Private storage units offer convenience and efficiency where the alternative will be chaos and clutter. As an individual, storage units can transform the clutter and disorganization of one’s life into a more breathable landscape. Your storage needs may be purely personal or you may find that your job requires you to go through a process that works better with a private storage facility lined up. If you are wondering, can I claim a storage unit on taxes, you may be surprised to find that your storage rental fee can be a permissible tax deduction in a number of cases.
Particularly in a business scenario, a storage unit can be a gamechanger. Every relevant department can enjoy organization at its finest, with ample climate-controlled space in a secure environment designed to store inventory, supplies, documents, and more without crowding the office. When wondering, can I claim a storage unit on taxes, it pays to do a little homework first to make sure your company is properly aligned for the best possible outcome with business expense deductions. In many cases, yes, your storage unit costs can qualify as business expenses for taxes!
Can You Write off Storage Rental as an Individual
If you are an individual with a personal home and a private self storage unit, it’s unlikely that you can legally write off your storage facility rental fees. The exception is if you qualify for and claim a moving expense deduction related to a new job relocation or a transfer for a current job. In this case, you may be able to deduct up to 30 days of storage rental if you are not able to move into your new home right away.
According to federal tax laws, you can deduct your moving expenses in either of the following scenarios:
- Your current job requires you to transfer to a new location.
- Your new job requires considerable relocation.
More specifically, your move must meet certain requirements to qualify as a valid move with moving expense deductions. The distance test and the time test come into play.
- The distance test – Your move must be at least 50 miles further from your home than your current job’s location using the shortest possible route in both instances. So if your current job is 10 miles away, your new job must be 60 miles away in order to qualify for a moving expense and personal storage tax write off.
- The time test – You must work full-time for no fewer than 39 weeks in the course of 12 months at the new location. The ticker begins on your first day in the new location, and you are afforded some flexibility. The 39 weeks do not need to be consecutive and you may also work for multiple employers to satisfy the requirement. Remember that you will have to reverse the deduction if you fail to satisfy the conditions above.
If you handle your own taxes, you will need IRS form 3903 to declare your moving expenses.
Can You Write off Storage Rental as a Business
Perhaps you store tools, supplies, or other equipment to properly run your business. If you run a business with legitimate storage needs as a typical requirement, you can write off your storage fees as a standard business expense deduction. Even as a smaller corporation, you can claim self-employment tax deductions for storage units if they are ordinary necessities of doing your kind of business.
Self-storage tax deductions qualify within the category of rent expenses. On your taxes, you’d write off these business expenses in the following manner:
- S-Corporations: U.S. Income Tax Return for an S Corporation, Form 1120S (line 11)
- C- Corporations: U.S. Corporation Income Tax Return, Form 1120 (line 16)
- Partnerships and multi member LLCs: U.S. Return of Partnership Income, Form 1065 (line 13)
- Sole Proprietorships and single-member LLCs: Profit or Loss from Business, Schedule C (line 20B)
Perhaps your self storage unit is of mixed use and you store some personal things there as well as your business items. In this case you’d have to declare the percentage that is work-related and identify the “other uses” that do not apply to your write-off. If you are unsure of how or whether your storage unit qualifies as one of the things you can deduct on your taxes, consider contacting your accountant for professional advice.
You can also connect with us here at Price Self Storage to discover our different storage locations that may be most convenient to your home or business site. Contact us today to clear your clutter and free your mind!