Do you own a business and live in an RV? You may be tempted to claim a home office deduction on your taxes for a portion of your RV. But this can be a risky move. Let’s break down why it might not be a good idea to take the home office deduction for your RV.
Why do I know about this topic? Because I live and work remotely including spending 5 years as a full-time RVer AND I’m a tax expert. I study and learn the tax code specifically as it relates to travelers, RVers, digital nomads, and remote business owners.
Now let’s dive into the specifics of the home office deduction for your RV.
What is the Home Office Deduction?
The home office deduction allows self-employed individuals to deduct a portion of their home-related expenses, such as rent, mortgage, and utilities, as long as they meet certain criteria. The key here is meeting the criteria when you live in a tiny space like an RV.
How to Qualify for the Home Office Deduction
To qualify, your home office must meet two key criteria:
- Exclusive and Regular Use: The space must be used solely for business purposes on a regular basis.
2. Primary Place of Business: The space must be your principal place of business or where you regularly meet with clients.
For RVers and digital nomads, this could mean setting up a home office in your RV. However, simply using a kitchen table or dinette that comes with the RV doesn’t satisfy the requirement for exclusive use.
Think of all the other things you do at that table. Maybe you plan your travel, eat meals, do a craft, play games, and the list continues.
If you file a Schedule C for freelance, gig work, or self-employment, you might qualify—if you also meet the exclusive and regular use test.
Can an RV Be Your “Home” for Tax Purposes?
Yes, the IRS considers an RV as a home for certain tax purposes, including the home mortgage interest deduction. However, when it comes to the home office deduction, things get a little more gray.
Why RVers Often Don’t Qualify
Most RVers won’t qualify for a home office deduction, even though their RV can technically be considered a home. The main issue? Most RVs simply don’t have enough space for a dedicated, exclusive office area. A kitchen table or dinette that doubles as a work area doesn’t meet the IRS’s standards.
Some RVers may convert spaces like a bunk area or garage of a toy hauler into an office, which can improve your chances. However, if the space serves any other purpose—such as storage or leisure—it no longer qualifies.
If you think you have a space that meets the criteria, document it well. Take photos and videos to show separate sleeping, dining, and living areas, and demonstrate that the office is used exclusively for work.
Taking Advice from Social Media
I highly recommend you don’t get your tax advice from social media or even AI where an influencer tells you how they took the home office deduction for the use of their dinette. Trust me. They are wrong and could get in trouble.
They say that you can use the percentage of time you use your RV for business purposes to claim this deduction. Again, this is wrong and not how the IRS sees a home office. It’s not about TIME at all.
Like much of the social media tax and law guidance out there, it is wrong. You cannot use a percentage test of how much you use your RV for business vs personal use to calculate the home office deduction.
Don’t get it wrong and be subject to penalties and interest like others.
IRS Guidelines and Court Rulings
In the tax case Dunford v. Commissioner (2013), the taxpayer tried to claim their RV’s dinette as a home office. The court found it “implausible” that such a small, open area could be reserved exclusively for business purposes. The deduction was denied, and the taxpayer was also required to pay penalties and interest.
There are numerous other cases where taxpayers have failed to qualify for the RV home office deduction under similar circumstances.
Is It Worth It?
Let’s assume you do have a dedicated space in your RV that qualifies as a home office. How much will you save? Using the simplified method, you can deduct $5 per square foot, up to 300 square feet. If your office space is about 14 square feet, as it might be in a converted RV bunk area, your deduction would be $70.
This is the deduction, not the tax savings. The tax savings come down to maybe $10 – $20. Is that small amount worth it for all the record-keeping and burden of proof on you? Plus, you’d be raising a red flag with that small of an office space.
Using actual expenses, the deduction might cover around 3-4% of your RV-related expenses. But remember, you need to keep meticulous records and avoid double-counting deductions, such as loan interest or cell phone expenses.
My Experience as an RVer
If you’ve followed my journey at all, I am currently using a van as my travel mode. Plus, I now RV part-time and maintain a traditional home with a dedicated office space, which qualifies for the home office deduction. However, my RV (a van) doesn’t have a home office space that meets the IRS criteria for exclusive use, so I don’t claim the deduction for my RV.
Even when I had my 5th wheel and we traveled full-time, I still didn’t feel like my desk in the RV qualified for the home office deduction. It was used to eat, plan travel, hold my baked goods as they cooled, etc. By now, I hope you get the idea that a desk in an RV is not feasible to qualify for the home office deduction in an RV.
However, I do take advantage of expenses related to business travel when using my van. These are things like mileage to meet with a client or to attend an RV-related conference like Escapade.
The Bottom Line
Most RVers living full-time on the road do not qualify for the home office deduction. Even if you do, the financial benefit may not be worth the effort and audit risk. Is it worth it for $20?
I would say it’s better to focus on other tax-saving strategies that are more straightforward and less likely to raise red flags with the IRS.