Utilities (Business Portion)
Partially deductible based on your home office square footage percentage.
Details
Electricity, gas, water, trash, and heating oil can be allocated by the home office square footage percentage.
Conditions
- •Calculate based on home office square footage %
- •Keep monthly utility statements
- •Document allocation method
15% of the electric bill for a home office occupying 15% of the house
Common Mistakes to Avoid
- • Deducting lawn care or pool maintenance (generally disallowed)
Check Another Expense
Is Utilities (Business Portion) Tax Deductible for Your Business?
Utilities (Business Portion) is partially tax deductible for business purposes. You can only deduct the portion that is directly used for your business. Accurate tracking and documentation of your business usage percentage is essential.
Key Rules for Deducting Utilities (Business Portion)
Electricity, gas, water, trash, and heating oil can be allocated by the home office square footage percentage.
Requirements to Claim This Deduction
- Calculate based on home office square footage %
- Keep monthly utility statements
- Document allocation method
How to Document Utilities (Business Portion) for Tax Purposes
Proper documentation is critical for any business deduction. For utilities (business portion), you should:
- Keep all receipts and invoices showing the amount paid
- Record the date of the expense and the business purpose
- If mixed-use, maintain a log showing business vs. personal usage
- Store records for at least 3 years (7 years for major purchases)
Source: IRS Publication 587. This information is for educational purposes only. Consult a qualified tax professional for advice specific to your situation.
Related Expenses
Home Office
Yes, if you use a dedicated space exclusively and regularly for business.
Internet Bill
Partially deductible based on the percentage used for business.
Cell Phone Bill
Prorated for mixed use, or 100% if it's a dedicated business phone.
Office Furniture
Yes, furniture for your business workspace is fully deductible.
Computer / Laptop
Yes, fully deductible if used exclusively for business, or prorated for mixed use.
Office Supplies
Yes, office supplies consumed in your business are fully deductible.