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."
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.)
