Cell phone for LLC

[mwmiller1]

For business expenses where do i enter the cost for a cell phone paid in full. (the actual phone not the monthly bills)?

[ColeenD3]

You can depreciate the phone. Include it as an asset.

Cellphone depreciation

The Small Business Jobs Act of 2010 changes the way you calculate cellphone depreciation, according to the Schneider Downs accounting firm. Under the old rules, if you used your cellphone less than 50 percent of the time for business, you could only depreciate it on a straight-line 10-year depreciation schedule. Now, however, the law allows you to write off depreciation—the loss in value from wear and tear—over a seven-year schedule, in addition to making it easier to claim bonus depreciation.

Cell phone

[mwmiller1]

I typically get a new phone every 6 months to a year. Is there any way to treat it as a one time expense?

[ColeenD3]

This is precisely what the IRS is trying to avoid. A cell phone is not a disposable item, like pens or paper. It is an asset.

[mwmiller1]

Turbotax gave me this option for the phone

>>I'll deduct the full value of the item this year. (Take the Section 179 deduction)

Thoughts?

[JamesG1]

Under the rules of a Section 179 deduction, you must retain business use of the asset until the end of its useful life. If that isn't possible, you must pay back part of the deduction as a Section 179 recapture.

Instead of depreciating an asset over a multi-year period, you might be able to deduct its entire cost during the first year of use as a Section 179 deduction.

To qualify for a Section 179 deduction, the asset must be:

• Tangible (you're able to touch it, which excludes intangible assets like patents or copyrights)
• Purchased (not leased) for business use
• Used more than 50% in your business
• Placed in service (purchased, acquired, or converted to business use) during the current tax year
• Acquired from a non-related party

Also consider Bonus Depreciation here.

[mwmiller1]

Thanks seems the initial response I received didn’t mention this