Do You Claim Deductions for Phone and Internet Use?
The Tax Office recently released updated information to assist individuals in claiming mobile phone, internet and home phone expenses. The following outlines the records that need to be kept each year to substantiate your deductions.
How to substantiate claims
You need to keep records for a four week representative period in each income year to claim a deduction of more than $50. These records may include diary entries, including electronic records, and/or bills.
How to apportion work use of your phone
As there are many different types of plans available, you will need to determine your work use using a reasonable basis.
Incidental use: If your work use is incidental and you are not claiming a deduction of more than $50 in total, then you may make a claim based on the following without having to analyse your phone or internet bills:
- $0.25 for work calls made from taxpayer's landline
- $0.75 for work calls made from taxpayer's mobile, and
- $0.10 for text messages sent from taxpayer's mobile.
If usage is itemised on your bills: If you have a phone plan where you receive an itemised bill, you need to determine your percentage of work use over a four week representative period which can then be applied to the full year.
You will need to work out the percentage using a reasonable basis. This could include:
- the number of work calls made as a percentage of total calls
- the amount of time spent on work calls as a percentage of your total calls, and
- the amount of data downloaded for work purposes as a percentage of your total downloads.
If usage is not itemised on your bills: If you have a phone plan where you don't receive an itemised bill, you will need to determine your work use by keeping a record of all of your calls over a four week representative period, and then calculate your claim using a reasonable basis.
Bundled phone and internet plans: Phone and internet services are often bundled, so if you are claiming deductions for work-related use of one or more services, you will need to apportion your costs based on your work use for each service.
If you do have a bundled plan, you need to identify your work use for each service over a four week representative period during the income year. This will allow you to determine your pattern of work use which can then be applied to the full year.
It's important that you keep accurate records for any deductions and that they are appropriate for the nature of your employment or business. If you have any questions about what you may or may not be able to deduct, please contact us to discuss your personal situation.
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