With the increasing reliance on mobile devices for work, many employees are wondering whether they can write off their cell phone expenses on their tax returns. The short answer is: it depends. While there are certain circumstances where you can claim your cell phone as a business expense, there are also some limitations and requirements you need to be aware of.
Let’s dive deeper into the topic of writing off your cell phone for work:
What are the IRS Rules on Writing Off Cell Phone Expenses?
The IRS allows you to write off your cell phone expenses as a business expense if you use your phone for work-related purposes only. This means that you need to keep accurate records of your phone usage and be able to provide evidence that the expenses were incurred for business purposes.
Additionally, the IRS requires that the expenses must be ordinary and necessary for the operation of your business. In other words, you can’t write off luxury or unnecessary expenses such as premium phone plans or the latest smartphone model.
What are the Types of Cell Phone Expenses You Can Write Off?
Here are some examples of cell phone expenses that you can write off:
- Monthly service fees
- Data usage and internet charges
- Roaming fees for business travel
- Equipment costs such as a phone case or charger
However, keep in mind that you can only claim the percentage of your cell phone usage that is related to your work. If you use your phone for both personal and business purposes, you will need to calculate the percentage of business usage and claim only that portion.
What Records Do You Need to Keep to Write Off Your Cell Phone for Work?
To claim your cell phone expenses as a business expense, you need to keep accurate records of your phone usage. Here are some tips:
- Keep a log of your calls and messages that are work-related
- Save your phone bills and highlight the business-related charges
- Provide evidence that the expenses were incurred for business purposes, such as emails or receipts
Remember that the burden of proof is on you, the taxpayer, to provide evidence that the expenses were incurred for business purposes. Without proper documentation, your claim may be denied by the IRS.
Writing off your cell phone expenses for work can be a great way to save money on your taxes. However, it’s important to understand the IRS rules and requirements and keep accurate records of your phone usage. By doing so, you can maximize your tax deductions and avoid any potential issues with the IRS.