Mixed Tele-Signals

Today TaxMama hears from Charles in Louisiana, who tells us. “I have an Internet consultation business (LLC) and I use my Internet connection and mobile phone primarily (but not exclusively) for business. Should I be able to expense these?”

Hi Charles,

Phones, Internet connections, computers, cameras, autos – all of those are things that folks tend to use for both personal and business.

You should have no problem deducting the business use of all these things.

The question is, how do you determine what part of the expenses are for business and which are personal.

Essentially, when it comes to phones, on your home phone, the base phone fee is always personal.

On all the other phones, and the rest of the home phone, keep logs to keep track of business and personal use.

I’ve read tax cases where the courts backed IRS’s denial of deductions where the business-owner didn’t have records to show the business and personal use.

Go through the phone bills to review the calls and separate out the personal calls – and don’t deduct those.

For the Internet, if your family is using it too, either keep logs or prorate the costs among all the users in the family. If you have 4 people, split the cost 5 ways – 1 for each member of the family’s personal use (including your own) and 1 for the business use. I hope this helps?

And remember, you’ll find answers to lots of questions about business expenses and other tax information, free. Where? At TaxMama.com

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