How Much Of Your Cell Phone Bill Can You Deduct?

  • John A. Osborne
  • May 03, 2023
Small Business Insurance Massachusetts

Cell phones have become a crucial part of our daily lives. They play a significant role in our communication, entertainment, and even business activities. As a result, they have become a common expense for most people. However, did you know that you could deduct some of your cell phone bills on your taxes? Yes, you can, but the amount varies depending on several factors. In this article, we will explore how much of your cell phone bill you can deduct.

Before we delve into details, it’s essential to note that not everyone is eligible to deduct their cell phone bills on their taxes. The IRS only allows deductions for specific groups of people, including:

Self-employed individuals

If you are self-employed, you can deduct all of your cell phone bills as long as you use your phone exclusively for business purposes. However, if you use your phone for both personal and business activities, you can only deduct the business portion of your bill. For instance, if 60% of your phone usage is for business, you can only deduct 60% of your bill.

Employees

If you are an employee, you can only deduct your cell phone bills if your employer doesn’t reimburse you for them. In such cases, you can only deduct the business portion of your bill, just like self-employed individuals.

Home office deduction

If you work from home, you can deduct your cell phone bills as part of your home office deduction. However, you must meet specific requirements set by the IRS to qualify for this deduction. For instance, your home office must be your primary place of business, and you must use it exclusively and regularly for business purposes.

Itemized deductions

If you don’t qualify for the above categories, you can still deduct your cell phone bills through itemized deductions. However, this option only applies to certain expenses, such as medical expenses, mortgage interest, and charitable donations. You can only deduct your cell phone bills if they exceed the standard deduction amount for your tax filing status.

Tax deduction limits

The amount you can deduct from your cell phone bills depends on your usage and your tax bracket. The IRS allows you to deduct the ordinary and necessary expenses of running your business, which includes your cell phone bills. However, you cannot deduct more than what you actually spent on the bills. Additionally, there is a limit on the amount you can deduct if you use your phone for both personal and business activities. The limit is calculated based on the percentage of your phone usage that is for business purposes.

Conclusion

As you can see, the amount of your cell phone bills you can deduct on your taxes varies depending on several factors. If you are eligible to deduct your bills, ensure that you keep accurate records of your phone usage and bills. This will help you calculate the exact amount you can deduct, and also avoid any issues with the IRS during tax season.

Sources

  • https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses
  • https://www.irs.gov/taxtopics/tc500/tc511
  • https://www.nerdwallet.com/article/taxes/can-you-write-off-your-cell-phone-bill-on-taxes

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