Draw an outline around the portion of Sheetrock that you want to cut. If, for example, you want to cut out a rotted piece of Sheetrock, use a pen and ruler to outline the damaged area in a square. If you want to install lighting, measure and draw the exact length and width the light requires on the ceiling.
Place a stud finder flat against the Sheetrock within the outline you drew, and move it from left to right. If a joist or wiring is within the outline, the stud finder will alert you. Remain aware of the joist's or wiring's location when you cut into the Sheetrock.
Insert the tip of a utility knife onto the outline. Use medium pressure to cut 1/8 inch into the Sheetrock with the utility knife. Make the cut as straight as possible using the drawn outline as your guide.
Cut deeper into the Sheetrock with the utility knife, following the 1/8-inch deep cut you made. Continue to cut deeper into the Sheetrock until the portion you want to remove is completely loose and falls.