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Old 01-15-2013, 01:27 PM   #1
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Default Taxes and boats

Are there any tax deductions we can take for Our boating expenses?

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Old 01-15-2013, 02:56 PM   #2
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I'll preface my reply with the following:

Regarding Taxes and Legal Advice, it's always better to discuss with a professional, such as a CPA or a Lawyer. I caution that one should take either from anonymous sources on the internet with a grain of salt.

The Sales Tax Deduction
For boat owners who paid substantial state sales taxes on a new or used boat purchase last year, the Tax Extenders Act of 2008 continues to offer a federal tax deduction for state sales taxes. Boaters must choose either the state sales tax deduction or state income tax deduction on their federal tax return — you cannot take both.

In addition, to take the state sales tax deduction, the sales tax on a boat purchase must be applied at the same tax rate as the state’s general sales tax. In order to claim the sales tax deduction, tax returns must be itemized. State sales taxes are entered on IRS form Schedule A line 5b.

The Boat Loan Deduction
For those owners with a secured boat loan, mortgage interest paid on the loan may be deducted from your federal income taxes. Taxpayers may use the home mortgage interest deduction for one second home in addition to their primary home, and must itemize deductions on their returns. A boat is considered a second home for federal tax purposes if it has a galley, an installed head and sleeping berth.

Some boaters may be unaware of this potential tax benefit because not all lending institutions send borrowers an Internal Revenue Service form 1098 which reports the interest paid. Not receiving the form does not preclude taking the deduction. If a 1098 is not available, boaters should contact their lender for the amount of interest paid and should enter it on line 11 on Schedule A along with the lender’s tax ID number. If a form 1098 is sent, boaters should simply enter the amount on line 10 of Schedule A.


Fuel

If you purchase fuel from a landbased gas station, that fuel includes State Highway Use Taxes. However, you are not using the fuel on State Roads, therefore you should be able to submit for a refund from the state where the fuel tax was paid. Determine whether any on-water fuel docks are also including State Tax in the fuel cost. The taxes added for Highway Use can be deducted from the state if used on Off highway use (construction equipment, off road vehicles, boats, planes, etc).
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Old 01-15-2013, 03:07 PM   #3
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I deduct mine as a second home. Only the interest on the loan, not any operating cost.
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Old 01-15-2013, 04:16 PM   #4
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Just found this from : http://www.americanboating.org/fueltax.asp


Recreational boaters who purchase taxed fuel for use in their boats may be able to get a refund of all or part of that 'highway use tax' depending on the state in which the fuel was purchased.

According to the Federal Highway Administration, almost 4 million gallons of gasoline were used for non-highway purposes in 2001. Of this, almost 25% (993,837 gallons) was used in marine activities. The cost of this fuel generally includes a highway use tax of anywhere from 7.5/gallon to close to 30/gallon depending on the state.

Many states apply the tax on marine fuel towards boating programs through the Aquatic Resources Trust Fund. But in other states the money does not get funneled into the marine community, and instead is put into the highway improvement fund. Since boats don't cause wear and tear on the highways, bridges, and ferries that benefit from that fund, applying marine fuel tax towards the highway improvement fund is widely viewed as unfair.

To deal with the problem, several states have instituted procedures to refund at least part of the tax to recreational boaters who take the time to fill out the required paperwork and provide receipts as needed. To encourage ABA members to get the refund to which they are entitled, we've compiled basic information on the procedures for each participating state. Most of the state forms include detailed instructions; be sure to read them carefully.
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Old 01-15-2013, 08:02 PM   #5
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The fuel deduction is interesting... since I pay approximately 300 dollars a weekend for fuel expenses.. the deductions would add up quickly

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Old 01-16-2013, 04:01 PM   #6
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Quote:
Originally Posted by 9Ball View Post
The fuel deduction is interesting... since I pay approximately 300 dollars a weekend for fuel expenses.. the deductions would add up quickly

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As stated, verify with a CPA. Also note, this is on a State-by-state basis:

http://compnet.comp.state.md.us/Moto...otor_Fuel_Tax/
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Old 01-16-2013, 07:05 PM   #7
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Unfortunately Maryland doesn't allow Fuel tax deductions Unless it's a commercial vessel

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