Tax deductions for small businesses

According to my Wells Fargo Business Roundup newsletter, there are a number of tax deductions that businesses can take. It can be to an RVer's advantage to have a business, however unless it used strictly for business and you have another residence, only a percentage of some travel expenses and depreciation can be deducted. Still it can make a difference to your tax bill. Also, to qualify to deduct more than you take in, you have to show a profit most of the time. Otherwise your business is classified as a hobby business and you can only deduct expenses up to the amount earned.

Here are the top deductions:

• Auto expenses: actual expenses or standard mileage rate method
• Legal and professional fees including tax preparation
• Bad debts: only for goods, not services
• Travel
• New equipment
• Interest for loans used strictly for business purposes
• Software
• Charitable contributions
• Taxes: most but federal income tax can be deducted
• Advertising and promotion

It is worth consulting with a tax adviser. Some of these have restrictions and could depend on the type of business you have. All need proper record keeping.

In any case, a small business can be a good way to earn money as you travel. Don't miss out on tax deductions due to lack of knowledge. Jaimie Hall Bruzenak

For information on Jaimie's 2nd edition of Support Your RV Lifestyle! An Insider's Guide to Working on the Road, see RVBookstore.com.