Fulltime RVing & Taxes – Making the Most of It
The middle of April is fast approaching. For most people around the world it’s a month of anticipation and hopeful touches of Spring, but for those of you doing US taxes it’s a big deadline that hangs like a lead weight over your head and reminds you the government wants its moolah.
Now, I’m one of those very strange people who do my own taxes and always have. Hubby and I have had some really complicated situations over the years with multi-residency changes, foreign earned income, foreign tax credit, options, MLP’s etc. and I’ve always felt more comfortable knowing all the details myself.
No country I’ve ever lived in has as complicated tax laws as the US (oh, what fondness to remember the 1/2-page tax form from Hong Kong), but with some study and time (and the magic of Turbotax) you can find your best deal. When we moved full-time into the RV, I immediately started looking for tax advantages that could help us out and found a few gems that I wanted to share.
Now, I must preface that I’m no tax lawyer and can’t give you specific tax advise, but there’s people out there who can. So, always do your own research and make your own conclusions. With that said here’s some ways full-time RVing can be tax-friendly:
1/ Establish Legal Residency in a Tax Free State – You can’t get away from paying Federal Taxes, but as a full-time RVer you can definitely break free of State Taxes, and it makes 100% sense to do so. We established legal residency (domicile) in South Dakota for exactly that reason. Texas is another popular spot. Choose your domicile carefully and make the changes to get you there.
2/ Deduct Interest on Your RV – If you took out a loan to buy your RV, you can deduct the interest on your taxes just like you would with a regular mortgage (IRS publication 936)
3/ Take the Solar Credit – If you got Solar Panels installed on your RV (like we did last year) the Federal Government currently offers you a 30% tax credit on the total installation costs. It’s a huge bonus and is definitely worth taking (IRS tax form 5695)
4/ Deduct Home Office Expenses – If you are self-employed and work from home in your RV, you can deduct a portion of your home expenses (incl. repairs, camping fees, utilities, registration fees, depreciation etc.). This is a great bonus for mobile RVers with a business, but you do need to treat it carefully. It requires you to have a qualified home office area used exclusively for business in your RV. (IRS form 8829)
5/ Benefit From a HSA – If you decided to opt for a high-deductable health insurance like we did, it makes alot of sense to set-up a Health Savings Account (HSA) and take advantage of tax-deductible contributions. Anything you pay in is a direct write-off against your adjusted gross income. (IRS form 8889)
Those are some biggies, but there are many more. Some other posts with great tips:
- Tax Issues for Full-Timers
- Establishing Domicile (choosing your State)
We finished our taxes a few days ago at the lovely Public Library in Junction, TX and are happily looking forward to another year of tax-friendly RVing.
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I got confused this year using Turbo Tax when it came to the foreign tax paid my form from my investment company didn’t match what Turbo Tax was asking for and the idea of hanging on the phone for who knows how long to talk to somebody who was just hired a month ago was not appealing to me. So, I bit the bullet and took it to a tax preparer and paid the outrageous fee for doing such a simple thing. Hopefully the Tax Preparer’s soft ware is up to date. If not I could be meeting some Government Employee down the road…
Best of luck with your taxes…
I know what you mean! The Foreign Tax Credit (Form 1116) is a bear. We lived several years abroad so I was forced to figure it out, but Turbotax sure doesn’t make it easy. We file it every year for one of our MLPs.
Nina
Done, filed, and paid for another year. Yippee!!
Good job!! Celebrating right here with ya! Nina
You are living my dream! Great tips on taxes. Something I will keep in mind if, one day, I will finally get to hit the road. I love you are adding your photos of your trip. I am going read you whole blog…you aren’t really that strange for doing your own taxes. I actually know very few people who don’t. Turbo Tax makes it so easy.
So happy to have you along for the ride and do hope you get to live your dream soon. Nina
Howdy ya’ll (practicing my Texan still)-
Matt from Operation Tally Ho here. I was curious which mailing service you guys went with in SD (assuming that you used one). I’m sorry if it was in one of your posts and I just missed it. I’ve read the ones on taxes and domicile and didn’t see it mentioned. We registered our rig in SD (south dakota) from SD (san diego – where we are from) over the phone but are thinking we should go ahead and just get legal residency in South Dakota since we are out of Ca. now.
Thanks for the info and hopefully we’ll cross paths one of these days. Too bad we missed you in Austin. I think Christy and Kali had told us that you guys were getting together. I could be wrong, I get stuff mixed up regularly. Anyways, safe travels.
Tally ho…
Matt
Hiya Matt,
We’re ex-San Diegan’s too!! How cool is that!
For mail forwarding we went with Alternative Resources. They’re a long-established group in SD and we’ve been very happy with them. They helped us with all our stuff (registration, new tags etc.). You can do almost everything via phone/mail except for your drivers’ licence. Legally you need to get a new license within 90 days of registering your RV/car. What we did was plan our RV trip for a summer romp in the Black Hills. We got our drivers licence right downtown in Custer (took all of 10 mins).
And yeah! We met Christy & Kali in New Orleans! Too bad we missed you guys in Austin…I got into your blog juuust as we left. Are you coming to NM/CO by any chance?
Nina
Try TaxAct. I have been using it for years. Tried TurboTax. Didn’t like it. Customer service by email or phone is great. Free version or Deluxe for $20. Deluxe covers all bases.
TJ,
Do you happen to know how flexible TaxAct is at handling MLPs (K-1’s)? These are probably my biggest headache every year. Turbotax manages them, but it’s a laborious process.
Also are you able to import Gainskeeper (stock & option details)? Being able to import Gainskeeper is the #1 item that keeps mw w/ Turbotax since it would literally kill me to have to enter each trade transaction manually.
Always looking for better software so definitely interested!
Nina
TaxACT customers can enter multiple Forms 1099-B quickly and easily by importing a .CSV (comma separated values) file. This feature is only available to Deluxe users. In order to do this, you will need to obtain a spreadsheet file from your broker (or create one of your own) and save it to your computer. If you use Microsoft Excel 2003/2007 or Open Office to open files, you must convert the spreadsheet file to .CSV format, and then import that file into TaxACT.
Mt MLPs and K-1s don’t seem to be a problem. I just fill them out on line and electronically file my return. The customer service is really great, both email or by phone. Hope this helps. Love your web site…. Tom D.
Cheers for the detailed reply!! This may definitely be an option we look into next year!
Nina
I have excellent free (State retiree survivor) healthcare coverage through Kaiser, but they require Northern California residency to be a member. I am going fulltime, and the only local home address/mail option I can think of is the local UPS Store and a mailbox there; with mail forwarded to me where ever I am. I hope that this address is O.K with the DMV for license/registration.
BTW, I do mail order a fair number of things, and USPS and UPS boxes should be no problem, but I believe Amazon uses its own package delivery service. I hope they will deliver to the UPS store, too, and all can be forwarded to me.
Make sure you check with your insurance that they will accept a UPS address before you make any changes. Some will not (for example BCBS in SD does not). I’ve heard of other RVers losing their coverage this way. Good luck with all your plans!
Nina
I need ideas on how you would have space that you can claim as a home office in your RV. Thanks for any help.
You can set-up a permanent desk which is not used for anything else. I’ve seen several folks do this in their rigs. Often they’ll take out one of the couch areas (or the dinette area) and convert it to a permanent office space (desk, computer, files etc.), plus they’ll have part of an overhead cabin or cupboard dedicated to printer and other equipment. It takes away part of your living space, but if you’re claiming the deduction you’ll get $$ in return.
Nina
I’ve found your blog to be the most helpful in our plans of early retirement and full time rv’ing. I’ve also appreciated your collaboration with Cherie. Thank you! We are still in research mode and hanging onto the corporate jobs and what we know kind of life. Thanks again for helping educate me. Nancy
Nina,
Sorry if you’ve already answered this somewhere (So many posts, So little time!!!)
After being recently summoned for Jury Service, the question occurred to me – have either of you been summoned for Jury Service (presumably to your Domicile State) while you’re out on the road? And so how did you deal with it? 😉
Yes, we have. In SD (Minnehaha county, where we’re domiciled) it was super easy. We were just told to write “fulltime RVer” on the summons and they excused us. I followed-up with a call to the court house to confirm we were excused, but it all worked flawlessly. This is one of the advantages of domicile in a “RV friendly” state.
Every place is different so for your county you’ll have to call in to specifically confirm what you need to do. Your mail forwarding service should be able to tell you, but if not the court house will. If you’re in a county that doesn’t excuse fulltime RVers you can certainly be excused (once) for travel, but you may have to attend the next time around.
Nina
Well, established domicile in TX, then could not make it there due to one pup having to have emergency dog surgery , and she can now not travel for six months. Rented home out in CA Filed taxes with that address, .. full time in RV, not registered in Tx yet. HELP … we do not have a real property address there nor been able to make it there. Do I still have time? Perhaps buying a small rv pad there will cover this as a solution. I am worried. Do not want problems with the IRS
I’m no expert, but if you haven’t yet established domicile in TX you’re probably still officially domiciled in CA even if you’re living fulltime in your RV. CA are very aggressive that way (we were very careful when we broke our domicile there). But honestly, I’d consult a tax attorney on this one. Be sure and consult an expert.
Nina
I am a former pilot and flight instructor living in Oklahoma. I had to leave my former employment due to the onset of what has finally been diagnosed as Mutiple Sclerosis. I am on disability and sold my 2000 sq ft home and 4 acre land and bought a 38ft 5er. The smaller size will allow me to stay independent. I am just beginning to learn about full timing it will allow me to move as necessary for climate when I need to. I appreciate all the information that has been posted. I was bedridden and unable to speak without extreme difficulty only 5 months ago. What my MS specialist said was impossible due to the damage to my brainstem was said to be permanent. The Lord had another idea for me, I am walking and talking again. Off all MS related pharmicuducals which were 168,000 retail a year. The illness has left me with very little but by the grace of God I am doing ok. I wondered if there were any decent Telecommute (over Internet and phone etc) employment opportunities that I could be pointed in the direction of to help supplement my disability. I would rather be working period but suffer from disabling anxiety at times, not to mention flare ups and muscle spasms. Makes it tough to even try and consider a 9 to 5. If y’all happen to have any suggestions it would be so very much appreciated. May the Lord keep and bless you for providing the wealth of information about the wonderful lifestyle of full timing.
Sincerely,
Allen
I have a rare situation. I bought a 31 foot Winnebago this summer to live in, however five weeks after the cash purchase I was hit by a drunk driver with no insurance (I had liability only). After that I became homeless and was put in a fairly severe state. Having gained nothing from this I’m now curious if I can at least get a deduction. It was my home that was destroyed afterall. Any tax advice or direction would be helpful..