There are so many good reasons for businesses large and small to use self-storage units. When a company needs one, that’s usually a sign of success, since they’re growing and need more room for whatever they use to run the business. Using a self-storage unit saves your business the trouble and expense of having to find a larger office or storefront to rent.
There’s another benefit to renting a self-storage unit, and that’s when tax time comes around. Your storage rental fee can be a tax deduction in several cases, saving you even more money when it comes to your operating expenses.
Can I Claim a Storage Unit on Taxes?
Storage units have become increasingly popular with business owners. Storing inventory and other items helps keep their main office from getting overcrowded. Managers can find themselves needing to fill a unit with a variety of items necessary for running the business, including:
- Surplus inventory
- Materials used to create your product
- Excess office supplies
- Specialized parts and equipment
- Older records and files
- Seasonal furniture
- Holiday decorations
Self-storage units like the ones at Treasure Island Storage are housed in buildings that have high levels of security, including advanced monitoring, front gate security, and indoor and outdoor lighting. The units are climate-controlled to prevent excess humidity or moisture from damaging anything inside there.
And it’s also important to think about the business expense deductions available to you since a storage unit can definitely qualify as a business-related expense.
Claiming storage rental fees as a deductible business expense is allowed as long as this expense is necessary for running your business. The cost of the storage facility is usually deductible for businesses and sometimes for individuals when they use storage space while they’re in the process of moving.
According to the general tax deduction rules, the cost of a storage facility can be tax-deductible under two circumstances:
- The rent that a business pays for a storage facility is considered a tax deduction if you need that extra space to help run your company;
- Individuals can deduct rental expenditures for a storage facility if they’re part of a deduction for moving expenses related to your job or self-employment.
What Does the IRS Say about Tax Deduction of Storage Expenses?
The Internal Revenue Service has guidelines on business expenses, available at Publication 535–Business Expenses. A business expense is whatever is considered “ordinary and necessary” for your business to operate. If you need that extra space to run your company, that can be considered an ongoing, regular business expense.
As long as you’re storing supplies or other equipment needed to run your business, you can write off your storage fees as a standard business expense deduction, and that’s true even if you’re a smaller corporation. There are self-employment tax deductions for storage units that you can claim. Self-storage tax deductions qualify within the category of rent expenses.
If your storage unit is being used for both business and personal items, you would need to declare the percentage of items inside the unit that’s related to your business, and identify the “other uses” that you wouldn’t be able to write-off. An experienced tax accountant can help you determine which of the items inside your self-storage you can deduct on your taxes.
When it comes to deducting storage expenses for an individual, the cost qualifies for a tax deduction if the storage unit was used as part of your moving expenses. That would be considered deductible on an individual tax return. Deductible moving expenses are those costs related to a move that’s required for a job or a business location.
The new location must be at least 50 miles from your previous home. So for example, if you move to a new city more than 50 miles from your existing home for a new job, and put things in storage while you’re searching for a new home, the rent you pay for storage is tax-deductible as part of your moving expenses.
Discover TI Storage for Self-Storage Solutions in NYC
If you’re in need of a storage unit, look no further than Treasure Island Storage. Security is a top concern at TI Storage, which is why we offer video surveillance, gated security, climate-controlled units and insurance for your belongings. Whatever it is that you need to have stored, TI Storage has a variety of climate-controlled storage units to suit your needs, and you can access your belongings 24/7.
Located throughout New York and New Jersey, Treasure Island Storage is guaranteed to be the top choice for self-storage near you. Simply locate the Treasure Island Storage in your neighborhood and stop by. Our team of storage solution associates is happy to show you around and help you reserve the unit you need. Contact us today!