Electricity for a rented office or studio belongs on Line 25, utilities.
Why line 25
Power at premises you rent for the business is the plainest line 25 entry there is: it is deductible in full, no percentage and no allocation, because none of it serves a household. That includes the whole bill, the supply charge, the delivery charge and the taxes. Where it gets missed is when the landlord bills power as part of the rent or as a common area charge. If it is not separated on the invoice, it is rent on line 20b, and trying to split it out by estimate creates a number you cannot support.
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 electricity for a rented office or studio lands on Line 25 without you sorting it.
Start for freeWhat electricity for a rented office or studio is confused with
- Line 30, line 30, business use of your home
- Electricity at a rented business location is line 25 in full; electricity at a home where you have an office is a household utility that flows through the home office calculation on line 30.
- Line 20b, rent or lease of other business property
- If the lease bundles utilities into one rent figure with no separate utility charge, the whole payment is rent on line 20b rather than split between lines.
- Line 21, repairs and maintenance
- The power bill is line 25; rewiring, fixing the panel or replacing the lighting is repairs and maintenance on line 21, or a capital improvement if it is a betterment.
Examples that belong on line 25
- $188 a month of power at a rented photography studio
- $640 a month at a small workshop running machinery
- $74 a month at a one-room office you lease
- $320 of summer cooling cost at a retail unit
- $95 a month of power at a rented storage and packing space
What does not belong here
- Power at your home, which runs through the home office calculation.
- A share of a bundled rent and utilities payment estimated by you.
- Electrical repair or rewiring work, which is not a utility.
- A deposit paid to the utility, which is not an expense until it is applied.
What to keep
Keep the twelve utility bills or the annual account summary in the business name at the business address. An account in your personal name at a business address still works, but note why, because the mismatch is the first thing that gets asked about.
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 |
| gas and heating for business premises | Schedule C, Line 25 |
| internet service | Schedule C, Line 25 |
| utilities in a part-shop part-home building | Schedule C, Line 25 |
| water, sewer and trash for business premises | Schedule C, Line 25 |
Related lookups
- Can I deduct homeowners insurance for an office?
- Where does office rent go on Schedule C?
- 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 electricity for a rented office or studio lands on Line 25 without you sorting it.
Start for free