Can I claim my mobile phone as tax deduction? The answer is YES. However, you must genuinely use your mobile phone for work purpose to be eligible to claim a tax deduction.
Example: Often people use their mobile phone during work or after work hours to contact staff & management. In both cases they use their own equipment for such work. If this sounds like you, it's likely that you could claim your mobile phone as a tax deduction.
In this article we will cover following mobile phone tax deduction questions:
- How do I claim a mobile phone as a tax deduction?
- Can I claim a one off tax deduction or do you need to claim it as depreciation?
- What if I have hired/leased a mobile phone?
- How can you prove it?
- Can I claim a deduction for phone calls?
1. How do I claim a mobile phone as a tax deduction?
The most important thing to note here is that you are only eligible to claim a 'business use percentage' of your mobile phone as a tax deduction. To begin with, you need the following records:
- 1 Proof of purchase for the mobile phone
- 2 The purchase date
- 3 The business use percentage
- 4 Working out your business use percentage (work purpose usage)
ATO require you to keep a diary of all your mobile phone usage for a minimum 4 weeks, and make a note of the time spent on your mobile phone for work and for personal use. Once documented, you will be able work out what percentage of your mobile phone use is for work.
2. Can I claim a one off tax deduction or do you need to claim it as depreciation?
The answer to question depends on the price of mobile phone.
If your mobile phone cost under $300, you can claim a one-off, immediate tax deduction for the business use percentage of the purchase price.
If your mobile phone cost more than $300, you can claim the depreciation of your mobile phone over the life of the equipment which is 3 years as per ATO guidelines.
3. What if I have hired/leased a mobile phone?
You can claim a mobile phone as a tax deduction even if you lease or pay a monthly fee for your mobile phone. Claim the business portion of the lease payments on your tax return.
4. How can you prove mobile phone tax deduction?
First you need list of record listed on question 1 plus you need to have a genuine reason to use personal mobile phone for work and it must be a requirement of your job. Note, ATO can request further clarification, in that case you will be required to prove that personal mobile phone use is a requirement of your job. Also note, most employers provide office facilities and equipment so you are not required to work at home or, if you do, you are provided with work mobile phone so that you do not need to use your own mobile phone.
5. Can I claim a deduction for phone calls?
You can also claim a tax deduction for phone calls cost. Establish what percentage of your phone call cost is for work purposes (just as you did for your mobile phone) and claim that percentage of your annual phone calls bill as a tax deduction.
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This information is intended as a guide. All actual detail and circumstances differ, refer to ATO website for current legislation. Please discuss your situation with Top Accountants at https://topaccountants.com.au/tax-return
Contact our tax accountants at 1300 009 007 or info@topaccountants.com.au