Thursday, February 9, 2012

Tax Prep Part 2

A few months ago I read a thread on the LDW face book page about residents being able to deduct a percentage of their cell phone bill from their taxes as work related expenses not reimbursed. In previous years we haven't pursued that particular deduction because we would have had cell phones whether they were used for work purposes or not, and our bills were fairly reasonable for our two lines (about $75).

Today, things are different. It's amazing how quickly technology can consume a profession. Today my husband uses his phone constantly for work, and the phone he has now is a fancy phone. He has the new iPhone as do all of the residents so they are sending photos, texts, and occasionally talking on the phone. Our bills have increased by almost double!

I started with January 2011 and realized that if I printed out an itemized statement for each of the 12 months I would probably run out of paper and ink. Just the itemized list for his number for one month was 20 pages. I decided to print off quarterly itemized statements to get an average and last night we spent a romantic evening combing through the bills highlighting the calls that were used for work. We only completed one month and decided this is crazy.

Here are some interesting statistics from the month of September:

Phone calls made/received: 345
Work related: 121
Percentage: 35%

Texts sent/received: 621
Work related: 457
Percentage: 74%

Overall he uses his phone for work 72% of the time.

The problem is I can't find the tax code that talks about being able to deduct this. From what I read we might be able to deduct "depreciation" but not the actual monthly expenses and only if it comes to more than 2% of our adjusted gross income (AGI). We can't take the depreciation route because the hospital covered the cost of purchasing the phone. If only I could find a way to write off the percentage of our bill that is used for work. I figure that would be about $790.00. Would it meet the 2% of our AGI? No.

Some of the potentially deductible employment costs can be found here. Do we have any other work related expenses to help us get over the 2% AGI? No. Fortunately his program covers all of the items on the list. I need to be more grateful for that, they really have been good to us in that respect.

Next year though we should have some expenses related to moving for fellowship and other job searching expenses. But that will be a post for next year.

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