The most common tax deductions for mobile homes
It’s 2023, and that means it’s time to file your 2022 tax return. Filing your taxes is never a pleasure, but it’s a little easier to bear when you can reduce your tax bill with deductions. If you’re a mobile home owner, you may be able to take advantage of some mobile home tax deductions.
Let’s take a look at the different ways you can deduct RV-related expenses from your taxes.
Most RV owners use their RV as either their primary or secondary residence. If that’s the case for you, you can probably claim some deductions.
Let’s take a look at the most common tax deductions for mobile homes: sales tax and loan interest.
Sales tax deduction as a tax deduction for mobile homes.
If you bought a mobile home in 2022, there’s good news: you’re (probably) eligible for a tax deduction.
All but five states (Alaska, Delaware, Montana, New Hampshire, and Oregon) require you to pay sales tax when you buy a new mobile home. Since you have already paid this tax, you can deduct it from your 2022 taxes.
You can claim this mobile home tax deduction even if you paid cash directly for the mobile home. In some states, such as Georgia, you must pay an “ad valorem” tax on the value of the vehicle. This can also be deducted from your taxes.
Note that these deductions can only be claimed in the tax year in which you paid them. If you fail to take advantage of these deductions, you will be out of luck in the future.
Deducting the interest on your mobile home loan.
If you use your mobile home as your primary or second home, you qualify for homeowner tax deductions. Many of these deductions, such as from property taxes or mortgage insurance, don’t apply to mobile homes. But you can still claim one of the largest deductions for homeowners: the deduction for the interest on your mobile home loan.
As long as you meet certain requirements, the IRS will essentially treat your mobile home loan like a mortgage. That means you can deduct any interest that accrues on the loan from your taxes (up to a maximum of $750,000).
To qualify for this mobile home tax deduction, you must:
- Have a secured loan (i.e., the mobile home is collateral for the loan itself)
- Have a mobile home with sleeping, cooking and toilet facilities
- Use the mobile home as a primary or secondary residence
Most motor homes qualify, but owners of certain Class B motor homes may not because they do not have a toilet.
If you rent your RV, you must be present in it for at least 10% of the days you rented it or 14 days (whichever is longer).
Deduction of mobile home business expenses
If you use your mobile home for business in any way, either full-time or part-time, you probably qualify for a number of deductions. Examples of business use include renting out your mobile home and using all or part of the mobile home as a mobile office.
Let’s take a closer look at how you can deduct business expenses for your mobile home.
Deductions for mobile homes used for full-time work
Most mobile home owners do not use their vehicle exclusively for business purposes. However, if you are part of this minority, you have access to a variety of deductions.
Examples of deductible business expenses include:
- Business start-up costs
- Insurance for business
- Invention-related costs (e.g., the cost of goods you sell).
- Office supplies and software
- Advertising and marketing
- Corporate taxes paid
These are only some Of the available tax deductions for mobile homes. Probably the most valuable deduction if you use an RV for business is the deduction for mileage and other travel expenses. You can do this by recording the miles and money spent or by using the IRS standard mileage rate of $0.585 per mile.
Note that these deductions only apply if you use the RV 100% for your business. If you also use the RV for recreation or as a home, you can’t claim most of these expenses. However, that doesn’t mean you’re out of luck, because there are also deductions if you use the RV only partially for business.
Deductions for mobile homes used for incidental business purposes.
There are a number of mobile home tax deductions you can take if you use your mobile home only partially for business.
One common option is the home office deduction. To claim this deduction, you must use a portion of the mobile home exclusively for business purposes.
Emphasis added by exclusive. For example, if you use your dining area for work and for taking meals, you will not be qualified.
Since most mobile homes are quite small, you will have difficulty claiming any of it as an exclusive home office. And the IRS has taken action against mobile home owners who have tried to do this. However, if you own a particularly large RV, such as a Class A, you may have room for a true home office.
If you partially rent out your mobile home, you probably also qualify for certain deductions. Deductible expenses include the cost of the listing, repairs, and other qualified business expenses.
You must determine what percentage of the year you use the mobile home and what percentage you rent it out. You can use this percentage to determine what you can deduct from your taxes. Since this can get a little complicated, you should get help from a tax professional.
How do you use tax deductions for mobile homes?
To use these RV tax savings, you need to itemize your deductions.
The itemized deduction is the alternative to the standard deduction, and you must choose one or the other.
For 2022, the standard deduction is $12,950 for single and married filing separate returns. For joint filers, it is $25,900, and for heads of household, it is $19,400.
For you to save money with an itemized deduction, your deductions must be higher than this amount. Otherwise, you’ll waste time and effort on the itemized deduction without saving a dime. If you are not sure what is best for you, you should consult with a tax advisor.
Save 2022 taxes with mobile home tax deductions.
Whether you use your mobile home as your primary or secondary residence, or use it for all or part of your business, you can claim a number of tax deductions. Sales tax, loan interest and more are examples of things you can deduct.
Whatever deductions you take, you’re sure to love the money you save on taxes by RVing!