Many Ministers use their own cell phone for Church activities. They also use it for personal calls. The big question is determining what you can claim on your return as a work deduction (without getting in trouble with the Internal Revenue Service!).
We all know that the IRS is a document-focused agency. If you are going to be claiming a deduction on your return, you are expected to maintain adequate records proving the deduction. A cell phone deduction is no different. You have to keep a record to take the deduction.
The hardest part of documenting a cell phone deduction is separating the time you use it for Ministry purposes from the time you use it for personal purposes. You can deduct the Ministry use but you can’t deduct the personal use.
One way to divide the bill is to keep a log of when you use it. You don’t necessarily need to keep this for the full year, thankfully. You could keep a week-long log and then extrapolate that for the rest of the year. If your log shows that 60% of the time you were using the phone for Ministry purposes and 40% of the time you were using the phone for personal purposes, then you could deduct 60% of the bill.
Another way to divide the bill is contacting your cell phone carrier. In some cases, they are able to print an activity log which can show what the phone was being used for. You would just need to go through the log and denote which calls were personal and which were ministry related. Just like in the previous example, you would determine what percentage of time the phone was being used for Ministry work.
Documenting this use can be time-consuming, but if IRS ever questions your deduction, you’ll appreciate having the documentation ready to go.
Do you have more questions about deductions? Clergy Financial Resources answers questions during our 1040 tax review process. If you want your returns prepared by CFR, visit our website at https://www.clergyfinancial.com/services/clergy-tax-preparation/ for more information.
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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