How much of my phone can I write off?


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Mobile phones are more essential to every common person’s life. The role of smartphones is more linked with human relation, business, connectivity, transfer, earning, and so on. The usage of smartphones within the business has been mandatory for slack messages, calling a client, or even navigating people towards your business location. Almost everyone has enjoyed technology development due to varieties of mobile phones with different software solutions. All these special considerations of mobile phones have made them an essential expense in an individual’s life. And if you are a business holder or freelancer, then the expenses on a mobile phone are a little higher. 

Mobile phones’ expenses and charges are bundled with your business development process. To handle this excess expense, you can plan smartly with tax write-off under cell expenses deduction.

Limits of cell phone bill deduction

Usually, your cell phone purchase bill is partly deductible when purchasing them for your personal use. This kind of personal mobile purchase is practiced only once in a few years so that you can benefit from the partial deduction. Whereas if you maintain a single mobile phone for the dual purpose for both personal use and business purpose, then you can have a little more advantage with cell expenses deduction. To gain more write-off, you have to determine the percentage of mobile phone usage with business processing. 

For example: if you involve your mobile phone with 60% for business use, then you can equally claim 60% of a write-off with cell expenses deduction. You can have the utmost of 100% cell expenses deduction when using a separate phone for your business. The mobile you use for business has to contain full of business contacts. If so, you can claim a 100% tax deduction. This full tax deduction benefits people working as freelancers and self-employed during tax was written off. 

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Deducting business use of your cell phone 

If you are handling one phone for business and personal purposes, you can have deductions, particularly with the percentage of business involvement. The time you spend with your mobile for attending personal calls and browsing with social media and various other entertainments during the leisure hour will be separated to calculate your business usage percentage. This process of prorating your mobile practice is essential to avoid cell expense tax deduction when you maintain a single mobile with dual benefits. The process of figuring and framing out business usage percentage is a critical tax when your usage percentage varies to an irregular extent every month or week. But it is important to come up with perfect calculations because IRS provides you with complete write-off only with your business usage. If you still have doubt, then you can have clarification with an example below:

Consider a person abc use their phone for business processing between 9 AM to 5 PM. And this business usage timing is followed for five days a week which results in 40 hours of business usage every week. When they calculate the percentage for business usage percentage, it will result in 41% for business use and 59% for personal use. In this case, if the mobile user receives a bill of $100 per month, they can deduct up to $41 every month. This deduction can benefit you with $492 of tax reduction every year. You can also follow this procedure to calculate other cell phone deductions like internet usage and messaging. 

Deducting the cost of a new phone 

When you plan to buy a brand new mobile from a showroom or online, you can have various price ranges based on features. Guess what? If you plan to buy a higher technological model with more features, you will be quoted with more cost with the bill. With such high-cost billing, you have to face your income tax payment more. At the current generation, every mobile performs a minimum amount of business use within the working hours. Due to this reason, a brand new mobile with high investment is considered as a listed property that is used for business or personal purposes. You can have tax deductions with such investment without involving more processes like a clear log description. You can avoid framing ultra-detailed call logs of your mobile to claim to write off with the mobile expense deduction from the cost of the new phone. It is enough to claim a tax deduction when calculating the business-use percentage. 

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Using the de minimis safe harbor election    

The de minimis safe harbor election is a tax write-off that avails your benefits with a tax write-off for your business equipment whose price ranges below $2,500. This deduction is also considered for your mobile phones when you use them for your business process. Remember that you can claim this tax write-off only when you use the mobile for business purposes for complete one year from the date of purchase. Under this method, you can easily deduct your mobile phone purchase tax. You can avoid the calculation process with depreciation. You can effortlessly include this election with your tax returns. This tax deduction process is just for the year of mobile purchase and will not continue for the preceding year.       

Deducting your family plan 

You can also consider deducting your family plan to a certain extent by involving it with your business process. You can have practice using a family plan with internet and phone call with your business plan and have deduction up to a certain level. And to acquire the full benefit, you have to come up with results of charges that are directly related to your cell phone expenses. With your family plan, you can add up all your family member’s activities with a perfect slit billing explaining mobile usage for personal and business purposes. 

You can enjoy write-off under mobile expense deduction after computing an itemized bill of your family member’s activities. And within this procedure of deduction with a family member plan, you have to remember that you can only have deduction when the taxpayer pays the call expense. If any of your family members pay on your phone bill, you can’t access it with the deduction. 

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Deducting cell phone expenses on your business trip 

Every traveling plan needs more connection and conversation. The same thing happens with your business trip plan. During such trip, you can include your phone bill with your business expense. Under this deduction, you can also include roaming charges. All these cell expenses under trip planning are completely tax-deductible. Additional cell expenses like long-lasting calls for your hotel room, hotspot, and internet access can be included with deduction. 

Deducting cell phone accessories and apps

If you are a freelancer or a business owner, you might purchase certain other phone-related accessories for your work process. You can relate such phone accessories with your business accessories and have 100% tax deductions.

Bottom line:

You can eliminate tax payments for your cell phone expense with a tax deduction when using your mobile for business purposes.   


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Md Jahangir