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Cell Phones for Business Use

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These days just about everyone has a cell phone. For many business people, they’ve become an integral part of doing business. Nevertheless, because these phones are usually used for personal calls as well as business calls, they are considered “listed property” under the Internal Revenue Code. Therefore, no business deduction is allowed for the cost of your cell phone unless you keep adequate records collaborating the phone’s business usage. And then only the portion of the costs attributable to your business is deductible.

To secure a business deduction for your cell phone, we recommend you note your business calls on the detailed list of your outgoing calls that is included with your monthly bill. If such a list is not provided with your bill, you may be able to get it of the provider’s website. If your provider doesn’t offer such a list, we suggest switching to one who does (assuming it otherwise makes business sense to do so).

We also recommend you keep a log of your incoming calls and indicate on the list the ones that are for business. We recognize the difficulty of doing this, but it will go a long way in securing a deduction for your cell phone expense. Fortunately, if your business usage of the phone is fairly consistent from month to month, it may be possible to use a one month’s log to substantiate the whole year.

While cell phone rates have come down substantially over the last few years, they can still easily cost $100.00 or more a month if you use a lot of airtime. If this is the case, keeping track of the business usage may well be worth your effort.

If you have any questions about what we’ve discussed in this letter, please give us a call.