How to Deduct Campground Fees as a Business Expense
DISCLAIMER: The information and materials we share in this article are intended for reference only. As the information is designed solely to provide guidance to the readers, it is not intended to be a substitute for someone seeking personalized professional advice based on specific factual situations. Therefore, we strongly encourage you to seek the advice of a professional to help you with your specific needs.
As full-time RVers we spend a lot of money paying for campgrounds each night. It’s one of our biggest expenses if we don’t find that perfect boondocking spot. Wouldn’t it be awesome to be able to deduct some of these costs on your tax return?
There may be a way.
The purpose of this article is to help you understand if you may be able to claim campground fees as a business expense deduction on your next tax return.
Two Ways to Be Able to Claim Your Campground Fees
In general there are two distinct ways to potentially claim your campground fees as a business expense.
- The first is if you travel away from your tax home and duplicate your expenses at a campsite for business purposes.
- The second is if you have a legit home office in your RV (make sure your home office meets these requirements), you may be able to deduct a percentage of your campground fees as “utility” expenses for your business.
If you have a legit home office in your RV, scoot on down to the section titled You Have a Home Office in Your RV below. For the rest of us, let’s determine your tax home to see if you can claim your campground fees as a business expense.
We say us, because we’ve personally determined we don’t have a qualified home office in our Casita Travel Trailer.
Determine Your Tax Home
What is a Tax Home?
Your tax home isn’t the place you live. The IRS considers your tax home as the place you work and make your money.
If you live and work full-time out of your RV and travel around, the IRS considers you an “itinerant.” An itinerant is another word for a transient.
Here’s what the IRS says about itinerants making travel deductions (this includes campground fees):
“If you don’t have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax is home is wherever you work. As an itinerant, you can’t claim a travel expense deduction because you are never considered to be traveling away from home.” Source
Since the IRS sees us full-timers as itinerants, they see our tax home as wherever we are in our RV living and working. So, as an itinerant, you can rarely claim a travel expense deduction (like a campground fee) because you aren’t often considered to be traveling away from your tax home for business purposes.
However, we all know our situations are always changing. Here are three factors the IRS gives us to determine where our tax home is at any given moment.
Factors to Determine Your Tax Home:
Here are three factors to determine your tax home from the IRS.
“If you don’t have a regular or main place of business or work, use the following three factors to determine where your tax home is. If you satisfy all three factors, your tax home is where you regularly live. If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you can’t deduct travel expenses.
Three factors:
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- You perform part of your business in the area of your main home and use that home for lodging while doing business in the area.
- You have living expenses at your main home that you duplicate because your business requires you to be away from that home.
- You haven’t abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging.” Source
Again, if you satisfy all three factors, your tax home is where you regularly live and you can claim your campground fees as a business expense if you are at the campground for business purposes. If you satisfy only two factors, you may have a tax home and you may be able to claim your campground fees depending on all the facts and circumstances. If you satisfy only one factor, you are considered an itinerant, and your tax home is wherever you work and you can’t deduct travel expenses and campground fees.
Based on this information, where is your tax home? Is it the home you regularly live and base camp from? Or is it your RV that’s always on the move?
If your tax home is your RV that’s always on the move and you don’t have a legit home office, then we don’t suggest you deduct campground fees as a business expense. If your tax home is your main home that you travel away from for business purposes, then you may be able to claim your campground fees as business expenses.
Two Situations You Can Deduct Your Campground Fees
1. If you travel away from your tax home for a business purpose and duplicate your expenses.
If you have a tax home that you travel away from for business purposes, you may be able to deduct your campground fees.
Here’s an example: You are a photographer that lives in a sticks and bricks home in Arizona. You’ve been hired to shoot a wedding in New Mexico. It makes more business sense for you to take your RV and stay at a campsite in New Mexico while you shoot your client’s wedding. Your campsite is an ordinary and necessary expense to perform your photography service for your client and can be a business expense deduction on your taxes. This is because you left your tax home in Arizona to do business work in New Mexico.
2. You have a home office in your RV.
Assuming you have a home office in your RV that meets all the requirements in this article, it is our opinion that you can claim a percentage of your campsite fees as “utility” fees to run your business. The key distinction that we make is the campsite is not considered a “lodging” fee, but it is a “utility” fee. This is because your lodging is your RV that you have already paid cash for or have a mortgage for. As RVers, we pay for campsites for the utilities they provide us. We need the water, sewage services, and electricity for business purposes like charging our laptops, printers, phones, etc.
This is similar to a typical home office environment where you have an office for your business in your home. Utilities are considered a business expense that can be claimed (at a percentage) as a deduction.
Read this article about how you can claim the home office deduction and claim a percentage of your utility fees as business expenses.
How to Claim Your Campground Fees as a Business Expense
If you can deduct your campground fees based on the factors above, here’s how to make the deduction.
- Keep a copy of your receipts.
Keep the physical version or take a photo of your receipts and store them in a specific folder for “Campground Fees” to have proof of your campground fees. - Keep a travel log.
Maintain a travel log on a spreadsheet with all of your campsites locations, the dates at the campsite, the cost of nights stayed, and your intention for being there (business, etc.) You can see an example of a travel log here.
- Make the deduction on your tax form.
Add up the total cost from your spreadsheet and report it on the appropriate part of Schedule C of your taxes.
If you are considering doing this, make sure to understand this is specifically speaking for a Schedule C business that is taxed as a sole proprietor. If you operate as a Partnership or S Corporation, you will need to have a formal Accountable Plan in place to route a rental agreement through.
If you have any questions about your specific situation and claiming campground fees as business expense deductions, seek professional advice from your Certified Public Accountant.
DISCLAIMER: The information and materials we share in this article are intended for reference only. As the information is designed solely to provide guidance to the readers, it is not intended to be a substitute for someone seeking personalized professional advice based on specific factual situations. Therefore, we strongly encourage you to seek the advice of a professional to help you with your specific needs.
Author
Adam & Lindsey Nubern
Adam Nubern -CPA and Lindsey Nubern help RVers, digital nomads, and location independent businesses with their taxes and accounting at Nuventure CPA LLC. They are digital nomads and have been traveling for over four years in the US and abroad out of backpacks, campervans, and RVs. They live the lifestyle and enjoys helping folks navigate their numbers while being on the road.
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Thanks Guys for clearing the air and providing a basic understanding of accounting for the nomadic work experience. This will prove to be a valuable reference source in setting up our future.
Phil