Van life and taxes

In My Humble Opinion
1

So, this van life thing seems to be taking off a bit these days. I don’t know what percentage of young folks are taking it up, but it certainly seems as though it is far more popular and also far more practical than it was just a few years ago, let alone 20 or so when I was that age.

I know that if I was getting ready to leave the nest, and looking at the current housing situation, I would be strongly considering it.

There are a number of challenges that come along with such a decision, logistical, practical, hygenical, and so forth, but the one that I’ve never seen addressed is the tax situation.

When I worked for a utility, I’d get quite a number of w-2’s, one for everywhere I worked. Even if all did was a single disconnect in a particular municipality, I had a w-2 subtracting out a few cents to go towards their income tax.

Many of these van life people talk about how they have a job that they can do from anywhere there is internet (and Starlink is expanding that substantially), but they don’t talk about how they figure out their taxes. You pay taxes on where you work, which means that if you are parked in a Wal-mart parking lot in East Nowhere in the morning and working, then go to a Kroger parking lot in West Nowhere in the afternoon to finish up, then you should have to pay taxes in both towns of Nowhere.

Over the course of a year, one may build up dozens or more of towns and states that they owe taxes to. How would one go about determining their tax burden for all the places that they have been, or would most not even bother? Also, how would one determine their place of residency, not just for taxes, but for voting or other amenities(for instance, if you live in a local county, then you get free access to county parks, if you don’t, then you have to pay).

2

Taxes aren’t specifically directed towards the physical place where work is done. The workplace of record will control a lot of that.

This said, some jobs like professional sports generate income based in the place it was performed, so you might want to involve an accountant for that. If it’s just pure income, the paperwork won’t be too bad, just time consuming.

I’m guessing you live in a state that loves local taxes, many don’t have these or only the biggest counties do. Otherwise each state has it’s own law and requirements about what constitutes a resident. In order to drive you need a DL, and van life doesn’t mean you have to change the license frequently. The state of licensure generally is evidence of residence, and you need to surrender it within X days and get a new state if the address of record expires. Same is of what the county library considers a resident, or how many days residence they have.

3

I expect that they just have some kind of “permanent” domicile in a state with no income taxes and claim to live and work there. Very few van-lifers are making significant money or (without a mortgage) are going to have significant deductions, so they’re pretty unlikely to be audited to begin with, and how would whatever state they happen to be passing through even know to look into them?

The high-profile high-income ones probably keep detailed notes and hire a CPA to handle it.

This might depend on some state laws, but in general you don’t stop being a resident of somewhere if you go on a (long) vacation. If you intend to return to your state of residence and go on a 3 year road trip, you’re still a resident of where you used to live.

4

You are only allowed to collect the benefits of residency for one place at a time. This article has it broken into two lists: “Evidence often considered” and “What State auditors are looking for”. It also advises keeping a journal of dates and locations.

"Other evidence often considered in evaluating whether there has been a permanent change in domicile includes:

  • Location of employment
  • Classification of employment as permanent or temporary
  • Location of business relationships and transactions, such as active participation in a profession or trade or substantial investment in or management of a closely held business
  • Serving on the board of directors for a business or charity
  • Living quarters: whether a person’s former living quarters were sold, rented out or retained, and whether he or she leased or purchased real property in his or her new location
  • The amount of time spent in the state versus amount of time spent outside the state (183-day rule)
  • State where the taxpayer is registered to vote
  • The state of issuance of a driver’s license or fishing/hunting permits
  • Location of the school a family’s child attends
  • Memberships in country clubs, social or fraternal organizations

In residency audits, state auditors will review:

  • Credit card statements: where charges are incurred, where the bill is sent and the location of the checking account used to pay the bill
  • Location of bank accounts, investments and other financial transactions such as automated teller machine withdrawals
  • Resident and nonresident fishing/hunting licenses and park admissions
  • Freeway fast-lane pass charges (E-ZPass, SunPass, etc.)
  • Records of airline frequent flyer miles
  • Jurisdiction issuing a driver’s license, vehicle registration, professional license or union membership
  • Homestead tax abatement or credit applications and property tax bills
  • Church attendance and membership
  • Location of doctors, dentists, accountants and attorneys
  • Official mailing address and where mail is received
  • Where an individual is registered to, and actually does, vote"