Is a Safe Deposit Box Still Tax Deductible? Who Still Qualifies

A safe deposit box is not tax deductible for individuals, and after the One Big Beautiful Bill Act was signed on July 4, 2025, that rule is permanent.¹ The fee is still deductible in narrower circumstances: when the box is used for a trade or business, for rental property, or to administer an estate or trust. If you rent a box to hold personal papers, jewelry, or your own investment documents, the cost comes out of your pocket with no help from the tax code.

Why Individuals Can No Longer Deduct the Fee

Through tax year 2017, safe deposit box rent was a miscellaneous itemized deduction on Schedule A if the box held taxable income-producing items like stock certificates or bond agreements, and only to the extent your miscellaneous deductions passed 2% of adjusted gross income.² Personal-use storage never qualified.

The Tax Cuts and Jobs Act of 2017 suspended all 2% miscellaneous itemized deductions for tax years 2018 through 2025, and IRS Publication 529 states that rent for a safe deposit box used to store taxable investments “can no longer be deducted.”² The suspension was scheduled to lapse after 2025, but the One Big Beautiful Bill Act (Public Law No. 119-21) made the elimination permanent.¹ Starting with the 2026 tax year, there is no path back to deducting the fee as a personal investment expense.

When the Fee Is Still Deductible

The permanent change targets individual miscellaneous itemized deductions. It leaves untouched the separate tax code provisions that allow deductions for business, rental, and fiduciary expenses.

Business Owners

Federal tax law allows a deduction for all ordinary and necessary expenses paid in carrying on a trade or business, including rentals required for the continued use of property used in that business.³ A box used to hold business records, contracts, or similar documents qualifies. An “ordinary” expense is common and accepted in your field, and a “necessary” expense is helpful and appropriate; it does not have to be indispensable.

Sole proprietors report the deduction on Schedule C. Partnerships, S-corporations, and C-corporations deduct it on their entity returns. The box must genuinely serve the business, and mixed personal use limits what you can claim.

Rental Property Owners

If you own rental real estate and keep leases, deeds, or financial records for the property in a safe deposit box, the fee is an operating expense of the rental activity, treated like other costs necessary to run the property.⁴ Report it on Schedule E. The link between the box and the rental has to be real; a box that mostly holds personal items with one lease tucked inside will not support a full deduction.

Estates and Non-Grantor Trusts

Estates and non-grantor trusts have a separate rule. Under IRC Section 67(e), expenses paid in administering an estate or trust that would not have been incurred if the property were not held in that estate or trust are not treated as miscellaneous itemized deductions and remain fully deductible.⁵ Treasury Regulation 1.67-4 confirms which administration costs survive the suspension, listing fiduciary expenses that are not commonly incurred by individuals.⁶ A box rented by a fiduciary to safeguard estate assets or trust instruments fits the same logic and is deducted on Form 1041.⁷

Mixed-Use Boxes

Many people keep business records and personal valuables in the same box. In that case, deduct only the portion of the fee tied to the business or rental use. A reasonable allocation, usually based on how much space each category takes up, is what the IRS expects. Half-business, half-personal supports a 50% deduction. A box that is 90% personal with one business folder does not.

Records to Keep

If you qualify under one of the exceptions, keep the bank’s receipt or billing statement showing the fee and the tax year it covers, along with the rental agreement establishing when the box was opened and in whose name. Maintain a short inventory of what is in the box and why it serves a business, rental, or fiduciary purpose, and update it when contents change. For mixed-use boxes, write down your allocation and the reasoning. The IRS requires that records supporting return entries be available for inspection, and a deduction without any backup showing qualifying use is an easy target in an audit.⁸

1
U.S. Congress. H.R.1 – 119th Congress (2025-2026)
2
Internal Revenue Service. Publication 529 (12/2020), Miscellaneous Deductions
3
Office of the Law Revision Counsel. 26 U.S. Code 162 – Trade or Business Expenses
4
Internal Revenue Service. Topic No. 414, Rental Income and Expenses
5
Office of the Law Revision Counsel. 26 U.S. Code 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
6
eCFR. 26 CFR 1.67-4 – Costs Paid or Incurred by Estates or Non-Grantor Trusts
7
Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 (2025)
8
Internal Revenue Service. What Kind of Records Should I Keep