 Tax deduction for work-related PDA phone
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 Dear
Tax Talk,
I am purchasing a PDA phone to use for work. I am an employee of
this business and the phone will only be used for data purposes,
meaning that it will be a portable Internet connection and no calls
will ever be placed on this phone. I am interested in finding out
if I can get a tax deduction for the cost of the phone and the monthly bill on
my taxes. I have done some research and there are many different
answers. Your help would be greatly appreciated.
Best,
-- Bryant
 Dear
Bryant,
Employees can claim unreimbursed business expenses, if they are ordinary and necessary, as itemized deductions in the year paid or incurred. Employee business expenses are subject to reduction by 2 percent of adjusted gross income. An expense is ordinary if it is common and accepted in your trade, business or profession. An expense is necessary if it is appropriate and helpful to your business. An expense does not have to be required to be considered necessary.
There is a two-part means test you must pass before you can claim a depreciation deduction for a computer or cellular telephone that you use in your work as an employee.
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You can claim a depreciation deduction if its use is: |
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You must consider all facts in determining if your
use of the computer or cellular telephone is for the convenience
of your employer. Use of either of these items during your regular
working hours to carry on your employer's business is generally
for the convenience of your employer.
A required condition of employment means that you cannot properly perform your duties without the computer or cellular telephone. Whether you can properly perform your duties without it depends on all the facts and circumstances. It is not necessary that your employer explicitly requires you to use your computer or cellular telephone. But neither is it enough that your employer merely states that your use of the item is a condition of your employment.
For example, let's imagine you are an engineer with
an engineering firm. You occasionally take work home at night rather
than work late at the office. You own and use a computer that is
similar to the one you use at the office to complete your work at
home. Since your use of the computer is not for the convenience
of your employer and is not required as a condition of your employment,
you cannot claim a depreciation deduction for it.
Depreciation, including Section 179 expense (complete write-off of equipment in year of purchase), should be claimed on Form 4562. You should also see Form 2106 instructions for claiming employee business expenses.
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