What are the tax implications of providing a service for your contract employees (such as fax services via eFax)? Can I write this off as a deduction if I provide it?

[Critter]

If it is a normal cost of doing business then it is a deductible business expense.

[lj340]

Would it be 100% deductible? In trying to figure out if I should provide this for my contract employees or require them to get there own fax line. If it is 100% deductible then I see no reason not to provide it as I can write the cost off. Thanks!

[Lisa995]

Are they employees or independent contractors?  How would they pay for their own fax line...you mean at their own house?

[lj340]

Yes, they are contract employees and yes the fax line would be in there home or associated with there email via an eFax service.

[Carl]

You need to clarify here. A Fax Line is a hard copper wire that has a dial done when off hook and requires the use of a dedicated fax machine that dials the telephone number of the intended recipient. eFax is faxing over the internet, usually initiated via e-mail. eFax does not require any equipment at all, other than a physical internet connecting and a device that can use that connection which is capable of sending faxes without the need to establish a dial tone before dialing a fax number.
If the e-Fax account is 100% business use, regardless of who uses it (employees, contractors, business owners) then it's a deductible business expenses you claim/report in the expenses section, sub-section for communications expenses.

[lj340]

Yes, an eFax service is what I am discussing. It is a monthly service with no fax machine or dedicate line needed. It allows you to send and receive faxes via your email. It would be 100% for business. I just didn't know if it made any difference for me as an agency it I paid for the service or required the contract employees to pay for there own. Sounds like it would make no difference so their is no financial reason not to provide the service. Thank you!

[Carl]

Either way it's a deductible business expense. But if the business pays for it directly then it's just less paperwork and less hassle for you when dealing with the financial aspects of the service.

[rjs · Accepted solution]

You are correct. It makes no difference whether you pay directly for the eFax service that the contractors use, or they pay for it and you reimburse them. Either way it is a business expense that you can deduct 100%.