Thursday, August 15, 2013

Business Expenses for Starting a New Business

Q.  We full-time in our 5th wheel and we have just started a concession business that we plan to travel with.  My in-laws were telling me there are all kinds of tax deductions we should get from doing so.  Where do I start as far as record keeping, what all can I deduct, mileage, gas, camping, new rig when we upgrade in a year?  I have so many questions, I just really don’t know where to start!  I really appreciate any help or advice you can offer!

A.  Your question deals with multiple issues.  First & foremost, I would tackle the bookkeeping (record keeping). A sterling set of records will be your best insurance of being able to deduct any type of business expense. Take advantage of the many bookkeeping programs available and start using them immediately. By keeping track of your mileage, fuel, camping fees, cost of maintenance as well as the purchase of a new rig, you will at least know your hard costs. The ability to deduct various expenses will depend on many factors, none of which I can answer without knowing many details of your business. I suggest you peruse this website and read the sections I have addressed. Use the labels as a guide.

After reviewing much of what I have written you will note there are no guidelines for RVers in the IRS Code and or regulations. The trick is to take advantage of what deductions are allowable for real estate (as opposed to wheel estate) dwellers.  We can only hope to keep accurate records which we can then apply to the rules and guidelines. The most difficult part pertaining to full time RVers is the issue of constantly relocating our tax homes. It's a difficult issue to cope with, and one that can seem very unfair. But that's just the way it is. Some things you will be able to legitimately write off, others you will not be able to take advantage of. Without proper records, however, you won't have a leg to stand on! Good luck and thanks for writing. 

Wednesday, August 14, 2013

Work Camper Travel Between Jobs

Q.  As a work-camper in Florida I will travel 2,300 miles as part of a 4 day trip to my next assignment.   Based on IRS regulations can I deduct my expenses traveling to my new job in Arizona?  The job is with a resort. I will not be paid but and I will be receiving a 1099 after my  6 month employment is completed. Question: are my travel expenses deductible traveling from one work-camping job to the next?

 A.  IRS Pub 521 lists all the details of qualify for deducting your moving expenses. Regrettably, in my opinion, it is going to be tough to qualify given the short duration of your commitment. Additionally, if you are a full time RVer not returning to a permanent dwelling, and your employer did not send you on a temporary assignment, you cannot qualify for the rules of temporary employment.

 When a full time RVer is moving from location to location, you are also moving your tax home from one location to the next.  Currently in order to qualify for deducting your costs of relocating, is to find employment (or self-employment) which will meet either the 39 or 78 week requirement. Sorry I can't offer more encouragement. If you have a permanent home to which you will be returning, and your employer sends you on a temporary assignment, the result would be different. Thank you for writing.