Can I deduct streaming services like Netflix and Spotify for tax purposes? Yes, according to Engineered Tax Services, streaming subscriptions like Spotify and Netflix are tax-deductible when they are “ordinary and necessary” business expenses, such as providing music for clients in an office or offering streaming entertainment to guests in a rental property.
Julio from Engineered Tax Services (ETS) shares unique and often-overlooked deductions that can significantly lower the tax burden for small business owners and real estate investors. The key to deducting streaming services like Spotify and Netflix is demonstrating a clear business purpose: Spotify is deductible if used to play background music for clients or in a business office environment, and Netflix is deductible if provided as an amenity for guests in rental homes (like an Airbnb or a furnished corporate rental). The IRS requires these expenses to be ordinary and necessary for the business function. For rental properties, the subscription cost is generally fully deductible as a utility or guest amenity, strengthening the appeal and rental value of the investment.
Furthermore, with the shift to remote work, ETS reminds taxpayers to maximize their home office deductions, a benefit that became increasingly relevant following the pandemic. This includes deducting a portion of home internet costs and electricity, provided the workspace meets the IRS requirements for regular and exclusive business use. These unique deductions, when properly documented and applied, offer substantial opportunities to save money on taxes, and Julio encourages taxpayers to explore all available avenues to maximize their financial benefits.
Unique Tax Deductions: Key Takeaways
- Spotify Deduction: Subscription costs are deductible when used for a business purpose, such as playing music for clients in a professional office or for background ambiance in a commercial space.
- Netflix/Streaming Deduction: Video streaming services are deductible when provided as an amenity for tenants or guests in rental properties (e.g., short-term rentals, furnished corporate housing).
- Home Office Utilities: You can deduct a portion of home internet and electricity costs related to operating a business from home, provided the workspace qualifies under the IRS rules (usually requiring regular and exclusive use).
- Ordinary & Necessary: For any expense to be deductible, it must be ordinary and necessary for carrying on the trade or business, and proper allocation must be made between business and personal use.
