Taxes as a fulltimer

I seemed to get hammered when it came to taxes last year and I am not sure how people handle this.  I work several small job in Indiana and my residence is Indiana (my DL address is my office address at a small college I teach at).

My RV is my home, my office, and my vehicle for work.  Does anyone have experience with how to handle deductions and claiming aspects of this lifestyle? 

Thanks in advance for your thoughts!

When I started out full timing I was working from our RV and my tax accountant told me it was impossible to take any sort of deduction for the RV and related expenses.  You need to consult your tax advisor for specifics applicable to your case.

The rules for deducting a home office are very stringent and it is extra hard to qualify in an RV.  Possible, I guess, but difficult.

As for a work vehicle, it's no different than any other if you drive it as part of your work. Claiming work mileage should be easy; claiming any actual costs would be quite complex because it is more than a vehicle and more than a mobile office .

In other words, you probably need professional advice for such a complex situation.

When I asked my tax adviser about claiming mileage when driving the motorhome to a work location, I was told that since it was my home, no deduction could be taken.  However, I could take mileage on our car when driving between the campground and the customer site.  Since that wasn't very far in that case, I didn't bother with the additional complexity of the deduction and a possible red flag on the return.

The problem with deducting anything as an office, is that it must be DEDICATED space and it's practically impossible to have any square footage in an RV used exclusive for business purposes.


As for mileage, going from you "home" (ie, where the RV is parked) to your work place, is "commuting" and is not deductible. Mileage from where you work to another place you work, is deductible. You need lots of records, all in writing, to prove this.


Unless you make a lot of money and pay a lot of taxes, it's not worth the hassle.


Wendy

I have been full-time RV (almost) for 6 years now. The "almost" part is to comply with the tax laws as my accountant has advised me. I keep a home in Florida and my RV is a 'task specific custom spec'd' unit built on a Freightliner class 8 chassis. I average 300-320 days on the road and the deductions play a significant role in my business.

Oh boy, this could be interesting.  No malice intended.

  As a faithful taxpayer I am happy to support your chosen work and life style....I think.  : What if I had a commute of 200 miles a day (2-way) just going to work, would I be eligible ?

dan680fl said:

I have been full-time RV (almost) for 6 years now. The "almost" part is to comply with the tax laws as my accountant has advised me. I keep a home in Florida and my RV is a 'task specific custom spec'd' unit built on a Freightliner class 8 chassis. I average 300-320 days on the road and the deductions play a significant role in my business.

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Just curious, as an accountant, are you talking about using your RV for business, or using it to travel away from home for work? I believe the OP was asking about living in her RV and driving it back and forth to work. That makes it "transportation" not "travel". One is deductible, the other is not.


Wendy

All these little wrinkles is why you need advice specific to your situation. Combining your home with your mobile office that moves from job to job really complicates things. If you just had a mobile office used exclusively for your business and moved it between job sites, I think it would be a no-brainer on deductions. But saying it's also your home...

Ned said:

When I asked my tax adviser about claiming mileage when driving the motorhome to a work location, I was told that since it was my home, no deduction could be taken. 

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I think this is based on the fact that people who have no fixed address are itinerant and, therefore, can't claim "relocation" to a new position.  But I've never figured out why they wouldn't be entitled to the simple mileage costs associated with "moving" to accept a new position. 

I know from chatting with others on RV forums that there are some RVers who claim the mileage associated with going to a new volunteer or paid position.  It sure doesn't sound unreasonable that if I'm going to travel cross country to take a volunteer position for a non-profit that I at least ought to be able to claim the mileage cost of getting there, even if the allowable cost is the 24 cent/mile "moving deduction" rather than the 56.5 cent/mi business deduction.  As a worst-case fall-back position even the 14 cent/mi charitable deduction is better than nothing.  This year we drove ~2,400 miles to spend 4 months volunteering at a state park.    Considering we will claim no mileage while at the position, I see no reason why I shouldn't claim the cost of getting there.

A number of years ago we had a close friend who was a prosecuting attorney for the Criminal Tax Division of the Justice Dept. in DC.  He went around the country prosecuting people for tax evasion.  He explained to us that as long as you have a reasonable rationale for why you claimed a deduction it is very difficult and nearly impossible for the government to charge you with fraud.  The most likely case is that they would disallow your deduction and charge you interest and underpayment penalties for the tax owed on the income.  From that time on I've always made sure I could explain what I was doing and why, but I've been far less reluctant to claim deductions if I could articulate what I felt were decent reasons.  These days, I figure that IRS has more rewarding people to prosecute than a senior citizen living on a pension and social security.  :

I really appreciate all of the replies!  Rather than answering each individual, here are some points that will help clarify what has been brought up.

I am interested in finding a tax professional that has some experience with fulltiming in an RV.  Rather than going to a chop-shop "over the counter" tax company where unique situations like this probably won't get handled well, I posted in case people had a recommendation regarding someone that has experience with this type of situation.  If people have had any luck here, let me know!


(Gary this next part is not for the explicit hope of gaining tax advice here, just sharing for a richer understanding for those that are interested)

There are 5 places in Indiana that I have work in, everything from adjunct/part-time positions to freelance that is somewhat regular.  This makes up 80% of my work.  The other 20% involves travel elsewhere- everything from other places in Indiana to other states.  Paying rent made absolutely no sense to me as I would be living out of a suitcase and hardly ever home, so instead I thought it would be more fitting to live out of a 23' suitcase and always be at home. 

Even if couch-surfing and hotels sounded appealing, most of my work involves playing (and therefore practicing) a bass trombone regularly.  Believe me, it's not the type of thing you can really do in a hotel or a friend's living room...  The RV also provides a studio space to practice wherever I go, which has been fabulous.  It has been great thus far, except for explaining it to the government in a way that they can fit it into a category "on the sheet".

Again, thanks for all of your insight.  I am thankful for such a giving community! 

Safe travels all!

Jason

Jason,

Off topic, I know. Just curious how your splendid remodel is holding up.

Stan

You should be able to take a travel deduction from your residence (wherever you elect that spot to be). Check out IRS Pub 463, boring reading but helpful.

Jason

Wendy and Gary have pretty much hit it on the head. To start with, to deduct the RV, only the portion that is dedicated and exclusive use for business purposes is deductible. Travel from your tax home to a job site is usually considered commuting expenses and not deductible. However, the IRS states in topic 511:
"You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away. "

These definitions can be very subjective and subject to challenge. Often heresay results regarding tax deductions do not always reflect the IRS audit that occurs 3 years after filing the return.

If your coach was modified to serve as a mobile office, the results could be different. If your coach can qualify as a second home, you can always deduct the loan interest and personal property taxes.

As recommended, your best bet is to meet with a qualified tax professional and lay out your travel itineraries to see if they could possibly generate any deductions.

Well, here is a MH that can be written off on their taxes.  They, husband and wife team, pull a trailer, drop it off to be unloaded, then when they have the trailer ready, they pick it up and take it to the next delivery.  So they pull freight with it, and I guess you could call this a super sleeper, but it looks like a great MH as well.  I've seen the inside of this MH, as well as it hooked to a trailer, it definitely looks like it is only good for delivering trade shows.