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bjbj Hello everybody and welcome to another episode of Erickson TV. I m Curtis here with
Lauren. Hey Lauren, you have a cell phone correct? I have a cell phone. Everyone has
a cell phone. Our client range goes from kids in school all the way up to people well into
their retirement and everybody I know has a cell phone. It s one of the great communication
tools. I will say this though: I have a cousin, I won t say his name, who s the only adult
I know that does not have a cell phone. He s taken it a point of pride. Part of it is
he doesn t want to be easily accessible to his family business. But that could change.
He has a long term girlfriend now that I m sure is going to require him to get a cell
phone. So, everyone except my cousin has a cell phone! The thing that people always wonder
about is if cell phones are tax deductible. You have to buy the cell phone; you have to
pay the high monthly fees; if you re fortunate enough to have a smart phone, that adds an
internet charge. There are a lot of expenses that come with having a cell phone. Now, this
applies to employees that work for a company and also for company owners. There are several
different rules. Up until a recent law changed cell phones were considered listed property.
What is listed property? Listed property. This is the simplest way to explain why it
exists: there are a lot of things that as a business owner you might use in your business
but then you probably also use it in your personal life as well. So for instance, you
might use your car a lot in your business. It s listed property because you have to list
to what extent you use it personally and to what extent you use it in your business. Normally
it can only be deducted on the business side but sometimes you can deduct it in both places.
But the rules would be different. So cell phones, up until the recent law change, had
been considered listed property. That s basically the IRS saying , Hey, fair warning, if we
audit you you re going to have to prove your business use percentage. So they had this
recent law change where they said that because cell phones are so prevalent and everyone
has one, and because the record keeping requirements are so onerous (you have to go through every
phone call on your cell phone bill) they are going to say that cell phones are now not
listed property. Which is great. And even better, if you are an employee, and let s
say your company provides you a cell phone to use, even if you use that for personal
use, it doesn t matter. The IRS says we re not going to deem that personal use to be
compensation or fringe benefit. We re not even going to make you prove that it s a business
phone. As long as you have to be available to your employer for the phone, you don t
have to prove that it is all being used for business. Now, this is related to business
owners now. If you re a sole proprietor, you don t have to list it as listed property.
However, you still have to keep track unfortunately, as a sole proprietor, the business use versus
the personal use to be prepared if you re ever audited. You just don t have to list
it on the return. If you are an owner in a corporation there s a different rule. You
get 100% business use. You don t have to prove that it s business versus personal. So there
s a small advantage now to being in a corporation as opposed to being a sole proprietor or an
LLC. So that s the rule for cell phone deductibility. If you have any questions or if you want a
more thorough explanation on how this works in your particular situation, please give
Lauren or myself a call. Talk to you soon and have a great day. See you next time on
another episode of Erickson TV Curtis Erickson Normal Curtis Erickson Microsoft Word 10.0
Erickson Wealth & Tax Management Hello everybody and welcome to another episode of Erickson
TV Title Microsoft Word Document MSWordDoc Word.Document.8