Client Resource Center

Practical answers for your questions

Phone: 925-472-0990 • Fax: 925-472-0991

A Tax Deduction in your Hand...Literally...
Cell phones

With the proliferation of cell phones, and the corresponding accessibility of you to your employer, invariably most employees are receiving and making business calls on their cell phones. So how can you deduct your cell phone expenses on your tax return? Here are some ideas and tips:

Expense Report. If you are an employee and use your cell phone regularly for work, review your employer's policies regarding the ability to expense part of the cost.If properly documented, the reimbursed business expense for cell phone use is not income to you. Not sure? Ask your employer. It never hurts to make a reasonable request.

Employee Benefit. If you are required to be in touch with work, as in the case of a sales representative or an IT employee, ask your employer to consider providing a cell phone to you. It is much easier to reduce your billing for personal use, than to eat the expense without a valid tax deduction.

Business Expense Versus Miscellaneous Business Deduction. As an employee with unreimbursed business use of your cell phone, the old tax rules allowed you to deduct unreimbursed business expenses in excess of 2% of your Adjusted Gross Income. Beginning in 2018, this tax deduction is gone! Thankfully, business cell phone use as a sole proprietor is immediately deductable against revenue without the 2% threshold.

Keeping Records Just Got Easier. Thankfully, recent changes in the tax code make cell phone documentation requirements much easier. In the past cell phones were considered "listed property" just like automobiles. This meant you were required to keep a detailed log of business and personal use in order to deduct the expense. This is no longer required for cell phones. You still need reasonable documentation to support the business use of your cell phone, but it is no longer such a painstaking activity.