With spring in full swing, its times to get back on the water and enjoy the beauty of our boats. It is great to know that boaters will have extra cash in their pockets as the Internal Revenue Service (IRS) has introduced tax breaks. With the great news comes the catch, only certain individuals are qualified to receive these tax breaks. They are given depending on what your boat is used for and whether or not it is considered a second home.
Depending on the type of boat you own and specifications such as the dimensions of your boat along with amenities such as a berth, galley and a bathroom can qualify your boat as a second home. On your taxes using form 1098 you can report the mortgage interest. With this in mind, when filing taxes make sure the individual preparing them knows of this matter that way he can file accordingly. This alone will keep more money in your pocket; lessening the burden on your financial situation and sidelining more money to pay off the mortgage and the interest associated.
If your boat is not considered a second home, not to worry, it can qualify under another set of criteria in order to make you eligible for the tax break.
- Sending it off to charity: Thinking it’s time to purchase a new boat, your first instinct would be to sell off the old one; hopefully finding a buyer. What many do not think of is that you can send your boat off to a charity and receive a big tax break. Once you take care of having an appraisal completed, you can put the market value when filing taxes allowing you to have more money in your pocket.
- Captain of your boat: Ever thought of doing something on the side with your boat. Perhaps taking some people sightseeing or anything else recreationally from time to time can potentially qualify you for deductions in your taxes. Depending on the amount of time you wish to devote to charter your vessel; that is the only amount of expenses you can claim. When doing this is sure that amount of time is not too little to make it look like the purpose is recreational and not too long to the point where you have to pay more taxes on your income.
- Conducting business on your boat: Perhaps another criterion to receive a tax break is by taking on your business meeting on board your boat. It is the strictest way to receive a tax break as the paper work needs to be intact as you need to verify that these meeting are affecting income. With your business, when filing you can put down expenses such as food, fuel and mooring fees.
Hopefully these new tax breaks being given by the IRS will put some extra money in your pocket. If you are a new boat owner or are thinking of buying one; take the boating safety course with Captain Rick. Sign up today at nyboatschool.com
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