Almost everyone seems to have a cell phone these days. If you own a cell phone and use it for Ministry work, you may be able to claim the Ministry portion as a deductible expense. Here are some quick Dos and Don’ts about claiming a Cell Phone Deduction.
Do keep a good record of what you spent on your cell phone. If you are on a plan with multiple phones, determine how much of that bill is attributable to the phone that you are using for Ministry work.
Don’t claim the entire bill if you use it for both Ministry and personal reasons. If you are using your phone outside of work hours for personal calls, you shouldn’t claim the entire bill as an expense. You will have to divide the bill into Ministry and Personal usage.
Don’t claim a cell phone deduction unless you have some way to prove to IRS how much you use it. If IRS ever asks you how you determined that you use it 75% for business and 25% for personal, you want to be able to show how you arrived at that figure. One recommendation is keeping a log of calls and usage for a week, and then extrapolating that to the rest of the year. It won’t be perfect, but it will be a lot better than having no documentation when IRS comes knocking!
Don’t use the cell phone as an expense for the housing allowance. If you receive a housing allowance as a member of the clergy, IRS is very clear in their guidance that cell phones are not a qualifying expense. The only phone you can claim for your housing allowance expense is a land-line which is hardwired into the house.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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