The motorhome tax credit under the stimulus bill will expire December 31, 2009. If you have been thinking about making a purchase, act soon and deduct a portion of the sales and excise taxes on your income tax form. This will reduce your tax obligation for 2009.
According to RVIA Today Express:
For the remainder of the calendar year, tax provisions under the stimulus package allow for sales and excise tax deductions for new purchases of qualified motor vehicles, including motorhomes. The deductions are attributable to taxes applying to the first $49,500 of the purchase price. Individuals with an adjusted gross income of up to $125,000 and joint filers with an adjusted gross income of up to $250,000 are eligible for the deduction, which will reduce the taxpayer’s taxable income.
Cash or credit?
Should you purchase your RV on credit? You can deduct the interest on your income tax if your RV will be your main or second home. Your accountant can best advise you whether or not this is an advantage to you overall. Having your RV paid off does give you more flexibility, particularly if your spending is close to or exceeds your income including the payment.
You could realize quite a savings by taking advantage of the tax credit. It's something to consider. If you'd like more details, see the "RVIA Fact Sheet on the Motor Vehicle Sales and Excise Tax Deduction Benefit for Consumers."
Shop wisely
Even though this deal is tempting, follow all the steps you would normally follow to make a major purchase. Do not make this an impulse buy.
- Research RVs and find the right one for your planned RV lifestyle. The RV Consumer Group rates RVs for their intended use and lets you know about their quality. A membership is well worth the price when you consider you will be spending thousands of dollars.
- Go to RV shows and dealers without your credit card or checkbook. Take a check list of the features you want and then photograph each RV so you can have pictures to jog your memory when making a comparison.
- If you look at used units, hire your own inspector to check the unit out- both the engine and the body. Some weaknesses or problem areas are hard to see if you don't know what you are looking for.
- Test drive the unit. When we were looking at RVs, my late husband, Bill, drove a Fleetwood Bounder. Forever after we called them Fleetwood Bouncers! A washer/dryer combo had been added and that rattled and rolled plus the overall drive was very bouncy. That was the end of that one. A beautiful RV may not have a smooth ride.
- Have your financing lined up a head of time. That can save you big money in interest and give you more bargaining power.
- Check out the dealer with the Better Business Bureau and with RVServiceReviews.com to see how other RVers have rated them on the service end of things. I guarantee you will have to go back to get things fixed after your purchase.
Comparison shop
I do advise comparison shopping. Dealers are still hungry for sales. When Bill and I were getting ready to full-time RV and looking for a rig, we initially were interested in a Travel Supreme 5th wheel. We saw them at a show and were impressed with how well made they were. Bill sent a letter with specifications to a dozen or so dealers east of the Mississippi. We were astonished to find about a $20,000 difference in prices! The dealer closest to us in Maryland was had the highest price. With dealers listed on the Internet, it is much easier to let your "fingers do the walking" - either by phone or keyboard.
Should you rush into purchasing an RV in the next two months? Yes, if you are ready to make a purchase and have done your research or are willing to do so. If not, you'll have to weigh the savings v possibly making a too hasty decision. In any case, this lifestyle is an adventure and the sooner you get your RV, the sooner you can get out and take advantage of it! Jaimie Hall Bruzenak
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