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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13614
Experience:  15years with H & R Block. Divisional leader, Instructor
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If the division of a corporation has corporate cell phones

Resolved Question:

If the division of a corporation has corporate cell phones for their employees and allow them carte blanche use of those cell phones for personal use both texting and calling - not just during work hours but 24/7 can that company still claim their cell phone bills as a business expense?
Submitted: 5 years ago.
Category: Tax
Expert:  Robin D. replied 5 years ago.

Robin D :

The use of the cell phones would be a Fringe Benefit for the employee. Employers must report taxable fringe benefits to employees on Form W-2, and taxable fringe benefits to independent contractors on Form 1099-MISC. Fringe benefits include accident and health benefits; achievement awards; adoption assistance; athletic facilities; de minimis benefits; dependent care assistance; educational assistance; employee discounts; employee stock options; group-term life insurance coverage; lodging on your business premises; meals; moving expense reimbursements; no-additional -cost services; transportation (commuting) benefits; employer provided cell phones, tuition reduction and working condition benefits. Unless the useage for personal is considered De minimis. If their usegae is so low that the business use constitutes 85% or more than you are not obligated to includ ein taxable wages.
The employees personal time use would then not be the fringe benefit use woud be the deduction for the company.

Robin D :

Didi the above answer your question? In short if the business use is 85% or more than you can claim it all.

Customer:

Yes you answered my question - I just wanted to clarify whether it could still be a business expense since I have never personally worked any place where we were ever allowed to use their cell phones for personal use at all

Robin D :

Good, you can always come back here even after you clcik ACCEPT

Robin D :

that's CLICK (sorry)

Customer:

That's fine - thank you for your help - have a great day!

Robin D :

You are welcome

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