<a href="https://1800accountant.com/blog/accountant-help-small-business-growth">It's not uncommon for solopreneurs, gig workers, and small business owners</a> to use their personal cell phones for business functions. Smartphones can handle client communications, email, scheduling, and bookkeeping, among other essential tasks, all in the palm of their hands.If you've been using your phone for business purposes, you're probably wondering: What can I legally claim on my taxes if I use my personal phone for work? As long as you meet IRS criteria and maintain supporting documentation, you can deduct the portion of your smartphone costs associated with business use. But how?By following this essential guide, you can keep more of your hard-earned money while ensuring peace of mind. It breaks down exactly what you can claim, <a href="https://1800accountant.com/blog/quarterly-estimated-taxes">how to calculate your deductions</a>, and how to remain IRS-compliant as you build your business.&nbsp;<h2>Who Can Claim Personal Phone Usage, and What Can You Deduct?</h2>Not everyone who works is eligible to deduct cellphone expenses from their cellphone bill, but if you're self-employed or run a small business then chances are you qualify. You may be able to deduct both direct and indirect cellphone expenses as long as you can demonstrate business use.<h3>Figuring Out What’s for Work</h3>To claim a deduction, you must determine how much of your cellphone usage is work-related versus personal use. Business calls, texts, emails, apps (like Slack or Zoom), and data used to run your company all count as business use.&nbsp;Tracking your business usage with a log or digital tool is essential to determining the amount you can deduct. If you find that you use your phone 60% of the time for business, you can claim 60% of your phone expenses.<h3>Are You an Employee or Self-Employed?</h3>You can deduct eligible phone costs on your <a href="https://1800accountant.com/blog/self-employment-tax-2">Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship) if you're self-employed</a> or run a small business LLC. However, this is not an option if you're a W-2 employee. Since the 2017 Tax Cuts and Jobs Act (TCJA), employees can no longer deduct unreimbursed job expenses—including cellphone costs—from their federal taxes.While employees can no longer deduct cell phone reimbursements, they can still accept them. If your employer reimburses part of your phone bill, make sure it’s properly accounted for to avoid duplicate claims or flags that may invite unwanted attention from the IRS..<h2>What Can You Deduct?</h2>Now that you've established your eligibility, it's time to identify specific expenses that you can deduct on your tax return.&nbsp;<h3>What’s a Direct Expense?</h3>These are costs tied directly to your monthly cell phone use for business, including:<ul><li>Service charges</li><li>Data plans</li><li>Business-only app subscriptions</li><li>International calling fees for client work</li></ul>Remember—you can only deduct the portion of your phone used for business reasons. For example, if your bill is $100/month and you use it 70% for business, you can deduct $70 from your monthly bill.<h3>Phones and Fixes</h3>If you upgraded to a new smartphone this year or plan to, you may be able to deduct part of the cost or depreciate it over several years. The IRS lets you recover the cost of business assets through depreciation if the asset has more than one year of useful life.&nbsp;If you have yet to upgrade, but have repair costs associated with common issues like a cracked screen or battery replacement, and the phone is partially used for business, a portion of the repair cost is deductible, too. You can avoid or reduce smartphone damage via a screen protector or phone case, <a href="https://www.thestreet.com/taxes/can-cellphone-expenses-be-tax-deductible-with-a-business" target="_blank">which are also tax-deductible</a>.<h2>How to Calculate and Keep Track of Deductions</h2>Calculating each deduction is one of the more time-consuming and challenging aspects of reducing your tax liability. <a href="https://1800accountant.com/blog/maximize-small-business-tax-deductions">Follow this guide to maximize your tax savings</a>.&nbsp;<h3>How Much is for Business?</h3>Use your phone's screen time feature or a usage log to determine how much of your activity is business-related. You can also analyze your mobile phone bill and highlight business numbers from personal calls.We recommend retaining documentation for at least three months to establish a reliable pattern of business use.<h3>Different Ways to Calculate</h3><a href="https://1800accountant.com/blog/small-business-tax-deductions-checklist">There are two main ways to calculate deductions</a> related to business use:<ul><li>Actual Expense Method: Track the exact portion of your phone bill and phone costs related to business use.</li><li>Simplified Method: Estimate business use as a percentage and apply it to your total phone costs. This works best for solopreneurs with consistent usage patterns.</li></ul>If you need help with calculations or determining the optimal method,<a href="https://1800accountant.com/services/small-business-taxes"> 1-800Accountant</a> is ready to assist. Let our experts ensure your deductions are accurate, optimized, and claimed by the appropriate deadline.&nbsp;<h3>Keeping Everything in Order</h3>Good recordkeeping supports your deductions, ensures a smooth tax preparation process, <a href="https://1800accountant.com/blog/audit-without-receipts">and aids in audit defense should you receive a notice</a>. Records you should consider retaining include:&nbsp;<ul><li>Monthly phone bills</li><li>Notes differentiating between business and personal usage</li><li>Receipts for phone purchases and repairs</li><li>Any reimbursement documentation</li></ul>A digital expense tracker or app can streamline this process.<a href="https://1800accountant.com/services/small-business-taxes"> 1-800Accountant’s tech tools</a> and mobile application let you upload receipts and link accounts effortlessly.<h3>Following IRS Rules</h3>Make sure your documentation aligns with IRS expectations for business owners in your state and industry while avoiding common pitfalls like claiming 100% of your bill when you use your phone for personal calls. And don’t forget to properly implement depreciation if you’re deducting part of the phone’s cost.<h2>Real-Life Scenarios and Tax Tips</h2>Refer to the deduction example below that best fits your business classification. Sometimes, the best way to understand deductions is to consider a real-world scenario.<h3>Business Owner Example</h3>Olivia runs a graphic design business. She uses her personal phone for project discussions, client calls, and social media marketing—about 75% of her total usage. Her bill is $120/month.In this scenario, Olivia would <a href="https://turbotax.intuit.com/tax-tips/small-business-taxes/can-cellphone-expenses-be-tax-deductible-with-a-business/L6NQvycMO" target="_blank">determine that $90 of her $120 monthly bill qualifies as a business expense</a>. She then deducts $90/month × 12 = $1,080/year in business expenses.<h3>Consultant Example</h3>Raj is a self-employed consultant who bought a new phone for $1,200, estimating 60% business use. He can depreciate $720 over three years, claiming $240 yearly, plus 60% of his $80/month cell phone plan.&nbsp;<h3>Gig Worker Example</h3><a href="https://1800accountant.com/blog/doordash-tax-deductions">Sam drives for a delivery service and uses his mobile device for navigation</a>, orders, and customer communication. He logs 85% of business use and deducts that portion of his phone expenses using the simplified method.&nbsp;<h3>Employee with Partial Reimbursement</h3>Michelle works remotely and receives a $40/month stipend from her employer to cover work-related phone use employee expenses. Her total bill is $100 per month, and she uses her own device for work 60% of the time. Since she's reimbursed and a W-2 employee, she can't claim additional deductions, but she must account for the reimbursement when reporting her income if it's not classified as a tax-free fringe benefit.<h2>Planning for the Long Haul</h2>Think ahead beyond the current tax season. Tracking and deducting cellphone expenses can be part of a larger, long-term tax strategy—especially if you're scaling your business.Combine your cellphone deductions with other common write-offs (like home office, software, and internet) to reduce your taxable income over time.<a href="https://1800accountant.com/blog/small-business-tax-deductions-checklist"> To get started, browse our small business tax deductions</a> list for ideas and inspiration.<h2>Using Tech to Make Taxes Easier</h2>Incorporating digital tools and technology into your tax planning processes minimizes errors and headaches while saving time during the tax year.&nbsp;&nbsp;<h3>Tech Tools for Tracking Expenses</h3>1-800Accountant's mobile application for major smartphone platforms, Expensify, TurboTax, and QuickBooks, helps you securely track and categorize expenses, scan receipts, and store documentation—all from your phone.<h3>Syncing with Your Accounting Software</h3>Automating the sync between your bank account and bookkeeping software ensures no expense is missed.<a href="https://1800accountant.com/services/bookkeeping"> With 1-800Accountant’s full-service bookkeeping solution</a> for small businesses, you can integrate your data, save time, and prepare for tax season with the peace of mind knowing your financial data is current and error-free.<h2>Handling Tricky Tax Situations From Personal Phone Usage</h2>While addressing common business use scenarios with your personal phone is relatively straightforward with a bit of practice, overcoming edge cases requires more insight and expertise.<h3>Dealing with Different States</h3>Do you travel for work or operate in multiple states? State-specific rules may impact your phone deductions and will likely complicate your tax preparation and filing processes. Keeping a mileage and travel log alongside your phone usage can support more nuanced deductions that apply to multistate operations.<h3>Industry-Specific Tax Issues</h3>Your phone may be a vital business tool if you're in real estate, consulting, construction, or a high-communication field. If appropriately documented, some industries can claim higher percentages of business use.<a href="https://1800accountant.com/services/business-tax-advisory">1-800Accountant’s tax experts</a> can tailor advice to your industry, ensuring you never leave money on the table.<h2>Maximize Your Savings with 1-800Accountant</h2><a href="https://www.hrblock.com/tax-center/filing/adjustments-and-deductions/cell-phone-tax-deduction-requirements/" target="_blank">Solopreneurs, gig workers, independent contractors, and small business owners</a> must make every effort to reduce their taxable income throughout the year. As this article demonstrates, your personal phone can be a valuable business deduction—if you know how to strategically claim eligible deductions. From calculating the right percentage to storing proper documentation, correctly executing each step is essential and helps ensure compliance.Navigating the right deductions for your business operations can be challenging without critical guidance from<a href="https://1800accountant.com/support/contact-us"> 1-800Accountant</a>, America's leading virtual accounting firm. Our CPAs and tax experts understand the nuances of your business cellphone deductions, depreciation, and industry-specific rules, giving you peace of mind and the freedom to focus on your next business milestone.<a href="https://1800accountant.com/support/contact-us">Schedule a call today</a> to maximize your deductions and streamline your tax process, so you can keep more of what you earn.

As long as you meet IRS criteria and maintain supporting documentation, you can deduct the portion of your smartphone costs associated with business use. But how? By following this essential guide, you can keep more of your hard-earned money while ensuring peace of mind.

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If I Use My Personal Phone for Work, What Can I Claim?

The California sales tax system has city, county, and state components that make it incredibly complex, which further emphasizes the need for businesses to grasp applicable sales tax responsibilities. Businesses that operate throughout the state will encounter varying rates, which range from 7.25% to 11.25%, due to the addition of local district taxes.

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Sales Tax in California: Essential Guide for Businesses

Creating a tax strategy that will help achieve your short-term and long-term business goals is essential. Your tax strategy should aim to reduce your business's annual federal and state tax liability efficiently. Tax planning should save time and resources, but it’s generally not just one activity—it can be a combination of different supporting tactics that <a href="https://1800accountant.com/blog/small-business-tax-strategies-to-save-money">will ultimately help you save money</a>.<a href="https://1800accountant.com/blog/tax-strategies-for-startups">Whether you operate as a startup</a>, a sole proprietorship, a partnership, a limited liability company (LLC), an S corporation, or a C corporation, you want to reduce the taxes you owe while ensuring you fulfill your compliance and tax obligations. Use this guide to learn about the seven business tax strategies you should consider that will help you save more money, along with helpful answers to some of small business owners' most frequently asked tax planning questions.&nbsp;&nbsp;<h2>Top 7 Small Business Tax Planning Strategies for Tax Savings</h2><h3>1. Claim your deductions</h3>Use tax deductions to reduce your taxable income. The business taxes you pay will be based on your lowered income amount. Consider taking the following tax deductions to <a href="https://www.forbes.com/councils/forbesfinancecouncil/2025/03/17/the-power-of-strategic-tax-planning-in-driving-business-profitability/" target="_blank">support your small business tax planning strategy</a>.&nbsp;<ul><li>Home Office Deduction. If you’re a homeowner and have a regular and established workplace in your home, the associated costs can be deducted from your taxes.</li><li>Charitable Contributions. Lowering your adjusted gross income (AGI) is a popular strategy for small business tax planning. An easy way to do this is by donating to a charity. Many charities will provide a year-end statement to their regular donors, but keeping track of your giving through itemized deductions is essential.</li><li>Qualified Business Income (QBI) Deduction. The QBI deduction allows a small business owners who operate as a pass-through entity business structure to deduct up to 20% of net business income. This deduction is written into the 2017 Tax Cuts and Jobs Act (TCJA) and may expire if not renewed.&nbsp;</li></ul>A tax advisor can help determine your business expense’s eligibility and offer tactics to write off startup costs and half of your 15.3% self-employment tax while managing end-of-the-year federal tax considerations. Learn more in our blog,<a href="https://1800accountant.com/blog/maximize-small-business-tax-deductions"> 7 Tips to Maximize Deductions and Credits in 2024</a>.&nbsp;<h3>2. Use your tax credits</h3><a href="https://1800accountant.com/blog/business-taxes">A tax credit will either reduce the amount of taxes you owe</a> or increase your tax refund from your tax return. Consider taking the following tax credits to support your small business tax planning strategy, and learn more about additional tax credits your business may be eligible for in the blog above.<ul><li>Earned Income Tax Credit (EITC). This is one of the better-known tax credits that can apply to individuals with low or moderate incomes.</li><li>Small Business Health Insurance Premiums. Small business owners with fewer than 25 employees who pay at least 50% of employee premium costs qualify for this credit.</li><li>Work Opportunity Credit. If you employ individuals from qualifying groups who have faced significant barriers to employment, you may be eligible for this work opportunity credit.</li></ul><h3>3. Consider your entity structure</h3><a href="https://1800accountant.com/blog/entity-right-business">A foundational element of business tax planning is verifying your business entity structure</a>.Businesses come in all shapes and sizes, offering different benefits and disadvantages. An LLC provides more flexibility in its operations, with personal asset protection and pass-through taxation as popular features. When a business entity, including a sole proprietor running a sole proprietorship, a partnership, and an S corporation, features pass-through taxation, income is not taxed at the level of the business or corporation. Instead, it is passed through to be taxed at each owner's individual taxpayer level.Although your business is already registered as one entity type, a change may be worth considering. For example, once you form an LLC, you have 75 days to select a different business structure for your new company, such as a C corporation.<a href="https://1800accountant.com/blog/converting-llc-to-c-corp">Learn about the three tax consequences you should consider in our blog</a> if you are thinking about converting from an LLC to a C Corp this tax season or next year.&nbsp;<h3>4. Defer or accelerate income</h3>Deferring your small business income and accelerating deductions is an excellent tax planning tax-saving strategy. When you defer your business income, shifting it from one tax year to the next, you can potentially lower your tax bracket and overall tax liability. This shift to a lower tax bracket may qualify you for deductions unavailable to businesses in higher brackets.The tax deductions your business qualifies for will lower your tax liability further, minimizing the amount you will pay to the IRS and accelerating your income.<h3>5. Set up retirement plans</h3>Even if it seems like a long way off, saving now will help you build a nest egg that ensures a comfortable retirement. As you consider a retirement plan, keep your employees in mind, as retirement contributions are a benefit and a means to retain talent.Consider offering your employees a retirement plan, which can provide additional tax benefits by lowering your taxable income. Small business owners can offer a 401(k) plan or a simplified employee pension (SEP) plan. It’s important to note that your employees are not required to contribute to a retirement plan. They may instead choose to save for retirement through a Roth IRA, which cannot be deducted from their taxes.Saving for retirement is another excellent tax planning tactic for small businesses. It can help them save money and better understand their tax bills.<h3>6. Offer employee benefits</h3>Aside from increased wages, the best employees gravitate to employers offering great benefits and other incentives. These can be healthcare-related benefits such as:<ul><li>Health insurance</li><li>Dental insurance</li><li>Reimbursement (transportation, tuition, or federal student loan payments)</li></ul>While no new laws governing employee benefits have passed recently, state and federal discussions about healthcare, telehealth, and expanded family leave exist. While businesses throughout America monitor legislative development impacting employee benefits, many employers are embracing quality of life and financial wellness benefits in the current year.&nbsp;<h3>7. Sell a losing investment</h3>“When life hands you lemons, make lemonade.” Addressing a poor investment and bad debts may be challenging, but it can be used to your advantage for business purposes when planning your tax strategy and navigating tax laws. If you decide to sell a losing investment, you can categorize this as negative income or a capital loss. This tactic can lower your income and reduce your tax burden.<a href="https://1800accountant.com/blog/filing-taxes-for-small-business-with-no-income">The maximum amount for a capital loss in 2025 is $3,000</a>. Any amount over that can be applied to the following year.<h2>Tax Planning FAQ for Small Business Owners</h2>Do I need to hire a small business tax planner? You can attempt to plan your tax strategy yourself,&nbsp; but you might not get consistently great results as you would working with a tax planning professional. <a href="https://1800accountant.com/blog/cost-of-tax-preparation-by-cpa-for-small-business">Partnering with a certified public accountant (CPA)</a> ensures you get quality service from a qualified expert committed to maximizing your business's tax savings.What are the disadvantages of tax planning? The main drawback of tax planning is the time and effort needed to optimize your savings. You may need to change your business operations as you implement these strategies. Small business tax planning doesn’t guarantee huge savings, and some business owners may want to focus on other aspects of their operations.How much does tax planning cost? <a href="https://1800accountant.com/blog/how-much-does-a-small-business-pay-in-taxes">The cost of tax planning services varies</a> based on your business’s intricacies, such as the number of employees or the range of deductions that may be involved.<a href="https://1800accountant.com/pricing"> Browse our standard packages and pricing here</a>, and contact us if you require a package customized to address your unique business needs.Are there any tax planning scams to be aware of? Most tax advice focuses on deductions and ways to save money, but it’s also important to be aware of the various tax scams that may impact your business. Scammers are devoted to deceiving taxpayers, often by impersonating the IRS and demanding immediate payment. The IRS will never call, text, or email an individual and request payment or personal information. When in doubt, contacting the IRS directly through their website is best to verify the legitimate notifications you receive.<h2>Maximize Your Savings and Business Profitability with Expert Tax Strategy</h2>An expert tax strategy has numerous benefits, which include boosting business profitability beyond valuable deductions and credits. If handling your small business tax planning has distracted you from your core business operations, the tax professionals at 1-800Accountant, America's leading virtual accounting firm, can help.Save time and achieve your annual financial goals with our suite of affordable, tax-deductible financial services. Schedule a quick consultation–usually 30 minutes or less—to learn how<a href="https://1800accountant.com/services/bookkeeping"> bookkeeping</a>,<a href="https://1800accountant.com/services/business-tax-advisory"> tax advisory</a>, and<a href="https://1800accountant.com/services/income-taxes"> personal income tax preparation and tax filing</a> will help you maintain full IRS compliance with maximum tax savings.

Your tax strategy should aim to reduce your business's annual federal and state tax liability efficiently. Tax planning should save time and resources, but it’s generally not just one activity—it can be a combination of different supporting tactics that will ultimately help you save money.

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Business Tax Planning Guide: 7 Strategies That Can Help You Save More

If your small business has yet to embrace tax loopholes, you're not alone. Use this great blog to learn what to know about tax loopholes for your small business, how you may benefit, and other strategies to reduce what you pay to government authorities.

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Tax Loopholes for Small Businesses: What to Know

Partnerships, S corporations, estates, and trusts must attach IRS Schedule K-1s to their business tax returns. K-1 forms report each owner’s share of passthrough business activity. Schedule K-1 represents a critical component of passthrough entity tax compliance. However, IRS rules and instructions can confuse business owners.

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Everything You Need to Know About IRS Schedule K-1

Collecting rent for short- and long-term rentals is usually considered passive income for tax purposes. However, there are exceptions written initially to benefit hotels and motels that short-term rental

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Understanding Short-Term Rental Tax: Is There a Loophole?

You'll learn about income thresholds that may trigger the need to report your income, essential tax forms you'll need to prepare and file with the IRS, when to submit your business taxes […]

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eBay Sales: How Much You Can Make Before You Owe Taxes

Airbnb hosts and other real estate professionals can use this guide to short-term rental tax deductions, a complicated topic, to gain insight into reducing their annual tax bills […]

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Short-Term Rental Tax Deductions for Airbnb Hosts & Real Estate

Our curated real estate agent tax deduction recommendations provide the insights your real estate business needs to reduce tax liability while maintaining compliance […]

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Lower Your Tax Bill with These 17 Deductions for Real Estate Agents

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