Can I deduct home internet expenses if I WFH with W-2 and 1099-NEC income?

Thanks for explaining! That makes sense about the W-2 part. For calculating the 1099 portion, would it make more sense to base it on hours worked rather than income? My side gig probably took up about 25% of my total working hours even though it was less income proportionally. Would that be a more accurate way to calculate it? Also, do I need any special documentation to prove this percentage if I get audited?

Using hours worked is actually a great approach and often more accurate than using income ratios. If your side gig took about 25% of your total working hours, then claiming 25% of your internet expenses (about $206) would be reasonable and defensible. As for documentation, keep records of your work schedule showing how many hours you worked on your 1099 activities compared to your W-2 job. Also save all your internet bills and any contracts or job descriptions that show internet was necessary for your work. A simple spreadsheet tracking hours worked for each income source throughout the year is extremely helpful if questions ever arise.

How exactly does the service work? Do you just upload your tax documents and it figures everything out? I'm in a similar situation but I'm worried about privacy since these are financial docs we're talking about.

I've seen a bunch of these tax tools pop up recently. How is this any different than what TurboTax or H&R Block software does? They also ask about business expenses and calculate deductions. Is it worth paying for another service?

The way it works is you upload your tax documents and any receipts/expenses you're unsure about. Their system uses AI to analyze everything according to current tax rules. It's more focused on finding deductions and expense allocations than general tax prep software. They use bank-level encryption and don't store your docs after processing. What makes it different from TurboTax is it's specifically designed for people with mixed income sources or complex deduction situations. Regular tax software asks basic questions but doesn't help with the nuanced calculations like determining the right percentage of expenses to allocate to different income sources. I was literally leaving hundreds in deductions on the table before using it.

Does this actually work? I've literally spent DAYS trying to get through to the IRS on multiple issues. How much does it cost? Seems too good to be true honestly.

This sounds like a complete scam. The IRS phone system is notoriously terrible. How could some random service possibly get you through faster than anyone else? They're probably just selling your info or something sketchy.

It absolutely works! It uses some kind of callback system that navigates the IRS phone tree and holds your place in line. When an agent is about to be available, you get connected. I don't remember the exact cost, but it was reasonable considering I would have spent hours on hold otherwise. Not a scam at all - they don't even ask for any sensitive tax info. They're just solving the hold time problem. The value of getting definitive answers directly from the IRS instead of conflicting advice online was huge for me. They can't sell your info because they don't collect anything besides your phone number for the callback.

Wait this is interesting. I thought my tax software said I couldn't take the home office deduction because I don't use the space 100% for work, but maybe I was answering the question wrong? I have a desk area that I ONLY use for work (both W-2 and 1099), but sometimes I use it for my main job and sometimes for my side gig. Would that still qualify?

That's where it gets tricky. The space needs to be used exclusively for business purposes, not for your W-2 job. Using the same desk for both your W-2 employment and 1099 self-employment work technically disqualifies it from the home office deduction. If you could create a separate, dedicated space that you ONLY use for your 1099 work, then you'd qualify. Some people set up a specific corner or section that's exclusively for their self-employment work. But if you're using the same exact workspace for both types of work, the IRS would likely not consider it "exclusive" for business use.

This is good advice but be careful with cell phone deductions. The IRS looks at these carefully. Make sure you have a logical way to calculate the business percentage. I track my business calls/texts in a spreadsheet each month to support my deduction percentage.