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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. 1 Step 1: Determine if your phone is dedicated to business only (100% deductible) or shared with personal use (percentage deductible).
  2. 2 Step 2: Calculate your monthly phone bill or the business-use percentage if shared, then multiply by 12 for annual cost.
  3. 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

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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