IRS and motor homes

[AnnHester]

My wife and I are going to start using our motor home as a traveling business as of September 2009. Does anyone know what IRS tax advantages we can use to write off the expenses and motor home while we are on the road with this business?

The business is legit and will produce more income than expesses. While on these trips to seven states, the trips will be for business and we will be calling on some 50 retail establishments.

[tbutler]

Ann,

The short answer is yes, you can deduct some of your expenses while traveling in the motor home on business. The long answer will have to come from a tax attorney or a tax accountant who can sit down with you to discuss your specific situation. Things like the amount of time spent working vs. vacationing or sightseeing and visiting friends and relatives, etc. as well as whether you have a permanent home may affect how the law applies. There are IRS publications that you can use for initial guidance if you don't mind slogging through the legalese. Check the IRS website to download the latest of these. Of course those will currently be last years laws and regulations (Tax Year 2008). You will have to check again at filing time to get the latest word.

[tbutler]

AnnHester,

I was reading the post, http://community.fmca.com/index.php?showtopic=244 Driver Licensing - SC and Other States when it occurred to me that you might have to consider the regulations in your home state for your drivers license if you are using your motor home in support of your business and deducting motor home expenses related to your business. If you read my post there, the response from the South Dakota drivers license bureau indicates that a commercial drivers license is not required if the motor home is used for recreational purposes only. That is South Dakota, what about your state? If their laws are similar, then you might need to get a commercial drivers license to stay on the right side of the law.

[kalynzoo]

Call me a pessimist. If the IRS gets you in their sights it will cost you. If what you plan to do is out of line with the auditors experience, you may receive a ridiculous bill. The auditor may be a contract employee, not even a direct employee of the IRS. You may then contest the audit, and this will require your accountant and perhaps an attorney make a complete and complex reply. After the back and forth, a settlement will be made; however, after attorney fees and accountant fees your out of pocket expenses will be about the same.

Therefore, before you start, get the advice of professionals. Establish a policy and procedure based on that advice. Then carefully and completely document your expenses.

Best of luck. Sorry to be such a downer, but my experience with the IRS on other matters has given me a very pessimistic outlook.

[pianodan]

Another consideration, as I have done interstate business with my small business of piano tuning and repair, is the business laws of the states, cities, counties and townships (parishes in La) where your business will be conducted. I discovered when I rebuilt, sold and delivered an antique pump organ to a small church in an almost ghost town in IA (Carbon, the only coal mine town in IA), that one county over I would've been required to buy a permit to conduct my business. Of course, the only way I would've been caught up in that would be if someone had turned me in for doing business without that permit.

In my travels I've seen signs outside of a lot of towns stating that a visit to the city hall is required before any out of towner can conduct business there, I suppose to stop the fly by night carpetbaggers from conning people out of their money.