How to Deduct Employee Cell Phone Expenses

If you are required as a condition of your job to have a cell phone, or you need a cell phone to perform your job, and the job does not pay for it, then you are eligible to deduct some or all of the expense on your income taxes. If you are self-employed and need a cell phone to run your business, the expense is also deductible.

Instructions

1. Determine how much of your cell phone usage is business and how much is personal. Record all of your usage over a month and then calculate what percentage of the time you spend on the cell phone is for business.

2. Claim accelerated depreciation under General Depreciation System (GDS) when filing taxes if your business usage of the cell phone is greater than fifty percent.

3. Choose straight line depreciation under the Alternative Depreciation System (ADS) if your business usage is less than fifty percent of your total usage.

4. Deduct the percentage of your monthly cell phone service charge that corresponds with the percentage of business use. For example, if you log indicates that you use your cell phone seventy percent for business and thirty percent for personal, you can deduct seventy percent of the monthly charge.

5. File with your tax records documentation from your employer on company letterhead stating that a cellular phone is required for you to perform your job.

6. Keep a log of every time that your cell phone is used and whether the use was for business or personal. This log should includes dates as well as the start and stop time for every call made or received.