Can You Deduct Home Internet and Phone Costs for a Business?
A phone bill and an internet bill land in the mailbox every month whether or not any work happens at home, which raises the natural question of how much of that cost, if any, a business can actually claim.
The short answer
A self-employed person can generally deduct the business-use portion of home internet and phone costs, not the whole bill, unless the service is used entirely for business. The key step is figuring out what share of use is actually work-related, since mixed personal-and-business use is the norm for most home internet and phone plans. This is treated as its own calculation, separate from any home office deduction someone might also claim.
Why the full bill usually isn’t deductible
Most people use their home internet for streaming, browsing, and other personal activity alongside any work they do, and the same is true of a personal cell phone used for both business calls and everyday life. Because the expense serves two purposes, only the portion tied to business use is treated as a deductible business expense. Claiming the entire bill would only make sense if the service were dedicated exclusively to business, which is uncommon for a typical home internet or phone plan.
Figuring out the business-use share
The general approach is to estimate what fraction of use is business-related and apply that percentage to the total bill. For a phone, that might mean reviewing call logs or estimating the proportion of calls and data used for work over a representative period. For internet, it’s often a broader estimate based on how much of the connected time or purpose is work-related versus personal streaming, browsing, and other household use. There isn’t one single required method, but whatever approach is used should be reasonable and applied consistently, similar to the logic behind calculating a business-use percentage for a shared expense more generally.
Why this is separate from the home office deduction
It’s easy to assume internet and phone costs are automatically wrapped into a home office deduction, but they’re generally figured independently. A home office deduction is typically based on the square footage or share of the home used for business, while internet and phone costs are based on usage, not space. Someone could have no qualifying home office at all and still deduct the business-use portion of these services, since the expense isn’t tied to occupying a dedicated room.
Recordkeeping that supports the deduction
Because these deductions rely on an estimate rather than a metered, business-only bill, keeping some record of how the percentage was determined matters. That might be a log of business calls over a sample period, notes on how a work routine uses the connection, or any other reasonable method for arriving at a defensible number. Consistency matters too — a percentage that swings wildly from year to year without a clear reason can be harder to support. These business-use costs typically flow onto the same Schedule C that reports other self-employment income and expenses, alongside things like software subscriptions used for business.
The bottom line
Home internet and phone bills can support a deduction, but only for the slice that’s genuinely business use, and that slice has to be estimated and documented rather than assumed. Because the rules around what counts as a legitimate business expense depend on individual circumstances and can change over time, it’s worth treating this as a concept to understand rather than a fixed formula to apply the same way every year.