- Days left
FierceWireless reports that the Internal Revenue Service is mulling a plan to tax employer-provided cell phones as a fringe benefit.

"The IRS is proposing that employers declare 25 percent of an employee's annual cell phone expenses as a taxable benefit," the site reports. "However, the tax collector said employees could avoid being taxed under the proposal if they were able to prove they used personal cellphones for non-work-related calls during work hours."

Holy crap. What a waste of time.

According to JD Power & Associates, the average monthly cell phone bill is $73. Twenty-five percent of that is $18.25. Multiply that by 12 months per year and you get $219 in annual fringe benefits from the use of a cell phone. For someone earning between $33,950 and $82,250, we're talking about an additional annual tax liability of $54.75.

And to collect that extra money, we're going to require employers and employees to do tons of extra paperwork, keep track of annual cell phone bills and what percent of calls are personal and which are work.

If you call a client who's also a friend and talk partly about business and partly about family, how does that break out? You could just divide it in half, but what if some of the small talk is necessary for keeping a good client relationship? So perhaps is 75% work and 25% personal? It's all very complicated.

Isn't the tax code already complicated enough? With all the cash being stuffed into companies like AIG to allow them to go on spa retreats, isn't it a little lame to start hounding the little guy over his cell phone use? It's especially stupid because we're talking about such a small amount of revenue.

Increase your money and finance knowledge from home

Building Credit from Scratch

Start building credit...now.

View Course »

Introduction to Retirement Funds

Target date funds help you maintain a long term portfolio.

View Course »

TurboTax Articles

Know The Key Dates For Health Care Reform

"Open enrollment periods for the health insurance marketplace under the Affordable Care Act are limited" says Mac Schneider, a retired certified public accountant from Albion, Michigan. ?Avoiding tax penalties requires awareness of important dates that may vary year-to-year.? As well as key dates, there are time cycles and coverage gap allowances important to health insurance coverage under provisions of health care reform.

Deducting Mortgage Interest FAQs

If you're a homeowner, you probably qualify for a deduction on your home mortgage interest. The tax deduction also applies if you pay interest on a condominium, cooperative, mobile home, boat or recreational vehicle used as a residence.

What Extra Tax Deductions Should I Make Sure To Take?

The federal government offers tax deductions and credits to reduce taxable income under certain circumstances. There are several that are often overlooked, including deductions for job hunting, caregiver expenses for dependents and children while you work, a credit to reduce taxes for moderate- to low-income earners and the premium tax credit associated with the Affordable Care Act. TurboTax can help determine if you qualify for these credits and deductions.

Add a Comment

*0 / 3000 Character Maximum