The most common question asked at tax time is "can I claim work-related phone calls as a tax deduction?" The answer is "Yes"
In this article we will cover following phone calls tax deduction questions:
- How do I calculate & claim phone calls as a tax deduction?
- Can I also claim atax deduction for mobile internet cost?
- How can you prove it?
- Can I claim a deduction for mobile phone (handset) cost?
1. How do I calculate &claim phone calls as a tax deduction?
If you have paid cost of phone calls and were not reimbursed by your employer then, you can claim a deduction and same rule applies if you use your phone for both work and private use, you will need to work out the percentage that reasonably relates to your work use.
Good news is that you are not required to go through every bills. Instead, ATO require you to calculate work related phone call from one bill only and then multiply calculate amount for remaining month of the financial year. Follow below to calculate work related phone call percentage:
- count the number of phone calls made one monthly bill (i.e. in July 100 calls were made)
- count the number of phone calls made for work purposeout of total calls (50 calls out of 100)
- divide work related phone calls over total phone calls made (50/100 = 50%)
- this means 50% of total monthly bill is work related
- multiply above calculate percentage with that specific bill amount ($250 x 50% = $125)
- multiply monthly amount with number of month phone call were made ($125 x 12 month)
- you are eligible claim deduction for $1,500
Example: Sam has a $250 per month phone plan. He receives a bill which itemises all of his phone calls. Over a 4-week representative period, Sam identifies that 50% of his calls are work-related. He worked for 12 months during the income year. Sam can claim a deduction of $1,500 in his tax return (50% x $250 x 12 months).
2. Can I also claim a tax deduction for mobile internet cost?
You can also claim a tax deduction for mobile internet cost. Establish what percentage of your mobileinternet cost is for work purposes (just as you did for your phone calls) and claim that percentage of your annual estimate internet cost as a tax deduction.
3. How can you prove it?
First you need following documents:
- Itimised phone bill which shows information of all phone calls, duration and costs
- Bill must be issued under your name
- Receipt of payment of bill
- Details of how you calculated work related percentage and deduction amount
- Lastly, insure bill cost is not reimbursed to you by your employer.
Plus you need to have a genuine reason to use personal mobile phone for work related phone calls and it must be a requirement of your job. Note, ATO can request further clarification. Also note, most employers provide office facilities and work mobile phone so that don’t need to use your own mobile phone.
4. Can I claim a deduction for mobile phone (handset) cost?
Yes, you can claim deduction for mobile phone cost. See our article on "Tax deduction for mobile phone" for more information.
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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