Does Your Company Provide You a Work cell Phone?

If they do be prepared to pay tax on your company provided phone.


The Internal Revenue Service proposed employers assign 25 percent of an employee's annual phone expenses as a taxable benefit. Under that scenario, a worker in the 28 percent tax bracket, whose wireless device costs the company $1,500 a year, could see $105 in additional federal income tax.

The IRS, in a notice issued this week, said employees could avoid tax liability if they showed proof they used personal cell phones for nonbusiness calls during work hours. The agency also could decide on a set number of phone minutes as "minimal personal use" that would be untaxed.

In a third option proposed by the IRS, employers could use a statistical sampling to determine what portion of workers' cell phone use is personal and how much is work-related. Workers would be taxed on the difference.

The IRS move, which is spurring efforts by the wireless industry and others to kill the idea, would mark a stricter enforcement of an existing rule that classifies employer-provided cell phones as a taxable benefit, rather than a 24-hour-a-day work tool.

Under a 1989 law, workers who use company-provided mobile phones for personal calls are supposed to count the value of those calls as income and pay federal income taxes accordingly.
But businesses and workers have long ignored the requirement, prompting the IRS to consider steps the agency said would make it easier for businesses and workers to comply.

http://www.foxnews.com/politics/2009/06/12/tax-mans-targets-work-mobile-phone-use/