Tuesday, November 21, 2017

Q.  I'm a resident of Florida, previously a resident of North Carolina (before we started fulltiming). 

I work for a large (more than 50,000 employees) bank that has presences in all the states we visit. I do all my work in the RV or in misc. places, but never in a branch and only at a bank location when I travel to that location on business maybe twice in a year for a week each.

Do I need to worry about how long we stay in a state related to income taxes? Ie, if we are in a state more than 30 days, do I then owe that state taxes for that time? For more than that time? 


A.  States that have income taxes all have different requirements Normally it is not based on the amount of time you spend in any given state, but the amount of income you earn from that state. One of the best examples I can think of is the professional athlete.  Since they earn thousands of dollars per game (even if all they do is sit on a bench), they are required to file a tax return and pay taxes on this income. You didn't say if you were an employee with the bank or an independent contractor. If you are an employee, and you are currently a legal resident of Florida, you probably receive a W-2 form listing only the state of Florida. If however, you are an independent contractor, you may have several filing requirements. Good luck!

RV Rental

Q.  I have a RV that i have financed. I have a company that manages and rents it for me. The management company issued me a 1099-Misc and I also have a record of expenses. I was only able to use it last year for about a week. I don't personally/formally have a business but I'm generating income. Should I file as though I have a business with the RV asset and depreciation? Seems like a huge deduction. Any references you can provide to look into this further would be appreciated! 

A.  When you purchase an asset and hold it out for business use, yes it should be reported on your income tax return, and if you make $400 or more from revenue you are legally required to claim this income. In your case, you should file a Schedule E to report both the income and expenses from your RV rental. However, once you "take back" the asset or convert it to personal use, you will no longer be able to claim business deductions and if this should happen mid-year, you would need to pro-rate all expenses.

Wednesday, June 14, 2017

A tragic loss

Q  I recently lost my motor home to a fire this past December 2016. Although I made it out my beloved pet did not. It was a total loss for my RV. Is there any type of loss available for tax purposes?.  I lived in my RV full time while working out of state from my permanent residence. I had to cash out a retirement account in order to pay off the loan on my other RV and a down payment on a new RV, any guidance would be greatly appreciated.

A.  Sadly a loss of this type is almost impossible to take for tax purposes Publication 547 explains the limitations regarding casualty losses. Basically, your best bet is going to be your insurance. Although nothing can replace the loss of a loved one, at least you should receive some relief in regard to your RV. Please accept my sincerest condolences. Hopefully by now you are back on the road. Thank you for your inquiry. 

An apology for Late Reply's

I try to answer your inquiries on a timely basis, but this year after working 7 days a week with 10 -12 hour days, it became impossible. Hopefully you either went through the labels and found your answers and or filed for an extension. Under the premise of "Better late than Never," I shall endeavor to catch up!

Sunday, February 5, 2017

Q.   A client  recently bought an RV and is now looking for ways to deduct expenses. I told him about the recent tax case and that it was very unlikely that we could find any way to do that.   He brought up a couple of possibilities such as:

1. taking clients on trips in the RV and deducting it as entertainment and, 

2. being a contractor, using the RV while he is working on jobs out of town. He owns the RV personally but his business is an S corp so he wanted to know if he could have the S Corp pay rent to him when it's used for business purposes which would then be deductible. 


A.  I'll do my best:

1.  If he can verify he actually takes a client on a trip & returns, he might be able to get away with the actual costs. Since depreciation isn't allowed & is also included in the mileage method, I don't see any way other than taking actual costs. This also may or may not be allowable in the event of an audit.

2.  He won't be able to deduct any costs acting as a contractor.

3.  If he pays rent through the business, he will need to claim the rent on his personal taxes, so he will have a net sum of zero.

Regrettably he's in a tough position. According to the Jackson case, the IRS views RVs as personal vehicles designed for pleasure only. Business use is no longer an option. 

Wishing you & your clients a productive tax season! Honey

Wednesday, January 25, 2017

Q.  My husband and I began full-time RVing in 2003 and have done a variety of paid work camping through the years. We have never felt that any of our travel expense was deductible. We now own an RV site in Florida where we spend Oct.-April and are legal residents of Florida. After 7 summers working a paid seasonal job in Tennessee, we traveled to Wyoming to take a Memorial Day to Labor Day volunteer position as campground hosts in a state park. This coming summer we will be doing the same in Utah. Are any of our travel expenses deductible?  Thank you.

A.  Unfortunately the cost of getting to your site is considered commuting and therefore is non-deductible. If your volunteer "job" is for a charity formed under IRC 501(c), and you incur travel expenses on behalf of the charity and are non-reimbursed for this, your mileage may be deductible if all criteria is met.

For further information please refer to Pub. 526 page 19. Thanks for writing and enjoy your summer travels.

Tuesday, January 24, 2017

 Q.  My husband and I have lived renting in Pennsylvania for the last 6 years (where we have filed all our taxes), and my husband works from home as a software developer, for a Texas based company.  We do not own a RV/boat (or any home in the US), but we have decided to travel around the country in our car (and by plane sometimes) and use Airbnb or monthly rentals to live in until we find a place we love.

        So have been thinking of using one of the forwarding mail services available in Florida to establish our residency (St. Brendans Isle, Escapees Home, My RV Mail,...), while traveling the country.

Our questions are: 
            1) Is the address provided by the forwarding mail services useful for tax return purposes? 
            2) Do we have to file a tax return, in each state we visit if he works during our stay in said state? 

A.  I cannot attest to mail forwarding services since that is not my expertise. Each state has different residency requirements, & thresholds for filing income tax return requirements.

On the left of my blog you will notice links to all 50 states. There you can research the requirements for each state. I suggest you start with Texas since that has been the main source of your income.

For federal tax purposes, all income is reportable, and may or may not be taxable. Each state has its own filing requirements which are usually based on source income. Where you happen to be when the income is earned is irrelevant. You will need to research the filing requirement for each state your earn income in. Some states require a return if you are required to file a federal return. Other states require a return if your income is equal to or above a certain threshold. Of course if any state withholds state income tax, you will need to file a return if only to get a refund. 

I hope this guidance is helpful. Enjoy your travels throughout the US.!

Tuesday, July 26, 2016

No Justice!

Oftentimes there is no justice when it comes to tax law. With the major problems facing this country, congress considering the needs of RVers are not among them.

Although I have sited the Jackson case many times since it was published, the implication has not hit home.

To summarize, the Jackson's  took their case to court and lost. Not because they didn't keep proper records, not because they didn't have documented receipts, not because of missing mileage logs, not because of a lack of client records. Basically it boiled down to Code Section 280 A(d) which defines a dwelling unit.

For your convenience the underlined line above contains a link to the entire ruling.

So, what are we left with? Basically, treat your business as though you don't have an RV and take the time tested deductions that have stood through the years. Be through with all your documentation and the required record keeping.

Most importantly, enjoy your RV and your lifestyle. We are indeed the lucky ones!



Saturday, March 19, 2016

Q.  We live in a RV full-time and I write and take photographs for travel destination articles for the major RVing and sailing magazines   I also write travel destination articles and RVing related articles and publish photos on my website which earns advertising revenue.

Everywhere we traveled in 2015 was a destination that I wrote an article about for an RVing magazine, and the same is going to be true in 2016 (the magazines have contracted me to write articles for 2016 about destinations we will be traveling to).

So, we aren’t idly traveling — we're traveling from one destination I write about to the next (a truly dream life!).

In 2015 we drove our truck about 25,000 miles total, and we towed our RV for about half of those miles getting from place to place (the rest of the miles were “personal” once we arrived at a destination, getting around town doing errands, etc.

My question is this:  can I “safely” deduct the miles of travel that took us from one destination to the next so I could write those magazine articles, if the miles were documented in a log book as you describe?

A.  In view of the court cases sited, I'm not positive there is a safe answer. However, if you had no RV but were working out of a stationery dwelling such as a house or apartment, there is no question your mileage would be deductible, as long as you returned to the place you started. This seems to be the big problem for RVers. Your travel is certainly legitimate and as long as you are not deducting any expenses of the RV, I see no problem in taking a deduction for mileage.

The safest course would be to make certain you have a "tax home" that you travel to and from. A sharp IRS  agent in an audit situation could declare you a "tax turtle" which means every destination to travel to becomes your tax home, and therefore travel does not exist. Don't you just hate how complicated our tax lives have become?