Is Internet Tax Deductible?

Quick Answer: ✅ Yes — the business-use portion of your internet bill is deductible. If you work from home, this is one of the easiest recurring deductions to claim.

The Short Answer

Your monthly internet service is a deductible business expense — but only the portion used for business. If you work from home and your household also streams Netflix and games online, you'll need to estimate a business-use percentage. If you have a separate internet connection exclusively for your home office or business location, that's 100% deductible.

IRS Rules for Deducting Internet

The IRS treats internet service as a utility expense for business purposes:

1. Ordinary and necessary — Internet access must be ordinary (common in your industry) and necessary (helpful for your business). For nearly any business in 2026, this is a given.
2. Business-use percentage — If the same connection serves business and personal use, only the business portion is deductible.
3. Separate from home office deduction — You can deduct internet as a standalone business expense even if you don't claim the home office deduction. However, if you use the simplified home office method ($5/sq ft), internet is considered included in that calculation.

Source: IRS Publication 535 — Business Expenses; Publication 587 — Business Use of Your Home

Internet + Home Office: How They Interact

• Actual home office method: You can deduct internet as part of your home office expenses (at your office-use percentage), OR deduct it separately as a business utility. Don't double-count.
• Simplified home office method: Internet is baked into the $5/sq ft rate. You technically can't deduct it again separately.
• No home office deduction: You can still deduct the business-use percentage of internet as a standalone expense on Line 25 (Utilities) or Line 27a (Other Expenses).

How Much Can You Deduct?

Example — Home-based freelancer:

Internet bill: $80/month. You work from home full-time and estimate 70% business use.

• Monthly deduction: $80 × 70% = $56
• Annual deduction: $56 × 12 = $672

Example — Dedicated business internet:

You have a separate internet line for your home office at $100/month.

• Annual deduction: $100 × 12 = $1,200 (100% deductible)

Example — Business with a commercial lease:

Internet at your office/studio: $150/month. It's 100% business.

• Annual deduction: $1,800

How to Categorize in QuickBooks

• QBO Category: "Internet Expense" or "Utilities" (under Expenses)
• Schedule C Line: Line 25 — Utilities, or Line 27a — Other Expenses
• Tip: If you're using the actual home office method, you may categorize internet under "Home Office Expenses" instead and let the percentage flow through Form 8829. Pick one approach and be consistent.

Common Mistakes to Avoid

1. Deducting 100% when it's a shared household connection — If your family also uses the internet, you can't deduct the full bill. A reasonable business-use estimate (50-80% for full-time home workers) is appropriate.
2. Double-counting with home office — If internet is already factored into your home office deduction (especially the simplified method), don't deduct it again as a separate expense.
3. Forgetting upgrades for business — If you upgraded to faster internet specifically for video calls, large file uploads, or other business needs, the incremental cost above your previous plan is arguably 100% business-driven.
4. Not deducting internet when working from home — Even if you don't claim a home office deduction, you can still deduct the business portion of your internet bill.

Record-Keeping Requirements

• Monthly ISP bills or statements
• Documentation of business-use percentage
• If claiming as part of home office: include in Form 8829 calculations
• Note if you upgraded service for business reasons (supports higher business-use percentage)

Who Can Deduct Internet?

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