Stay-at-home dads with side gigs may deduct internet costs as a business expense if self-employed. The deduction covers the work-related portion of the bill, calculated by usage percentage. A dedicated home office can enhance eligibility, but W-2 employees cannot claim this. Accurate records are crucial for IRS compliance.
Understanding Internet Cost Deductions for Stay-at-Home Dads with Side Gigs
Stay-at-home dads juggling parenting and side gigs often rely on the internet to run their businesses, whether it’s freelancing, online tutoring, or managing an e-commerce store. A common question is whether the cost of home internet can be deducted as a business expense on taxes. The answer hinges on employment status, the nature of the side gig, and IRS rules.
If you’re self-employed—meaning you earn income reported on a 1099-NEC or operate as a sole proprietor, freelancer, or independent contractor—you can typically deduct a portion of your home internet costs as a business expense. The IRS allows deductions for expenses that are “ordinary and necessary” for your trade or business, and for many side gigs, internet access is essential. For example, a stay-at-home dad running a graphic design business or streaming as a content creator relies heavily on internet connectivity to generate income.
To calculate the deductible amount, you must determine the percentage of your internet use dedicated to business activities. This can be tricky since home internet is often used for both personal and professional purposes. One method is to track the time spent using the internet for work versus personal use. For instance, if you use the internet for your side gig for 10 hours a week and your household uses it for 30 hours total, approximately 33% of your internet bill could be deductible. If your monthly bill is $100, you could deduct $33 per month. Another approach is to base the deduction on data usage, comparing work-related downloads to total household data consumption, though this requires detailed records.
If your side gig operates out of a dedicated home office, you may qualify for the home office deduction, which can include internet costs as part of “utilities” on IRS Form 8829. To qualify, the space must be used exclusively and regularly for your business—meaning no personal activities like watching Netflix in that area. The deduction can be calculated using the simplified method ($5 per square foot, up to 300 square feet, for a maximum of $1,500) or the actual expense method, which allocates a percentage of household expenses (like internet, rent, or utilities) based on the square footage of your office relative to your home. For example, if your home office is 200 square feet in a 2,000-square-foot home, 10% of your internet bill could be deductible.
However, if you’re a W-2 employee working remotely for an employer, you cannot deduct internet costs or other unreimbursed work-from-home expenses. The Tax Cuts and Jobs Act of 2017 eliminated these deductions for employees through 2025. Some employers may offer reimbursement for internet costs, but this depends on company policy and isn’t guaranteed. If you’re a stay-at-home dad with both a W-2 job and a self-employed side gig, you can only deduct expenses tied to your self-employed income, and the home office space must be used exclusively for the side gig, not your employee work.
Record-keeping is critical. The IRS requires proof that expenses are business-related, so save receipts, bills, and logs of work-related internet use. A diary noting a four-week period of usage can establish a pattern for the year. For bundled plans (e.g., internet and streaming services), you must apportion costs to isolate the internet portion. Failure to maintain records could lead to disallowed deductions during an audit.
Some states may have different rules, so check local tax regulations. Consulting a CPA or tax professional can ensure compliance and maximize deductions. Tools like FlyFin or TurboTax can simplify tracking expenses and calculating deductions for self-employed individuals.
Disclaimer: This article provides general tax information and is not a substitute for professional advice. Consult a certified tax professional for personalized guidance. Sources include IRS guidelines, tax publications, and expert-reviewed financial websites.
