Discussion:Cell Phone deductible?

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Discussion Forum Index --> Tax Questions --> Cell Phone deductible?

Dude7707 (talk|edits) said:

16 April 2006
T/P has MaryKay business, has cell phone wants to deduct monthly bill. It is my understanding, unless you have a 2nd line into the home you can only deduct the LD calls relating to the business. Having a home phone and a cell does not qualify for 2nd line. Am I correct?

Sandysea (talk|edits) said:

16 April 2006
Only the portion used for business purposes is deductible...this includes local and long distance.

LJACPA (talk|edits) said:

17 April 2006
This has been a real issue this year and will continue to be more and more. As I understand it, the IRS has provided guidelines for the deductibility and is denying some if not all. I always tell my clients, who of course insist that the cell phone is 100% business, that that's impossible and I usually will not deduct more than 75% (usually 50%) of their cell phone expenses. Trying to figure out what realistically is "business purpose" is wide open. Be conservative and don't take the entire expense.

SharonCPA (talk|edits) said:

20 April 2006
At a continuing education seminar recently the instructor (CPA) said the IRS now disallows cell phone deduction unless taxpayer has a log. Supposedly it doesn't accept bills as sufficient. I have yet to see this as a problem in practice and I am only repeating what I heard.

Natalie (talk|edits) said:

20 April 2006
Do you have a citation or reference for that comment Sharon? My husband has a cell phone that he uses for his business. About a year ago the cell phone company stopped sending detailed logs of the calls. I can see how this could be a problem for some people who run up large bills each month.

Karen258 (talk|edits) said:

20 April 2006
Does this apply to larger companies that have a contract for many phones? I have 5 employees on my contract and I've been taking the deduction. I can't imagine having to tell my clients it's not deductible. Does anyone have a reference on this?

Dennis (talk|edits) said:

20 April 2006
With employer provided phones you have to deal with the problem of accountable vs non-accountable plans.

Randian (talk|edits) said:

21 April 2006
What happens if you don't get a bill? In my area MetroPCS offers a flat-rate, unlimited minutes plan, but no itemized bill.

SharonCPA (talk|edits) said:

21 April 2006
As I wrote, I am just repeating what the instructor said and I don't have a citation for the IRS requirement of a cell phone log. It is supposed to be something recent. Theoretically you have to allocate between percentage business and nonbusiness use. I have no clue how the IRS thinks you can do this without bills, even if you do keep a log (and really, who would?). Are you supposed to do it by number of calls, treating a 20-minute call the same as a one-minute call? Are you supposed to stand there with a timer as you talk? I think the IRS will probably have to back off on this one.

Jdugancpa (talk|edits) said:

21 April 2006
This is not an issue that will cause me to lay awake at night, I can assure you.

Trillium (talk|edits) said:

29 May 2010
[update] Current IRS stance remains the same, see for example, IRS on Employee Cell Phones, but also see Notice 2009-46.

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