The Starbucks' Deduction

June --

Here's a question that could only be asked in this new coffee culture.

I am self-employed and about 50% of the work I do requires me to have internet access, which I don't have at home. I am always at the same local coffee shop using their internet for a couple hours a day. I always buy a cup of coffee because I'm using their internet, electricity, and space for a minimum of 2hrs/day. I never do work at home. Can my coffee be considered a business expense as it may be necessary in order for me to have internet access? There is no sign posted at this independently owned coffee shop stating that you must buy something to use the internet. But, you can't get access to the wifi unless you have the special code, which you receive at the register.

Angela from Seattle, WA


Hello Angela,

Wish I could tell you the coffee were an expense, but as it's currently set up at your local coffee place it is not. That's because you may not take as a deduction the cost of meals or snacks for yourself. Why not ask for the cost of access to the code without buying coffee and see if they give it to you. If you must buy something in order to get access then you have a legitimate reason to deduct the cost of the least expensive item.

Other ways to look at it:

If coffee were $3.00 a cup but to get the code a cup cost $4.00 then you'd have a $1.00 deduction.

Or if coffee shops all over town charged $2.00 a cup and your place, the only one with Internet service, charged $3.00, well, then we could argue for a dollar deduction.

Of course, if you were there with a business associate and you paid for her coffee and yours, then both coffees are a deductible meals&entertainment expense for you.

-- June