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.