Can Cellphone Expenses Be Tax Deductible with a Business?

Take the time to shop around for phone plans, see if you can get a business deal from your personal provider, etc. You might also be able to write off repairs, a phone case and a new battery. If you write off the phone as a business asset, you might have to pay personal business property tax. Ask a tax professional about this and whether you can depreciate your smartphone’s initial purchase price and ongoing expenses. You can deduct the entire expense of a smartphone and your monthly bill if 100 percent of its use is business-related.

To make things easier, you can even use Keeper, an app that will automatically track and record business expenses like these. However, don’t overthink it and let that requirement scare you away from taking legitimate deductions. If you want to claim business use of your cell phone, the actual documentation requirements are pretty straightforward. The de minimis safe harbor election allows you to write off business equipment costing less than $2,500 —  including cell phones — in the first year you use it for work.

Tax Law Changes for a Claiming Cell Phone as a Business Expense

The rules regarding IRC Section 179 deductions, however, apply to listed and nonlisted property alike. Therefore, under the new law, cell phones still must be used for business purposes greater than 50% in the year placed in service in order to take an IRC Section 179 deduction. Also, if business use is greater than 50% in the year placed in service but falls below 50% in subsequent years, any IRC Section 179 deduction must be recaptured. It might get more scrutiny than the rest of your tax return, so it’s important to learn how to write off your cell phone as part of your business expenses.

In practice, a super simple way to put this documentation together is to take your cell phone bill, print it out, and write your business-use percentage calculation on it. If my phone bill is $100 per month, I can take a tax deduction of $41 per month, or $492 per year. Although this is a minor aspect, your phone’s size and color can affect value, as well. For example, modern phones might include built-in memory as high as 1 terabyte. These phones cost more in the first place and often have a higher resale value.

Small Business  Accelerated Depreciation and Instant Asset Write-off

A recent comparison between certain iPhone and Android models shows that the Apple devices have a slight edge when it comes to resale value, but that might not be true for the phone model you own. To read Decluttr’s full phone depreciation report for 2021, check it out here. Following up the lower half of the depreciation frustration list, Google’s Pixel 2XL ties with the Z Flip at 28%. Then comes the Pixel 3 and 3 XL, both of which retain only 27% of their value after the first year.

When you’re ready, simply ship your phone off to Decluttr’s warehouse, and you’ll get paid one day after it arrives. After you’ve figured out your individual cell phone’s cost using your itemized bill, you can split that between your business and personal use, like in the example we went through above. Newer phones may still work on 3G networks, but many telecom service providers are retiring those networks.

2022’s Top 10 Google Pixel Trade-In’s VS. Depreciation

SellCell.com’s Smartphone Depreciation Calculator shows you the value of many devices compared to their initial manufacturer purchase prices. This same calculation can be applied to other expenses that you use for both business and personal purposes, like your internet bill. First, I’ll take my 14 waking hours per day and multiply wave review it by seven to get my total waking hours per week. That gives me a percentage of about 41% business use and 59% personal use. Phone manufacturers release new electronics every year, so you may not be surprised that electronics lose their value very quickly. If you got your phone a year ago, it may feel like that’s not long at all.

You could deduct unreimbursed business expenses that amount to more than two percent of your adjusted gross income. Cellphones have become just as vital to business as a land line, which makes cellphone use a legitimate, deductible business expense. BankMyCell tracked hourly trade-in market quotes from multiple buyback vendors across 500 devices, including storage capacity options.

Expert does your taxes

Below, we’ve sorted the most popular Google Pixel phones by trade-in popularity, so consumers can see how much value these Pixel phones are losing in 12-months. Below, we’ve sorted the most popular Samsung Galaxy phones by trade-in popularity, so consumers can see how much value these flagship Samsung phones are losing in 12-months. You can also take a depreciation deduction for the business-use portion of the cost of the cell phone. To get started, head on over to Decluttr’s website and enter a bit of information about the phone you want to sell. Decluttr will then present you with the amount they’re willing to pay for your phone and lock in that price for the next 28 days, giving you time to decide and/or purchase a new device. Even better, Android Police readers can add 10% more cash (up to $30) to their phone’s value by using the code POLICE10 at checkout.

• Taxpayers have the option of self-determining the effective life of a depreciating asset.
• In “Entrepreneur” magazine, writer Kristin Edelhauser recommends getting an itemized phone bill, so you can measure your business and personal use and prove your deduction to the IRS.
• That’s because they tend to use their phones for business and personal purposes, and that’s all bundled together into one monthly bill.
• You can even get the advice of a financial professional before you invest in company mobile plans and phones so that you make the best choice for your business.
• Carriers want you to sign a contract so they create an incentive to do so.

An online tool can help you determine whether trading in your phone is worth it. To learn more about Decluttr, including how you can lock in the value of your current phone for the next 28 days, check out Decluttr’s website here. We kick the list off with six Samsung devices, starting with the Galaxy S9+ only holding onto 32% of its value, followed by the Galaxy S8 at 30%. Tied for third place are the Galaxies S9, S10 5G, and S8+ at 29%, with the original Galaxy Z Flip landing at 28%. We know every form you need and every deduction you can take to pay less this year. Some freelancers and independent contractors end up spending on other phone-related purchases for their work.