Ask any entrepreneur what’s the best way to keep more of your hard earned money in your own pocket, the response your likely to get is “start a business”. Any business will help you take advantage of tax breaks and loopholes, lessening the bite taken by Uncle Sam. Why not make it a business that also allows you the opportunity to travel, you guessed it, in your RV.
Starting a business doesn’t necessarily mean you walk away from your current job or career. Small part-time endeavors reap many of the same tax incentives that a larger company would. After all, your goal may only be to help compensate some of the expense involved with traveling in an RV. How big or small you make your business is completely up to you.
Obviously most people start a business to make money. Sometimes, by placing “making money” as a secondary goal, you can come out just as far ahead.
I’m a writer, I sell articles about many subjects, not just those pertaining to Recreational Vehicles. Much of the information for these articles is obtained from the Internet, newspapers, TV and even radio. Most often I don’t need to go anywhere to find material for more articles. With a very low operating overhead, almost everything I make at this point is clear profit.
A business operates on straight income vs. expense bookkeeping system. If you have no expenses, all your income becomes taxable. Legitimate expenses reduce your income directly, reducing your tax liability often by their full amount.
So this weekend we want to load up the RV or Van and take a trip to Bayfield WI to enjoy the October Apple Festival. How is this going to help my writing business?
Whereever I go my camera and note pad are my constant companions. Snap a few pictures, jot down a few notes, and when I get home a series of articles will be written. There is no guarantee that the articles generated by this trip will exceed the expense of the trip, but guess what, it doesn’t matter.
Expenses are measured against the whole years income. With my writing being a part time income, reducing my total profit is to my advantage. It’s not my fault that I occasionally lose money on an RV trip. I at least try to make it profitable, and in some cases I actually succeed in showing a profit off a trip.
In the end our enjoyable weekend outing allowed us to deduct mileage on our RV, deduct all admission and campground fees, and deduct a portion of our meals throughout the trip.
Even though Uncle Sam will gladly allow you to show a net loss on a business for up to 5 years without question, I always do my best to make sure there is enough of a profit to be considered a viable business.
Being a writer is only one way you can make a small business work for you. Any business you can operate from your RV on the road will provide the same tax benefits for you.
Examples may include selling things like jewelry, used books, leather goods, or what ever at flea markets. Pulling a small cargo trailer behind your RV with your inventory or tools of the trade makes your RV a rolling work shop.
Start a food concession and travel the festival circuit in your region. You get to attend all the festivities and make money while you’re doing it.
Making your travel expenses a legitimate tax deduction is as easy as starting any kind of a portable small business. Remember, sometimes you can make out better when making money becomes a secondary goal.