Can I deduct my phone and internet bills as a self-employed person in Ontario?
Yes, telephone and internet expenses are deductible to the extent they are used for business purposes. If you have a dedicated business phone line used exclusively for business, the full amount is deductible. If you use a single phone or internet plan for both personal and business purposes, you must reasonably estimate and deduct only the business-use portion.
A common approach is to calculate the percentage of your total usage that is business-related and apply that fraction to the monthly bill. The CRA does not prescribe a specific formula, but your allocation should be defensible if questioned. For example, if you estimate 60% of your phone use is for business, you can deduct 60% of the bill.
Keeping a short log of business calls or usage for a representative period can help you justify the allocation if audited. The same principle applies to other utilities and services used for mixed purposes. On Form T2125, telephone and utilities are listed as separate expense lines.
Key takeaways
- Dedicated business lines are fully deductible; personal/business shared lines must be allocated.
- Apply a reasonable business-use percentage based on actual usage patterns.
- A brief usage log for a representative period can support your allocation.
- Mixed-use expenses appear on Form T2125 at only the business-use fraction.