Can I Deduct My Cell Phone as a Business Expense?

Every small business owner today relies on cell phones and technology—communication, operations, billing, management, sales, marketing—everything. So, it’s about time I talked about how to deduct your cell phone as an expense.

You need to know the details to understand and implement cell phone deductions. So, we’ll move through definitions, rules, exceptions, and remote work.

Claim deductions for the use and value of your cell phone.

Let’s get to the big question: “Can I deduct my cell phone as a business expense on taxes?” The answer is “yes.”

You can claim deductions on “use” and “value.” Let me explain.

Here’s how deductions for business owners break down:

  1. Use: Talk and data costs that you see on your phone bill. “Business use” is the portion of the costs associated with business. Personal use is the portion not associated with business.
  2. Value: The purchase cost of a new cell phone. We don’t need to differentiate between business/personal and business-only. I’ll explain shortly.

So, we have the essential definitions covered. Let’s get into the rules.

What is the “business use” of a cell phone?

Any expense classified under “business use” will offer tax deductions, and that rule applies to cell phone usage.

In this context, business use means that the cell phone or technology is necessary for normal business operations and is directly related to business activities. Sales, client relations, and travel-related billing costs are included.

Business use cell phone expenses should also fall within industry norms to qualify as deductions. Cell phones are in every industry, so any cell phone that is available for public purchase and has not been modified or accessorized would pass the test.

Here’s what you can deduct if you use a cell phone for business and personal use.

I’m going to lay this out in bullet points. Right now, I’m talking about rules for business owners who pay self-employment taxes—sole proprietors, partnerships, LLCs.

  • What can I deduct for cell phone use? You can 30% of the data, messaging, and talk costs related to business.¹ To deduct the expense, you would need to calculate the business-use percentage of the cell phone on a month-by-month basis.
  • What can I deduct for cell phone value? You can deduct 100% of the purchase price of a new cell phone for personal and business use. If the cell phone is purely for business, you can also expense all costs of use (your phone bill).¹

Those are the details behind the question, “Can I deduct my cell phone as a business expense.”‘

So, for personal and business use cell phones, keep an itemized phone bill that differentiates between business and personal to prove your deduction to the Internal Revenue Service (IRS). Also, keep your receipt for the phone you purchased.

Consider investing in a business-only cell phone.

Why? It’s inconvenient and expensive. True, but consider this: If you’re not an active cell phone user for personal reasons but an active cell phone user for business purposes, then put your money into a more powerful business cell phone. All expenses—use (bills) and value (purchase price)—are 100% tax-deductible.

What if your business is 100% remote?

Computers, software, and online software applications are deductible—even for remote workers. But when the home is the office, and the office is the home, the line between personal and business use gets blurry. We want to make sure we’re diligent and compliant in these situations.

Ideally, I’d like to see a dedicated computer and dedicated software strictly for business. But is that practical? Not particularly. Remember that home office deductions also cover remote business owners and the associated expenses. So, we’d need to look at how we classify that expense. (That’s tax planning, ladies and gentlemen.)

Make informed choices on technology deductions.

Remember that an expense is an expense; the fact that it’s tax-deductible doesn’t make it free, and there will be complications. The tax code, after all, is not renowned for its clarity. So, if you’re looking at new technologies and are uncertain whether they are tax deductible, it might be time to give me a call.

Talk soon,
Jeremy A. Johnson, CPA


  1. Part III – Administrative, Procedural, and Miscellaneous [Internet]. [cited 2023 Feb 20]. Available from: https://www.irs.gov/pub/irs-drop/n-11-72.pdf
Meet the Author
Jeremy A. Johnson, CPA, is an expert in strategic tax planning, accounting, CFO services, and thought leadership.

Jeremy writes for small business owners who need actionable information on tax strategy, efficient accounting practices, and plans for long-term growth.

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