Is My Internet Bill Tax-Deductible in 2022?

by
Chloe Bryan
Updated 
October 20, 2022
October 19, 2022
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Reviewed by
Sarah York, EA
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Reviewed by
Sarah York, EA

Sarah is a staff writer at Keeper and has her Enrolled Agent license with the IRS. In 2022, she was named one of CPA Practice Advisor’s 20 Under 40 Top Influencers in the field of accounting. Her work has been featured in Business Insider, Money Under 30, Best Life, GOBankingRates, and Shopify. Sarah has nearly a decade of public accounting experience, and has worked with clients in a wide range of industries, including oil and gas, manufacturing, real estate, wholesale and retail, finance, and ecommerce. Sarah has extensive experience offering strategic tax planning at the state and federal level. During her time in industry, she handled tax returns for C corps, S corps, partnerships, nonprofits, and sole proprietorships. Sarah is a member of the National Association of Enrolled Agents (NAEA) and maintains her continuing education requirements by completing over 30 hours of tax training every year. In her spare time, she is a devoted cat mom and enjoys hiking, painting, and overwatering her houseplants.

Is My Internet Bill Tax-Deductible in 2022?
by
Chloe Bryan
Updated 
October 20, 2022
October 19, 2022
Icon check
Reviewed by
Sarah York, EA

The internet is so ingrained in our lives, we might not even realize how vital it can be for work. Without it, we couldn't have Zoom calls, send invoices over email, or Slack anyone.

If you have to get online for work, you might be able to write off your internet bill as a work-related expense. But since we often use home internet for business and personal reasons — and since it's all on the same bill — the tax deduction can be tricky to figure out.

Here's how to write off your internet if you work from home — and how to determine whether you can do it in the first place.

Contents

Can you write off your internet if you work from home?

Short answer: It depends on whether you’re working for yourself or for an employer. 

If you're a freelancer, a small business owner, or otherwise self-employed, you can likely deduct at least part of your internet bill.

If you're a W-2 employee who works remotely, you can't. (Sorry.) However, you might be able to get reimbursed by your employer.

If you're a freelancer or small business owner: Probably

If you're self-employed, you can write off part of your internet bill if you use the internet for work.

What counts as using the internet for self-employed work?

J. David Bennett, a CPA and a founding member of the Renaissance CPA Group in Nashville, Tennessee, looks at it this way: “If your business has a website that you run, then that’s a place of business on the internet.”

Think of the online world as an extra “wing” of your office. If you regularly conduct business on the internet, then you can write off part of your bill.

If you’re a freelance writer, for example, your business clearly requires the internet to function. It also counts if you're a self-employed kayak instructor or construction worker who:

  • Books clients through a website
  • Sends client emails
  • Sources customers on LinkedIn or Instagram 

You can track your internet write-offs (and other recurring monthly costs like rent and utilities) using the Keeper app. It’ll even pick up the name of your internet service provider automatically, so you can set it and forget it — and have all the information you need to file when tax season hits.

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Are there any online tasks you can’t write off?

It’s fairly rare for independent contractors who WFH to not qualify for any internet write-offs. But if you only use your home internet for tasks that are loosely related to your business, your internet is probably not a tax deduction. (“Loosely related” means activities that won’t ever lead to profit.) 

For example, say you’re an Uber driver. You book rides on the road using cell service. At home, you use your Wi-Fi to update the Google Sheets where you track your income and expenses for the month — including what you earned from Uber. Even though there is a work-related component, this counts as personal use. You’re managing your personal finances — it’s not, in any sense, a revenue-generating activity. 

On the other hand, if you have a spreadsheet designated for your rideshare driving that you use to gauge profitable driving windows, gas usage, and other work-specific notes, the Wi-Fi you use updating that spreadsheet would count.

In this scenario, you’re taking an active role in managing your business, and the data on your spreadsheet will lead to more profit down the road.

Note: If your only reason for claiming the internet is a bit of spreadsheet use, your deduction is unlikely to be very much. That’s because you can only claim part of your total internet bill. (More on this later!) 

If you're an employee who works remotely: No

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 reimbursement — including expense programs and work-from-home stipends. You might even be legally entitled: The Fair Labor Standards Act (FLSA) requires employers to reimburse any work-related expenses that cause their employee’s pay to drop below the minimum wage. 

Until 2017, remote employees were able to deduct internet costs under the "2% rule." This allowed write-offs for work expenses as long as they exceeded 2% of the employee's annual gross income. However, the Tax Cuts and Jobs Act (the tax reform bill that passed in late 2017) nixed these write-offs through at least 2025. 

How much of your Wi-Fi bill can you deduct?

You probably use your home internet for both work and leisure, but you can only write off the portion of your internet usage that’s work-related — called your “business-use percentage.”

For example, pretend you use your internet for client communications 40% of the time, and for Netflix, TikTok, and online shopping the other 60% of the time. You can only write off 40% of your internet bill. 

Calculating your business-use percentage for Wi-Fi

You (probably) don't have separate "work" and "leisure" Wi-Fi connections for the same space, so this percentage can be tricky to figure out. Here's an example:

Selin uses their home internet to work on freelance projects from 12 PM to 6 PM, Monday through Friday. They're generally awake from 8 AM to 9 PM every day. Here’s how they can calculate their business-use percentage for internet:

  1. They figure out their total waking hours for the week: 12 hours x 7 days = 84 hours
  2. They calculate their total work-related internet usage for the week: 6 hours x 5 days = 30 hours
  3. They divide 30 hours by 84 hours to find the business-use percentage of their home internet

That's around 36%, which means that Selin can deduct 36% of their internet bill.

Of course, this isn’t the only way you can approach the write-off. Bennett pays close attention to his clients’ risk tolerance and recommends tracking methods accordingly. Extremely risk-averse clients, for example, might feel most comfortable keeping detailed logs each week, which isn’t strictly necessary. Less risk-averse folks might be okay with an educated estimation. 

The important thing is to be realistic: “I would never write off 100% of [your internet bill],” says Bennett, “because you’re asking the IRS to look into it.”

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How to write off your internet as a business expense

There are two ways to write off your Wi-Fi, depending on whether or not you’re taking the home office deduction.

Method #1: Without the home office deduction

If you're not claiming a home office space, you'll report your income and business write-offs using Schedule C

Wi-Fi is a utility, so you'll account for it on line 25. Using this method lets you skip Form 8829, which you’d have to fill out to take the home office deduction.

part II of the schedule C form with line 25 ("utilities") circled in orange

Method #2: With the home office deduction

In addition, you can claim the home office deduction if you "exclusively and regularly" use a dedicated part of your home for work. (Not sure if you can claim the home office deduction in general? We have a quiz for that.) This means you can deduct things like home insurance, maintenance, and — that's right — home internet.

Your home office space doesn't have to be a separate room (though if it is an entire room, that’s fine). It could be a desk in the corner of your living room. 

Using this method, you’ll calculate your home office deduction using Form 8829. You won’t need to find a separate business-use percentage just for your internet.

part of Form 8829, "expenses for business use of your home"

If you don’t want to track home office expenses, you can also opt for the simplified home office deduction. If you go this route, you won’t write off your internet bill specifically. Instead, you’ll write off your entire home office in one fell swoop.

How the simplified method works

Basically, you’ll claim $5 for every square foot of your home office, up to a $1,500 limit. Say your home office is 100 square feet. Multiply that by five, and voilà: That’s $500 you can write off.

But which method — regular or simplified — will lead to bigger tax savings? For most self-employed people, the regular method wins out. While the simplified home office method has a reputation for being easier (it’s just one calculation, after all), the regular method will likely net you more at tax time. And Keeper makes the regular method pretty darn easy — it’ll do the expense tracking for you.

Which method should you use to claim your internet? 

Generally speaking, reporting your internet directly on your Schedule C is the safer bet. That’s because you can only take a home office deduction if you still have income left over after subtracting all your other work expenses. If you don’t, you can’t claim a home office that year. 

The advantage of claiming your internet on Schedule C

Unlike with a home office, putting your internet directly on Schedule C lets you write it off even if you end up with a business loss. (That’s when your expenses for the year turn out to be more than your income.)

You can even use this loss to lower your taxable income from other sources, like W-2 wages from a day job.

The advantage of claiming your internet through the home office deduction

Writing off your Wi-Fi through a home office deduction saves you from having to find a separate business-use percentage just for your internet. You can simply use your home office calculation instead.

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Other internet-related expenses you can deduct

Besides the internet bill itself, there are other internet-related costs you can deduct, too. The key is to ask yourself this question: What tools and office supplies do I need to work online successfully? The list you come up with is likely your list of write-offs.

Here are a few examples:

  • 💻 Computer: If you use your computer for business purposes, that's a write-off. Approach this calculation the same way you do your internet: Only the time you spend using your computer for work (not binging Love Island) is deductible
  • 📱 Phone bill: If you have a landline for business activities (vintage!), that bill is deductible. Your cell phone bill is also partially deductible. You'll just need to calculate your business-use percentage for that mobile device
  • 🌐 Wi-Fi while traveling: If you're traveling for work purposes, you can deduct the cost of Wi-Fi on an airplane or in a hotel
  • 🔌 Accessories: Need a USB dongle or a hotspot to use the internet properly? Those are deductible business expenses, too 

You can use the Keeper app to track these and other tax-deductible expenses, so you don’t leave money on the table come tax time.

Chloe Bryan

Chloe Bryan

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Chloe is a staff writer at Keeper and a writer, editor, and journalist. She previously reported on internet culture and lifestyle trends for Mashable, where she also led the shopping section. In her free time, she enjoys reading and writing poetry, traveling, watching the Mets, and hanging out with her dog Pete.

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