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Writing off business use of your cell phone on your taxes

March 15, 2014

Any business owner, regardless of what industry, will tell you that a phone is crucial to a company's success.

Today's smartphones that let you text customers, map your route to a business meeting and check your office email while away from your desk are even more business friendly.

Cell phone evolution

That essentially ensures that the cell phone is an ordinary — that is, something that's common and accepted in your line of work — and necessary — yep, just like it sounds; can't live without it — business expense.

So you definitely want to deduct your cell phone if you are a business owner.

The Internal Revenue Service will be OK with the write-off, as today's Daily Tax Tip notes, as long as you follow the rules.

Business, personal or both: The easiest way to pass IRS deduction muster is to use your cell phone exclusively for business.

Yeah, that's not happening.

When you're an employee, you at times use your office phone to call your spouse or send your best friend an email confirming your weekend getaway plans. It's no different when you're the boss paying the business phone bills.

But when it comes to deducting that iPhone's or Android's costs on your tax return, you need to be upfront and accurate about how much it was used for work.

If the IRS asks, you need to be able to show just how much was used for business. To do this, turn to your telephone bills. Most are itemized. Use those call logs to add up the number of minutes spent on business discussions vs. those that were personal to determine the deductible business usage percentage. If 70 percent of your call time is for business, you can deduct 70 percent of your phone bill.

While the Small Business Jobs Act of 2010 changed the way the IRS treats cell phones — basically, the communication devices are no longer subject to strict documentation rules regarding business use — you also should keep good phone records. Noting on your calendar, for example, that you spoke by phone (a cell phone notation is even better) to a client will help substantiate that you used the phone for legitimate work purposes.

And if you do indeed use your cell phone exclusively for business, it's a good idea to have separate phone, cell or land line, available for personal use. This will make it easier to convince an IRS auditor that your totally business cell phone is indeed just that.

Other small business tax breaks: Telephone use is just one of the 12 small business tax breaks that were included in the Daily Tax Tip for Friday, March 14.

These dozen deductions etc. can help reduce what you'll owe Uncle Sam if your business is booming, so check them out.

You also can find more about business tax deductions in IRS Publication 535.

You also might find these items of interest:

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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