Cell Phone Usage

[taxguy057]

Got a client who drives for trucking company and has to use his personal cell phone to conduct business communication between he and his dispatch. Can he claim the unreimbursed phone expense during the course of the year while out driving for the company?

Have a feeling he can, but I know its a certain percentage he can deduct. Just too tired to research it right now so asking my guru's out there.... Pacun please if you will if Jainen is "sleepy house!" LOL!

TG

[GraceNY]

Unless my info is outdated....

The regular monthly expense of a personal cell phone is never deductible, even if the personal cell phone is used partly for business

Tax Court Summary Opinion TC2005-181 held that under a flat rate plan, the taxpayer incurred no additional expense to make buisness related cell phone calls; therefore no part of the flat rate was deductible.

Additional charges above the flat rate, such as long distance charges for business related phone calls or the incremental cost of purchasing a plan with additional minutes for business use, are deductible business expenses. These expenses must be substantiated.

Depreciation of Cell Phones. The business portion of cell phones is depreciated under MACRS; however, because cell phone are considered listed property, special procedures apply: Employees: If the taxpayer is an employee, expenses for cell phone use may be deducted if the use is for the employer's convenience AND the use is required as a condition of employment.

[Pacun]

How about a business decision like this. My personal usage will be satisfied with a $39 plan. Since I am going to use it for work, I will purchase a $90 plan because; if I don't, my bill could be more than $100 per month.

I understand that auditors will accept 50% of global cost if they understand that client uses phone about 50% for work.

No way Jainen is sleeping. Remember he is in CA.

[Terry D EA]

I have to follow GraceNY on this one. Your client must be able to substantiate the business related calls and only the charges for the business related calls are deductible. One other option is a cell phone purchased or added to a plan strictly for business use. The additional fees to add the phone, the monthly charge for the phone, and any added minutes would be deductible. I did this with my own business as it is ridiculous to pay 150.00 per month for a phone to take up space on my desk. I added a line, ported the company number and added minutes to cover the business use. Here is the key, my wife is to never and under no circumstances call me on this phone. Non-business calls are easily identified on the phone bills. This is an area to be extremely careful with.

[jainen]

>>my wife is to never and under no circumstances call me on this phone<<

Ahh, a fine new twist on the old "Don't ever call me at work"! Does your wife fall for that line about taxes? My wife always says, "Honey, I have to visit my Dad so I'm taking the cell phone with me." I don't deduct any telephone costs on my own tax return.

Cell phones are listed property so therefore require a usage log. I always ask my clients if they keep a record, then I put down whatever they say their cost is. When the IRS decides to publish some sensible rules about the matter, I'll change my procedures.

[OldJack]

Cell phones are listed property so therefore require a usage log. I always ask my clients if they keep a record, then I put down whatever they say their cost is. When the IRS decides to publish some sensible rules about the matter, I'll change my procedures.

My clients tell me their phone is 100% business and that they have a record. I deduct whatever they say their cost is.