Self-Storage and Taxes:
A Short FAQ

February 2, 2018

With April 15th fast approaching, you have likely spent time listing tax deductions for which you may qualify. We understand you want to get as much from your tax refund as possible, or else pay as little as you can for the year. We cater to a diverse population throughout Hampton Roads – military families, people coming to or leaving the area, lifelong residents – and just as everybody is different, so are their needs for storage. Though we are not experts in accounting or taxes, we do our best to answer questions about self-storage and how it relates to your expenses. For answers to the complex questions, contact an expert. Until then, here are a few we can cover for you:

Can I deduct storage unit rental fees if I use the storage for business?

Say you have a home-based business where you sell clothing or skin care or kitchen goods. You don’t have room for the inventory at home, so you keep everything in a secure storage unit and retrieve what you sell when you need it. You have kept track of all business expenses for marketing and travel, but what about storage?

This is a tricky one, because it depends on how you use your unit. If you use your storage space exclusively for business purposes, meaning your personal items are not mixed in with the goods you sell, you may be able to write off your rental fee as a business expense.

Can I deduct storage rental fees for moving?

You had to move last year, and required self-storage for a period of time while you made the transition. Can you write off the rental fees? Yes, but only if you meet the IRS’s requirements.

Your move should be related to your work. If you move after acquiring a position with a company more than fifty miles from your previous employment, and if you are a full-time employee for 39 of your first 52 weeks at the job, you may be able to deduct storage expenses. If you are self-employed – for example, moving to a new city to start or take over a business – you need to work full-time at least 78 weeks of your first 2 years in that business to be able to deduct storage.

Military personnel may be exempt from the time and distance qualifications if they move from one permanent location to another within a year of retirement or leaving the service.

What if my employer reimbursed some of my expenses?

If you moved in 2017, you will fill out Form 3903 when you file. Say your storage and transportation fees totaled $1000, and lodging during transition cost $500. If your employer gave you $1500 or more to help with the move, you cannot deduct expenses. If they reimbursed a part of your expenses and you covered the rest, you may be able to write off the difference.

Bear in mind, we are not tax experts, so if you are uncertain about deducting your storage fees, consult with your accountant or other tax professional. For more detailed information on acceptable deductions related to storage, you can also visit the IRS site.