Can I use Section 280A(g) to rent storage space in my home for online selling business?
I've been searching everywhere and can't find a clear answer about this specific tax scenario. I'm confused about how to interpret the tax code correctly. I run a small Etsy shop selling handmade jewelry, and I keep all my supplies and inventory in a spare bedroom of my home. I'm wondering if I could use the Augusta rule (Section 280A(g)) to have my business pay for the storage space in my home. My thought is maybe I could research what local climate-controlled storage units cost per square foot, then charge my business that rate based on the actual square footage I'm using in my home for inventory storage. Would I be allowed to charge my business for this storage space once per month? This is just a side gig that brings in about $13k in net profit annually. Not sure if that matters for this particular tax question, but figured I'd mention it. Anyone familiar with Section 280A(g) who could help clarify this?
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Genevieve Cavalier
The Augusta Rule (Section 280A(g)) specifically allows homeowners to rent out their residence for up to 14 days per year without reporting that income on their taxes. However, I think there's a potential issue with how you're trying to apply it. When you're using the Augusta Rule between yourself and your business, you're essentially renting out part of your home to your business entity. This works well for business meetings or events, but for continuous storage, it becomes more complicated. The rule is designed for short-term, occasional use - not ongoing storage. For storage space, you might be better off looking at the home office deduction, which allows you to deduct expenses for the business use of your home including a portion used "exclusively and regularly" for storage of inventory. This applies especially well to seller businesses like yours.
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Ethan Scott
•Wait - I thought the home office deduction was only for spaces used EXCLUSIVELY for business? If they're storing inventory in a spare bedroom that's occasionally used for guests, would that still qualify?
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Genevieve Cavalier
•You're right that the home office deduction typically requires exclusive use of the space for business purposes. However, there's a specific exception for inventory storage. According to IRS Publication 587, you can deduct expenses for space used to store inventory or product samples if you: Sell products at wholesale or retail as your business, and use your home as the only fixed location of your business, and use the storage space on a regular basis, and the space is separately identifiable. The room doesn't need to be used exclusively for inventory if these conditions are met, though the deduction would only apply to the portion of the room actually used for storage.
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Lola Perez
After getting absolutely nowhere with figuring out the home office deduction for my Shopify business, I finally tried https://taxr.ai and it was a huge help. You upload your tax documents and describe your situation, and it walks you through exactly what qualifies for Section 280A(g) vs regular home office deductions. In my case, I learned I could actually use the Augusta Rule for occasional business photoshoots in my home, but for the storage space I needed to use the regular home office deduction method. The system even calculated the exact square footage and percentage I could claim based on IRS guidelines.
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Nathaniel Stewart
•Does taxr.ai help with deciding whether to use the simplified or regular method for the home office deduction? I'm always confused which would give a better deduction.
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Riya Sharma
•I'm skeptical about these online tax tools. How does it handle state-specific tax issues? My state has weird rules about home-based businesses.
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Lola Perez
•Yes, it definitely helps with comparing the simplified vs. regular method. It actually shows you calculations for both methods side by side so you can see which gives you a better deduction. In my case, I had a lot of home maintenance expenses this year, so the regular method saved me about $800 more than the simplified option. Regarding state-specific rules, it covers those too. After analyzing your federal situation, it has a section specifically for state tax implications. When I mentioned I was in Pennsylvania, it flagged some specific state requirements about business licensing for home-based businesses that I wasn't aware of.
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Riya Sharma
I just wanted to follow up on my experience with https://taxr.ai after being skeptical initially. I decided to try it for my Ebay business tax questions, and it was pretty impressive. The document analyzer spotted that I was mixing up Section 280A(g) with regular home office deductions in my records, which could have caused issues in an audit. The system walked me through the exact difference between occasional business use under the Augusta Rule versus ongoing storage space deductions. Turns out I was leaving money on the table by not properly documenting my dedicated inventory storage area. It even generated IRS-compliant documentation for me to keep for my records.
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Santiago Diaz
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Millie Long
•How does this actually work? I've been on hold with the IRS for over 2 hours multiple times, so I'm intrigued but confused about how any service could get through faster than me calling directly.
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KaiEsmeralda
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Santiago Diaz
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KaiEsmeralda
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Debra Bai
I may be missing something here, but I think another option might be to look at the regular home office deduction rather than the Augusta Rule. If you're using a space exclusively and regularly for business storage, you can deduct that percentage of your home expenses (mortgage interest, utilities, etc.). For example, if the storage area is 10% of your home's square footage, you can deduct 10% of those expenses. This might actually be more beneficial than trying to charge your business a "rental fee" under Section 280A(g).
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Zane Hernandez
•Thanks for this perspective! One question though - does the storage area need to be COMPLETELY exclusive to inventory? Like, I keep most of my supplies in plastic bins that are stacked against one wall of the spare bedroom. The room is maybe 200 sq ft total, but the storage probably only takes up about 40 sq ft. Can I deduct just that portion?
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Debra Bai
•The general rule is that the space needs to be used exclusively for business, but there's a special exception for inventory storage. If you're selling products as your business (which you are), and your home is the only fixed location of that business, you can deduct the space used for inventory storage even if it's part of a room. In your specific case, you could potentially deduct the 40 sq ft used for storage, not the entire 200 sq ft room. You'd calculate what percentage that 40 sq ft is of your entire home's square footage. So if your home is 2,000 sq ft total, you'd be deducting 2% (40 ÷ 2,000) of your eligible home expenses.
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Gabriel Freeman
The confusion here seems to be mixing up two different tax concepts. The Augusta Rule (280A(g)) lets you rent your WHOLE home to your business for up to 14 days tax-free. This is great for business meetings, photo shoots, training events, etc. For ONGOING storage, you want the home office deduction specifically for inventory storage (different part of tax code). You can claim the actual space used even if the room isn't exclusively for business. I made this mistake and got flagged for audit! Don't try to use the Augusta Rule for year-round storage - it won't fly with the IRS.
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Laura Lopez
•Can you do both in the same year though? Like use regular home office deduction for the storage space, but also use Augusta Rule to rent your living room to your business for a few days for meetings?
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