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Old 01-25-2013, 12:45 PM   #1
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Tax Time Tidbits

Sorry, I couldn't resist the alliteration.

As tax time comes along, I thought it might be helpful to pass along some tax items that not everyone is aware of. Even if you don't do your own taxes, your tax preparer may not think to ask you these questions. All of these suggestions apply only if you itemize deductions. If you don't itemize and you are not using your RV in a business, then these suggestions may not apply to you.

If you purchased an RV this year you can deduct the sales tax paid on your rig. The calculation is that you compare the state income tax you paid and the sales tax deduction from the table for your state and/or county and add the sales tax you paid on an RV, auto, truck, etc. If the sales tax is more than the state income tax you paid then you can deduct the sales tax rather than the income tax.

If you live in a state that levies a personal property tax on RV's, you can also take that tax as an itemized deduction.

If your RV has bathroom and kitchen facilities, then you can take any interest you paid for the RV. A caution here is needed. Take the deduction as other interest, not as mortgage interest. Be sure to state the financial institution you paid the interest to. If you show the interest on the mortgage line, you will probalby hear from our friendly IRS during the year.

I hope that helps some of my fellow RVer's out there.
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Old 01-25-2013, 02:01 PM   #2
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Thanks

Thanks for the info.
I made a copy and will give it to my accountent
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Old 01-25-2013, 02:30 PM   #3
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Quote:
Originally Posted by wnytaxman View Post
If you don't itemize and you are not using your RV in a business, then these suggestions may not apply to you.
I'm confused by your comment in regard to the "If...you are not using your RV in a business, then these suggestions may not apply to you."

The way I read this comment is that the only way you can take the deductions is if you use the RV in a business.

I don't think that's what you meant to say, since we've taken the sales tax deduction and the loan interest deduction and we DON'T run a business out of the RV.

I don't remember reading anything in the IRS instructions that said anything about the only way to take these two deductions is if you run a business out of the RV.
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Old 01-25-2013, 02:36 PM   #4
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As always, I really appreciate your tax topic tutorials.

I'm a bit confused. My understanding is that since my MH is "self contained" (I believe that is the term) even though it is not for a business that I can deduct the interest as a second home. Wouldn't that be "mortgage"?

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Old 01-25-2013, 02:40 PM   #5
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Sorry but I didn't word that clearly enough. Basically there are two ways that an RV can be used to reduce your taxes. One way would be that you are using the rig in a business. The other way would be the way that applies to most RV owners. That would be taking the itemized deductions for the sales tax, personal property tax, or interest. If you do not have enough deductible expenses to itemize then the tax items may not apply to you.

Sorry about the confusion.
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Old 01-25-2013, 02:41 PM   #6
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Also- and this is only for those who live in States like mine where there is no State income tax:

I think that the sales tax deduction for folks in non-income tax states, though on the chopping block last fall, was in fact extended. Itemization of deductions is required to take the deduction.

Here's information specific to Washington State
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Old 01-25-2013, 02:44 PM   #7
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Also- and this is only for those who live in States like mine where there is no State income tax:

I think that the sales tax deduction for folks in non-income tax states, though on the chopping block last fall, was in fact extended. Itemization of deductions is required to take the deduction.

Here's information specific to Washington State

You are correct that the sales tax deduction is still with us for the 2012 tax returns. The same is true of the second home interest deduction which is what the RV interest falls under.
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Old 01-25-2013, 06:46 PM   #8
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And you need to remember that if you are using your RV as a business, you will more MIGHT need a commercial drivers license. There may also be insurance implications as well.

Ken
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Old 01-25-2013, 06:56 PM   #9
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Very Nice, Thank you!
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Old 01-25-2013, 08:52 PM   #10
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And you need to remember that if you are using your RV as a business, you will more MIGHT need a commercial drivers license. There may also be insurance implications as well.

Ken
Ken, I think you would only need a commercial drivers license if you are carrying passengers for hire. For example, I have a client who does engineering studies in remote areas who uses his RV for business. The fact that it is used for business for tax purposes does not change any licensing requirements for the RV. The RV is still a "house on wheels" rather than a commercial vehicle.
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Old 01-26-2013, 08:19 AM   #11
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Originally Posted by wnytaxman View Post
Ken, I think you would only need a commercial drivers license if you are carrying passengers for hire. For example, I have a client who does engineering studies in remote areas who uses his RV for business. The fact that it is used for business for tax purposes does not change any licensing requirements for the RV. The RV is still a "house on wheels" rather than a commercial vehicle.
Not according to the Texas codes.

Ken
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Old 01-26-2013, 12:00 PM   #12
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Good advice, also if the state charges a registration fee based on the VALUE of the vehicle, the Feds say "That is a property tax" and I for one will not argue with the feds on that.

Sadly for me, at this time in my life, I'm better off doing the "Standard Deductions" bit,, I know because I do the math every year, add up the items and then the standard and compare the two returns.. Then file the standard.
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Old 01-26-2013, 12:54 PM   #13
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Not according to the Texas codes.

Ken

Ken, can you give us something specific on that Texas code? I have never seen a situation where the tax status would have any effect on the DMV requirements and it would be good to know the distinction that Texas or any other state uses.
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Old 01-26-2013, 05:47 PM   #14
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Quote:
Originally Posted by wnytaxman View Post

Ken, can you give us something specific on that Texas code? I have never seen a situation where the tax status would have any effect on the DMV requirements and it would be good to know the distinction that Texas or any other state uses.
Have just completed the written test for the Class A cdl exempt, I have done a lot of research.

http://www.txdps.state.tx.us/interne...orms/CDL-2.pdf

Above is the form I had to sign. It clearly states a recreational vehicle that is driven for personal use.

Now my question is what determines business use vs personal use. I think you can keep 2 sets of books on this subject.

Example: use the RV in lieu of a hotel and personal vehicle. Ie: traveling salesman. If the rv looks like a personal vehicle then Johhny law will accept the exempt class a/b. your mileage logs will allow you to deduct the business portion of the rv on the federal taxes. All should be well.

I think where you get in trouble is if you plaster your business all over the RV for advertising and haul merchandise and setup as a store. At that time it is a traveling business.

If you normally have employees drive this for business, but on the weekends you camp in it, then you are ok as long as you have an exempt class a/b & are on your way to from a camping trip not business related when Johnny law pulls you over --or-- when you have an accident.


Your employees would need a commercial a/b when using this for trade shows etc. if you drive it to trade shows, then you too need commercial a/b.
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