Am I the only one who found out the IRS lets you deduct your home internet based on square footage of your office space?

I was digging through the IRS publication 587 last night and it blew my mind that you can figure your business internet deduction by the percentage of your home your office takes up, even if you share the connection with your whole family, has anyone else actually tried claiming it that way?

3 comments

3 Comments

henryr4515d ago

Yeah that's close but not totally right. The square footage method is for the home office deduction itself, not for internet costs specifically. Internet is a direct business expense, so you can deduct the actual percentage you use for work, usually based on time or a reasonable estimate. The square footage trick works for things like rent, mortgage interest, and utilities tied to the physical space, but internet is a separate thing because it's a service you use, not a room in your house. Still worth keeping a diagram and log of your work hours though, since that'll back up your claim if the IRS ever asks.

joseph4815d ago

Yep but that's how my CPA told me to do it and it held up fine.

lee.cora16d ago

...and honestly I never even thought about doing it that way until my tax guy showed me. I was already itemizing my internet costs by just taking the full amount for months my office was the only one using it, but he pointed out the square footage method works way better for me since my whole family is online constantly. The IRS really does let you do it based on the percentage of your home floor space that office takes up, even if you're sharing the connection with everyone else in the house. Just make sure you keep a simple diagram of your home with the office area marked out, that's all I needed when I got audited a couple years back.