Tax deductible

[1930]

Someone recently told me that my camper on my 5 acres of property is considered a second home and is tax deductible.

I'm not the type of person that wants to push any limits I don't live out there I go out there on the weekends sometimes that's it.

I'm real unclear on what the laws are and again don't want to push anything.

But I am wondering is my tractor tax deductible?

I'm using it to clear the land it stays out there in the property.

Is there a way to make it tax deductible?

 

[TnAndy]

To make most things deductible for tax purposes, you have to be using it to attempt to earn money....a business use.

The following is for Federal taxes....I don't think you have a State income tax in Florida, but in State's that do, my guess is the rules are about the same as the Feds.

Are you renting out the camper ? If so, you'd have some write offs for the original cost and maintenance of it....but you also have to file a Schedule C reporting the income along with the expenses. Using it yourself, or just letting family/friends use it won't qualify.

Same with your tractor. Is it part of a legitimate attempt to earn money farming ?......and I don't mean you sell a few bucks worth of eggs from time to time. IF you can claim it IS a piece of equipment needed to farm for income, then yes, you can write off the cost of it plus maintenance, fuel, etc. You'd need to file a Schedule F to reports income/expenses.

Find yourself a GOOD tax advisor if you really want more specifics....not H&R Block type twits...look for someone with an "enrolled agent" status (someone that can represent you like an attorney in tax court) if you want someone that is generally pretty good at what you can and can't do.

 

[3Ts]

The real answer is "It depends" and on several things. Also, how much are you willing to risk getting audited? The real answer for you is to see your tax adviser and explain what you're doing and trying to accomplish. You may have more tax deductions than you realize.

I had a discussion with my CPA about business use of vehicles and the IRS allowance per mile. IRS allows more if you have records to prove it. I had the records, but CPA said we're not going to because it will raise a red flag for an auditor and the cost of the audit is far more than you'll save with the larger deduction. He did find several other areas where I had no clue that saved me far more than that. The way I see it is that he's saved me more in deductions that what he charges me to do my taxes. With a side benefit of less aggravation.

 

[3Ts]

Note: An "enrolled agent" is usually one who worked for the IRS but does not usually have their CPA license. All CPA's can represent you in tax court if need be.

 

[TnAndy]

I had a discussion with my CPA about business use of vehicles and the IRS allowance per mile. IRS allows more if you have records to prove it. I had the records, but CPA said we're not going to because it will raise a red flag for an auditor and the cost of the audit is far more than you'll save with the larger deduction.

No, the IRS allows the same deduction per mile records or not. They do ask on the Schedule C in the line for mileage "Do you keep a log" but the deduction is the same. My guess is you answer "no" to that question, they figure you're a more likely victim for an audit.

If you have a LEGITIMATE deduction for mileage and your CPA says "don't take it", I'd find a new tax guy.

One year I was doing commission sales work and put a lot of miles on my vehicle compared to income from those sales.....which is why I got audited for my mileage. It was a simple, limited audit, they wanted to see if it was legit. Now I never kept a log book....what a PITA.....I simply took my start of year mileage and subtracted it from my end of year mileage, and used about 75% of that as business miles, which I felt was true.....but I did get a yearly calender type book every year and throw it in my tax record JUST in case of audit.

So, before the audit for that year, I took the blank book, along with several different pencils/pens, and created my 'log book'. Get in the audit, the gal says "Well, let's just look at one month....say March". We add up the miles I have on my log book, and it comes out to be (amazing huh ?) exactly what my adding machine tape stapled to my records says !

End of audit....except for one thing....that year, the mileage rate was 25 1/2 cents per mile (.255).....I'd hit .225 when I ran the tape by mistake, and had thus underclaimed 3 cents/mile.....for a whole bunch of miles ! She ran it for the year, and they owed me 4-500 bucks !! I looked at her when she got done and said (so help me God)...."Hey, this was great.....can we do it again next year ?"

Never been audited again

 

[TnAndy]

Note: An "enrolled agent" is usually one who worked for the IRS but does not usually have their CPA license. All CPA's can represent you in tax court if need be.

Yep..... and when they switch sides, they know all the tricks too !

 

[1930]

Ok, I don't want it that badly. Thanks

 

[skipperbrown]

"Good decision. The IRS doesn't want to see a business deduction unless the bottom line shows a taxable profit," said a recovering cpa [that's me], "and even then, they may challenge the deduction (but not the income)."

 

[nards444]

Your RV is deductible if it financed and is a second home. meaning you have a first home as well. The RV must have shower/bath, kitchen, and sleeping area. The interest on that loan for the RV is deductible. The RV would be deductible as well if you were either renting it or using it another manner to make money, but then again that would be rolled up in your business. If your trailer has no loan, and you dont use it for business then NO its not eligible for anything Federally, although you might be able to deduct registration fees on it.

As for the tractor unless its used as way to make money there is nothing deductible about it.

Of course there could be state situations but doubtful, and if you were a farmer there may be somethings as well.

 

[bambam31]

Your RV is deductible if it financed and is a second home. meaning you have a first home as well. The RV must have shower/bath, kitchen, and sleeping area. The interest on that loan for the RV is deductible. The RV would be deductible as well if you were either renting it or using it another manner to make money, but then again that would be rolled up in your business. If your trailer has no loan, and you dont use it for business then NO its not eligible for anything Federally, although you might be able to deduct registration fees on it.


As for the tractor unless its used as way to make money there is nothing deductible about it.

Of course there could be state situations but doubtful, and if you were a farmer there may be somethings as well.

This is the correct answer.

 

[Overtaxed]

This is the correct answer.

Yup.. My boat counted as a 2nd home and the interest on it was deductible just like mortgage too because it had a bathroom and sleeping area.

However, for most of us, this is a moot point anymore because of the new tax law. This past year I took the standard deduction for the first time ever because of the limitations on state/local tax. Unless you have a special situation (lots of charitable donations, for example) most people will be taking the standard deduction now. This past year was the first time in ~15 years that I haven't itemized, and I did it both ways (itemized and non), the standard deduction was the way to go for me. Oh, and sending in a 35,000 dollar check on top of what I've already paid (all W2 income). Yeah, now you know where my screen name comes from.. If you add up my house payment, car payments, and all my fixed expenses (electric, water, etc) every year, and then you multiply that number by 2, you're about where my total federal income tax lands. Add in state taxes, it's over 2X. So I pay for my house, my cars and all the stuff that goes along with living my lifestyle, and then I pay it 2 more times to the government.

Don't get me started (probably too late for that).

 

[nards444]

Yup.. My boat counted as a 2nd home and the interest on it was deductible just like mortgage too because it had a bathroom and sleeping area.

However, for most of us, this is a moot point anymore because of the new tax law. This past year I took the standard deduction for the first time ever because of the limitations on state/local tax. Unless you have a special situation (lots of charitable donations, for example) most people will be taking the standard deduction now. This past year was the first time in ~15 years that I haven't itemized, and I did it both ways (itemized and non), the standard deduction was the way to go for me. Oh, and sending in a 35,000 dollar check on top of what I've already paid (all W2 income). Yeah, now you know where my screen name comes from.. If you add up my house payment, car payments, and all my fixed expenses (electric, water, etc) every year, and then you multiply that number by 2, you're about where my total federal income tax lands. Add in state taxes, it's over 2X. So I pay for my house, my cars and all the stuff that goes along with living my lifestyle, and then I pay it 2 more times to the government.

Don't get me started (probably too late for that).

Yeah people over complicate taxes and overvalue right offs like they are something, although money is money. Standard is probably what most will do anyway unless your making multiple six figures even then chances that you have more than 24k in itemized deductions is slim, unless you own a business or have a special situation. If you take the standard this whole deduction on this thread is moot point federally at least. Even then if you look at deductions people think ohhh i had a 1000 dollar write off, yeah technically your deduction is 1000 but the actual cash value is probably more like 100 bucks.

Pro tip if look at your 2040 if its a 24k deduction on there, file it yourself online for free and be done with it. I got tons of buddies that pay this guy or that guy 2-300 bucks to file a standardized return, lol. Its pretty simple go to your W2 look at box one, subtract 24k for a standard deduction, credit child credit, then go to the tax tables and calculate. For this guy hes paying around 11k in taxes.

But i feel you we do pretty good but not that good and our federal, state taxes are dang near the national income average. crazy