Mark J. Kohler, a CPA and attorney, explains that smartwatches may be tax deductible as accessories to your cell phone, similar to Bluetooth earpieces. The IRS hasn't ruled definitively, but many accountants treat them as listed property you can deduct partially or fully based on business use. Small business owners can also deduct 100% of cell phone service if they have a home phone.
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Hi, Mark Kohler here with another two minute tax and legal tip. Let's talk about the Apple Watch or a smart watch for those out there that are not fans of Apple but may have a Google watch or there's all sorts of variations now. Right, Well, I want to talk about making sure it's tax deductible in your business. Now first you'll see I'm wearing my watch here, but I don't want to talk about writing off the watch itself right now. I want to talk about just making sure you're up to speed on writing off your cell phone Service. Now, since 2011, the IRS has allowed small business owners to write off 100% of their cell phone service for themselves, their spouse or children working in the business. Now that's as long as you have a home phone. You can't. You have to at least have a home based phone or maybe you're using a, gosh, some sort of Internet IP phone system or MagicJack or something like that. But you have to phone line in your home and then you can deduct 100% of your cell phone service. Now that's a big deal and you want to make sure you're tracking your cell phone service as 100% write off. Now let's talk about the hardware itself. And keep in mind the IRS has not given a definitive ruling on smart watches and write offs and I doubt they will because they don't write a ruling on every little thing. But the position accounts are taking across the country, and I'm taking is that the smartwatch is an accessory to your phone. It's much like an earpie Bluetooth device. The smart watch is providing much more than just checking for the time. It's giving you calendar and message alerts. It's allowing you to be more hands free. It does provide Bluetooth. There's a lot of features with a smartwatch that helps you be more successful as a business owner. When you talk to your accountant, keep in mind that your Apple Watch or Smart Watch would be listed property and you probably write off a percentage of it, maybe 100% if you're a small business owner going 100 miles an hour. But you and your accountant may decide you'll write off 50 or 60 or 70% of your watch because there may be some personal benefit from that as well. Now again, that's up to you and your accountant. But for me and my clients, we're writing off a lot of these smartwatches because they're an accessory to your phone as a Bluetooth device. Finally, make sure that you're always talking about these small little things that can add up and save you thousands of dollars on your tax return. Keep living the American Dream and remember, tax planning can be fun and exciting along with running your business. Thanks for listening and I hope that information was helpful and let me speak from the heart here. I've been talking about topics like this for 1015 years. I'm a CPA attorney, best selling author, radio show host and I am passionate about helping small business owners save taxes, build wealth and protect it. Please check out the link right here. Download my free ebook on 10 Common Mistakes Small business owners make in the tax and legal arena. Also check out my social media links here. I've got Daily Tips, a weekly blog radio show every week. This information is free and I'd love to help you. Click below. Find out more about me and thanks for listening.
