Can I Write Off My Internet Expense on Taxes?

Updated on: by Miranda Grimm

Self Employment Tax Help

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If you work online then it is obvious you have an expense of the internet! Now, you possibly would have already had that expense because you already use it for personal reasons. So can you write off your Internet Expense on Taxes? Let’s discuss this subject and learn if you qualify for your internet expense to be a tax deduction and how much it could save you!

I started this Tax Series months ago, trying to prepare us all for the what is now closely approaching!- The beginning of Tax Season! If you are an early filer, then now is a better time than ever to review over those posts!

 

We previously talked about writing off our Home Office Space and in that post we learned the IRS is very particular about being sure we use the space for our work and NOT for personal use. So what about the internet we use to work but also use to chat on Facebook, shop and play Farmville with?

You will be glad to know the internet is a legit tax deduction for us Self-Employed Work at Homers. But as with all things dealing with the IRS it is not a simple deduction. Because you most likely use your internet for personal reasons as well, you can only write off a percentage of your internet cost.

 

How do you know how much of your Internet Expense is Tax Deductible?

I was not sure either so I contacted a tax guru and self- employed friend of mine, Chrystal Mahan. Chrystal explained to me the percentage of your internet deduction is based on the percentage of use for business.

So, that sounds easy for someone who has set hours and has an idea of how much time they spend online. If they work 7 hours a day but they are online for a total of 9 hours a day, then that is a pretty simple math equation of 78%.

But someone like me who goes from working to playing constantly throughout the day (stopping in chat in Facebook, work, read the news, work, check the weather…etc) Plus let’s not forget the hours the internet is streaming Netflix or other things pulling on my WiFi connection. I truly had no clue how much of my time online is for personal or business use. None at all.

So I spent some time figuring up numbers in my head and really thinking about the time spent using the internet. All of my figured were estimates and from what I understand, that is all the IRS can expect anyhow.

So, don’t get uptight, like I was, and think you have to log all your time spent personal versus business 365 days a year. Give a solid estimate of the percentage used for your self employment work. That same percentage will be used against your internet expense and that is the number you can write off as an expense.

 

Important Reminder:
Keep a solid record of your internet expense. If you receive electronic bills, either print them off and store them or save them on your hard drive. You cannot write anything off that you cannot back up with receipts or proof of payment.

Are you missing a bill?
A lot of times your internet provider keeps a record online. You also may have record in your checking account statement showing where you paid them each month.

 

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There are many things you can write off as a self employment deduction. The government gives you this benefit that can really make working for yourself worth it. But if you take advantage of this benefit and cheat the system it will most likely hurt you. So, be honest and keep records of your expenses and income to cover yourself!

 

Follow Work at Home Adventure future posts to catch-all of the Self Employment Tax Help and  other Work at Home related posts:

 


 

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Leisa Good

January 4, 2012 at 7:40 pm

Never too late to start thinking about the infamous Inferno Revenue Service. Yikes! But thanks for the much needed information.

Lisa Mills

January 4, 2012 at 9:34 pm

I hate tax season. I always take off a percentage of my Internet fees, PayPal fees associated with my business, office supplies, equipment, ink, headphones. I have never taken the home deduction, because I’ve heard it can cause you to get audited, which although I have nothing to hide, sounds like a big pain in the you know what. Not worth it.

Chrystal

March 1, 2012 at 12:32 am

I dont know how I missed this, but thanks for the mention! Glad I was able to help you out.