Can I deduct all of my internet since I sell only the internet? There are 3 computers in the house, the others may be used for personal. Also, we have 3 cell phones. Family plan. The other 2 are used for personal and only cost $10 a month, but the main number is for business and is about $50. We can share minutes though. I want to write off the $50.
http://www.nshd.com/pdf/tax_action_memos/deducting_cell_phone_expenses .pdf example of an internet search
Well as long as you can give legitimate proof that the phone is used primarily for business use I would say it is safe to write off just the $50. If you were to be audited you could show that the other phones are not used for this purpose and therefore were not used for a deduction.
According to my read of the IRS website, you can only deduct things like the Internet if you ONLY use it for your business. The safest course of action would be to read the IRS website for yourself.
The cell is my only business number. Also, without internet, I have no business. To interpret IRS rules.... basically, if you are a sole prop, just give the IRS everything you earn from your business so you keep working for corporations.
Goodrat, You can deduct part of your internet charges else you might raise an audit flag. Consider 49%. You can deduct your biz cell phone entirely if you never take any personal calls on it. Else consider a lesser percentage. It's better to error on the generous side with taxes than to risk raising a red flag. You can also deduct some or all of your office space as a percentage of the total square footage of your house - assuming your office is in your house. ~Newbie Shield~
Yes you can have those as deductions provided that you only take a certain percentage. It is up to you what that percentage is. It all depends on much you use it for business. (eg. 25%, 50% etc.)
I spoke with an auditor while preparing my taxes this year and she said if you have a home office you're allowed to take a percentage deduction on your household expenses(home phone, gas, water, electrical, internet, etc.) based upon the sq footage of the office to the sq footage of the home. So say if you have a home office that is 300 sq ft and your home is 3000 total sq ft you can deduct 10% of your household expenses as 300 is 10% of 3000. As far as cell phone usage, she indicated that I could take whatever the estimated percentage use was for business. So if I estimated that 50% of my cell use was for business and my total cell bill for year was $2000 than I could deduct $1000. But of course make sure you have the proper documentation to back up these deductions.
