your current home is, you need someplace to call your place of business.
Hi Miguel,
I think that your client would have a good case for using the fifth wheel as a business expense. I’m assuming he’s getting paid as a 1099 and not as a W2 employee. The employee business expense deduction appears to be going away for 2018.
I will be purchasing a used Minnie Winnie soon. I will use it to travel to antique shows and sell my antiques and collectibles. I have a DBA and pay taxes on my small business and have done this for years. What if anything can I expect to claim/ deduct in regards to the RV? I understand there are new tax laws and my traveling would be from NY to FL…entire east coast. Thanks in advance!
Hi Julie,
I think that since it is a mobile massage therapy office, that you should be able to claim the full $10,000 for depreciation. It doesn’t sound like you can even use it for personal use. Sounds like an awesome idea!
I have an online eBay business where part time I had 120k in sales my first year. I was thinking about leaving my full time job, selling my home for an RV. I drive around to stores and buy deep discount items and resell them online. I put on 20k business miles around a tristate area and if I got an rv and left my full time position I could really take it to the next level. I would be on the road long periods at a time and hauling my fuel efficient car to run to stores with the rv parked in a central location. Probably put on over 1000 miles of week for business and under 50 miles for pleasure. All business and all hard work. It would be my mobile office. Thoughts?
@ Lisa,
So there’s goes the mortgage interest write off that I just mentioned.
Hi Lisa,
He might not be able to claim it at all. Just letting you know that up front. He definitely won’t be able to claim it in 2018 – any possibility of a deduction for him went away with the new tax law. But for 2017 – let’s check that out.
First – you mentioned that he uses the RV when he is in the city working. Is his regular job in the city? If yes, then that’s just where his job is and there’s no deduction for that. But let’s say his regular job is out in the county, but sometimes he works in the city – then it’s a temporary work location – then he could deduct the RV costs of being at the park, etc. See the difference.
You can only deduct the RV expenses for “temporary job locations”. If he just has a really long commute from his home to his job – that’s not a temporary job location and therefore the RV would not be a deduction. He could only write of the mortgage interest of the RV as a second home.
Hi Jan,
Document, document, document! I get it 🙂
I’ve started a mobile drone business. I’m using quadcopters to provide all sorts of photos / videos (realty shots is an example).
I’m also working remotely full time as a computer coder. Right now I have a 50/50 split with the work (50% remote coding and 50% videography work). The goal is to go 100% videography work as demand increases. I would in a travel trailer drive to a populated area and adevertise locally for my services. I would stay at a camp ground for the duration of the advertisement and produce weekly demo reels to bolster my online presence. At same time I’d be performing job functions as a remote coder.
Please then how much of the tow vehicle, travel trailer purchase and ongoing expenses (campground fees, fuel, maintenance) can I expense? I am currently renting a home and will only have the travel trailer in the future.
Thank you,
Christopher
Hello Jan,
I have a client who travels across the State referring games. He wanted to know if he could deduct the cost of a fifth wheel to sleep in on weekend events (Friday to Sunday games). He would usually stay in a cheap motel otherwise. He does plan to use the 5th wheel in the summer for personal purposes, he does not owns a home but rents an apartment.
Thank you,
Miguel
Hi Jan,
I purchased a used RV last summer for $4000 and spent 5 months and $6000 on customizing, repairs, tires, shocks, etc. to turn it into a mobile massage therapy office. I starting using it 3 months ago in November and it is solely for business. Can I depreciate the full $10,000 value (initial cost + improvements) using the MACRS method? Other suggestions?