Can I deduct utilities like electricity and heat for my home office?

Yes, a prorated share of home utility costs — including electricity, heating, and water — is deductible as part of your home office expense for self-employed individuals. The deductible portion is based on your home office percentage (typically the ratio of office space to total home space).

So if your home office represents 12% of your home and your annual electricity bill is $2,400, you can deduct $288 as a home office expense. The same applies to your heating costs and other utilities allocated to the home as a whole.

Internet costs, if not already claimed separately as a direct business expense, can also be included in the home office calculation or claimed in full (or in part) as a direct business expense if primarily used for business. Avoid claiming the same cost twice — once as a direct business expense and again as part of the home office allocation. Keeping your monthly utility bills and your home office percentage calculation documented makes the deduction straightforward to support.