Can I Take RV Tax Deductions?
Whether you like it or not, tax season is upon us. Lucky for you, the nation’s tax deadline will be April 17 this year – so you will have two additional days to file beyond April 15. Yay!
But back to the question at hand….Can I Take RV Tax Deductions? Well….this question is actually a great question for your Tax preparer or CPA. But if you purchased a new RV or own an RV, you might be interested in this article by Sapling about RV Tax Deductions. If you have any additional deductions not mentioned here, leave it in the comments! Enjoy!
Although most folks don’t buy an RV for the tax breaks, there are a few to be had. If your RV meets the Internal Revenue Service qualifications for a first or second home, you may deduct any mortgage interest and points you purchased to finance the RV. You may also write off the cost of RV sales tax in lieu of deducting state income tax. Taxpayers can claim both deductions on Schedule A, Itemized Deductions.
Any interest you pay financing an RV may be tax-deductible. The IRS allows taxpayers to write off interest expense on the purchase of a first or second home. The interest on the purchase of an RV, trailer, motor home or camper can be deducted if it meets the definition of a qualified home. If it has a place to sleep, cooking facilities and toilet facilities, it qualifies as a home.
The loan origination fee, any discount points and subsequent interest payments on qualifying RVs are all tax-deductible expenses. Your lender should send you a Form 1098 each year detailing the amount of tax-deductible interest payments you made during the year. If you did not receive one, call your lender to request either a Form 1098 or an amortized list of payments that break out interest. Itemize interest and points on lines 10 and 11 of “Interest You Paid” on Schedule A.
Sales Tax Paid
If you purchased your RV outright, you’ll have the opportunity to claim a deduction for the sales tax you paid on it. The IRS allows taxpayers to deduct either state and local income tax or state and local sales taxes. If you live in a state that doesn’t levy income taxes, it’s a no-brainer to claim the sales tax deduction. If you do pay state income taxes, you should compare the amount you paid in state income tax to the amount you paid in sales tax and choose the larger of the two.
Deducting Sales Tax
Add up all the sales tax payments that you have documentation and receipts for. It can be a time-consuming task, so use bank statements and credit card statements to help you identify purchases. Record sales tax as an itemized deduction on Schedule A. Under item 5 in “Taxes You Paid,” mark box B and record your total general sales tax payments.