Cell Phone Records

[Edward]

Cell Phones of course are listed property and thus we are required to maintain records reflecting business use. 1040 Quick Reference Binder (PPC) has a worksheet for this purpose (similiar to the auto mileage worksheet). But, wow, who's going to long EVERY CELL PHONE CALL? Nearly impossible. There's got to be an easier way. I've always show a percentage of total

for the year based on what the client tells me. This may not be acceptable in the future, so I suspect the LOG is the only way to go. How you handling this? Appreciate your comments.

[jainen]

>>How you handling this? Appreciate your comments.<<

In my opinion, this is one of those things it's better not to talk about. No good can come of asking clients how they determine the amount of this deduction. As long as the IRS won't address it in a realistic way, there really isn't much to say.

[SunTaxMan]

>>How you handling this? Appreciate your comments.<<

In my opinion, this is one of those things it's better not to talk about. No good can come of asking clients how they determine the amount of this deduction. As long as the IRS won't address it in a realistic way, there really isn't much to say.

In my opinion, I would rather "address it in a realistic way," so IRS sees no need to address it in audit - at least that's my opinion at this point.

How to "address it in a realistic way?"

I ask clients (and I do this myself for my own tax return) to review and summarize at least 3 "typical" monthly cell phone bills and code the calls for business, medical, personal, rental, and any other categories pertinent to that taxpayer. Tally the minutes for each category and come up with an allocation of time on the basis of this summary. If they don't want to do it, I will do it for them, and include the cost of this work. No documentation, no deduction.

For the year of equipment purchase, this is the basis for depreciation and usage and cost deduction.

For following years (as long as taxpayer's situation does not significantly change), this is the basis of cost deduction.

[jainen]

>>address it in a realistic way<<

How is that any more realistic? It isn't based on the rules for documenting listed property, is it? Anyway, the IRS feels you should only deduct business costs that EXCEED the basic costs for personal use (in other words, nothing). And that's why there is really nothing to talk about, realistically.

[joanmcq]

Except I would need to purchase much less minutes if I only used for personal; in fact, when I started my job and really started to use the phone for biz, so that I could be reached when not in my home office, the cell became my primary business phone, and I had to upgrade my plan immediately because I kept going over minutes.

[TAXBILLY]

If you get another cell phone number to be used strictly for business it is no longer listed property.

taxbilly

[lbbwest]

"If you get another cell phone number to be used strictly for business it is no longer listed property.

taxbilly."

The voice of reason.

I've suggested the same thing for computers in the home, rather than the tedious record keeping of a log. Unfortunately I've encountered too many taxpayers that prefer the gambling of deducting personal use items as business; in the past years they have been very lucky, so fighting the tide is not always easy. lbb

[TAXBILLY]

Laptops are so cheap these days that it would be a good suggestion to the client to get a "work related only" computer. It will save headaches if they are ever audited.

taxbilly