Is the iPhone eligible as a tax write-off?

[Bob Loblaw]

Is the iPhone eligible as a tax write-off? I planned on getting one anyway (and worried that I wouldn't need the data plan all that much, especially since we don't have 3G here yet), but I just got a job yesterday working for a Congressional candidate and I definitely need a smart phone. Anyone have experience with this? Will I be able to write it off as a business expense?

 

[shecky]

if it is a legitimate business expense then of course. its no different than any other cellphone.

the question is not is the iPhone something you can write off, but is a cellphone something you can write off.

we write off both of our phones entirely (one iphone and one blackberry) for our business; in fact the business pays both bills.

 

[rotobadger]

I own my own company and write my iPhone off. In the eyes of the IRS it is no different than, say, a Blackberry. As the poster above stated, if it is a legitimate business expense then you may write it off.

Now if I could just write my cat off as a dependent...

 

[Bob Loblaw]

Alrighty, that answered my question. It kind of works out for me then. I do a lot of canvassing and literature drops and the like, also organizing volunteers and working with the candidate himself and the higher-ups. I'll need to be able to get directions on the fly with the GPS, check e-mails, keep a track of my calendar and events (I'll probably have to buy MobileMe as well), etc.

Thanks guys!

 

[feelthefire]

I'm not sure if you can write off a phone as a business expense if it isn't used for the purposes of running a business you pay taxes on--in other words, since you're not working for yourself, I'm not sure you can write off a personal phone as a business expense.

If a business pays the bill, then that business can write it off, but if you're using it in the course of working for someone else, that's generally speaking NOT tax deductible. If your employer provided it and paid for it, then it would be deductible for them.

In other words, generally phones don't qualify as "unreimbursed employee expenses" because you have to have income from the business (not from payroll, from the business) to write off against.

 

[maxxscholten]

I don't know too much about write-offs, but he doesn't have to declare it as a business write-off in order to write it off. He could do a personal write-off and claim it as a "tool" that he uses for work.

I don't own my own business but I'm a student. I plan to write off some things such as a new camera and lenses I buy later this year and possibly a new MBP. (I'm a photojournalism student).

I think there's a "general write-off" category, where if you decide to write some things off and the total is under like $3,500, then you really don't have to explain what you're writing off.

Then again, I probably have no idea what I'm talking about

 

[firewood]

Ask your accountant.

If the phone bill is paid out of a business account, and you are filing a corporate tax return or a schedule C for your business, you need to know the rules for all your other business deductions anyway.

 

[feelthefire]

I don't know too much about write-offs, but he doesn't have to declare it as a business write-off in order to write it off. He could do a personal write-off and claim it as a "tool" that he uses for work.

I don't own my own business but I'm a student. I plan to write off some things such as a new camera and lenses I buy later this year and possibly a new MBP. (I'm a photojournalism student).

I think there's a "general write-off" category, where if you decide to write some things off and the total is under like $3,500, then you really don't have to explain what you're writing off.

Then again, I probably have no idea what I'm talking about

Might want to check with your accountant on that one.

For unreimbursed employee expenses, the total is only deductible once the expenses exceed 2% of your taxable income, and then only the amount over that is tax deductible.

So, say for example the OP makes $30k a year. That means his unreimbursed employee expenses would have to total $600 or more before they are tax deductible. The iPhone 3G costs a minimum of $70/mo, so that's $840. A whopping $240 of that would actually be deductible, IF it could be documented that the phone was necessary for his job.

Student expenses are a little different but you can't just randomly deduct things.

 

[maxxscholten]

Might want to check with your accountant on that one.

For unreimbursed employee expenses, the total is only deductible once the expenses exceed 2% of your taxable income, and then only the amount over that is tax deductible.

So, say for example the OP makes $30k a year. That means his unreimbursed employee expenses would have to total $600 or more before they are tax deductible. The iPhone 3G costs a minimum of $70/mo, so that's $840. A whopping $240 of that would actually be deductible, IF it could be documented that the phone was necessary for his job.

Student expenses are a little different but you can't just randomly deduct things.

Ah, this makes a lot more sense. Like I said, I really didn't know too much about it.

Can I still deduct some camera expenses since I do occasional wedding work/freelance with some newspapers? I'm probably earning under $8,000 a year because I'm a full time student

 

[aneftp]

yes, take the full section 179 deduction

I am a 1099 physician and have written off cell phones in the past. (I wrote off the first iphone I got last year). It's basically like getting a 30-35% off of the iPhone. If you are a W-2 employee, it is generally harder to write off expenses unless you can prove that it is a necessary work expenses not reimbursed by your employer AND accounts for more than 2% of your salary.

Make sure you have another phone line that you can claim as your personal line.

In theory you should only claim the percentage of time the phone was used for business purposes but most everyone I knows writes off the full amount. Tell your accountant to take the 100% deduction for this current tax year instead of carrying it over 3 years.

 

[aneftp]

Can I still deduct some camera expenses since I do occasional wedding work/freelance with some newspapers? I'm probably earning under $8,000 a year because I'm a full time student[/QUOTE]

First off, do you get paid cash/check for these freelance work? If I were you (I now it's not legal but trust me with the low amount of money you are making....8K is considered "very low" to the IRS" I wouldn't even bother reporting income unless the person cutting you the check specifically tells you they are reporting your check as income to the IRS. If you are paid by cash than I really would not report that to the IRS. Trust me I pay more than my full share of taxes and have all the documentation to prove all my expenses because I'm anal about getting audited. But you are the "little guy" Look how long it took the IRS to go after Wesley Snipes and he should have known he should have paid taxes when he was making millions.

But if you want to do everything legally, than fully document your expenses, when you file your Schedule C as a sole prop. (I doubt you are incorporated), record your iphone as a business expense and say you made 8K- ($200 iphone + a prorated amount of your cell phone bill (say $400 for the year)= 7400 business income that is considered taxable. Off course you will be responsible for self-employment taxes also.......I would do some research on google on this if I were you. All of this information is freely available on the internet. I have no idea why I still pay my accountant 4-6K a year when my own tax projections are nearly identical to his; maybe for peace of mine.

 

[Hmac]

Is the iPhone eligible as a tax write-off? I planned on getting one anyway (and worried that I wouldn't need the data plan all that much, especially since we don't have 3G here yet), but I just got a job yesterday working for a Congressional candidate and I definitely need a smart phone. Anyone have experience with this? Will I be able to write it off as a business expense?

You can only write off the portion that is used for business, and only then the portion that exceeds 2% of your taxable income. If the IRS questions it, and they may, you might end up having to prove the percentage that you wrote off, and that none of it was personal use. If your iPhone is your only cell phone, you're going to have a tough time proving the whole phone cost and monthly charges as business expense deduction.

There are indeed advantages to incorporating. If you do, you are still obligated to deduct only the portion actually used for business, but now the deduction is above the line, and the 2% rule goes away.

 

[gloss]

Bob Loblaw lobs law bomb.