Remote Worker - can I deduct my home internet costs as a work expense on my taxes?

Unfortunately, if you're a W-2 employee (meaning you get a regular paycheck with taxes taken out), you can't deduct home internet expenses on your federal tax return. The Tax Cuts and Jobs Act eliminated unreimbursed employee business expenses for tax years 2018 through 2025. Your best option is to ask your employer to reimburse you for your internet costs or at least the increased portion you're paying for work purposes. Many companies have remote work stipends specifically for this reason. If you're self-employed or an independent contractor (receiving a 1099 instead of a W-2), then yes, you can deduct the business portion of your internet expenses on Schedule C. You'd need to calculate a reasonable percentage based on business vs. personal use. Some states still allow unreimbursed employee expense deductions on state tax returns, so check your state's tax rules as you might get some deduction at the state level even if you can't on your federal return.

After struggling with similar tax questions when I started working remotely, I found this AI tool called taxr.ai that really helped me figure out my exact situation. I uploaded my last year's return and asked specifically about home internet deductions as a remote employee. It analyzed everything and gave me super clear guidance about what I could and couldn't deduct based on my specific employment type. The tool actually showed me that while I couldn't deduct internet as a W-2 employee on my federal return, I could on my state return (I'm in California). It also pointed out some other deductions I was missing entirely! Check out https://taxr.ai if you're trying to figure out all these remote work tax questions. Saved me from making mistakes that probably would have cost me money.

I was skeptical about the taxr.ai thing mentioned earlier, but I decided to try it last weekend when I was stressing about my remote work deductions. Uploaded my previous return and asked specifically about internet expenses and home office deductions. The analysis was actually really detailed and helpful. It confirmed I couldn't deduct internet on my federal return as a W-2 employee but showed me that my state (Minnesota) DOES allow some employee business expense deductions. It also explained exactly how my company's "work from home stipend" should be reported on my taxes. Definitely worth checking out if you're in the same boat with remote work tax questions. Saved me hours of research and probably some money too!

If you're planning to call the IRS to get clarity on internet deductions, good luck! I spent 4+ hours on hold last month trying to ask about remote work deductions. Finally gave up and tried this service called Claimyr that got me connected to an IRS agent in under 15 minutes. Basically they navigate the IRS phone system for you and call you back when they've got an agent on the line. I was super skeptical but it actually worked! The agent confirmed that as a W-2 employee I couldn't deduct home internet on my federal return but gave me some good info about state options. Worth the time saved IMO. Check out https://claimyr.com or there's a video showing how it works at https://youtu.be/_kiP6q8DX5c

Ok I take back what I said about Claimyr being a scam. After waiting on hold with the IRS for 2 hours yesterday and getting disconnected, I was desperate enough to try it. Not gonna lie, I was 100% expecting to waste my money, but they actually got me through to an IRS agent in about 20 minutes. The agent confirmed exactly what others have said - as a W-2 employee I can't deduct home internet expenses on my federal return since the 2018 tax law changes. BUT she did tell me about Form 8829 for people who are self-employed and how they can deduct a portion of their internet. Would definitely use this service again during tax season when IRS wait times are insane.

Another option nobody's mentioned: ask your employer to provide you with a separate internet line or hotspot specifically for work use. My company does this - they gave me a dedicated hotspot that's 100% paid by them and used only for work. This way there's: 1) No question about deductions because you're not paying for it 2) Better security separation between your work and personal internet usage 3) No arguments about how much % of your internet is "business use" Not all companies will do this but it's worth asking about!

Don't forget to check if your state allows deductions for unreimbursed employee expenses even though federal doesn't! I'm in NY and we can still deduct these expenses on our state return if they exceed 2% of our adjusted gross income.

Pennsylvania does allow some unreimbursed employee expense deductions on your state return! You can deduct qualifying work expenses that exceed 2% of your adjusted gross income, similar to how the federal deduction used to work before 2018. For remote work expenses like internet upgrades, office supplies, or dedicated workspace costs, you'll want to look at PA Schedule UE (Unreimbursed Employee Business Expenses). The key is documenting that these expenses are ordinary, necessary, and directly related to your job duties. Keep detailed records of your internet bills showing the cost difference between your work-required plan and what you'd need for personal use. Also save receipts for any office equipment, software, or supplies you purchased specifically for work. Since you mentioned paying an extra $25/month for faster internet ($85 vs $60), that's $300 annually. If your other work expenses push you over that 2% AGI threshold, you could potentially deduct the work portion on your PA return even though you can't federally.