Open Google Analytics to the main profile for the account you want to filter.
If there is a profile labeled "External" use that.
Otherwise use the profile "All Website Data."
Click "Add Filter"
Give it a name related to the location of the IP
Select the filter type: Exclude
Select the source: traffic from IP address
Open the Yardstick IPs Worksheet, and copy the IP address you want to filter.
Click to enlarge image
Once you've created a filter that profile will no longer include visits or activity from that IP address. (It will still show prior visits.)
Google Analytics - How to Filter Out Local Traffic
We rely on Google Analytics to help us understand what people are doing on our websites. But when there's not a ton of traffic to a website, our frequent visits to a website or submitting forms can skew the results. So we filter it out!