Tax Deductions – Could Your RV Get You Some Money Back?
When tax time rolls around, you quickly begin scouring the internet looking for deductions that you may qualify for. If you purchased an RV this year, your purchase could score you some deductions on this year's taxes.
Sales Tax Deduction
The sales tax on a big ticket purchase such as this is usually pretty significant. Well, the good news is, you may be able to reclaim some of the money that you have paid into the sales tax when you purchased your RV.
According to the IRS guidelines, the sales tax that is paid on the purchase of motor vehicles is tax deductible. The IRS defines motor vehicles as cars, trucks, vans, sport utility vehicles, motor homes, motorcycles and recreational vehicles. This means that your RV would qualify for a sales tax deduction on your federal taxes this year.
Registration fees may seem like nothing, but when you add the cost of these fees to all of your other deductions, it could help you get a nice little tax break. The IRS permits vehicle owners to deduct the amount that they pay to the Department of Transportation for registration fees for all of the vehicles that they register each year. Add the RV registration to the rest of your vehicle registrations and you could have a substantial amount to deduct.
The interest may be deductible if your family uses your RV as a second home. If you spend half of the calendar year living in your RV full time, you could deduct some of the interest that you pay on the loan. By the end of the year, the amount that you can claim will depend on how much time you spent living in the RV - the more time you spend, the more you can claim.
If you use your RV to travel for business purposes and sleep in it instead of paying for expensive hotel rooms, you may be able to claim a business deduction for the RV. Business deductions are an option if you use the RV for travel purposes, meeting purposes or base your business out of the RV. Don't take this deduction unless you truly do use the RV for business use. Like many business deductions, this could flag an audit, so you must be able to prove the true business use of your RV.
Talk with a tax preparation professional like Cowan Digiacomo & Associates to learn more about taking these deductions on this year's upcoming taxes.