Early stage entrepreneurs who are focused on growing their business know every last dollar counts. You work hard for your money. That’s why we want to help you find more ways to keep it. Writing off your phone expenses is one of example of how you can do just that.
Getting your money back gives you cash to stimulate the growth of your business.
Use your phone for work? Even if you don’t have separate business and personal phone numbers, you can deduct the parts of your service that are used for professional purposes. Having separate numbers does make it easier, but it’s not make or break. Just get an itemized bill if you use the same number for personal and business so you can deduct the percentage of time used for business.
What phone expenses can I Deduct?
The IRS says: To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
It is important to separate business expenses from the following expenses:
- Expenses used to figure the cost of goods sold
- Capital expenses
- Personal expenses
Remember, if you’re writing off your phone expenses be careful not to overcompensate. If you use your personal phone number for business 30% of the time, be prepared to prove it if asked. Work with your accountant or double check your own math to ensure you’re deducting the appropriate and optimal amount.
Being self-employed has so many awesome perks, but it also comes with extra responsibility. You’re the star and manager of your career. Be vigilant and avoid a side-eye from the IRS by keeping track of your spending, especially receipts. If you haven’t already, consider Veryfi.