How to calculate your deduction
The IRS doesn't require you to log every call. You need a reasonable estimate of your business use percentage.
Look at a typical month:
- How many of your calls are business-related?
- Do you use data for business apps, email, or research?
- Do you text clients or vendors?
If about 70% of your phone use is business, deduct 70% of the bill. Keep it consistent and reasonable.
What you can deduct
- Monthly service plan (business percentage)
- Phone purchase cost (business percentage, or depreciate over time)
- Business apps and subscriptions
- A second phone used exclusively for business (100% deductible)
Example
Your cell phone bill is $120/month ($1,440/year). You estimate 65% business use.
Deduction: $1,440 × 65% = $936
If you bought a new phone for $1,000 and use it 65% for business: $650 deductible (in the year of purchase under Section 179).
IRS Reference
Cell phones are listed property under IRC Section 280F. Since the Tax Cuts and Jobs Act (2018), cell phones are no longer subject to strict substantiation requirements, but you still need a reasonable basis for your business-use percentage.
Cell phones are listed property under IRC Section 280F. Since the Tax Cuts and Jobs Act (2018), cell phones are no longer subject to strict substantiation requirements, but you still need a reasonable basis for your business-use percentage.
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