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Can I write off data storage subscriptions?

TL;DR

Data storage subscriptions can be deductible if they are ordinary and necessary expenses for your trade or business.

Detailed Answer

Data storage subscriptions are deductible as a business expense if they are directly related to your business operations. For example, if you are a freelance photographer storing client photos or a small business maintaining cloud-based records, these expenses can be considered ordinary and necessary. However, if the storage is used for personal purposes, it is not deductible.

Where to Put It on the Tax Form

Schedule C (Form 1040), Line 27a for sole proprietors; Schedule E for rental activities; or as a business expense on the relevant business tax form.

Real World Example

A freelance graphic designer pays for a cloud storage service to back up client projects and invoices. This expense is deductible as it is necessary for maintaining and accessing business files.

Audit Risk & Documentation Tips

To minimize audit risk, maintain receipts or invoices for your data storage subscriptions and ensure they are clearly related to your business activities. Keep records of how the storage is used, especially if you use the same service for both personal and business purposes.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

FreelancersSmall BusinessPhotographersIT Professionals

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 7, 2025

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