How much of my cell phone bill can I deduct?

A common expense that flight crew members ask about are those expenses associated with a cell phone or data plan.  Cell phones are both commonplace and helpful to flight crew members with their jobs, and therefore they do meet the IRS definition of ordinary and necessary.  The issue with cell phones is that they typically are not only used for work - they are used for personal reasons, as well.  Personal expenses are not deductible, so this introduces a dilemma for cell phone or data plan bills.

To handle this, it is necessary to find a way to determine the portion of the cell phone expense that is used for work, while excluding the portion that is used for personal.  Unfortunately, the IRS doesn't have a specific guideline that designates what percentage is to be allocated toward business or personal.  This means that you, as a flight crew member, should make a reasonable determination for the percentage or amount of your cell phone bill that you can justify as being business if you are audited.

There are two basic ways to do it:

  • A percentage of your total bill
  • A flat rate

Percentage Example

Some crew members may elect to use a percentage of each bill (e.g. 80%, 75%, 50%).  if your return is audited, you would likely have to justify your reasoning. 

Flat Rate Example

If you use a flat rate, the math is a lot easier. For example, you might have a bill that is $109.95 per month for a family plan. But you know you need the phone for work and you could obtain a suitable plan for work for $50 per month. The yearly deduction would simply be $50 x 12 = $600 in that example.

Again, these are just examples of what some flight crew members have done in the past, but are not strictly specified, and there is also no guarantee that an auditor would accept the reasoning behind the expense.

What's all this about?

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