Dedicated business line vs. personal phone
Dedicated business line: 100% deductible. This includes a separate cell phone plan, landline, VoIP service (Google Voice, RingCentral, Grasshopper), or virtual phone number.
Personal cell phone: Only the business-use percentage is deductible. If you use your phone 60% for business, you can deduct 60% of the monthly bill. Note: the IRS says you cannot deduct the base cost of your first landline phone — but this rule is largely irrelevant in the cell phone era.
What's included?
- Monthly service charges
- Phone purchase/lease (business-use percentage)
- Business apps and subscriptions (Slack, Zoom, etc.)
- International calling charges for business
- Phone cases and accessories (business-use percentage)
- Phone insurance
How to calculate business use
The IRS doesn't require you to log every call. A reasonable estimate based on your usage pattern is sufficient. Common approaches:
- Review one month's call/text log and calculate the business percentage, then apply to the full year
- If you have a business and personal phone, the business phone is 100% and the personal is 0%
- Use a second-line app (like Google Voice) for all business calls to create a clean separation
Your cell phone bill is $85/month. You estimate 70% business use.
Annual deduction: $85 × 12 × 70% = $714
Plus your $10/month Google Voice business number: $120/year (100% deductible)
Total: $834
Phone expenses are deductible under IRS Publication 535 (Business Expenses). Report on Schedule C, Line 25 (Utilities) or Line 27a (Other expenses).
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