What pieces of my cell phone bill do I need to take to my tax prep? I started using my personal cell for some calls that were work related in June 08. Do I need to highlight specific calls, or just give him a monthly payment rundown?
Getting my son's parttime business stuff ready for the CPA. Take the totals for the whole amounts, you take the time to sort them out and list totals. The total bill (if you have no overage) will be divided out by percent used as a business expense. So you will have to know if 100 calls per week of 500 are work related-20% of the bill gets to be used. If you have overages on your allotment, that is YOUR loss, not to be added, you can't prove those work calls put you over. If you have a flat monthly fee, you know exactly what the 20% is going to be. These are the figures your CPA will use to do your taxes.
When I was working as a tax preparer last season this was a fuzzy area. I'm not sure if the regulations have changed or become more clearly defined this year, but basically if you incur expenses over and above what you would already pay for your personal cell phone, you can deduct those expenses (i.e. you go over your minutes, etc.). Odds are you won't be able to use the deduction anyway, because you can only deduct unreimbursed work expenses to the extent that they exceed 2% of your adjusted gross income. For example, if your adjusted gross income is 30,000, you cannot deduct any expenses until you reach $600 worth. Even then, you can only deduct the expenses that are over $600 (so if you have $605 worth of unreimbursed expenses, you can only deduct $5).
Take all the information with you, just in case. Your tax preparer should be better able to gauge your individual situation. Hope this helps!
Login using the form on the top of the page to post feedback (if you are a registered user). If you have not yet registered, click here to do so. It's FREE!.
