Reprinted with permission from Storage Authority.

Kevin O’Leary, an investor featured on the TV show “Shark Tank,” says success isn’t only about how much money you make but how much you get to keep after taxes. Each year, self-storage operators have to pay property tax—one of the largest business expenses—and income tax, which can be another hefty outlay. You can’t eliminate this cost entirely, but there are ways to minimize it.

Following are three great strategies to legally transfer money “tax-free” from your self-storage company to you and your family. Read on to see if they might work for you. Just bear in mind that I’m not a certified public accountant (CPA) or attorney, so consult with your own expert to further understand the details and IRS requirements of these tactics.

No. 1: Rent Your Home to Your Business

Tax laws allow you to rent your home to your self-storage business for 14 days per year and not pay taxes on the income. So, if you rent your own house for a $1,000 a day, that would be $14,000 on which you don’t pay a penny in income tax. And just as exciting, your company gets to write it off as an expense to save even more!

There are many reasonable ways you can use the property over those 14 days. You might host some staff meetings or mini retreats. My personal favorite is to make social media marketing videos.

Good record-keeping is a must here. You need to send an invoice from you as the homeowner to your self-storage company. The rental should be at market rate, so you need to contact two or three local venues and see what they charge for a day's rental. Typically, there’s a $500 minimum and often much more.

No. 2: Pay Your Kids to Work for You

This works for children ages 7 to 18, who can earn up to $12,000 a year. Your kids won’t even have to pay income tax. Again, the wages will count as an expense to your business for further savings.

Imagine if your kids made $12,000 a year and half went into their IRA or college fund. It could be life-changing. Just as important is the education they’ll get by working. My kids learned more by working in our self-storage facility than they did in college!

The caveat is does have to be legitimate work. Here are several ideas for things your children can do to support your self-storage business:

No. 3: Consider Depreciation

Instead of depreciating your self-storage facility over the standard 29 years set by the IRS, hire a professional to prepare a component depreciation schedule. You can significantly depreciate your facility in the early years for more cash flow.

Everyone’s financial situation will be different. Only a professional CPA can help you identify the right course of action for your self-storage business and family.

Marc Goodin is president of Storage Authority LLC, a self-storage franchise, and the owner of three self-storage facilities that he designed, built and manages. He’s been helping others in the industry for more than 25 years. To reach him, call 860.830.6764, email [email protected]. You can also purchase his books on facility development and marketing in the Inside Self-Storage Store.