Recent Income Tax Developments Involving Cell Phones

Bruce M. Bird, JD, MST, CPA, and Marcia Sakai, PhD, and Christine M. Haynes, PhD

The past decade has witnessed a dramatic surge in the use of cell phones. The number of cell phone subscriptions in the United States is about 300 million. Cell phones have traditionally been used to send and receive phone calls and text messages. Newer models—also known as “smart phones”— offer advanced features such as Internet access. Many employers provide cell phones to their employees. In most cases, these cell phones are used for both business and personal purposes. The deductibility of cell phone expenses used for business purposes has been a complex issue, complicated by changing technology, policies, and habits.