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Level 1
posted Jun 4, 2019 12:31:14 PM

Do I have to deduct my electricity as a home business deduction even if most of my electricity expense is strictly related to my business?

I have a sole prop home business. Currently, I am deducting electricity as a percentage of the home office deduction. However, part of my business requires high energy-using hardware leading to a high electricity bill. I only use 25% of my home so I can only deduct this much for electricity; however 75% of my electricity is from my business. Is there a way to better reflect this in my business expenses. Can I forego deducting the electricity on my home deduction but rather as a business expense? 

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1 Replies
Intuit Alumni
Jun 4, 2019 12:31:17 PM

You can allocate part of the electric bill to the home office and part as a business expense, but you would need to have a procedure that the IRS would accept for determining the amounts. If you can prove that 75% of your electric bill is for business use, the remaining 25 would be allocated between the home and the home office.