Mobile Phone & Internet — United States Tax Rules

Deduct the business-use percentage of your phone and internet bills — document your business vs. personal usage split.

Claimable: Partially claimable · Tax authority: IRS (Internal Revenue Service)

IRS (Internal Revenue Service) Rules

• Only the business-use portion of your phone and internet bills is deductible on Schedule C Line 25.
• Calculate your business-use percentage honestly: if you use your phone 70% for work calls, emails, and apps — claim 70% of the annual bill.
• If you have a dedicated second phone used only for business, 100% of that plan cost is deductible.
• Internet costs for a home-based business: if you also use the internet for personal browsing, deduct only the business-use percentage.
• If you include internet as part of your Home Office Form 8829 calculation using the floor area method, do not double-claim it on Line 25.
• Keep your monthly phone and internet bills as records. Note the business-use percentage you apply and your rationale.

Limits

No annual dollar cap — limited to documented business-use percentage of actual costs.

Worked Example

Jake, a freelance developer, uses his phone 80% for work. His annual phone bill is $1,440. Deductible amount: $1,440 × 80% = $1,152. His home internet costs $960/year and he uses it 90% for business. Deductible: $960 × 90% = $864. Total deduction: $2,016.

Record Keeping

• Keep monthly phone and internet provider statements
• Document your business-use percentage calculation and review it annually
• If you use a dedicated business phone line, keep the contract as evidence of 100% business use
• Note which apps, calls, and internet activities are business vs. personal

Frequently Asked Questions

Can I deduct 100% of my cell phone if I use it for business?

Only if the phone is used exclusively for business with no personal use. In practice, a cell phone used for both work and personal purposes can only have the business-use percentage deducted. Most self-employed individuals claim 70–90% depending on their usage pattern.

What if my internet is included in my home office calculation?

Do not claim internet costs twice. If you include internet in your Form 8829 home office calculation (Regular Method), do not also deduct it on Schedule C Line 25. Choose one method consistently.