Utilities in a part-shop part-home building belongs on Line 25, utilities.
Why line 25
The business part of the building is business property, so its utilities go on line 25 in full once you can identify them. A separate meter for the commercial space is the strongest possible allocation and worth installing if the building will be held for years. Without one, allocate by floor area, the square footage of the shop against the total heated and lit area, and adjust only if one part plainly uses far more, a walk-in cooler or a kiln for instance, in which case an engineer's or electrician's estimate of connected load supports a better split. The residential share is personal unless part of the residence itself qualifies as a home office, in which case that slice routes through Form 8829 rather than line 25.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so utilities in a part-shop part-home building lands on Line 25 without you sorting it.
Start for freeWhat utilities in a part-shop part-home building is confused with
- Line 30, line 30, business use of your home
- Utilities for the part you live in are never line 25; the only route for them is Form 8829 to line 30, and only for space used regularly and exclusively for the business.
- Schedule A, schedule a, personal itemised deduction
- Mortgage interest and property tax on the same building split the same way, with the residential share available on Schedule A if you itemise and the business share on lines 16a and 23.
- Line 21, repairs and maintenance
- Repairs follow the same allocation: work on the shop area is line 21 in full and work on the whole roof is split by the same percentage.
Examples that belong on line 25
- A 1,200 square foot shop under a 800 square foot flat: 60% of the shared utility bills
- $4,800 of annual electricity at 60%: $2,880 on line 25
- A separate commercial meter reading $3,100: $3,100 on line 25, no allocation needed
- A kiln drawing most of the load: an electrician's load estimate supporting 80% rather than 60%
- A 100 square foot office inside the flat: that slice goes on Form 8829, not line 25
What does not belong here
- Deducting the whole bill because one building is one bill.
- The residential share on line 25.
- Claiming the same utility cost on both line 25 and Form 8829.
- An allocation that changes year to year without a change in the building or its use.
What to keep
Keep the utility bills, a floor plan with the business and residential areas measured, and any load estimate you relied on for a non-area allocation. If you install a separate meter, keep the installation invoice, since it also dates the change in method.
Other expenses on line 25
| Expense | Line |
|---|---|
| a dedicated second business landline | Schedule C, Line 25 |
| a hotspot or mobile data plan | Schedule C, Line 25 |
| a mixed-use phone bill | Schedule C, Line 25 |
| a mobile phone bill | Schedule C, Line 25 |
| a security monitoring service | Schedule C, Line 25 |
| a shared internet connection | Schedule C, Line 25 |
| a VoIP service | Schedule C, Line 25 |
| electricity for a rented office or studio | Schedule C, Line 25 |
| gas and heating for business premises | Schedule C, Line 25 |
| internet service | Schedule C, Line 25 |
| water, sewer and trash for business premises | Schedule C, Line 25 |
Related lookups
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- Where does a laptop repair go on Schedule C?
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so utilities in a part-shop part-home building lands on Line 25 without you sorting it.
Start for free