Today TaxMama hears from Melinda in Tennessee, who asks. “How much are we allowed to deduct for our business phone cost?”
You may deduct as much as you spend on your business use.
If you only have one telephone, you are not permitted to deduct the base monthly cost of the phone and its features.
Beyond the base cost – there should be no charges unless you have toll charges or long distance calls. Look at those charges and see which are business. Deduct them.
On cell phones, again, if this is your primary phone – the base charge isn’t deductible.
If this is a second phone – specifically for business, then deduct all of it – less the personal usage.
Ideally, scan the bill for personal calls and subtract those costs.
Of course, how many people really go to all that trouble? Some do. Many people just pull a percentage out of the air. And they’re fine with that – until IRS audits and sets them straight.
So, does this give you the clean, simple, straightforward answer you wanted?
Sorry, the US Tax Code doesn’t offer ‘simple’ as an option.
And remember, you can find answers to all kinds of questions about phone bills and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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- IRS Publication 535 :: Section on Business Telephones