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
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