Jump to content

Tax questions for new to full timing?


JCZ

Recommended Posts

I'll be retiring in approx. 15 months. We are 100% debt free....no credit card debt, auto loans, etc. Sold our home a few years ago and are saving everything to put down on a class A diesel pusher just before I retire (she has an internet business that will keep going). We both have FICO scores over 800 and I know it's easier to get a loan if I'm still working so we'll get that loan before I retire. Would like any tips regarding taxes, on doing it this way.

 

I would really like to hear from somebody that has first hand experience at buying a motorhome and claiming it as their "primary home" for tax purposes.....especially if they bought and work in California?

 

Also, we will be changing our domain to South Dakota as fast as we can, once I retire. Are there CPAs or other tax people in or around Rapid City that specialize in taxes for full timers? Can you refer us to one that understands the taxes regarding full timers?

 

Anything else along these lines that I'm not thinking about that we should consider? Any and all tips, advice, suggestions, your experiences, etc. will be appreciated.....especially if it can possibly help us save some $$.

 

 

Link to comment
Share on other sites

We didn't fulltime in a motorhome (we had a fifth wheel), but we claimed the interest on the fifth wheel loan as mortgage interest...did this for the 12 years we were fulltimers. Now that we're no longer fulltimers, we still claim the interest on our RV loan as a second house. Of course, that's assuming that you have enough deductions where you can actually claim the interest.

 

Since you mentioned Rapid City, I'm going to assume that you will be using America's Mailbox. Give them a call...I imagine they can refer you to a CPA. We use Turbo Tax, and have for years; but we don't have complicated taxes, so it makes no sense for us to pay a CPA to fill out a tax form.

Link to comment
Share on other sites

I would really like to hear from somebody that has first hand experience at buying a motorhome and claiming it as their "primary home" for tax purposes.....especially if they bought and work in California?

Interest on a loan for a fully self-contained RV that can be lived in is a legal deduction from your federal income tax. It has been that way for a long time, qualifying under the IRS code where it described a second or recreation home. It really doesn't have to be your primary home as it would be allowed even if you continue to own a stick home and doesn't change when you see the stick home.

remember that if you buy the motorhome while you are still in CA you will need to pay taxes there as required. If you either buy the motorhome out of CA and then store it there until you are gone, then you can avoid their sales tax and registration fees but it will be important to be very careful in doing so.

 

In addition, when you shift your domicile from CA you would do well to file a partial year of state income tax return in order to define and make clear that you have departed the state.

Link to comment
Share on other sites

Standard deduction is now $6,300 in 2 years may be more? Couple $12,600

That would be a lot of interest on a new MH. As it is hard when retired and only have the MH & no house to come up with other deductions to beat the standard deduction.

 

Better off to save enough to pay for that new MH in cash. As your deprecation on it will outpace any payments with interest. :(

Link to comment
Share on other sites

I paid for my MH from funds that tax had already been paid for. But that was 14 years ago when Interest on loans were higher then they are now.

 

I did buy my new toad 2 years ago on a 5 year loan at 0%. But I will have it paid off in less then 3. Before and since I retired, I just don't like loans. But that is just me.

Last home I bought was on a 15 year loan and I paid it off in 9.

Link to comment
Share on other sites

The question at hand is not should I pay cash or get a loan. The question is regarding taxes. The interest on a motorhome is deductible as a second home whether you full time or still live in a house. As others have said you must have enough other deductions to file a Schedule A rather than take the standard deduction. Without mortgage interest on a house you may not not have enough other deductions. But you may. Have you filed a Schedule A in the past? I left CA and established a So Dakota domicile. SD does not have income tax so I do not have to file a state return there. I rented out my house in CA so I file a nonresident CA return in addition to my Fed return. My mortgage interest on my rental (my former sticks and bricks home) is deducted from my rental income on my Schedule E. Last year I did not have enough other deductions so I did took the standard deduction and was not able to deduct the interest on my RV loan since I did not file a Schedule A. Obviously if you pay cash there is no deduction of interest to discuss. You can use your current accountant or any accountand anywhere to file you Fed return. You will not need to file a So Dakota return. I still use my CA CPA.

Link to comment
Share on other sites

  • 2 weeks later...

I have been to the Workamper News Rendezvous and to the RV Inspector training. They use Mark Kohler as a CPA/Lawyer to get advise for being in an RV and having a business. I have not yet contacted him yet but have purchased two books to read soon. Other than hearing what he has said in two presentations I don't know any details. I plan to have a business (RV Inspection, Mini Golf, and/or something else) when I go FT RVing as I am not retirement age and will need a source of income. I plan to at least consult a bit with him before I get on the road in later 2017. http://markjkohler.com

Link to comment
Share on other sites

I'll be retiring in approx. 15 months. We are 100% debt free....no credit card debt, auto loans, etc. Sold our home a few years ago and are saving everything to put down on a class A diesel pusher just before I retire (she has an internet business that will keep going). We both have FICO scores over 800 and I know it's easier to get a loan if I'm still working so we'll get that loan before I retire. Would like any tips regarding taxes, on doing it this way.

 

I would really like to hear from somebody that has first hand experience at buying a motorhome and claiming it as their "primary home" for tax purposes.....especially if they bought and work in California?

 

Also, we will be changing our domain to South Dakota as fast as we can, once I retire. Are there CPAs or other tax people in or around Rapid City that specialize in taxes for full timers? Can you refer us to one that understands the taxes regarding full timers?

 

Anything else along these lines that I'm not thinking about that we should consider? Any and all tips, advice, suggestions, your experiences, etc. will be appreciated.....especially if it can possibly help us save some $$.

 

 

Go buy a copy of Turbo Tax Basic for $29 and do a What If. You don't have to have exact figures since you are not actually filing taxes. You just want to know what happens when you input the data you are going to have to give the CPA anyways. It doesn't take a lot of time to do this and it will really teach you a lot. You get to see in black and white how much you have to have in itemized deductions to get to the standard deduction.

Link to comment
Share on other sites

The What if worksheet is one of the best parts of Turbo Tax.

I too have used it and very much agree, but there are other income tax software packages that seem to have pretty much the same features and ease of use. We have used the H&R Block package as well and found it pretty easy to use and containing nearly as many features as Turbo Tax. If you like online evaluations, both Reviews.com and also PC Magazine give their #1 rating to TurboTax.

Link to comment
Share on other sites

  • 2 weeks later...

The tax software programs mentioned all do a fantastic job. The problem is not with the software itself, but like when you have a problem with your car...."it's usually the nut holding the wheel".

 

I am a forty year tax practitioner, and I learn something new almost every day. We have 6 CPAs who come to us to get their taxes done. Why you say? Because they know enough to know what they don't know. And most qualified tax professionals don't just do the taxes, but provide year-round advice and assist you with resolving issues if you get a pesky tax notice.

 

So is hiring a professional for everyone? Definitely not as some returns are truly simple. However, I had a client last year who said her returns were "simple", only to find that she overpaid her taxes by $45K a few years ago, and we got her the money back.

 

What I like about this country is that we all have a choice as to how we want to handle our own financial affairs. What might fit for one, may not fit for another. Good luck with your taxes!!

Link to comment
Share on other sites

  • 4 weeks later...

Sales taxes are deductible for the year in which the purchase was made (on Federal). Lord knows that will be a big number in California! Some of your registration fees in CA are also part of your accumulated deductions annually (once you register your vehicle in SD you may need to look at that again).

 

You mentioned your wife has an internet business. Do you have an entity established for that business in CA? You may want to look into moving it to SD as well. Helps strengthen the domicile and may save you some $$ in taxes for that as well. Just a thought.

 

Personally, I don't mind paying a professional to do our taxes. He has saved us so much over the years. Way more than the preparation costs. Plus he advises us during the year. We would not have been able to retire early (maybe ever?) without his guidance. He is located in California but licensed in all states to do taxes (we moved out of CA 2 years ago).

 

All the best to you.

Link to comment
Share on other sites

  • 3 weeks later...

A slight change of plans. We ended up buying a 2017 Momentum 376TH 5th wheel. At 41'4" it's huge! Bought the truck and 5th wheel as a package from a private party. He'd just bought the 5th wheel in May so it's relatively new. The truck is a Ford F-350 Lariat, FX-4, dually, long bed with ultimate pkg. and of course it came with the 5th wheel hitch and remote controlled air bags.

 

The Momentum has 5 slide outs, a garage for my Harley and has all the options available plus a few goodies that he had installed like the Splendide washer/dryer, a 160w solar panel, back up camera, apple TV, even the Kurig coffee maker.

 

=https://flic.kr/p/S7fdCo]32888511422_a5b68e9206_c.jpg

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

RVers Online University

campgroundviews.com

Our program provides accurate individual wheel weights for your RV, toad, and tow vehicle, and will help you trim the pounds if you need to.

RV Cable Grip

RV Cable Grip

All the water you need...No matter where you go

Country Thunder Iowa

Nomad Internet

Rv Share

Dish For My RV.

RV Air.

Find out more or sign up for Escapees RV'ers Bootcamp.

Advertise your product or service here.

The Rvers- Now Streaming

RVTravel.com Logo



×
×
  • Create New...