The
costs of a cell phone may be a business expense, but only the additional costs
in using a cell phone for business are deductible. The Tax Court has several
interesting cases on this. In one case, the taxpayer paid a flat rate on a
phone used for business and personal calls. The court held that as he paid a flat
rate for his personal phone and incurred no additional charges for business
use, he has no deduction. (Ritchie, TC Summary Opinion 2005-181).
For
an employee, if deductible, they would be entered as a miscellaneous itemized
deduction for employee business expenses.
Example
from Ritchie: "Petitioner’s cell
phone was a personal phone that he also used for business calls. Petitioner
testified that he paid a flat rate, regardless of phone usage. Therefore, aside
from the personal expense of the phone, which is rendered nondeductible under §
262, he incurred no additional charge for business use."
Quite frankly, I've never seen an easy way to allocate internet charges short of using a log of business and personal use. Sometimes you just have to come up with a conservative estimate.
If
you are an employee, they are an employee business expense, which often results
in no deduction anyway. You can claim
them only if:
- You can itemize deductions, and
- they exceed 2% of your adjusted gross income.
If
your miscellaneous itemized deductions clearly don't exceed 2% of your adjusted
gross income there is no need to go through the time consuming effort to enter
them. If they are over 2%, under the deductions and credits tab at the bottom
of the list under other deductions and credits. Look for other deductions.
Turbotax
explains the 2% rule at this site.
For employee business expenses look under Federal Taxes,
then Deductions and Credits, then Explore on My Own, then Employment Expenses
(near the bottom.)
