Is My Internet A Work From Home Tax Deduction? (2024)

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Is My Internet Bill Tax-Deductible?

There’s really nothing better than working from home. You can roll out of bed and be at work without needing to commute and worry about traffic or bad weather. The pandemic played a huge role in shifting how people worked, showing us that running a business doesn't always have to be from a storefront. What's made this possible, of course, is digital technology. It has completely changed our lives in every possible way, especially how and where we conduct business. The internet provides anyone access to a network of possibilities, including freelancers and small business owners. If access to the internet is necessary for your work as a self-employed person, you might wonder whether you can write off your internet bill or at least a portion of it. You might also have questions like “Does the internet count as part of a utility bill?” or “Are utilities even tax deductible?” Read on and find out!

Table of contents

Key takeaways...Read more

If I work from home, can I deduct internet costs?...Read more

When is my WiFi bill nondeductible?...Read more

Can a W-2 employee deduct their internet costs?...Read more

Does the home office write-off cover all internet costs?...Read more

How to write off WiFi for business...Read more

What else can I claim on my taxes?...Read more

Key takeaways

Internet costs are no longer a type of remote worker tax deduction and are only available to self-employed individuals.
A portion of your internet can be a home business tax deduction.
Utilities are tax-deductible if you work from home.

If I work from home, can I deduct internet costs?

The answer to this question depends on whether you’re self-employed or work for an employer. Before 2018, full-time employees could write off internet costs as a remote worker tax deduction on their income tax returns. This is no longer the case. For most self-employed people, the internet is necessary to conduct business. You might have an online clothing store, teach piano lessons to students across the country or stream on Twitch. The internet makes it possible for you to run your own business, and without it, your business wouldn’t exist. You can deduct internet costs if you work from home or regularly do business online. Running a business online can include:

Acquiring new business or customers through various platforms
Online banking for your business
Sending emails to customers or vendors
Monitoring analytics
Researching new products or pricing information

This deduction can lower your 1099 income, which helps you pay less in SE tax. A self-employed tax calculator can help you calculate this.

When is my WiFi bill nondeductible?

Let’s say you work for Instacart and manage most of your business on the road. You receive assignments, use the maps feature and check on your payments. Once home, you use your personal internet to create a monthly budget. Your monthly budget isn’t technically related to your job, so you couldn’t write off a portion of your WiFi for business. But if you were sending work emails or reviewing your Instacart finances using your home internet, a portion of your home internet bill would be tax deductible. You can always use a 1099 tax calculator to find all the deductions you can claim.

Can a W-2 employee deduct their internet costs?

Sadly, no. Working from home as a W-2 employee doesn’t qualify you for any work-from-home tax deductions. Some employers will reimburse employees for their interest costs, but that’s totally up to the employer. Before 2017, employees could actually write off the expenses if they were 2% greater than their annual gross income. After the Tax Cuts and Jobs Act, the IRS scrapped this rule until 2025.

Does the home office write-off cover all internet costs?

Like most self-employed individuals, you probably use your home internet for both personal and business purposes. You can only deduct the portion of your bill that's used for work, so you need to calculate your business-use percentage. This can be a bit tricky and requires some math, but at least it saves you money when paying estimated quarterly taxes. For example, if you run your own business from 9 am to 5 pm every business day and you’re awake from 7 am to 9 pm, you'll need to:

Calculate the hours you’re awake
Calculate how many of those hours you use for business
Divide the answer from step two by the answer in step one
Arrive at your business-use percentage

So, in this case, your business-use percentage is 41%, which means you can write off 41% of your WiFi bill.

How to write off WiFi for business

You have two options for how to deduct your internet bill, either as a work-from-home tax deduction or separately on Schedule C. If you have a dedicated space in your home for your home office that you use often and it’s your primary place of work, you’re eligible to claim the home office deduction. You’ll need to calculate the deduction for your home office using IRS Form 8829. If you choose the regular method, you can include other working-from-home tax deductions like:

Office plants
Rent
Utilities
Renter or homeowner insurance
Office furniture
Phone bill
Laptop (through depreciation)

Or, you can choose the simplified home office deduction if you want to deduct your entire home office without a lot of calculations and just deduct $5 per square foot of your office or workspace. If you’re not taking the home office write-off, you’ll need to report your internet deduction on Schedule C and attach it to your Form 1040. With this option, you can write off part of your WiFi for business even if you are experiencing a loss, unlike with the home office deduction. A loss can help lower your taxable income. So which option should you choose? Generally, reporting your internet costs on Schedule C is the safer choice. The reason is quite straightforward – you can only use the internet for the working-from-home tax write-off when you have income left over after covering all your other work-related expenses. If your income doesn't outweigh your total expenses for the year, you won't be able to claim a home office deduction in that tax year.

What else can I claim on my taxes?

When you work for yourself, you can take advantage of many self-employed tax deductions to help lower your taxable income and save some money. When paying income tax, you can also claim the standard or itemized deduction for your personal expenses. The obvious way to go is whichever route gives you the most tax savings.

The IRS also sets a standard deduction amount each year to match rising costs and inflation. How much you get to deduct with the standard deduction depends on your filing status (single, married filing separately or married filing jointly). This option is convenient, saves time and anyone can take it, even if you don’t have any deductions to itemize. Unlike the standard deduction, itemizing your personal expenses requires some recordkeeping. But you can claim more deductions and potentially save more money. It takes more time and effort, though, and not every item qualifies for a deduction. You can write off expenses like dental costs and charity contributions. If you're already claiming the internet deduction, you may be asking yourself, “Are utilities tax deductible?” You can deduct a portion of your home utility bill as a working-from-home tax deduction as long as your home serves as your business HQ. Does the internet count as a utility bill? Well, it depends. Claiming internet costs as part of the home office deduction, it is a separate cost to utilities. If you’re not claiming the home office deduction, you should report the internet on Line 25 on Schedule C under “Utilities.” You can also include any work-related gas, water and electricity costs. It would be nice if you could just record these business expenses and be on your way. But things are never that simple with the IRS, who require proof that you actually had a business need for the expenses you claimed. So start saving receipts and other proof of purchase statements. Business expenses need to be ordinary and necessary to qualify as a self-employment deduction. Suppose you’re a social media influencer. You can deduct internet costs if you work from home as it's a necessary expense. You can also write off buying a high-quality camera as taking photos is an ordinary part of your work.

Examples of ordinary and necessary expenses :

Work uniforms
Courses for a certification or license renewal
Repairs and maintenance of business equipment
Office supplies
Advertising
Office utility bills

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2024

FAQs

Is My Internet A Work From Home Tax Deduction? ›

Internet costs are no longer a type of remote worker tax deduction and are only available to self-employed individuals. A portion of your internet can be a home business tax deduction. Utilities are tax-deductible if you work from home.

Find Out More ›

Can I write off my internet bill if I work from home? ›

If you're a W-2 employee and work from home, your internet bill is not tax-deductible. If you're in that position, consider asking your employer about potential opportunities for reimbursem*nt — including expense programs and work-from-home stipends.

Are there any tax breaks for working from home? ›

If you work from home for part of the year, only include expenses incurred during that time. Under the simplified method, you deduct $5 for every square foot of space in your home used for a qualified business purpose. Again, you can only claim the deduction for the time you work from home.

Learn More Now ›

Can I deduct home office if I work remotely? ›

Home-Related Expenses

Your home office can be claimed as a business expense if it is for and supports your self-employment and not your job as an employee. For phone and internet expenses, you can split them between your self-employment work, employee work, and personal expenses.

Learn More Now ›

What deduction can I claim without receipts? ›

What does the IRS allow you to deduct (or “write off”) without receipts?

Self-employment taxes. ...
Home office expenses. ...
Self-employed health insurance premiums. ...
Self-employed retirement plan contributions. ...
Vehicle expenses. ...
Cell phone expenses.

May 31, 2024

Get More Info ›

Can I deduct Internet for home office? ›

Calculating Your Internet Deduction. Internet expenses associated with your home office are deductible on the “Utilities” line of Form 8829. Expenses associated with an office in the home either are considered a direct expense or an indirect expense. Direct expenses are costs that pertain only to the home office.

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What does IRS allow for home office deduction? ›

Standard deduction of $5 per square foot of home used for business (maximum 300 square feet). Allowable home-related itemized deductions claimed in full on Schedule A. (For example: Mortgage interest, real estate taxes).

Find Out More ›

What utilities can you write off for a home office? ›

As a general rule, you can deduct the business percentage of your utility payments for heat and electricity, and for services that pertain to the entire house such as trash collection, security services, and maid or cleaning services.

Know More ›

Can you write-off utilities if you work from home? ›

The home office tax deduction is an often overlooked tax break for the self-employed that covers expenses for the business use of your home, including mortgage interest, rent, insurance, utilities, repairs, and depreciation.

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Are there any tax deductions for remote workers? ›

Employees who work from home can no longer claim tax deductions for their unreimbursed employee expenses or home office costs on their federal tax return. Prior to the 2018 tax reform, employees could claim these expenses as an itemized deduction.

Get More Info ›

How do I file taxes if I work remotely? ›

You'll file as a resident for the state where you live, and if the work state withholds taxes, you'll file a nonresident return for the state where you work.

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Is internet a utility expense? ›

Internet bills are considered a utility bill, just like telephone bills, because they provide services to the home or business that are considered necessary for daily activity.

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