Business Phone Deduction

June --

Psychotherapist, licensed & self-employed for 3 1/2 years from Sacramento, CA.

I use a cell phone as my one and only business phone for my therapy practice.

I pay a flat monthly rate for my cell phone service. If I sometimes make or receive personal calls on this cell phone, does this mean I cannot deduct 100% of the cost of my cell phone plan?

And if I cannot deduct 100%, how on earth do people manage to keep a log of every single phone call made and received and whether business or personal, in order to determine what percent of calls were business? Even looking at my monthly statements I cannot identify who all the phone numbers belong to unless I have been writing down each and every phone call and phone number and person to whom every phone number belongs.

Thank you for your help,
Jacqueline


Dear Jacqueline,

I assume you have a phone at home for personal use. Were I your accountant I would deduct a small percent of your cell phone for personal use. If there's only a non-phone-using cat at home I'd take a smaller % than I would were you to have three kids you had to check on or an aging mother in a nursing home whom you had to call twice a day. Or if you had chosen a plan that allowed for more minutes to include personal calls you could exclude the additional cost. In other words I'd find some logic for the small % or cost reduction.

As a psychotherapist you cannot list the patient calls even if you were to keep a record. However, were you able to show that in one week you used 500 minutes and 50 were to mom then you could use that as a typical week and extrapolate for your entire usage.

Of course, all those phones in The Callous Corporation offices are used for personal calls to home and the corp gets a 100% deduction. So be as generous to yourself as you comfortably can. If you feel that the personal calls are really incidental -- for instance a late work night -- then deduct 100% as a business expense.

-- June