Full Time RV living as a S Corp/1099 employee

[OpenRoadsAhead]

First post here so thanks for any and all opinions/comments!

Long story short, I have the opportunity to sell my home and buy an RV to go travel full time while working in a virtual job. Timeframe is within the next 4-8 months. My employer is very open to the idea as we have clients nationally that need our attention, so I can plan my travel routes around our clients/needs. I have a few connections with good accountants (past employment) and have already begun opening discussions with them about how to arrange this to maximize expenses, taxes, income, etc

I have a meeting lined up on 10/25 to discuss more in depth, but thus far I have spoken to my FL accountant who suggested establishing a corporation (most likely S Corp) with a FL address and then approach my employer to discuss becoming a 1099 employee paid to my corporation.

My main questions and interest with this post center around others who may have done this and have some experience in the process as far as things to consider. Please feel free to comment and share if you have been in a similar situation or know others who may have done something like this.

 

[creativepart]

I think you mean becoming a paid private consultant to work on a contract basis - not a 1099 "employee." You incorporate and work out a contract with your employer to pay you on a contractual basis for your efforts on his behalf.

That's all good but, you need to figure out a realistic amount to charge that encompasses:
1. Travel costs, fuel, insurance, etc
2. Maintenance, depreciation, wear and tear, repairs of the RV
3. Health Insurance costs as a non-employee contractor will be much higher than you think
4. Cost for computers, programs, internet access on the road in your RV
5. Your hourly rate or better yet, your cost per client visit and all of the overhead to provide the service
6. Don't forget withholding taxes and accounting for your "corporation" will take additional funds

When you figure this all out the amount you need per month or per work day or per client visit may be a shockingly high amount of money. Price this too low and you will be sorry and resent every day on this arrangement. Price it too high and your boss may never go along with it or see the value at that cost.

I'm retired now but I was self-employed for 30+ years (S-Corp). Running a business, which is what you'd be doing is a great thing, but it's a totally different mindset from being an employee. There is greater risk but also the potential for greater reward.

PS. Don't forget you'll want to have extra money to set aside for your eventual retirement, too.

 

[HueyPilotVN]

I did this for many years as a consultant. It was so much more efficient than Planes, Hotels and Rental cars.

The most positive aspect was the ability to have all the reference manuals, computers, plotters and other tools as well as a comfortable work and living space.

 

[donn]

If your basically retired and doing this as a supplement the only issue I see is the crazy low amount of money you can make before having to give back social security. If your not collecting that yet no problem. If this is your only source of income. Your going to need a lot of money on each job to carry you through the lean times and still buy gas, pay for parking etc.

 

[Laura & Charles]

We started full timing in June, 2016 and both work full time office jobs M-F. We rented our house the first year just to make sure it was something we wanted to continue. Sold the house in August, 2017. Creativepart makes an excellent list of things to consider. I would emphasize his second point: budget a lot for maintenance and repair. If your itinerary is completely dictated by work demands and you have to north in winter, a large budget for propane will be required, too.

 

[jackiemac]

Firstly Welcome to the Forum.

Secondly, does your job require a good Wi-Fi connection? If so you will need to consider the best way of getting this as it can be very sketchy even in established campgrounds. There are several threads about it if you use the Search function. Good luck.

 

[Gary RV_Wizard]

Sound advice from creativepart! But those concerns aside, what you plan is very reasonable.

There are some nuisance wrinkles in fulltime RV travel, thngs that are simple when you have a fixed home can get annoyingly complex when you no longer have that. Some examples include Internet and tv access, insurance and RV financing when you have no fixed address, voting registration, driver license and vehicle titles, state income taxes when you earn money in various places, to name a few. The Chapter S corporation to own the RV, receive your contract funds and pay your salary avoids some of those things, but comes with the concerns that creativepart raised. All solvable with careful planning.

 

[Kirk]

There are 2 things that I would ask you to consider carefully. First is health care insurance which done on your own can be very expensive so make sure that you know what to expect when you loose your employee benefits. The second issue to look at closely is your retirement plan. That can be a critical issue as you get older so be sure you know what will happen to your present benefit and that you have some kind of plan to replace it.

I wonder if you have any RV experience as you move forward with this plan? If you do not, feel free to ask for help and advice as there is a great deal of experience among the folks here.

 

[JudyJB]

Not only will you need a good internet connection, but depending on your job, you may need a lot of bandwidth for Zoom meetings and downloads/uploads. Most "unlimited" plans you can buy today are not going to really be unlimited, as they throttle your speed after so many gigs per month. Make sure you know how much you need and whether that is doable under your unlimited cell service plans.

Also, as a contractor, you will need backup equipment. I taught online college classes half-time for many years while living on the road. One year, my hard drive died in a campground in Okracoke in the Outer Banks, so I had to "teach" for one week using my cell phone and there was no way I could grade papers on that!! I ended up taking a ferry and driving 150 miles to Virginia Beach, finding a Best Buy, and buying a backup laptop. I also learned to have TWO mobile hotspots in case one died and also because I needed the gigs from two lines. And don't forget to get an external hard drive to keep your data backed up. I keep one in my motorhome and switch it out periodically with one at my son's house in case it and my laptop are destroyed in an accident!!

My point is that when you work as a contractor, you won't have that corporate IT office to provide equipment and help you solve technical problems, so you need extra equipment and the software to go with it. It is certainly doable, but a company will not be happy if you cannot get access to things because of technical issues, so you have to plan ahead.

 

[Ex-Calif]

First let's talk about personal taxes.

I retired in May from Ohio so I have recent experience. I also managed a field team for 30 years. Our company has W2 employees in many states with our headquarters in Ohio.

You need to establish a tax home where you will need to meet a bona fide residence test. That is an address that you claim to occupy more than 50% of a year. Ohio does not want to give up their collecting taxes.

What I did was move to Florida in January and worked in my RV until retirement. I joined my niece on her house lease in Cocoa Beach and got driver's license, registered to vote, registered my cars etc. Florida has no state tax and my employer simply had me WFH at my Cocoa Beach address.

For 1099 employees it is basically the same thing. We sometimes hire 1099's in states other than Ohio.

In regards to an S-corp - You probably have to establish residency in FL to start a business here (My son and I started an LLC for other purposes but there were no issues as I was already a resident). The second barrier is whether your company has any barriers to hiring contract companies and outside corporations. The contract would look much different. It would basically be a term sheet for labor, expenses etc.

The benefits issues are also important. 1099 wages need to be at least 30% higher than W2 wages as you are responsible for benefits as well as SS and unemployment payments.

The easiest thing to do is, if you company is agreeable, stay a W2 employee with a permanent residence in your new tax state, once you have established residency.

BTW - Not a tax lawyer or labor lawyer.

 

[Hvactech]

OP, when you say " virtual job " do you mean all contact with client will be over the Internet with you at a remote location. If this is the case how will you justify travel expenses etc with IRS being you don't have to be at clients location. Home office expense yes , but that's a very slippery slope per IRS rules on the office space last time I was up to speed on this.
I am not a CPA but was president of 2 s-corps for 31 yrs before we sold both business & retired. The no SSI/selfemployment tax on the passive income is about the only advantage as the liability protection just isn't there if your doing the actual work with the client. Audits are no fun & we survived 2 with no problems and believe me when I say we pushed the grey area on deductions until they looked almost black.

 

[Rob&Deryl]

We have SSDs for disks as they are more vibration resistant than spinning media. We have a small Synology NAS as file server set up with Raid and also storage for backing up our Macs (using time machine). I use the tv in the living room as the display for my Mac Mini through an HDMI switch. We get internet mostly through a Peplink cellular router. We have a T-mobile and a Verizon SIM card installed in case no service from one or the other. Also, between the 2 we get enough gigs.

 

[OpenRoadsAhead]

I think you mean becoming a paid private consultant to work on a contract basis - not a 1099 "employee." You incorporate and work out a contract with your employer to pay you on a contractual basis for your efforts on his behalf.

That's all good but, you need to figure out a realistic amount to charge that encompasses:
1. Travel costs, fuel, insurance, etc
2. Maintenance, depreciation, wear and tear, repairs of the RV
3. Health Insurance costs as a non-employee contractor will be much higher than you think
4. Cost for computers, programs, internet access on the road in your RV
5. Your hourly rate or better yet, your cost per client visit and all of the overhead to provide the service
6. Don't forget withholding taxes and accounting for your "corporation" will take additional funds

When you figure this all out the amount you need per month or per work day or per client visit may be a shockingly high amount of money. Price this too low and you will be sorry and resent every day on this arrangement. Price it too high and your boss may never go along with it or see the value at that cost.

I'm retired now but I was self-employed for 30+ years (S-Corp). Running a business, which is what you'd be doing is a great thing, but it's a totally different mindset from being an employee. There is greater risk but also the potential for greater reward.

PS. Don't forget you'll want to have extra money to set aside for your eventual retirement, too.

Great things to consider and I have thought about some of them already, was just trying to keep my ask short. Retirement is honestly all taken care of so not a worry about that. And I have the option to stay on as a full time employee and not go the corporation route, just trying to weigh my options and consider all angles to doing this.

 

[OpenRoadsAhead]

I did this for many years as a consultant. It was so much more efficient than Planes, Hotels and Rental cars.

The most positive aspect was the ability to have all the reference manuals, computers, plotters and other tools as well as a comfortable work and living space.

I'm mainly considering it for the lifestyle change to be honest as you eluded to. I have wanted to live/travel in this arrangement for a while now and having a virtual work from home job now that would support it has moved this life plan ahead for me.

 

[OpenRoadsAhead]

If your basically retired and doing this as a supplement the only issue I see is the crazy low amount of money you can make before having to give back social security. If your not collecting that yet no problem. If this is your only source of income. Your going to need a lot of money on each job to carry you through the lean times and still buy gas, pay for parking etc.

Not doing it as a supplement or collecting any other forms of income, only 43 years old. Looking at this as a lifestyle change to be more happy and free. There would be no lean times especially if I stayed on full time employment instead of the corporation route. And selling my house/buying an RV would be a net $200k increase in the bank which I figured would be plenty sufficient for a year or two of doing this while still earning my same living through being employed.

 

[OpenRoadsAhead]

We started full timing in June, 2016 and both work full time office jobs M-F. We rented our house the first year just to make sure it was something we wanted to continue. Sold the house in August, 2017. Creativepart makes an excellent list of things to consider. I would emphasize his second point: budget a lot for maintenance and repair. If your itinerary is completely dictated by work demands and you have to north in winter, a large budget for propane will be required, too.

I was planning on selling my house initially and using the proceeds to fund the RV and have cash reserves to go mobile. I would have to discuss the itinerary more with my employer, but they are very open to that discussion. Just trying to figure out how I want to approach the situation before having that conversation.

 

[OpenRoadsAhead]

There are 2 things that I would ask you to consider carefully. First is health care insurance which done on your own can be very expensive so make sure that you know what to expect when you loose your employee benefits. The second issue to look at closely is your retirement plan. That can be a critical issue as you get older so be sure you know what will happen to your present benefit and that you have some kind of plan to replace it.

I wonder if you have any RV experience as you move forward with this plan? If you do not, feel free to ask for help and advice as there is a great deal of experience among the folks here.

Retirement is thankfully not a problem for me. Health insurance I know would be going from full time employment to 1099, and I have that on my list to research options. I do not have any RV experience but I don't forsee that being an issue as I'm mechanically inclined and don't have any fear in learning.

 

[OpenRoadsAhead]

Not only will you need a good internet connection, but depending on your job, you may need a lot of bandwidth for Zoom meetings and downloads/uploads. Most "unlimited" plans you can buy today are not going to really be unlimited, as they throttle your speed after so many gigs per month. Make sure you know how much you need and whether that is doable under your unlimited cell service plans.

Also, as a contractor, you will need backup equipment. I taught online college classes half-time for many years while living on the road. One year, my hard drive died in a campground in Okracoke in the Outer Banks, so I had to "teach" for one week using my cell phone and there was no way I could grade papers on that!! I ended up taking a ferry and driving 150 miles to Virginia Beach, finding a Best Buy, and buying a backup laptop. I also learned to have TWO mobile hotspots in case one died and also because I needed the gigs from two lines. And don't forget to get an external hard drive to keep your data backed up. I keep one in my motorhome and switch it out periodically with one at my son's house in case it and my laptop are destroyed in an accident!!

My point is that when you work as a contractor, you won't have that corporate IT office to provide equipment and help you solve technical problems, so you need extra equipment and the software to go with it. It is certainly doable, but a company will not be happy if you cannot get access to things because of technical issues, so you have to plan ahead.

Great advice. I was an IT consultant for the past 10 years supporting 30-40 businesses, so well aware about having equipment and backups. I have three laptops currently along with a desktop and work laptop, so plenty of spare equipment. With cloud being so prevalent and available, backup of information doesn't seem to worrisome to me. I do agree about internet service and have started looking into options besides using my iphone on Verizon paid for by my employer.

 

[OpenRoadsAhead]

OP, when you say " virtual job " do you mean all contact with client will be over the Internet with you at a remote location. If this is the case how will you justify travel expenses etc with IRS being you don't have to be at clients location. Home office expense yes , but that's a very slippery slope per IRS rules on the office space last time I was up to speed on this.
I am not a CPA but was president of 2 s-corps for 31 yrs before we sold both business & retired. The no SSI/selfemployment tax on the passive income is about the only advantage as the liability protection just isn't there if your doing the actual work with the client. Audits are no fun & we survived 2 with no problems and believe me when I say we pushed the grey area on deductions until they looked almost black.

I currently work from home with clients all over the country. When traveling, I would have the opportunity to meet and work at their locations, but also still consult virtually with others across the country.