Helium Hotspot Business Expense Deductions: Complete 2025 Guide
Running Helium hotspots creates taxable mining income, but you can significantly reduce your tax burden through legitimate business expense deductions. This guide covers every deductible expense, from hardware to hosting fees, with actual dollar amounts.
$500-$1,500
Typical Year 1 Deductions
Schedule C
Primary IRS Form
100%
Section 179 Deduction
5 Years
MACRS Depreciation
Understanding Helium Mining as a Business
When you operate Helium hotspots, you're running a business that generates self-employment income. This is important because it means you:
- Must report income on Schedule C (Profit or Loss From Business)
- Pay self-employment tax (15.3% on net earnings for Social Security and Medicare)
- Can deduct business expenses to reduce taxable income
Why Business Deductions Matter
Every $100 in deductions saves approximately $37 in taxes (22% federal + 15.3% self-employment). A $500 hotspot deduction saves ~$185 in taxes. Proper documentation is your best tax strategy.
Complete Deduction Categories
| Expense | Typical Cost | Deductible |
|---|---|---|
| Helium Hotspot Device | $400-$800 | 100% |
| External Antenna | $50-$200 | 100% |
| Antenna Cable (LMR400) | $30-$100 | 100% |
| Lightning Arrestor | $25-$50 | 100% |
| Mounting Pole/Hardware | $50-$150 | 100% |
| Weatherproof Enclosure | $30-$80 | 100% |
| Expense | Typical Cost | Deductible |
|---|---|---|
| Internet Service (mining %) | $600-$1,200/yr | 10-25% |
| Ethernet Cable | $10-$30 | 100% |
| Network Switch/Router | $30-$100 | Mining % |
| WiFi Extender | $30-$80 | Mining % |
| Expense | Typical Cost | Deductible |
|---|---|---|
| Electricity Usage | $10-$30/yr | 100% |
| UPS Battery Backup | $50-$150 | 100% |
| Surge Protector | $20-$50 | 100% |
| Expense | Typical Cost | Deductible |
|---|---|---|
| Hosting Fee (if applicable) | $50-$200/mo | 100% |
| Rooftop Access Agreement | Varies | 100% |
| Property Owner Compensation | Varies | 100% |
| Expense | Typical Cost | Deductible |
|---|---|---|
| Rent/Mortgage (% of sq ft) | Varies | Space % |
| Utilities (% of sq ft) | Varies | Space % |
| Home Insurance (% of sq ft) | Varies | Space % |
| Expense | Typical Cost | Deductible |
|---|---|---|
| Tax Preparation Software | $50-$200 | Mining % |
| CPA/Accountant Fees | $200-$500 | Mining % |
| Crypto Tax Software | $50-$200/yr | 100% |
Section 179 vs MACRS Depreciation
You have two options for deducting equipment costs. Here's when to use each:
- Deduct 100% of cost in Year 1
- Best when you have mining income to offset
- Immediate tax savings
- 2025 limit: $1,220,000 (way more than you need)
Example:
$500 hotspot = $500 deduction in Year 1
- Spread deduction over 5 years
- Better if income increases over time
- Useful for tax planning across years
- More conservative approach
Example (5-year):
$500 hotspot = $100/year for 5 years
Real Example: First-Year Deduction Calculation
Income:
First-Year Deductions:
Record-Keeping Requirements
What the IRS Requires
For Each Expense:
- • Date of purchase
- • Amount paid
- • Vendor/seller name
- • Business purpose
- • Receipt or invoice
Recommended Practice:
- • Photograph all receipts
- • Store digitally (cloud backup)
- • Create expense spreadsheet
- • Keep for 7 years minimum
- • Separate mining expenses from personal
Step-by-Step: How to Claim Your Deductions
Gather Purchase Documentation
Collect receipts for your Helium hotspot, antennas, cables, and any mounting equipment. Include the purchase date, price, and vendor information.
Calculate Internet Deduction
Determine the percentage of your internet used for mining. Multiply your annual internet bill by this percentage (typically 10-25%).
Track Electricity Usage
Helium hotspots use approximately 5-10 watts. Calculate annual cost: (watts × hours × 365 × electricity rate) / 1000. This is typically $10-30/year.
Document Home Office Space
If your hotspot is in a dedicated space, measure the square footage and calculate as a percentage of your total home. Apply to rent/mortgage, utilities, insurance.
Record Hosting Agreements
If paying for remote hotspot placement, keep all agreements and payment records. These are 100% deductible.
Apply Section 179 Deduction
On Schedule C, list your hotspot and equipment costs. Elect Section 179 to deduct the full amount in year one, or use MACRS to depreciate over 5 years.
Common Mistakes to Avoid
Not keeping receipts
Photograph every receipt immediately
Missing internet deduction
Calculate and claim the business %
Forgetting accessories
Antennas, cables, mounts are all deductible
Using wrong form
Use Schedule C, not Schedule 1 for ongoing mining
Missing hosting payments
Track all payments to hotspot hosts
Not electing Section 179
Explicitly elect on Form 4562
Frequently Asked Questions
Yes! Under Section 179 of the IRS tax code, you can deduct 100% of your Helium hotspot cost in the year you purchased it, rather than depreciating it over 5 years. For a $500 hotspot, this creates an immediate $500 deduction against your mining income.
You can typically deduct 10-25% of your internet bill, representing the portion used for Helium mining. If your hotspot is your only crypto/business internet use, 10-15% is a defensible deduction. Keep records of your total internet usage to justify the percentage.
Yes, but the deduction is minimal since Helium hotspots use only 5-10 watts. At average electricity rates, this translates to approximately $10-30 per year. Still worth tracking and claiming as a business expense.
Yes, if you pay someone to host your Helium hotspot (common for optimizing location/coverage), those payments are 100% deductible as a business expense. Keep records of the agreement and payments made.
Yes, maintain receipts for all business expenses. The IRS requires documentation to substantiate deductions. Digital records (photos, PDFs) are acceptable. For expenses under $75, a log with date, amount, and purpose is sufficient, but receipts are still recommended.
Track Your Deductions Automatically
DePIN Tax automatically categorizes your expenses, calculates Section 179 deductions, and generates Schedule C-ready reports. Stop missing deductions.