Ever since some company named for a fruit unveiled the iPhone, the cell phone has changed from an important part of daily life to an essential part. From texts to emails to even (gasp! old school!) calls, most landlords today manage their rental property using their pint-sized touchscreen sidekick. Because it is so critical, cell phone related costs are a legitimate expense for a landlord.
What Phone Expenses Count For a Landlord?
There are two main components to cell phone expense.
- The phone itself
- The cellular plan (talk, text, and data) that allows you to use the phone on the go
Fortunately, both your purchase of a cell phone and the monthly cellular plan are legitimate landlord expenses. If you run your rental property business as a “pass thru” entity that shows up on your personal taxes (as many landlords do), these expenses will show up on the Schedule E of your IRS tax return.
Additionally, if you use just one phone for both business and personal, you’ll want to calculate roughly how much of your use of your smartphone is split between your landlording business and your personal use of the phone and allocate the expense appropriately (example, if 30% of the usage was for property management, expense 30%).
You may want to talk to a CPA about the expense also, as there are some advisors who suggest you can deduct the full cost of your line if you already have another line you use for your personal use.
Where On the Tax Return Does Cell Phone Expenses Appear?
If your rental property activities are as a ‘pass thru entity’ (aka appear on your personal return), then your landlord cell phone expense can appear on the ‘Other’ line of Schedule E.
Does tracking rental property expenses seem daunting? Never fear! Look into a free online tool like RentalIncomeExpense.com. With this software, you can easily record property expenses and generate a Schedule E Helper report at tax time.