Is internet tax deductible?
Internet is sometimes deductible when it’s used to earn income or run a business — but most plans are mixed-use, so allocation and documentation matter.
← Back to Expense Deductibility Guide
On this page: Short answer · Who this applies to · When it's deductible · When it's not deductible · Home business deduction · Deduction % calculator · Example · Records · Is internet a utility? · Related · FAQ
Short answer
Depends. Internet service may be tax deductible when it’s used for business or income-producing purposes and you can support the business-use portion.
If the internet plan is used for both business and personal reasons, you generally deduct only the business-use percentage.
FreshBooks — Track your internet deduction and business expenses automatically
Connects to your accounts, tracks recurring internet and utility bills, and keeps your Schedule C deductions organized year-round.
Who this typically applies to
- Self-employed individuals and small business owners using internet to run their business
- Freelancers and contractors using the internet for client work, sales, and business operations
- People with side businesses who use internet access to earn income
Employees often have stricter limits on deducting unreimbursed internet expenses. Reimbursement policies matter.
When internet is tax deductible
- The internet is used for your business (client work, sales, operations, administration)
- You can reasonably allocate business vs personal use (especially for home internet)
- The expense is ordinary and necessary for your income-producing activity
- You keep bills/receipts and some support for how you determined the business portion
When internet is not tax deductible
- The internet is used only for personal purposes
- You cannot support business use or you don’t have a real income-producing activity
- The cost is reimbursed by an employer or client
- The expense is primarily for entertainment or personal convenience
Can I write off internet for my home business?
Yes. If you run a home business, you can typically write off the business portion of your home internet as a business expense.
How home business owners deduct internet
- Self-employed (Schedule C filers): Deduct internet as a utility expense on Schedule C, Line 25 (Utilities) or as part of home office expenses
- Business-use percentage: Calculate based on actual use (hours spent on business vs personal, or device allocation)
- Home office deduction: If you claim a home office using the simplified method, internet may already be partially covered; if using actual expenses, include internet in your utility calculations
Common scenario: You work from home full-time running an online business and use internet 8 hours/day for work, 4 hours/day personal = 67% business use. On an $80/month bill, you'd deduct approximately $53/month ($636/year).
FreshBooks — Track deductible expenses automatically
FreshBooks categorizes internet, home office, and other business expenses so they're ready at tax time. Used by freelancers and self-employed business owners.
What percentage of internet is tax deductible? How to calculate it
There is no fixed percentage — your deductible share depends on how much of your internet use is genuinely for business. The IRS expects a reasonable, documented method.
| Work situation | Typical business-use % | Monthly bill ($80) → deduction |
|---|---|---|
| Full-time remote freelancer, minimal personal use | 70–80% | $56–$64/month |
| Part-time side business, household also streams/games | 40–50% | $32–$40/month |
| Home office, family household with multiple users | 25–40% | $20–$32/month |
| Dedicated business-only line (no personal use) | 100% | Full bill deductible |
Three acceptable calculation methods:
- Time-based: Business hours ÷ total online hours over a representative week. Most commonly used and easiest to defend.
- Device-based: If certain devices are exclusively for business, estimate those devices' share of total household bandwidth.
- Flat percentage: A conservative flat allocation (e.g., 50%) applied consistently — acceptable when exact tracking isn't practical.
Pick one method, note it in your records, and apply it consistently year to year. The IRS expects a logical approach — not a perfect log.
Example calculations
Example 1: Time-based allocation
- Freelance consultant works from home 40 hours/week on business
- Personal internet use (streaming, browsing): ~20 hours/week
- Business percentage: 40 ÷ 60 = 67%
- Monthly bill: $80 → Deductible amount: $53/month ($636/year)
Example 2: Conservative approach
- Home-based online store owner uses internet heavily for business but also for family Netflix/gaming
- Chooses conservative 50% business allocation to be safe
- Monthly bill: $90 → Deductible amount: $45/month ($540/year)
Being conservative is fine. The IRS doesn't require a perfect calculation, just a reasonable and supportable one.
What records to keep
- Internet bills or invoices (monthly statements)
- Proof of payment (bank/card records)
- A simple note explaining how you estimated business use (hours, devices, workspace)
Is internet considered a utility for tax purposes?
Yes — for tax purposes, internet service is generally treated as a utility expense, similar to electricity or phone service. Self-employed individuals and business owners deduct it on Schedule C, Line 25 (Utilities).
If you use a dedicated business internet line (not shared with personal use), you may be able to deduct 100% of the cost. For a shared home internet plan, you deduct only the business-use percentage. If you also claim a home office deduction, internet is included in your utility calculations under the actual expense method.
The IRS does not define internet as a separate deduction category — it falls under utilities or office expenses depending on your situation.
FAQ
Can I write off internet for my home business?
Yes, if you run a home business, you can write off the business portion of your internet bill as a business expense on Schedule C. Calculate your business-use percentage based on hours, devices, or another reasonable method.
Is home internet tax deductible?
Home internet may be tax deductible when it's used for business purposes. If it's mixed business and personal use, you typically deduct only the business portion.
Where do I deduct internet on my tax return?
Self-employed individuals typically deduct internet expenses on Schedule C, Line 25 (Utilities) or as part of home office expenses. The specific line depends on whether you're using the simplified or actual expense method for your home office.
Can I deduct internet if I work from home?
Sometimes. Working from home alone doesn't automatically make internet deductible. Deductibility usually depends on business use, your work status, and whether you can support a business-use allocation.
Can employees deduct internet expenses?
In many cases, employees cannot deduct unreimbursed work expenses. If your employer reimburses you, you generally don't deduct the expense separately.
Is internet considered a utility for tax purposes?
Yes. For tax purposes, internet service is generally treated as a utility expense. Self-employed individuals typically deduct it on Schedule C, Line 25 (Utilities). If the plan is mixed personal and business use, only the business-use percentage is deductible.
Looking for other deductible expenses? See the full Expense Deductibility Guide.
Last reviewed: January 30, 2026