With tax season underway, many taxpayers are wondering if they can deduct their Netflix subscription from their taxes. While there isn’t a straight yes or no answer to this question, there are certain rules that may allow you to deduct your streaming services from your taxes. Let’s explore how entertainment expenses might be deductible.
The IRS considers entertainment expenses to be non-deductible personal expenses. This means that if you use the service for personal reasons, such as watching movies or TV shows with your family and friends, then you cannot deduct it.
However, if you use the streaming service for business purposes—such as playing shows or movie in your business Lobby or researching a potential project or show—then you may be able to deduct it. In order to do so, you must provide evidence that the expense is related to generating income in some way.
It’s important to note that if you are self-employed, then you cannot deduct any of your streaming services unless it is used solely for business purposes. For example, if you purchase a subscription for business purposes but also use it for personal reasons such as watching movies with friends and family, then none of those costs can be deducted from your taxes. It must be used strictly for business purposes in order to qualify as a deductible expense.
Another thing to keep in mind is that all of your expenses must meet certain criteria in order to qualify as a deductible expense on your taxes. This includes having documentation of all expenses incurred—including receipts and cancelled checks—as well as evidence that these expenses were related directly to generating income in some way. Additionally, these expenses must not exceed 2% of your total adjusted gross income (AGI). If they do exceed 2% of AGI then they will not qualify as deductible expenses on your taxes.
In conclusion, while there isn’t a straightforward answer when it comes to deducting streaming services like Netflix on your taxes, there are certain rules and guidelines that may allow you to do so depending on how and why the service is being used by you or your business. Be sure to consult with an accountant or tax professional before attempting to claim any deductions related to entertainment expenses on your taxes this year!
