As a self-employed person and entrepreneur, you often use your phone for work. You can often deduct the cost of business calls and internet from your profit. But what if you also use your phone privately? In this article, we explain which costs you are allowed to deduct, when you are allowed to do so and how to properly arrange this.
What falls under business phone expenses?
Business phone costs are all the costs you incur for calling and internet for your business. Think for example of your mobile subscription, extra call minutes, costs abroad and fixed telephony if you use it for your business. But you can also include a business phone and accessories such as a headset or car charger.
When can you deduct phone charges?
You may partially deduct phone expenses if they are work-related. Do you use the phone for business purposes only? Then you may deduct all phone costs. Do you also use the phone privately? Then you may only deduct the business part. Make sure you keep a clear record of how much you call for business and private purposes. You can make a good estimate for this with your call records.
Is your private use of the phone less than 10%? If so, you are often still allowed to deduct all expenses. Do you use the phone about half business and half private? Then divide the cost fairly. Look closely at your call and data usage to determine which part is for work. Always use that division the same in your records. The tax authorities want you to make reasonable and good estimates.
Helpful tip: If possible, use a separate subscription for your business. This is because it makes it easier to split the costs and provides a good overview in your administration.
What can and cannot you deduct?
Deductible though:
- Subscriptions for your business phone
- The cost of business calls outside your bundle
- Cost of calling or using the internet abroad while working
- New business phones and stuff like a charger
Non-deductible:
- Charges for private use of your phone
- Subscriptions you only use privately
- Luxury stuff you don't need for work
Do you use one phone for both work and personal use? Then divide the cost fairly and explain well how you do it.
Tips for balanced administration
- Always keep your invoices: Write which part is for work. That way you can explain it properly if the Tax Office asks about it.
- Use an accounting programme: Use tools such as MoneyMonk. With these, you can easily allocate and track costs.
- Pay your expenses from your business account: It makes your administration more manageable.
Conclusion
As a self-employed person and entrepreneur, you can save money by deducting business phone charges. But make sure you keep private and business use separate and that your administration is up to date. This will help you avoid problems in case of an audit by the tax authorities and make the most of your business expenses.
