Is Your Cell Phone Bill Tax Deductible?

Quick Answer: ✅ Yes — the business-use portion of your monthly cell phone bill is deductible. If your phone is used exclusively for business, the entire bill is deductible.

The Short Answer

Your monthly cell phone plan — the recurring charge for service, data, and any add-ons — is a deductible business expense to the extent you use the phone for business. Most self-employed people have one phone for everything, so they deduct a percentage of the bill. If you have a separate business line, that bill is 100% deductible.

IRS Rules for Deducting Your Cell Phone Bill

The IRS treats cell phone service costs as a regular business expense (not listed property since 2010):

1. Business-use percentage applies — If you use one phone for business and personal, estimate the business portion of your usage. This percentage applies to your monthly bill.
2. No strict documentation method required — The IRS doesn't require you to log every call. A reasonable estimate based on your usage patterns is acceptable.
3. Additional lines for business are fully deductible — If you add a second line or eSIM specifically for business, that portion of the bill is 100% deductible.

Source: IRS Publication 535 — Business Expenses

What's Included in the Deduction

Your "cell phone bill" can include:

• Monthly service/plan charges
• Data overages
• Business-related add-ons (hotspot, international calling for business travel)
• Device insurance or protection plans (business-use portion)
• Taxes and regulatory fees on the bill

How Much Can You Deduct?

Example — Dedicated business line:

Your business cell plan is $85/month. Annual deduction: $85 × 12 = $1,020.

Example — Shared personal/business phone:

Your phone bill is $100/month. You estimate 70% business use.

• Monthly deduction: $100 × 70% = $70
• Annual deduction: $70 × 12 = $840

Family plan example:

You're on a family plan at $200/month for 4 lines. Your line's share is $50/month. Business use is 75%.

• Monthly deduction: $50 × 75% = $37.50
• Annual deduction: $450

How to Categorize in QuickBooks

• QBO Category: "Telephone Expense" or "Communication Expenses" (under Expenses)
• Schedule C Line: Line 25 — Utilities (many filers use this) or Line 27a — Other Expenses
• Tip: Set up a recurring monthly transaction in QBO for your phone bill. Split it: business portion to "Telephone — Business" and personal portion to "Owner's Draw" or exclude it. This keeps your books clean all year.

Common Mistakes to Avoid

1. Deducting the full bill when it's a personal phone too — If you text friends, scroll Instagram, and call your mom on the same phone, 100% isn't defensible. 60-80% is common for self-employed people who use their phone heavily for work.
2. Forgetting to deduct it at all — Your phone bill is a recurring expense that adds up. At $100/month, that's $1,200/year you might be leaving on the table.
3. Not separating the phone device from the phone bill — The phone itself (hardware) and the monthly bill (service) are different deductions with different categorizations. Track them separately.
4. Inconsistent percentage month to month — Pick a reasonable business-use percentage and stick with it for the year. Changing it every month without reason looks odd in an audit.

Record-Keeping Requirements

• Monthly phone bill statements (digital copies are fine — download from your carrier)
• Documentation of your business-use percentage estimate
• If on a family plan: documentation of your line's share of the total
• A brief note explaining how you arrived at your business-use percentage (e.g., "I use my phone primarily for client calls, business email, and scheduling — estimated 75% business use")

Who Can Deduct a Cell Phone Bill?

Missing deductions because your books are behind? Accounting Ketchup catches up your QuickBooks in 3–7 days — starting at $69/month. Get your price →