I use my RV entirely for work/office in my consulting business. I go to home on the weekend. I don't how to document this.

[terrimobley55-gm]

How do I enter deductions for the RV?

[Vanessa A · Accepted solution]

If you use your RV as your primary business location then you would enter the RV as an asset.  Expenses for the RV such as maintenance or repairs would be either deducted or depreciated.  RV's are depreciated over 5 years or you may be able to take the section 179 deduction. 

To qualify for a section 179 deduction you must use the RV more than 50% for business and would have had to purchased it or converted it to business during the tax year. 

To enter your RV as an asset click the following:

• Federal
• Income and Expenses
• Edit next to your business
• Add Expenses 
• Scroll down and click show more until you see Assets and click Add

[clarityhealth]

• Does this also work if your business is an S corp?  I had someone else tell me that the RV would just be considered part of our home property, and only the office equipment/furniture we purchase would be a business expense.  That didn't make sense to me if the RV is only used for our home office/business only.  It is not a permanent structure on our property, and was purchase for business use.

[Critter-3]

• @clarityhealth 

Depends on who owns the RV...you personally or the corporation. Do you give yourself a W-2 as an employee as required? 

[clarityhealth]

The RV is still to be purchased.  Just trying to find out the options.  

Yes, I go get a W2 from our S Corp.  Could it be a business expense if the RV is titled under the business, and only used for our work from home office.  The thought is that if it is not a permanent structure on our property it could be a business expense?  I really appreciate your input.

[clarityhealth]

@Critter-3 

[Opus 17]

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@clarityhealth wrote:

• Does this also work if your business is an S corp?  I had someone else tell me that the RV would just be considered part of our home property, and only the office equipment/furniture we purchase would be a business expense.  That didn't make sense to me if the RV is only used for our home office/business only.  It is not a permanent structure on our property, and was purchase for business use.

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Option 1.

The business buys the RV.  The business can deduct ordinary and necessary operating expenses according to the rules in publication 463.  If the RV is also available for personal use of the employee(s)--such as, remaining in the location of a job after the job is complete to do some camping--the fair market value of the personal use must be added to the employee's taxable wages (W-2 box 1, 3 and 5) and is subject to withholding of federal and state income taxes and social security and medicare tax.  Assuming the RV is parked someplace that charges a nightly fee, that is also a deductible business expense and you would want to pay that with a business credit card.  Food (meals) that are provided to the employee are a deductible business expense if you follow the rules for business meals.  (Meals while traveling away from home on business may be covered by the employer up to the federal ME&I rate.  Meals in excess of the ME&I rate are taxable income to the employee.)

Option 2. 

The employee buys the RV.  The business can reimburse the employee tax-free for business related use following an accountable plan, as described in publication 463.  This will generally involve the employee keeping records of mileage driven, costs for fuel, maintenance, insurance, repairs and depreciation. The employee can submit a request for reimbursement based on the cost of specific business trips. (In other words, if the employee uses the RV 80% for business and 20% for personal use, they can only be reimbursed for 80% of their costs.). The employee can't use the IRS standard mileage rate method because this is not a passenger automobile.  The employee can't be reimbursed for personal use of the vehicle unless that is included in their taxable income, which is why it is necessary to keep accurate records of business use including dates, miles driven, business purpose, and so on.

In addition to the cost of operating the RV, the employee can be reimbursed for food, parking fees, highway tolls, and overnight RV park costs, provided they are work-related and the employee provided adequate documentation (receipts).

If the business reimburses the employee for RV costs without adequate proof, that is a non-accountable plan, and the reimbursements must be included as W-2 taxable wages.  

[Opus 17]

Forgot the link.

https://www.irs.gov/forms-pubs/about-publication-463

[Opus 17]

@clarityhealth 

Since you are not the person who originally started the discussion, I also wanted to clarify that the use of an RV for business only applies if the RV is used for traveling away from your normal work area (your "tax home") to provide services to your clients.  Your tax home is generally the city or major geographical area where you live most of the time and do most of your work.  If you travel away from your tax home temporarily to perform work for clients, that is "Travel" as described in IRS publication, and travel expenses for business can be a deductible business expense.  

However, if the RV is used to live in when you are working within the area of your tax home, that is not a deductible or reimbursable business expense.  If an employee lives rent-free in an RV while living and working in the area of their tax home, the value of the free housing would be considered a fringe benefit that must be included as part of their taxable wages.

Lastly, if you are itinerant and have no regular place of work, and your work consists entirely of traveling from place to place for different clients, then you can't deduct or reimburse any travel expenses, because if you have no home, you are never traveling away from home for work.

[AmeliesUncle]

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@Opus 17 wrote:

@clarityhealth 

Since you are not the person who originally started the discussion,

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I want to add another thought - the original question said it was used "entirely" for business.   But if there is also personal use, that can SIGNIFICANTLY change the rules because it would be considered as a "residence".  If there is personal use, the RV might not be deductible at all.

[vaflyboy]

I have the same question, but I am a sole proprietorship, not an S corp. How would these options work with that situation?

[Critter-3]

Works the same ... since you are not an employee all of this is reported on the Sch C. 

[paccpas]

ALWAYS talk to a tax professional for matters like this -  as your actual situation will dictate how to handle this.  There are specific tax court cases on the matter and I would not rely on web articles as your backup if you get audited.  "ENTIRELY for work / office" is not how the IRS will see this.  They know (and the courts agree) you will also use it as your living quarters and even if traveling this change how much you will be able to deduct.