Can You Claim a Storage Unit on Your Taxes?

You've got boxes stacked to the ceiling, furniture gathering dust, and maybe even an old motorcycle yearning for open roads. But that storage unit is costing you money, and you're wondering: Can I write off the storage unit on my taxes? The answer, like most things tax-related, is it depends.

While not always a straightforward "yes," there are specific situations where storage unit tax deductions are possible. Let's explore when to claim those storage fees and how to do it right.

Storage Units for Business: A Tax Haven

If you're using a storage unit for business, you're in luck! The IRS generally allows you to deduct storage unit expenses if they are "ordinary and necessary" for your business operations. This can include storing:

● Inventory: Excess stock, seasonal items, or raw materials.

● Equipment: Tools, machinery, or office furniture.

● Documents: Important records and files.

● Company vehicles: Cars, trucks, or specialized equipment.

If the storage unit is essential to keep your business running smoothly, it's likely a tax deductible expense.

Important Note: If you're using the storage unit for business and personal use, you must allocate the expenses accordingly. Keep detailed records of how much space is used for each purpose to calculate the deductible portion accurately.

Moving Expenses and Storage

You might have heard that storage units are tax deductible when moving. This was true until the Tax Cuts and Jobs Act of 2017, which suspended the moving expense deduction. However, there's one important exception:

● Military Moves: According to the IRS, active-duty military personnel relocating due to military orders can still deduct moving expenses, including storage unit costs.

So, if you're in the military and facing a move, keep those receipts! You'll need them to claim your storage unit tax deduction.

Other Potential Deductions

Beyond the common scenarios, there are a few less-known situations where storage unit expenses might be deductible:

● Storing Donated Goods: The associated storage costs may be deductible if you're storing items intended for donation to a qualified charity.

● Disaster Relief: If your home is damaged due to a natural disaster and you need to store your belongings while repairs are underway, you can deduct storage unit expenses.

These situations are more nuanced, so consulting a tax professional for guidance is recommended.

Documentation is Key

To successfully claim storage unit tax deductions, accurate record-keeping is essential. Make sure to keep:

● Receipts: Keep all receipts for storage unit rental payments.

● Inventory: Maintain a detailed inventory of stored items, especially for business use.

● Relevant Documentation: If claiming a deduction related to a move or disaster relief, keep supporting documents like military orders or insurance claims.

Common Mistakes to Avoid

Even with the best intentions, it's easy to make mistakes when claiming tax deductions. Here are a few common pitfalls to watch out for when deducting storage unit expenses:

● Overestimating Business Use: Accurately allocate expenses if your storage unit is used for personal and business purposes.

● Missing Documentation: Keep thorough records to support your deductions.

● Assuming Deductibility: Not all storage expenses are deductible. Consult a tax professional if you need clarification.

Take the Stress Out of Storage with StoreEase

Whether you need storage units for business, personal use, or a military move, StoreEase offers a variety of options to meet your needs. Our secure, climate-controlled facilities ensure your belongings are safe and sound.

Find a StoreEase location near you and contact us today to find the perfect storage solution and learn how StoreEase can simplify your life!

Disclaimer: This blog post is intended for informational purposes only and does not constitute professional tax advice. Please consult a qualified tax advisor for personalized guidance on your situation.