Is water/sewer bill for steam heating deductible on Schedule C?

Thanks for the info! What if the kitchen space is actually a mixed-use facility? I have a similar situation where I rent a commercial kitchen but the building has residential units upstairs. Would that change anything about deducting utilities?

For a mixed-use facility, what matters is how your specific rental agreement is structured. If you're only renting a dedicated commercial kitchen space within a larger building, you can still deduct 100% of the utilities that are billed directly to you for that space. If your utilities are shared with residential units and not separately metered, you'd need to calculate a reasonable allocation based on square footage or some other consistent method. Keep documentation of your calculation method in case of an audit. The key is being able to show the portion that's directly related to your business operations.

How accurate is this thing? I've tried other tax software that claimed to analyze documents but ended up giving me generic answers that I could've found on Google.

Does it work for other business expenses too? I've got a bunch of receipts and invoices that I'm not sure how to categorize correctly on my Schedule C.

It's way more accurate than generic tax software. Instead of just giving broad answers, it actually analyzes your specific documents and applies the relevant tax rules to your situation. I compared its analysis with what my accountant told me, and it was spot on. Yes, it works for all kinds of business expenses! I've used it for everything from sorting out meal expenses to figuring out what portion of my internet bills were deductible. You just upload your receipts and invoices, and it categorizes them correctly for Schedule C. Saved me hours of stressing over expense categories.

Wait, how does this actually work? The IRS phone lines are notorious for long waits. Are you saying this service somehow jumps the queue?

Yeah right. Nothing gets you through to the IRS faster. Sounds like a scam that just takes your money and puts you on hold like everyone else. I'll believe it when I see it.

It uses an automated system that navigates the IRS phone tree and waits on hold for you. When an agent actually picks up, it calls your phone and connects you. It's not jumping any queue - you're still in the same line as everyone else, but you don't have to personally sit there listening to the hold music. I was super skeptical too initially! I thought the same thing - how could this possibly work? But I was desperate after trying for days to get through. I figured I'd try it once, and if it didn't work, I'd just dispute the charge. But within about 12 minutes, my phone rang and there was an actual IRS agent on the line. Saved me literally hours of waiting on hold. Not saying you have to use it, but it worked exactly as advertised for me.

Thank you all for the helpful responses! This clears things up a lot. I was getting confused because my space is 100% commercial (no home office) but my accountant kept talking about "disqualified utilities" which made me worry. Based on your advice, it sounds like I can deduct both the water and steam heating portions since they're directly related to my bakery operations. I'll definitely keep all my bills organized for documentation.

You're welcome! Yes, sounds like your accountant might have been mixing up rules for home offices with your commercial bakery situation. For a dedicated business space, utility expenses are straightforward business deductions on Schedule C. Just make sure the utilities are in your name/business name and that you have a paper trail showing they're for your business location. If you ever get audited, having organized documentation makes the process much smoother. Good luck with your bakery!

The IRS instructions are clear but they can be super dense to read through. Here's the direct link to the Schedule C instructions if anyone needs it: https://www.irs.gov/instructions/i1040sc And yes, utilities for regular business use are covered under "Other Expenses" if not listed separately.

thanks for adding the link! sometimes i forget not everyone knows where to find this stuff. the thing with tax instructions is you gotta read the whole section carefully. they might mention exceptions elsewhere that apply to specific situations. but for standard commercial space utilities, it's pretty straightforward.