How can I properly claim my mobile expenses?

Tax time is hectic enough as it is, so it's worthwhile making sure that you claim the appropriate amount for your personal mobile expenses.

The question of how to claim for your mobile expenses is a relatively complex one, because it relates directly to tax matters that can understandably differ depending on your circumstances. This isn’t intended to be an exhaustive guide, and if you’re in any doubt we’d strongly suggest seeking the advice of a qualified tax professional.

Claiming your mobile plan

The key thing to keep in mind when making a tax related claim as it relates to mobile usage is that you have to be able to prove genuine work-related usage in order to claim it as a tax deduction. This means that for almost any mobile you’ve got to sort out how much of your actual usage is work-related and how much of it is personal. Your calculations should only include calls and data usage related to your work, whether that’s in the form of the number of overall calls or a percentage of total data used on work-related tasks. Obviously this may vary depending on the call and data inclusions with your mobile plan as well.

The ATO provides guidelines for low-cost usage where you’re claiming less than $50 in a calendar year, though this relates to mobile telephony only. By following these guidelines, you don't have to provide substantiated proof of usage, letting you claim $0.75 each for work calls made from your mobile and $0.10 each for text messages sent from your mobile.

If you’re going to claim more than $50 in mobile phone related costs, the ATO requires you to keep records for at least a four-week representative period to back up your claims. You can use this period to calculate average usage over the entire financial year. These records can take the form of a physical log of calls and data use, electronically-produced logs or bills that show the relative usage and costs incurred. Depending on the nature of your work, you may also be required to provide proof that your employment includes an at-home or off-site component that includes the use of mobile telephony and data services.

As data is typically included in the bundle price of most mobile services, you'll need to claim usage at a proportional level because there's no way to break it out. The exception to this at a personal level is that the ATO does not allow claiming for excess data usage charges.

Claiming your mobile phone

You may also be able to claim depreciation on your mobile handset over the course of a year if it is used for work purposes, but again this is subject to proportional usage. If you purchased a mobile phone that you only ever used during work hours for work purposes, you could potentially claim its full cost, but you’d need strong evidence to prove that it was never used at a personal level. Given that most of us carry our mobiles with us all the time, this can be tricky to establish.

As a mobile phone can count as a "tool" for the purposes of depreciation, how you claim for it will depend on how much you paid for it if purchased outright. If you purchase a phone that costs $300 or less, it may be able to be claimed immediately relative to its proportional use, although there are usage tests that apply to making a claim in this way. Mobile phones with an outright cost of more than $300 will need to be depreciated, which means you can’t claim the full deduction in a single tax year, but instead claim a deduction based on their decline in value.

Claiming your work phone

Unfortunately, if your employer is footing the bill for your mobile usage or the handset itself, you cannot claim those costs on your tax. The same is broadly true for any kind of IT-related expense; the ATO’s notes on work-related expenses clearly state that:

"You cannot claim any deduction for the decline in value of laptops, portable printers, personal digital assistants, calculators, mobile phones, computer software, protective clothing, briefcases and tools of trade primarily for use in your employment if the item was provided to you by your employer, or some or all of the cost of the item was paid or reimbursed by your employer, and the benefit was exempt from fringe benefits tax."

As such, if your workplace provides a phone, it's feasible that they may be able to claim it, but you won't.

Image: Shutterstock

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