Claiming your phone and internet on your Tax Return

Mobile Phone DeductionsClaims for phone, internet and home phone expenses

Almost everyone looks to make a deduction for work and business. Anyone adding this to their Tax Return will be on the ATO’s hit list.

The Taxation Office has recently taken aim at claiming mobile phone, internet and home phone expenses, now generally requires many taxpayers making such claims to keep a 4-week diary or log book for any amounts over $50 being claimed.

Therefore, if you believe that you will be making a similar claim in your 2016/17 income tax return (i.e., for the year commencing 1 July 2016), you may well need to keep a record of your calls, internet use, etc, over a 4-week “representative” period.

So if you use your own phone or internet for work purposes, you may be able to claim a deduction. You will need to have paid for these costs and have some records to support your claims.

If you use your phones or internet for both work and private use, you will need to work out the percentage that reasonably relates to your work use.

You need to keep records for a 4-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 bills. Evidence that your employer expects you to work at home or make some work-related calls will also help you demonstrate that you are entitled to a deduction.

If you get your phone or bill paid for by work, hen you cannot make a claim as you have not incurred any costs.

You will need to apportion work use of your phone to make a claim if you use it for private use as well.

Incidental use

If you just use your phone for work a little during the year and you are not claiming a deduction of more than $50, you may make a claim without having to analyse your bills:

  • $0.25 for work calls made from your landline,
  • $0.75 for work calls made from your mobile, and
  • $0.10 for text messages sent from your mobile.
  • Usage is itemised on your bills

Home Phone DeductionsIf you have a phone plan where you receive an itemised bill, you need to determine your percentage of work use over a 4-week representative period which can then be applied to the full year.

You 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
  • the amount of data downloaded for work purposes as a percentage of your total downloads.

Don’t get caught out this year over claiming on your phone and internet this year. If you’re not sure ask us when your filling out your Tax Return or leave a comment and we can help you out. Simply make use of our handy messaging system when you log in.

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