Yes, the water bill is deductible if your home serves as your primary business location and qualifies for the home office deduction. Allocate the business-use percentage accurately based on the space used exclusively for business purposes. For those managing 1099 employee taxes, home office deductions can help reduce taxable income, but only direct and proportional expenses qualify. Maintain utility bills, detailed records, and calculations to substantiate your claims during tax filing and in case of an IRS audit. Using tools like expense trackers can streamline this process and ensure compli