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Can My Cell Phone Be A Tax Deduction?

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Can My Cell Phone Be A Tax Deduction?

Trying to find a way to justify your phone screen time? We might have the answer for you. What if we told you that you can claim a cell phone tax deduction if you’re self-employed? Of course, knowing the IRS, there are some conditions you’ll have to meet, but we’re here to break it down for you. Generally, you can write off the business portion of your cell phone bill and other related bills. You’ll need to keep pretty meticulous records of your usage throughout the year to do this. If you have a phone just for work, you can generally deduct the entire cost. But this deduction is also heavily dependent on your business. Learn the answers to questions like how much of my cell phone bill is tax deductible, can my LLC pay for my cell phone and how to report the IRS cell phone deduction on Schedule C.

Table of contents

Key takeaways...Read more

Can you write off a business cell phone?...Read more

Are there other cell phone tax deductions?...Read more

Can I write off a new cell phone purchase in 2023?...Read more

Can my LLC pay for my cell phone?...Read more

What does the IRS say about cell phone reimbursement in 2023?...Read more

Is my internet tax-deductible?...Read more

How can I deduct my cell phone as a business expense?...Read more

Key takeaways

  • You can write off your cell phone bill as a tax deduction if you use your phone for work.
  • You will need to find your business usage percentage to claim the deduction.
  • If you have a business cell phone, you can get a 100% tax deduction.

Can you write off a business cell phone?

If you buy a separate phone just to use for your business, you can technically claim a 100% tax deduction for it. But the IRS may have some questions. This is because it can be difficult to prove that your work phone has never been used for a personal reason. If you’re checking your email on your phone and take a 5-minute break to watch a cute cat video that your friend sent you, that’s a non-work related activity that you used a work cell phone to do. So, your best bet is to calculate your business usage percentage and only write off that portion. You can use a cell phone taxes and fees calculator to find your 2023 deduction amount. Most self-employed individuals can deduct a portion of their cell phone bill from their taxes if they use it for their business. Make sure that your phone is actually a necessary part of your job, otherwise, you cannot claim this deduction. So, if you’re a content creator on TikTok, you may use your phone to record and post content, check emails, take business calls and even write down future ideas. You can deduct all of this from your monthly phone bill. You can use a self-employment tax calculator to help you find relevant phone deductions. If you need to make estimated tax payments, you can use an estimated tax calculator. But how much of a cell phone bill is tax deductible? Say you work five days a week, 9 AM to 5 PM. That’s 40 hours of work per week. And let’s assume that you wake up around 7 AM every day and go to bed around 10 PM. That’s a total of 105 hours per week that you are awake. Now, the tricky part. To get the business use percentage of your phone, divide 105 by 40. That gives us approximately 38% of business use and 62% of personal use of your cell phone a week. So, if your phone bill is $150 for that month, you can deduct $57 as a business expense. If your hours are the same throughout the year, that’s $684 as a cell phone tax deduction.
Infographic entitled How To Calculate Cell Phone Business Use Percentage for claiming the cell phone tax deduction.
If this sounds too complicated, FlyFin links your expenses so A.I. can automatically find and classify every possible tax deduction that applies to you. CPAs also provide unlimited tax support on the app.

Are there other cell phone tax deductions?

Yes, there are! You can deduct some business cell phone expenses if they are necessary to your business. For example, if you drive for Uber, you could write off paying for Spotify as it keeps your passengers entertained. An Etsy seller can’t really make the same justification. You can also deduct your cell phone family plan from your taxes, but again, you’ll have to calculate your work percentage to claim it. But if your dad is paying for your phone, you can’t write it off at all unless you’re reimbursing him. A freelance tax calculator is the best way to find other deductible expenses to claim.
Infographic entitled Cell Phone Related Tax Deductions showing related cell phone deductions that can be reported on IRS Form Schedule C.
You will report your cell phone deduction on your IRS Form Schedule C, where you will report all your business income. You will file this along with Schedule SE, where you will calculate self-employment tax and the standard Form 1040.

Can I write off a new cell phone purchase in 2023?

You cannot fully write off a new cell phone purchase in 2023, but you can depreciate it over the period of its useful life of seven years, provided you use it for business. You can also claim bonus depreciation in the first year you use the phone, further lowering the tax on your cell phone purchase.

Can my LLC pay for my cell phone?

Your LLC can pay for your cell phone if you use it for business purposes. This expense is considered a legitimate business expense and can be deducted from the LLC's income before calculating taxes. You should keep records of your business-related calls, emails, and other activities to justify the deduction.

What does the IRS say about cell phone reimbursement in 2023?

Before 2018, if you were working for someone as a W-2 employee, there was a chance you had to use your own cell phone for work purposes. If you're the type to itemize deductions, the IRS used to let you claim depreciation on your phone as an "unreimbursed business expense" as long as you used it regularly for your job. This deduction is no longer available for taxpayers. It’s a different story for small business owners. According to a 2011 update to the Small Business Jobs Act of 2010, if you work for a small business and your employer gives you a cell phone mainly for work and not as part of your compensation, you generally don't have to pay taxes on its business and personal use. You won't even need to keep detailed records of how you use it. This also applies to any cash allowances or reimbursements provided to employees for using their own cell phones for work. But this tax-free treatment doesn't apply to unusual or excessive expenses or if the reimbursement is like a part of the regular salary. If you want to include the IRS’ cell phone reimbursement policy in your business in 2023, you can consult one of FlyFin’s tax professionals to help guide you through the process.

Is my internet tax-deductible?

A related tax deduction to cell phone usage that self-employed individuals should not forget is your internet. You can claim internet usage on your tax return whether you work from home or not, as long as it is essential to your business. Self-employed individuals have two ways to claim this tax deduction – with the home office deduction or without. The home office deduction will require you to fill out Form 8829. You can choose the standard method or the simplified method. With the standard method, you’ll have to calculate all your expenses related to your home office, like rent and utilities. If you choose the simplified method, you can just deduct $5 per square foot of your office space. With this option, you don’t have to calculate any business usage percentages. If you don’t want to choose the home office deduction, you can just write off your internet usage expenses on Schedule C. You can calculate your business use percentage just as you would for a cell phone.
Infographic entitled Internet Tax Deductions showing deductions related to the tax on cell phone purchases.

How can I deduct my cell phone as a business expense?

To claim the tax deduction on a cell phone purchase or just write off some phone expenses, you’ll need to save some documents throughout the year:
  • Purchase receipt
  • Monthly phone bill
  • Business vs personal usage records
  • Call logs
  • Receipts for phone accessories
  • Records of business calls (Date of call, who you called and for what reason)
  • Proof of payment of bills
  • Records of business purpose (proving why your phone is essential to your business)
  • Business use percentage calculation (using a cell phone taxes and fees calculator for 2023)
You should report cell phone expenses in Part V (Other Expenses) on Schedule C. Cell phone expenses are not part of the home office deduction, so you’ll need to do this even if you’re claiming the latter. It can be helpful to have a small business tax deduction checklist tailored to your line of work to help remind you of all the deductions you can claim on your taxes. Doing this at the start of a tax year can make it easier to save records and have everything you need when you file.
Infographic entitled Small Business Tax Deduction Checklist listing common tax write-offs for self-employed individuals and small business owners.
The bottom line is that as long as you keep your books up to date and have proper documentation of all your activities and expenses, you should be able to take full advantage of both the cell phone and internet tax deductions every tax season.

Mortgage Interest Tax Deduction

The mortgage interest deduction can be claimed by homeowners who itemize their expenses. You could claim the mortgage interest tax credit if you’re in a lower tax bracket.

Office Supplies Tax Deduction

Office supplies are tax deductible for self-employed individuals and can be reported under the office expenses category on Schedule C.

Advertising Tax Deduction

Ordinary and necessary promotion expenses and marketing expenses are tax-deductible for self-employed individuals. They should be claimed on Schedule C when filing 1099 tax.

Business Insurance Tax Deduction

Self-employed individuals can deduct business insurance expenses from their 1099 taxes. Sole proprietors and single-member LLCs can claim it on Schedule C.

Meals Tax Deduction

The meals and entertainment deduction in 2024 allows 1099 workers to deduct 50% of business meal costs. Certain meal and entertainment expenses are still fully deductible.

Business Travel Tax Deduction

Expenses related to traveling are deductible for business purposes. A per diem rate is set for deductible travel expenses.

Charitable Contribution Tax Deduction

If you make a charitable donation to an organization, it might count as a tax deduction. Not all charitable donations count as a write-off.

Clothing And Accessories Tax Deduction

Self-employed individuals can take the clothing tax deduction if their clothes cannot be worn outside the work environment.

Commission And Fees Tax Deduction

Self-employed individuals can claim certain commissions and fees as tax deductions if they are related to their business and are ordinary and necessary.

Contract Labor Tax Deduction

If you do any contract labor, you will have to pay contract labor taxes, also known as SE tax. Estimated payments quarterly need to be made for tax liabilities over $1,000.

Internet and WiFi Tax Deduction

Self-employed individuals can deduct some of their internet bills if they work from home as part of the home office deduction. Internet costs can also be reported on Schedule C.

Medical and Dental Tax Deduction

Certain dental and medical costs can be claimed as a medical tax deduction if itemized when paying income taxes. Expenses have to be more than 7.5% of AGI.

Rent Tax Deduction

Rent is tax deductible for self-employed individuals who work from home or have a separate office space. Some states offer renters tax credits to lower state taxes.

Repair and Maintenance Tax Deduction

Capital improvements can be claimed as a tax deduction through depreciation. Repairs to rental properties can be claimed as a business expense.

Professional and Legal Services Tax Deduction

Legal fees are tax deductible from 1099 taxes under the legal and professional fees category on Schedule C. The category also includes consultant and tax prep fees.

Shipping Tax Deduction

Business-related shipping expenses are tax-deductible. Shipping supplies and the cost of shipping are included as write-offs.

Software Tax Deduction

Software depreciation can be claimed with the straight-line method, Section 179 or through amortization. Report software depreciation on Form 4562.

Student Loan Payment Tax Deduction

Student loan interest paid is tax-deductible, and every type of education loan qualifies for the deduction.

Taxes and Licenses Tax Deduction

Self-employed individuals can take the license fee tax deduction on taxes and licenses that are ordinary and necessary business expenses.

Training and Education Tax Deduction

The educator expenses tax deduction allows eligible educators to deduct $300 of unreimbursed expenses from their taxes. Use education tax credits to lower tax liability.

Utilities Tax Deduction

Utilities are tax deductible when they are an ordinary and necessary business expense. They can be claimed with the home office deduction or as a rental property deduction.

Vehicle Insurance Tax Deduction

Interest on a car loan is tax deductible if it is used for business. Choose between the standard and actual method when claiming the vehicle deduction.

Vehicle Purchase Tax Deduction

You can claim the vehicle tax write-off if you’re self-employed and use your vehicle for business. It can also be taken if you lease your vehicle.

Mortgage Interest Tax Deduction

The mortgage interest deduction can be claimed by homeowners who itemize their expenses. You could claim the mortgage interest tax credit if you’re in a lower tax bracket.

Office Supplies Tax Deduction

Office supplies are tax deductible for self-employed individuals and can be reported under the office expenses category on Schedule C.

Advertising Tax Deduction

Ordinary and necessary promotion expenses and marketing expenses are tax-deductible for self-employed individuals. They should be claimed on Schedule C when filing 1099 tax.

Business Insurance Tax Deduction

Self-employed individuals can deduct business insurance expenses from their 1099 taxes. Sole proprietors and single-member LLCs can claim it on Schedule C.

What’s FlyFin?

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