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Phone bill format for Planning

okay yeah thank you so much susan i will send over the invoice in about an hour or two thank you so much for taking the time out to talk with me today okay bye oh hey y'all listen i already know what you're thinking and the answer is yes if you use your cell phone for work purposes it is a write-off [Music] what is up everybody my name is tyra and welcome back to keeper tax your one-stop shop for all things 1099 taxes here on this channel we create resources for freelancers independent contractors gig workers and anyone else who files or should be filing business taxes in this day and age cell phones are an essential part of daily work especially if you're a freelancer we check emails use our digital calendar call clients send invoices and a lot more but the crazy thing is we sometimes forget to deduct our cell phone bill on our taxes this happens because freelancers tend to use their phones for business and personal purposes and of course that's all bundled together into one monthly bill so we don't physically see the business expense but no worries today i'm going to show you how to get around that problem and write off your cell phone bill as a work expense the most important thing i want you guys to know is that your phone bill is partially tax deductible you can only deduct the business use percentage which we have talked about a few times on the channel but if you are new here the business use percentage is basically a ratio of the amount of time you spend using something for work or business purposes versus personal needs so that means that if you use your phone for work percent of the time you'd be able to write off sixty percent of your phone bill so if your monthly phone bill was one hundred dollars sixty dollars of it would be tax deductible this also applies to landlines as well if you have a dedicated landline phone that you strictly use for business in your home office that would be 100 tax deductible if you're claiming a home office now i have an entire video on home office deductions on the channel so if you haven't seen that one but you are planning on claiming a home office please please please go check that out i linked it down below now let's say you don't have a landline and you don't want to use your personal phone you can also purchase a separate phone and cell phone plan for business use only and if you guys did that it would be 100 tax deductible but i don't really recommend that for most freelancers and independent contractors because it's a lot of hassle when you could just use the phone you already have so how did we find that business use percentage all you have to do is a simple calculation let's say i use my phone for business purposes from 9 am to 5 pm monday through friday that's 40 hours per week and let's say my normal waking hours are 8 am to 10 pm 14 hours a day first i'll take my 14 waking hours per day and multiply it by seven to get my total waking hours per week that comes up to 98 hours then i'll divide that by the 40 business hours i keep per week in this case we get a percentage of about 41 business use and 59 personal use so what about a family plan now if you're like me then you are a part of a family phone plan but fun facts you can write off your family plan but only the portion you use for work of course the easiest way to do this is to get an itemized version of your monthly bill this will allow you to determine which charges are directly related to your cell phone and which are for your family members from there you can split up the charges like sales tax and fees between everyone on the plan now once you've figured out your individual cell phone costs using the itemized bill you can then split that number between business and personal use now keep in mind you can only deduct these expenses if you actually pay for them in my case i cannot my mom still pays my phone bill thank the lord but if i were paying it myself i would have another partial write-off to add to my tax bill [Music] keeping records for your phone bill is slightly more time consuming because you have the account itself and also your personal versus business use of that cell phone but it is important to keep documentation your phone records for tax purposes should include evidence of your monthly cell phone charge and an indication of the split between your business and personal use so i recommend that you take your cell phone bill print it out and write your business use percentage calculation on the top of the cell phone bill then i would scan it or take a picture to digitize it so i can keep it on file for tax time cell phone expenses on a business trip there are some cases where as a freelancer or self-employed person you may travel for work and you may end up spending a little more than usual on your phone bill for example if you go out of the country you may incur some roaming fees these extra trip related fees are considered a business expense and are one hundred percent tax deductible the same goes for other communication expenses over the course of that business trip like long distance phone calls from your hotel room hot spots and internet access while you're on the plane and if you're looking to learn more about writing off travel expenses we have a video all about it and i linked it down below for you make sure you check it out while we're on the topic of other write-offs in addition to the phone bill itself i have a few more to mention so a lot of us freelancers and independent contractors end up spending on other phone related purchases for work purposes for example an uber or lyft driver needs a phone mount and a car charger an influencer or content creator may buy a phone tripod a ring light to clip onto their phone while they're filming or even use a video editing app like final cut pro or a mileage tracking app the keeper tax app or any other apps you may subscribe to for business reasons phone accessories and apps like these are 100 tax deductible if you exclusively use them for work now speaking of the keeper tags app if you are looking for an app that can categorize your business expenses for you then the keeper tax app is exactly what you need it's super easy to get started just go to keepertax.com or hit the link down in our description box below to get started today that is all that i have for you guys if you have any questions about anything that i mentioned in this video as always leave a comment down below if you would like more easy to digest tax content make sure you give this video a like and if you have not already make sure you hit that big subscribe button down below and make sure your notifications are on so you can get all of the alerts and stay up to date with all things self-employed taxes thank you guys so much for watching today's video and i will see you in the next one bye