I am not in agreement with @Vanessa A on figuring the square footage percentage. You need to read IRS Publication 527, page 16, "Renting Part of Property". As I understand it, when it comes to the actual square footage of space used to figure the percentage of that space, the percentage of floor space is that square footage that is "exclusive to the renter". Common areas share by paying tenants and the owner are not included.
Also note that there are two common ways to split common expenses (like utilities) covered in that section. Doesn't hurt to figure both ways to see what works best for you. The method used can also be changed each year. Of special note is that if you only have one landline telephone on the property, then none of that cost is allowed to be deducted as a rental expense.
For any part of any utility costs to be deductible on the SCH E, the tenant must have access to it. For example, the tenant obviously has access to water since they need to bathe on a daily basis. However, the tenant may not have access to cable TV if they don't have a place to plug in and hook up their own TV. But if they do have access to cable (such as a cable drop in the room they are renting), then you can allocate some of that cost to the SCH E weather they actually use that cable drop or not, and weather they actually have a TV to plug into that cable drop, or not. They have "access", and that's all that's necessary. But still, when it comes to a hard wired telephone, IRS Pub 527 clearly states "You can’t deduct any part of the cost of the first phone line even if your tenants have unlimited use of it."
