The IRS is gearing up to enforce a little known record-keeping rule regarding computers and cell phones. Know what to keep so you’re ready if they ask!
Records You Need to Keep For Your Cell Phone
Cell phones and computers are considered listed property, just like automobiles. And just like automobiles, the IRS is going to want to see proof of your business use of your cell phone.
They have specifically said that it’s not enough to simply have a policy that states that you can only use the cell phone for business use. So you must keep a log, or keep track of the cell phone bills.
Highlight your personal calls and figure out the percentage of business use each month, then pro-rate your bill.
Otherwise, plan on the IRS disallowing your entire cell phone bill as a business deduction.
Records You Need to Keep For Your Computer
This one has us scratching our heads a bit. How do you divide up your time? I’m a CPA and a writer, which means I am constantly searching the Internet for ideas, pictures and the latest in tax law changes. Everything I look at (and that includes watching Condensed Soup on YouTube.com) might make it into one of my blogs.
But the reality is I need to track that all and figure out how much of the computer time is spent on personal activities and on business activities.
How about you? Are you ready to produce computer and cell phone logs if asked by the IRS?