Question: We have a client who works as a lawyer under a fixed-term contract. He keeps most of his professional library and office records in a self-storage facility, which he accesses occasionally for work. Can he claim the cost of the self-storage facility as a deduction against his employment income?
Answer: The ATO doesn't specifically list storage expenses as deductible in Taxation Ruling TR 95/9. Typically, they might be considered private expenses unless the taxpayer can prove they're for work purposes (i.e., for earning assessable income under s 8 of ITAA 1997). Unless the client is running a business, his office records are likely seen as personal.
To support a claim for the storage rental on his professional library, it would help if he:
- Keeps a list of all items in storage to demonstrate their work-related nature, separating any private items.
- Has documentation from his employer indicating the necessity of storing the library offsite but also the requirement or encouragement to consult it for work, along with records of such consultations.
- If part of his salary is allocated as an allowance for storage, this can further support the claim (see Taxation Ruling IT2198).
- Can provide an account from the storage facility provider for rent as evidence.
These steps can strengthen his case if the deduction is investigated.
