A phone handset belongs on Line 13, depreciation and section 179 expense deduction.
Why line 13
The handset and the service are two different deductions. Buying the phone outright is buying an asset you will use for years, so the business share of the price is recovered on line 13 through Form 4562, usually in full with a section 179 or bonus election. The monthly plan is a utility, so it goes on line 25 at your business use percentage. A phone that is also your personal phone is almost never 100 percent business, and claiming it that way is the single most common error on this expense.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a phone handset lands on Line 13 without you sorting it.
Start for freeWhat a phone handset is confused with
- Line 25, utilities
- The monthly service plan is utilities on line 25; the hardware purchase is what reaches line 13.
- Line 18, office expense
- A low-cost handset expensed under the de minimis safe harbour can sit on line 18 as an office expense rather than entering the asset list.
- Line 22, supplies
- Cases, chargers and screen protectors are supplies on line 22.
Examples that belong on line 13
- A 1,200 dollar phone used 80 percent for business, giving 960 dollars of basis
- A second handset kept only for business calls, deductible in full
- A 400 dollar refurbished phone for a field technician
- A tablet with a data plan bought as a job-site device
- A handset bought in November and placed in service the same month
What does not belong here
- The first landline in your home, which is not deductible even with business use
- The whole cost of a family phone plan
- Instalment payments on a carrier contract treated as a purchase deduction twice
- Apps and subscriptions on the phone, which are line 18
The limit that applies
Business use percentage applies to both the handset and the plan; a cell phone provided to an employee has its own rules and is not this deduction.
What to keep
Keep the purchase receipt and a basis for the business use percentage, such as a month of call and data usage you can point to. Carrier bills support line 25, not the hardware figure.
Other expenses on line 13
| Expense | Line |
|---|---|
| a business sign | Schedule C, Line 13 |
| a camera and lenses | Schedule C, Line 13 |
| a desk and office chair | Schedule C, Line 13 |
| a laptop or computer | Schedule C, Line 13 |
| a laptop used 70 percent for work | Schedule C, Line 13 |
| a trailer | Schedule C, Line 13 |
| capital expenditures | Schedule C, Line 13 |
| commercial kitchen equipment | Schedule C, Line 13 |
| software bought outright | Schedule C, Line 13 |
| tools over a few hundred dollars | Schedule C, Line 13 |
Related lookups
- Where does internet go on Schedule C?
- Where does printer ink go on Schedule C?
- Where do job materials go on Schedule C?
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a phone handset lands on Line 13 without you sorting it.
Start for free