Discussion:Before you deduct that cellphone
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| Revision as of 18:08, 30 April 2008 Wwtaxes (Talk | contribs) (And even that is) ← Previous diff |
Revision as of 18:10, 30 April 2008 DerekCPA (Talk | contribs) (There is HR 5791) Next diff → |
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| {{ForumReplyPost|UserID=Wwtaxes|Date=30 April 2008|Text=And even that is getting to be outdated, as more and more people are opting out of land lines and just going with cell phones, even in their homes. I understand the rules are against it, but they no longer reflect the current means of conducting business. But at least I know have IRC jargon to throw at the client when they ask why they can't deduct the entire business phone just because it is a cell. }} | {{ForumReplyPost|UserID=Wwtaxes|Date=30 April 2008|Text=And even that is getting to be outdated, as more and more people are opting out of land lines and just going with cell phones, even in their homes. I understand the rules are against it, but they no longer reflect the current means of conducting business. But at least I know have IRC jargon to throw at the client when they ask why they can't deduct the entire business phone just because it is a cell. }} | ||
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| + | {{ForumReplyPost|UserID=DerekCPA|Date=30 April 2008|Text=There is HR 5791 which is in the Senate now that would remove cell phones from being listed property.}} | ||
Revision as of 18:10, 30 April 2008
Discussion Forum Index --> Tax Questions --> Before you deduct that cellphone
Death&Taxes (talk|edits) said: | 30 April 2008 |
| take a look at Tash v. Commissioner, T.C. Memo. 2008-120 (4/29/08) where Sec. 274(d) requirements come into play. http://taxprof.typepad.com/ | |
| 30 April 2008 | |
| D&T, as much as I detest reading TC Memos and the like, I did read/scan this one because the issue of cell phone expenses is so common and I try my best to be as conservative as possible even when I get the typical, "it's all for business", right! Anyway, there appeared to be many, many other issues that were much more in question and I think I only saw one short sentence regarding cell phone expense and that did not include any amounts deducted (am I correct in this?). I think there needs to be further direction/clarification of deductibility instead of us having to once again "use our professional judgment". Did I miss something in this? | |
Death&Taxes (talk|edits) said: | 30 April 2008 |
| No, I don't think you missed anything but you can see that when the balance of proofs is in doubt, the Court will give nothing. | |
| 30 April 2008 | |
| In other words, make sure everything is as clean as possible and 'conservative', allocated cell phone expense might be 'overlooked'? | |
| 30 April 2008 | |
| I am still really struggling with differentiating a cell phone from a land line for deductibility. Business land lines are used all the time for personal calls (eg School nurse calls to say child is ill). I can't believe that companies like IBM, HP, etc look at the percentage of use when deducting the costs of these lines. So when a business chooses to use cell phones instead of land lines, why is it different? I can see if the charges are per minute or per call, but they are usually flat fees just like a land line. Am I missing something, or is this just an area where the IRS feels there is a lot of abuse going on?
I have a lot of small businesses that have foregone a land line and gotten a cell instead. They use the cell # on their business cards, and it is typically the only feasible way of contacting these people, since they are seldom in an 'office'. They all have fixed fee plans (not charged by the minute). Are others in this situation still recommending a % of costs for deductions? | |
| April 30, 2008 | |
| WW, I think there is a difference between IBM providing land lines for business and allowing (or accepting, or tolerating) their employees' use of these lines for personal purposes, and a sole prop using his/her own cell phone, which is being claimed as a business expense, for personal purposes.
That is, for companies like IBM, having employees use business phones for personal purposes is an acknowledged "cost of doing business". The IBM's and HP's of the world may choose to be more less "accepting" of the practice, but personal use of corporate phones is a fact of business life. The phone is still a justifiable, business expense. I don't believe the holds true for the sole prop. The New Tax Guy | |
| 30 April 2008 | |
| So small businesses should have to have 2 cell phones - one for personal calls and one for business, as a call from the school nurse is not a "cost of doing business" for them? The distinction still seems to be that it is a cell phone, bc if the sole prop had a land line in his office, I highly doubt they would ever question how many personal calls were made on it. | |
Death&Taxes (talk|edits) said: | 30 April 2008 |
| Cellphones are listed property and that is why they fall into Sec. 274 record keeping requirements. This goes back to the mid-80s when listed property was put into the law. At that time, no one could anticipate there would come a day when many people do not use a land line. It was about that same time that Congress passed Sec. 262(b) concerning the deduction of the home telephone line. | |
| 30 April 2008 | |
| And even that is getting to be outdated, as more and more people are opting out of land lines and just going with cell phones, even in their homes. I understand the rules are against it, but they no longer reflect the current means of conducting business. But at least I know have IRC jargon to throw at the client when they ask why they can't deduct the entire business phone just because it is a cell. | |
| 30 April 2008 | |
| There is HR 5791 which is in the Senate now that would remove cell phones from being listed property. | |
