Mark J. Kohler, CPA and attorney, shares four ways small-business owners can deduct cell phone expenses. Cell phones aren't classified as listed property, so you can often write them off fully without depreciation. Keep a separate personal phone line and establish a business entity to justify the deduction, and phones for family members who work in your business may be deductible too.
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Hi, Mark Kohler here with another two minute tax and legal tip. Let's talk about writing off the cell phone. Oh my gosh. Wouldn't it be nice if we could write off all those exorbitant fees that we all seem to pay every month for our smartphone and data? Right. Well, let me give you four tips that can help you get to a little better spot on your tax return. Now, number one, to be able to write off your cell phone or have the hope to write off your cell phone, you've got to have a small business. Now this is something I've taught for years and is a constant theme of my presentations is to at least have a small business on the side. So for those of you that have a day job and your employer's not paying for your cell phone, that's okay. Let's start that small business on the side where your cell phone becomes critical for your business success. Now it becomes a business expense rather than a personal expense. Number two, there's an important new law you need to be aware of. So it's passed in the last two to three years and there's been ongoing regulations in little cases that have helped CPAs around the country start to catch the vision of this. And that is a cell phone is not listed property, meaning it doesn't need to be depreciated if you use it in your business. You can write off 100% of your cell phone based on a couple other caveats or rules. But the big issue here is you can write off your cell phone again if you have a small business and you don't even have to depreciate it. Number three, the biggest part of this equation and how you're able to write off this cell phone is that you must have a home based phone line, some other phone line that you use for personal use to justify the reason that this cell phone is used primarily for your business or you wouldn't have to have it in the first place. And that's what gives you the ability to write off the cell phone, is because you need it in your business and you have a personal line somewhere on the side. Maybe it's Google Voice, maybe it's part of your Internet package at home with your cable or I don't know. But just make sure you have a home based line that you use for personal use. Now your cell phone again opens the door for your cell phone to be 100% write off. Number four, keep in mind that all of the cell phones in your household may be a write off as well. Is your spouse involved in the business? Are your teenage kids a part of the business or your older children? If they need a cell phone to work in the business alongside you, their cell phone should be write off as well. Again contingent upon them having a home based phone line for their own personal use. So this is a wonderful planning opportunity that you should be discussing with your tax professional and making sure that you're writing off your cell phone. Thanks so much and don't give up on that small business. If you thought that information was amazing and helpful. I have so much more to share with you. Please look at the links below and head to my website markjkohler.com you can subscribe to my weekly newsletter. Check out my weekly radio show. I have my online videos for tax and legal strategies that'll save you thousands ways to learn quickbooks with my fun videos online. And also if you enjoyed it, please leave a comment and give it a like and follow me on YouTube. I promise that these videos will change your life. Thanks so much.
