Tax Rules for Your Trailer as a Medical Traveler’s Home in 2023

Using a trailer, RV, or 5th wheel as your lodging while on medical assignments is a popular strategy for travelers. It eliminates the hassle of constantly packing and unpacking and searching for new rental housing. While terms like RV, 5th wheel, and travel trailer differ technically, for simplicity, we’ll use “RV” to cover these mobile dwelling types when discussing the general tax principles relevant to using your trailer for medical travelers in 2023. Acquiring an RV or trailer is a significant investment, often comparable to or exceeding the cost of a traditional home. However, paying rent for temporary housing at each assignment is also costly, and that money is gone once spent. Unlike rent, an owned RV remains an asset.

So, Can You Deduct Your RV or Trailer Expenses?

If you rented an apartment at an assignment location, you would typically deduct those lodging expenses less any per diem received specifically for housing. Since purchasing and using an RV or trailer serves as a substitute for renting a home or apartment, one might assume that associated RV expenses would also be deductible when used in this manner for work. However, the tax rules are specific.

First, Understand the Tax Home Requirement

To deduct any travel-related expenses for work assignments, a traveler must first maintain a qualifying tax residence. This is different from a permanent legal residence. A tax home is generally your principal place of income. If a person does not have a main place of work, their tax home can be their principal residence, provided they have substantial expenses to maintain that dwelling which are duplicated when they are at an assignment location. Without a qualifying tax home, none of your travel expenses, including housing costs for using a trailer for medical travelers, are deductible.

Second, Your Trailer/RV Must Be a SECOND Residence

If you travel full-time in an RV or trailer and do not maintain a primary job location or have a main dwelling that you incur a financial burden for (like mortgage or rent payments, utilities, etc.), you likely do not meet the tax home requirement mentioned above. Some individuals living mobilely might leave behind vacant land or an empty pad, but this is generally not considered a dwelling for tax home purposes. For your trailer or RV expenses to be potentially deductible in any way related to work travel, you must be duplicating living expenses by maintaining a separate primary residence.

Now that we’ve covered these foundational requirements for deducting any travel expenses, let’s address the specifics of deducting RV or trailer ownership expenses.

RVs and Trailers Are Considered a “Residence” in the Tax Code

Under the tax code, RVs and trailers are considered a “residence,” and more specifically, a “dwelling unit.” This broad category includes virtually anything equipped for living, such as houses, apartments, boats, and RVs/trailers. Just as mortgage interest and real estate taxes paid on a primary or secondary traditional home are deductible, interest paid on an RV or trailer loan can be deductible. Similarly, property taxes paid on the RV or trailer to local governments are also potentially deductible as they substitute for real estate taxes.

But what about all the other expenses associated with owning and operating your trailer or RV, such as insurance, maintenance, repairs, and depreciation?

RVs and Trailers Fall Under a Peculiar Part of the Tax Code

Tax rules illustration for trailer expenses of medical travelers in 2023

Since an RV or trailer is classified as a “dwelling unit” and considered a residence for tax purposes, it falls under a specific section of the tax code (§280A) that imposes significant restrictions on expense deductions related to dwelling units. Generally, if you use a dwelling unit for personal lodging for more than 14 days during the year, or if personal use days exceed 10% of the days it is rented out, the deductions for that dwelling are severely limited. Deductions are often capped at the amount of income derived from the property (e.g., if you rent it out), or in many cases for travelers using it as their own lodging, deductions are not allowed at all beyond the interest and taxes mentioned earlier.

This rule in §280A is the key answer to the question many medical travelers ask when considering using a trailer or RV in 2023 for assignments. If you were renting someone else’s RV for your assignment, the rental cost would likely be deductible as a lodging expense (assuming you meet the tax home test). However, owning the RV or trailer that you also use as your residence triggers these limitations. Once you use the RV for personal activities (sleeping, eating, watching TV, etc.) for more than 14 days a year – which is inevitable if it’s your housing for assignments – you are using it for personal purposes as a dwelling. This prevents you from deducting many of the typical business expenses, even though you are using it because of your work travel. The fact of ownership and personal use as a dwelling changes how deductions are treated compared to simply renting. Exploring travel equipment options like a what is the best travel scooter might involve different deduction rules than lodging.

Summary for Medical Travelers Using a Trailer in 2023

As a medical traveler using your owned RV or trailer as a residence at your assignment locations in 2023, you are generally permitted to deduct the interest paid on the RV/trailer loan and any property taxes paid. However, due to the rules surrounding personal use of a dwelling unit (§280A), you cannot deduct most other ownership expenses, such as insurance, maintenance, repairs, or depreciate the cost of the RV/trailer itself, since it is used for personal lodging for more than 14 days. The housing per diem you receive from your employer is intended to cover your lodging expenses, and these funds should be used to pay for your housing costs, whether it’s RV payments, site fees, or other related expenses, but the per diem itself doesn’t automatically make all RV ownership costs deductible. When planning your mobile lifestyle, exploring resources like flying j dealer — mega travel plaza breezewood photos can offer insights into roadside amenities, but understanding the tax implications of your mobile home itself is crucial.

References:
Jackson v Commissioner TC Memo 2014-160
Dunford v Commissioner TC Memo 2013-189