Phone/internet expense deducibility question

The PRIMARY phone line is presumed to be for personal purposes and is not pro-rated (all or nothing). LD charges, on the other hand, could be expensed by the business. Same thing with the internet connection. What is the incremental cost if also used for business purposes?

You can deduct the business long distance and the business portion of the DSL. Typically, you will not be allowed to deduct your base local phone rate if you have just one line.

If this is the only line into the house, you are out of luck. The IRS considers the first line into the house to be personal. You can only deduct a second line into the house as a business expense. The solution is to get a minimal personal line for about $25/month and then deduct the business line on Sch. C. Dennis

One rule speaks of "first phone line into a house is not deductible". Origin of this rule was propensity of employees to try to deduct their home phone as business expense. However a true "business" line cost more than residential service, and for good reason. The premium we pay is to ensure really fast repair service, much better than I get for my home line. So yes, by all means, deduct away on your schedule c.

Santa ChEAr$, Harlan Lunsford, EA n LA

This was my concern.

This is the reason I wanted to deduct some. I think what I will do is deduct the difference between what a standard residential package + DSL costs and the business + DSL. Since the capability I get with the business level account is directly tied to my work I can't see that the IRS is going to disallow it, especially in light of the fact that I still show (and pay taxes) on an amount significantly greater than the amount of the deduction.

The difference between $25/month for low speed with DHCP (dynamic IP address), and $75/month for higher speed and a fixed IP address (and being allowed to run servers), perhaps. Seth