How to Deduct Your Phone and Internet as a Gig Worker

For a delivery driver or a rideshare driver, the phone is the job. It takes the orders, runs the navigation, logs the miles and holds the earnings dashboard. For a freelancer working from a spare room, the home internet connection plays the same role. Both bills are partly business and partly personal, and that split is the whole question. This guide walks through how the business-use percentage works, what a record that holds up looks like, and what the deduction is worth in real tax dollars. It is educational, not tax advice. If you want the platform-by-platform picture first, the gig worker tax hub links to guides for Uber, DoorDash, Instacart and the other major apps.

The rule in one line: deduct the business percentage of each bill, never the base rate of the first landline into your home (IRS Instructions for Schedule C, line 25), and keep the records that show how you got the percentage.

The business-use percentage method

The federal tax code lets a self-employed person deduct ordinary and necessary business expenses. A phone plan you use for both work and your personal life is a mixed-use expense, so you deduct only the part that serves the business. In practice that means one number: the percentage of use that is business. Multiply the annual bill by it, and that is your deduction.

The IRS does not prescribe a single formula for that percentage. What it expects is a reasonable method applied consistently and supported by records. Three methods cover nearly everyone:

Time

Compare the hours the phone spends on business tasks with its total use. For gig workers this is often the cleanest option, because every major platform records your online hours. If you drive 30 hours a week with the apps open and your phone's screen-time report shows about 45 hours of total use, a business share around two-thirds is a defensible starting point.

Data

Most phones break down data use by app. Navigation, the driver or shopper app and your mileage tracker are business. Streaming, social media and personal messaging are not. A month of those numbers gives you a ratio that is easy to show someone else.

Calls and messages

For freelancers who spend their phone time on client calls rather than apps, counting calls or minutes from an itemized statement works well. It is less useful for drivers, whose business use is mostly data.

Whichever method you choose, use the same one all year and write down how you did it. A note that says "March 2026, data method, 37 of 52 GB during app sessions" will be far more persuasive in two years than a number you remember choosing.

Phone and internet are not the same deduction

The two bills follow the same percentage logic, but they behave differently in practice, and gig workers tend to overclaim one and underclaim the other.

The asymmetry matters. A delivery driver might use the home connection for 20 minutes a week to download a 1099, check a payout or update a vehicle document. That is a real business use, but it is a small one, and claiming 50% of the household internet bill would be hard to explain. A virtual assistant or designer who is online from 9 to 5 is in the opposite position. The honest percentage for the same bill can be 10% for one person and 60% for another.

Two worked examples

The saving is not huge, and that is the point of running the numbers. A $1,464 deduction does not save $1,464. It saves the tax on $1,464. For a driver in the 10% bracket, that is mostly self-employment tax, which is why even a low earner gets real value from keeping these records. The mileage deduction guide covers the far larger deduction on the same phone, the trips your tracking app logs.

Hana's second line is worth a closer look. It costs her $300 a year, and in exchange she never has to calculate a phone percentage or defend one. For people whose phone use is mostly calls and texts with clients, a dedicated number is often the simplest record there is. You can test your own figures in the self-employment tax calculator by entering your profit with and without these deductions.

Buying a new phone

The device follows the same percentage as the plan, but the timing question is different. Most freelancers want to write off the business share in the year they buy the phone rather than depreciate it over several years, and there are two common routes to doing that.

The first is the de minimis safe harbor in the tangible property regulations. A business without audited financial statements can elect to expense items costing up to $2,500 per item or per invoice. You make the election each year by attaching a statement to a timely filed return, including extensions. Most tax software handles this with a checkbox. A $960 phone falls well under the limit.

The second is Section 179 expensing, which works for larger purchases but requires that business use be more than 50% in the year you start using the item. Cell phones were removed from the "listed property" category by the Small Business Jobs Act of 2010, so they no longer carry the strict logging rules that apply to vehicles, but you still need records for the business share you claim.

If you finance the phone through your carrier, the monthly device installment is a purchase payment, not part of the service bill. Treat the device price as the purchase, in the year you start using the phone, and treat the service plan separately.

Records that hold up

A phone or internet deduction rarely draws attention on its own. When it does, the question is always the same: how did you arrive at the percentage? A good file answers it in five minutes. Keep these:

• Twelve months of carrier and internet statements, saved as PDFs, showing the amounts you paid.
• A one-month sample of your tracking, with screenshots of the data-use or screen-time report and a sentence describing the method.
• The online-hours report from each gig app for the same month. It ties your business use to a third-party record you did not create.
• A receipt for any device or accessory, with a note of the business share you applied.
• A fresh sample if your work pattern changes, for example if you go from part-time evenings to full-time driving.

If your receipts live in an inbox and a shoebox, a tool such as the free expense tracker at Self Employment Toolkit (from the same publisher as this site) can sort them into Schedule C categories as they arrive, which saves a reconstruction in March.

Where the claim goes wrong

A few other errors come up often enough to name. Claiming 100% of a phone you also use personally is the most common, and it is the one most likely to be cut. Claiming lines on a family plan used by a spouse or a teenager is another; those are personal expenses even when they share your account. W-2 workers who use a personal phone for an employer cannot deduct it on a federal return, so if you have both a job and a side hustle, only the self-employment side counts. And the base rate of the first landline into your home is not deductible at all, though business long-distance charges on it and a separate business line are.

On the form itself, phone and internet costs usually go on Schedule C as utilities on line 25, or as a listed item in Part V under other expenses. The exact line matters less than consistency from year to year. If your home office counts as your principal place of business, the home office guide for gig workers explains how it also changes which of your miles are deductible, and that effect can dwarf the internet deduction.

Setting it up before year-end

October is a good month for this, since there is still time to collect a clean sample before the year closes. Pick one ordinary month, choose a method, take the screenshots and save the statements in one folder. If a new phone is due, buying it before Dec. 31 moves the deduction into 2026, a timing move covered in more depth in year-end tax planning starts now. Then use the percentage the records support, not the one you hoped for.

Platform-specific details, such as how each app reports your online hours, are on the individual pages in the gig worker tax hub. For the wider rules that apply across every app, the gig economy tax overview is the place to start.