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A Great New Cell Phone Law For Extra Tax Savings!

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Can you hear me now? A Great New Cell Phone Law For Extra Tax Savings!

Can you hear me now? A Great New Cell Phone Law For Extra Tax Savings!
The United States Congress recently passed a new law that allows corporations, partnerships and multiple member LLC’s to provide cell phones to their employees TAX FREE! In addition, the monthly usage paid by the corporation for the employee is also tax free as long as the corporation can justify the expense as related to their business, which is easy to do.

Independent contractors can also get tax free cell phones IF provided by their employer or clients. Otherwise, both independent contractors and all self employed taxpayers get a bit of a shaft. They need to keep track of the business usage in order to deduct a portion of the cell phone bill. This can be accomplished by getting your bill and crossing out all personal usage. The difference would be for business. Take pictures of the bill and record it in Taxbot, or scan it into your records.

Special Canadian Tax Laws:
In Canada you can either buy or lease a cell phone, each option has different tax laws associated with it.

  • Lease Mobile Phones: Leased phones are deductible, however the usage must be tracked and recorded. You can do this by marking (highlighting) business phone calls on your phone bill, or crossing out all personal usage. Take pictures of the bill and record it in Taxbot, or scan it into your records.
  • Purchasing Mobile Phones: Purchased phones may be depreciated and deducted that way. Phone usage must also be tracked and recorded. You can do this by marking (highlighting) business phone calls on your phone bill, or crossing out all personal usage. Take pictures of the bill and record it in Taxbot, or scan it into your records.

Enjoy tax free talk time!

By Sandy Botkin, CPA, Tax Attorney & IRS Insider

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