How Much of My Internet Can I Deduct for Business?

If you run a business from home, you are entitled to deduct certain expenses from your taxes.

deduct internet for business

One of these expenses is the cost of your internet service. However, figuring out how much of your internet you can deduct can be a bit tricky.

In this article, we’ll explain how to determine your deductible internet expenses and what you need to know to stay on the right side of the IRS.

Table of Contents

Determining Your Deductible Internet Expenses

The first step in determining your deductible internet expenses is to figure out what percentage of your internet use is business-related.

This can be a bit challenging since you likely use your internet for personal reasons as well. However, there are a few ways you can estimate your business-related internet usage:

1. Keep a Log: You can keep a log of your internet usage for a week or two and note which activities are business-related and which are personal. This will give you a good idea of what percentage of your internet use is for work.

2. Estimate Based on Time: If you spend a certain amount of time each day on business-related internet activities, you can estimate your monthly business-related usage based on that time.

For example, if you spend three hours a day on work-related internet activities and work five days a week, you can estimate that you use 60 hours of internet per month for business.

Once you have estimated your business-related internet usage, you can calculate your deductible internet expenses. To do this, you need to know how much you pay for internet service each month.

Calculating Your Deductible Internet Expenses

To calculate your deductible internet expenses, you need to multiply your monthly internet bill by the percentage of your internet use that is business-related.

For example, if your monthly internet bill is $50 and you estimate that 60% of your internet use is business-related, you can deduct $30 per month ($50 x 0.60).

It’s important to note that you can only deduct the percentage of your internet use that is business-related. If you use your internet for personal reasons as well, you cannot deduct those expenses.

Staying on the Right Side of the IRS

When deducting your internet expenses on your taxes, it’s important to stay on the right side of the IRS. Here are a few tips to help you do that:

1. Keep Good Records: Keep a log of your internet usage and keep copies of your internet bills. This will help you support your deductions if you are ever audited.

2. Be Reasonable: Don’t try to deduct more than you should. If you estimate that 60% of your internet use is business-related, make sure that is a reasonable estimate.

3. Don’t Double-Dip: If you are already deducting your home office expenses, you cannot deduct your internet expenses separately. Your internet expenses are included in your home office deduction.

You Can Take Advantage of This Deduction

Deducting your internet expenses can be a great way to save money on your taxes if you run a business from home.

However, it’s important to make sure you are calculating your deductions correctly and staying on the right side of the IRS.

By keeping good records, being reasonable in your estimates, and avoiding double-dipping, you can take advantage of this deduction without running into any trouble.

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