Claimed my home internet as a deduction and got flagged for an audit

Last year I put down my full internet bill as a business expense because I work from home 100% of the time. My tax guy told me to split it based on business vs personal use instead of claiming the whole thing. I ignored him and the IRS sent me a letter asking for proof of how much I actually used it for work. Learned my lesson the hard way - now I track my usage with an app and only claim 60% of the bill. Has anyone else had luck getting out of an audit with a simple explanation?

2 comments

2 Comments

sanchez.ivan1d ago

Oh man, that's rough. I've been there with the IRS letters, they never mess around. But I'm curious, the big question everyone wants to know is, what app are you using to track your usage? Did you pick something that logs your time on specific work sites or does it just monitor your overall data usage? I've seen some apps that claim to split your connection data between work and personal automatically, but I'm always skeptical about how accurate they really are. The whole "60% claim" thing feels like you're pulling a number out of thin air even with an app, unless it can prove you spent exactly 60% of your online hours on job tasks. What happens when your work involves personal browsing during breaks, does the app count that as business or personal time?

pat_harris1d ago

Oh man, I feel you completely on this. I tried one of those automatic splitter apps last year and it kept logging my quick YouTube breaks as "work related" because I looked up a fence installation tutorial once lol. Ended up just using a simple timer app on my phone and manually tracking my hours, because at least then I know exactly what's work and what's me browsing memes during lunch. The IRS definitely isn't gonna buy that "60% claim" if the app can't tell the difference between you reading a contract and scrolling Instagram for 20 minutes.