2016-12-02 00:00:00TaxesEnglishLearn the steps involved in calculating a tax deduction for the cellphone bill of a small business, and review an example.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/03/cellphone-on-a-desk.jpghttps://quickbooks.intuit.com/ca/resources/taxes/how-to-calculate-a-deduction-for-your-cellphone/How to Calculate a Deduction for Your Cellphone

How to Calculate a Deduction for Your Cellphone

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Small business owners and freelancers can deduct their cellphone expense. Deducting 100% of the bill is allowed but only when the cellphone is used 100% for business. When a specific phone is used for personal and business matters, the correct proportion of the bill needs to be calculated.

  1. Determine the percentage of the overall bill as data use and phone use.
  2. Review the monthly activity, both data and phone calls, to determine what portions are for business.
  3. Calculate the deduction.

For example, a monthly bill is $100, of which 60% is the data cost and 40% is the phone cost. It is determined that 30% of the data and 80% of the phone are used for business. The deduction is then calculated as:

Deduction = ($100 x 60% x 30%) + ($100 x 40% x 80%) = $18 + $32 = $50

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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