When it comes to working RVers and earning an income on the road, many turn to starting their own businesses as freelancers, consultants, content creators, and other entrepreneurial endeavors. In a more traditional “sticks and bricks” environment, doing this seems fairly cut-and-dry; either you set up a home office space or you rent space somewhere else. BUT, when your home, business office, and vehicle are one and the same, it gets a bit trickier, especially when you look at tax opportunities, insurance liabilities, and even warranty coverage.
To help RVers make informed decisions about these questions, we reached out to experts in the different areas of RVing and earning income for their professional insight and advice.
Can I Write Off My RV As A Business Expense?
Business owners and freelancers often throw around the phrase “it’s a write off!” when it comes to reviewing business expenses. Before you get yourself into hot water with the IRS or your accountant, consider this advice from Heather Ryan, the Tax Queen.
When you use your RV as both your home and mobile office, it’s tempting to deducting many of your everyday expenses as business needs. Before you get too excited, remember there are two basic requirements for your home office to qualify as a deduction:
- Regular and exclusive use.
- Principal place of your business.
If you live tiny, can you really say any space is exclusively used for business? Probably not, right?
Plus, because the area used for business in an RV is so small, it usually isn’t worth the time and trouble to make the calculations and keep all the documentation. It’s also a red flag on a tax return. For all these reasons, Heather doesn’t recommend taking this deduction.
There are a couple of exceptions including a toy hauler and bunkhouse where the garage or bunk room can be dedicated office or studio space. Reminder: you do not meet the requirements of the exclusive use test if you use the area in question both for business and personal purposes.
If you plan to take this deduction, you must keep concise records. Lack of documentation alone can get your deduction denied by the IRS. In recent years, the IRS does allow for a simplified home office deduction which makes it easier to compute ($5/square foot up to 300 square feet) and less records are needed.
While the home office deduction can be valuable for those with a larger home and a designated office space, it isn’t often worth it for those living in a small space like an RV.
Think about it this way. The potential deduction may not be worth it, even if you do keep meticulous records and respect needed boundaries. Did you want to save maybe $20 and risk an audit? You decide if it’s worth it or not. (While we’re thinking about tax prep for RVers, check out this article from Heather, too!)
But what about RVers who work remotely as an employee of another company? If you are a W-2 employee and you own your own side business, you’ll need to prove exclusive use of your work space for your self-employed work. Otherwise, no, W-2 employees are unable to deduct expenses related to working from home.
Escapees – Working from the Road & RV Warranty Coverage
Taxes aren’t the only legal or financial loophole you have to be cautious of. If you choose to utilize your RV as a mobile office in some capacity, be mindful of how this may impact your RV warranty coverage. To help you navigate the fine print of your RV warranty, and how your mobile office may be affected, Staci Ritchie-Roman of Wholesale Warranties offers her insight.
The working condition of your home-on-wheels is always important, but never more so than when it is your living and working space. Unfortunately, any seasoned RVer will tell you, it’s not a matter of if your RV will breakdown, but when. You can’t prevent repairs altogether, but you can protect yourself from the costs associated with modern RV breakdowns. Extended RV warranty protection will step in to pay the cost of most mechanical and electrical failures your RV faces, allowing you to protect your travel (and home and work) budget! So, the question is, does involving your RV in your business impact your eligibility for coverage?
The answer is: not always! When looking at RV protection options, it’s always recommended to work with a provider who will get to know who you are as an RVer. This includes your rig, your travel plans, your full-timer status, and if you work from the road. Some policies will explicitly deny coverage in this case, but not all. A broker like Wholesale Warranties, who specializes in personalized coverage, will match you up with a provider who allows for commercial use of your vehicle. You can learn more about what is and isn’t covered by an RV warranty here.
Typically, you will pay an additional fee for commercial use. This is a one-time surcharge paid at the inception of your coverage, and will last for the duration of your term. Commercial Use typically applies to units that are used in a rental capacity, or as a functional part of your business, such as commercial construction or job site activity, an RV wrapped with commercial advertising, or a unit purchased in a company’s name. Some activities, like writing books, working a remote job from your computer within your RV, or creating a YouTube channel that centers on your travels, will most likely not require this added surcharge.
Working from the road is one of the greatest perks of RVing, and a way to truly live life on your terms. Protecting that freedom with an RV warranty is a great option, and one that is available to just about every type of RV business.
Insurance Things To Know: Using An RV For Business
Using your RV as a mobile office for your self-employment presents another potential hurdle- insurance coverage. The largest consideration for using your RV as a mobile office is the type of work you are doing. While most full-timer RV insurance policies allow for contents coverage (such as your laptop, monitor, webcam, and other equipment related to remote work), once you establish your RV as a mobile headquarters for your business, your coverage could be affected. To help figure out the ins and outs of these options, we reached out to FCIS/RV Advantage. Jake Thompson and Renae Hopp, both from the brokerage’s commercial division, lend their input.
Are you working remotely for an employer? This may not require additional liability to use the RV as your workspace. You should verify with your employer that any company-issued equipment is covered under their business policy if a loss, like theft, occurs. If those types of items are not covered by the company while it is away from headquarters, check with your homeowner’s or full-time RV policy for options.
A commercial or business insurance policy may be needed if the nature of your work is outside the normal scope of remote work. For example–utilizing the RV to travel to work sites, selling merchandise out of the unit, meeting with clients inside the RV, or using it for delivery would all require additional insurance. Be especially aware if you are operating a business from your RV while living in it more than 30 days a year. Check with your insurance provider on the coverage options available to you.
Regarding strictly using the RV as a mobile office, like writers, photographers or bloggers tend to do (not bringing any clients to/in the RV) while also using it as a residential/recreational vehicle there are no additional coverages needed for the RV or personal contents. This type of usage is acceptable on a personal travel trailer or motorhome insurance policy. Confirm a company issued laptop or equipment is covered by the employer or your homeowner’s or full-time RV policy.
If the insured has advertising on the outside of the RV that would attract people or if they are bringing clients to/in the RV or traveling to a worksite or location, this type of usage would require a commercial policy. A commercial policy would provide coverage for contents used specifically for the business whereas a personal policy would not. Physical damage coverage on the RV would be written on an Actual Cash Value settlement option, which means if there were a total loss to the RV, the insurance carrier would payout the depreciated or current market value of the RV at the time of loss. Total Loss Replacement and Agreed Value settlement options are not available on commercial policies.
The same is true for the auto being towed by the motorhome or towing the travel trailer. If there is no actual business being conducted than a personal auto policy is sufficient. The liability on the auto is extended from the Motorhome policy while traveling down the road and vice versa on a Travel Trailer/5th wheel. Physical damage to the vehicle would be covered by the auto/RV policy.
You risk having your claim denied or policy canceled if you have a personal RV policy while using the RV for business that would attract additional liability risks such as bring clients to/in the RV. Keep in mind, there are restrictions on the number of nights the RV can be used as a recreational vehicle on a commercial policy.
In a nutshell, if you are doing anything outside the scope of a general remote work job, you should check with your insurance provider to ensure you are adequately protected in case of an emergency. The last thing you want while dealing with a stressful emergency is also fighting with your insurance company over insufficient coverage. For the most peace of mind, check out this article from FCIS’s team about the things you need to know about your RV insurance coverage.
We hope that, with all of this in mind, you now feel better equipped to get the most from your office-on-wheels while keeping yourself out of legal and financial confusion! If you have further questions on any of these topics, we encourage you to reach out to the appropriate contributor for more detailed information.
