In the event that I use a cell phone for both personal and business use how would I divvy up and separate the expense in an accounting software if I pay a flat monthly fee? Would i just calculate the percentage of personal calls vs business calls based on minutes? Then use this formula for the rest of the year's invoices? Would i use the following Tax Line? T2124 Business: Telephone Utilities
Please help, my head hurts form all of this.
thanks
"Learn" wrote
Yes.
You should do that (divvy up between personal and business) each month.
Yes.
It's not that difficult for most of the common expenses of a business.
-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net
If this is your only cell phone and you use it for both personal and business purposes, the IRS position is that none of it is deductible as business expense. This is similar to the first phone line into the house being considered personal use and only a second phone line can be deducted as business expense. Only if there are additional charges for business use (such as exceeding your monthly minutes) can you deduct your cell phone charges as a business expense. Dennis
The CRA's stance of a phone used for both personal and business is that there is no division between personal and business. As a result, I generally recommend to people to never use the cell phone for personal calls. In your case, you have a cell phone used for both. You can not count the monthly connection, 911 service and all the other fees. You may count only the long distance charges associated with the business calls. You claim on the Telephone line of the 2124.
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