Full Time RVer - tax home

[Kea]

Retired clients plan to sell house & travel the US in their RV.  They will not have any set location (unless you count a vacation house in another country).  They are US citizens & will spend most of their time in US.  Can they follow the advice of the major RV experts (Good Sam, Escapeeze) in regards to choosing a tax home?  Not sure if these sources are as "reliable" as the MLM advisers (or local hairdresser, etc.).  Basically, can they choose any state they want to establish an address?  Will a mailing address alone be sufficient for things like tax returns (including state residency)?

Edited March 1, 2015 by Kea

[easytax]

Pub 946 speaks to "tax home" :

 

http://www.irs.gov/publications/p463/ch01.html#en_US_2014_publink100033754     you can look under index for determining tax home.

 

This is basically for whether you can deduct travel and such expenses but may shed some light.

 

NO ---- a mailing address does not define residency. There are many things that can/do such as where you have a vehicle license, voter registration, etc.

 

Here is a link to the PA Income Tax Guide that has a very good description/reference for what might define residency:  http://www.revenue.pa.gov/FormsandPublications/FormsforIndividuals/Documents/Personal%20Income%20Tax/dfo-02.pdf

 

Hope this helps.

 

Sorry, forgot page #;  page 6 onward for the PIT.

Edited March 1, 2015 by easytax

[Kea]

I presume that since that would be their only address, they would have to vote, register vehicles, get driver's licence, insurance, etc. from location of new address.  They wouldn't have any other address to use for these documents.

 

As full time RVers, with no fixed location (in the US), the only address they would have would be some sort of mail forwarding service. 

 

I know determining tax home also includes where you intend to return.  But if they don't have any plans to return to anywhere in particular...

 

Thanks easytax for the list of questions for PA residency / domicile.  That does help by listing factors to consider.  I would guess that the location of many of the items in that list would transfer to the location of the mailing address.  However, some are just not applicable to a retired full-time RVer in the electronic age.

[Lee B]

If they don't jump thru the hoops to set up residence in another state i.e., Drivers License, Vehicle Title & Registration, Vehicle Insurance, Voters Registration, etc., then their tax home will remain in their current state.

[Kea]

So, as long as they jump through the proper hoops, they can pick whatever location they want?

[Lion EA]

If they actually meet the requirements to be a resident, days spent there, domicile, whatever it is for that state.  As CBSLEE said, they have to leave their state AND stick the landing before their state will consider them no longer a resident.  Read the residency FAQs on the state websites or in the instructions for the state tax returns for their current state and for any states they are considering.  Then go to the state tax codes and court cases.

[Kea]

The issue is they probably not meet "days spent" in any one state. Currently in TX, so shouldn't have an issue there.

I'll tell them to check the various states' websites.

Thanks to all.

[kcjenkins]

Just make it plain to them that unless they do it right, they will remain residents of their current state.  Things like Drivers Lic, car and/or RV tags are the most obvious and provable.  

[Kea]

Thanks. Good to know.