Is a Business Phone Tax Deductible? Yes — Here's How to Claim It
100%
Deductible
Line 25
Schedule C
Utilities
Category
$40–$90/mo
Typical cost
A dedicated business phone line is 100% tax deductible and reports on Schedule C, Line 25 (Utilities). If you use a personal phone for both business and personal calls, you can only deduct the percentage of time spent on business use. This straightforward deduction typically saves self-employed individuals $40–$90 per month in tax liability.
Who qualifies?
Any self-employed individual, sole proprietor, or single-member LLC filing Schedule C with a phone line used exclusively for business qualifies for the full deduction. Those with mixed personal/business phone usage can claim a partial deduction based on business-use percentage.
How to claim it
- 1 Step 1: Determine if your phone is dedicated to business only (100% deductible) or shared with personal use (percentage deductible).
- 2 Step 2: Calculate your monthly phone bill or the business-use percentage if shared, then multiply by 12 for annual cost.
- 3 Step 3: Report the total annual business phone expense on Schedule C, Line 25 (Utilities), and keep phone bills as supporting documentation.
Pro tip
If you use a shared personal phone, document your business-use percentage (for example, by tracking call logs for one representative month), then apply that percentage consistently each year. A dedicated business line eliminates this burden and simplifies record-keeping during an IRS audit.
Source: IRS Publication 535: Business Expenses · Updated for the 2025 tax year
Common questions
How do I calculate the business-use percentage for my cell phone?
Review your phone usage for a representative month — estimate the percentage of calls, texts, and data used for business versus personal. Common methods include tracking call logs for a month, estimating based on work hours vs. total waking hours, or using your phone's screen time breakdown by app category. Apply that percentage to your monthly bill consistently for the year and document how you arrived at it.
Judy automatically tracks Business Phone
Connect your business bank account and Judy categorizes Business Phone charges to Utilities (Line 25) — no spreadsheets, no manual entry. Get a free 30-day audit first, then subscribe.
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