By Neil Seidler, CPA, CMA
It’s tax time again so I thought I’d give you a few tips and things to think about regarding your tax return.
1. Don’t miss out on deductions
Deductions are your responsibility, both to claim and to document. The IRS doesn’t care if you miss deductions or fail to claim legitimate deductions that will lower your taxable income and therefore your tax bill. Any expense incurred for the purpose of producing income is a deductible expense.
Keep track of all of your expenses including cell phone, internet, office supplies, advertising, professional fees, insurance costs, and travel expenses for business purposes. Travel expenses should be documented to show the business portion, the reason for the travel, and the actual business portion of the expense. Personal travel costs are not deductible.
2. Keep your receipts
Documenting the expenses is the responsibility of the taxpayer. Keep your receipts, either on paper or electronically, so that each expense can be easily verified if the IRS decides to review your tax return. Any receipt not there will be a disallowed deduction if the IRS does decide to look at your expenses.
3. What about the home office deduction for full-time RVers?
The home office deduction is for an office or space that is used exclusively for your business. In an RV it would be pretty hard to justify that the space claimed is used exclusively for business purposes. Even in a toy hauler with a small office set up in the back, I’m sure that space is used for personal use at times, and I think that you would have a difficult time proving that it isn’t.
The other consideration is that based on the size of an RV and the size of an office space in that RV, the deduction would be minimal at best. Do you really want to risk an audit over claiming a deduction for maybe a hundred dollars or so at best, and probably less than that in most cases? The time, effort, and costs of an audit really aren’t worth it for something that will likely be disallowed.
4. Professional advice is a great idea
Even if you prepare your business income and expense statements yourself, and do your own tax return, you may want to spend an hour or so with a tax professional to discuss tax matters specific to your own personal situation. Everyone has little differences in their personal, financial and tax planning positions, and discussing those with a professional can result in new and different ideas that you may want to consider. And if you’re already doing everything you can to maximize your benefits and minimize your costs, then it’s good to know that too.
We welcome your questions and inquiries. If you have tax-related questions, or any other questions that we may be able to address, please email us or comment below and we’ll try to answer them in a future article. You can email me at TheRVTaxGuy@gmail.com .
The material presented here is for informational purposes only and is not intended to provide, and should not be relied on for tax, accounting or legal advice. Readers should consult their own tax, accounting and legal advisors to discuss their own personal matters.
Neil Seidler, CPA, CMA, has served businesses and individuals across the USA and Canada for 35 years. As an avid RVer and recent full-timer he has a unique perspective on RV tax issues.
Read Neil’s previous posts here.