External Storage Devices
Hard drives, SSDs, NAS systems, and backup drives for storing and protecting your content files.
Tax Form
Schedule C, Line 22
Estimated Savings
$100-1,000/year
IRS Reference
Publication 946
How It Works
External storage devices are essential for content creators who work with large video files, project archives, and backups. Hard drives, SSDs, NAS (Network Attached Storage) systems, and USB drives used primarily for business are deductible. Items under $2,500 can be expensed immediately using the de minimis safe harbor; larger purchases can use Section 179 or depreciation.
IRS Rules & Requirements
- Under $2,500: Can expense immediately using de minimis safe harbor election
- Over $2,500: Use Section 179 to deduct full cost, or depreciate over 5 years
- Must be used more than 50% for business purposes
- Cloud storage subscriptions are also deductible (different from physical storage)
- Keep purchase receipts and document business use
Real Examples
4TB external SSD at $200 = fully deductible (under $2,500 threshold)
NAS system with 20TB at $1,500 = fully deductible via de minimis or Section 179
Multiple backup drives totaling $500 = fully deductible
Common Mistakes to Avoid
- Not keeping receipts for storage purchases
- Forgetting that physical storage and cloud storage are both deductible
- Not taking the de minimis safe harbor election for items under $2,500
- Missing deduction for replacement drives and upgrades
Pro Tip
The de minimis safe harbor lets you expense items under $2,500 immediately instead of depreciating. Attach a statement to your tax return titled 'Section 1.263(a)-1(f) de minimis safe harbor election.'
Related Deductions
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