- 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

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

Economics 101

Intro to economics. But fun.

View Course »

TurboTax Articles

What Are the Tax Penalties for Smokers?

Starting in 2014, the Individual Shared Responsibility provision of the Affordable Care Act made you responsible for having minimum essential coverage, or MEC, in health insurance. Otherwise, you need to be eligible for a health care exemption, or you could pay a penalty when filing your income tax return. This requirement for minimum essential coverage applies to smokers and nonsmokers alike. If you're not covered by an employer's health plan and are a smoker, you can go to the health care marketplace to find MEC. If you're still unable to comply, you may have a penalty applied.

A Brief History of Income Taxes

Did you know President Abraham Lincoln, one of America's most beloved leaders, also instituted one of its least liked obligations - the income tax? In this brief history of taxes, see the historical events which shaped income taxes in the United States today.

How to Itemize Taxes When Claiming Dependents

Claiming dependents and itemizing deductions is an effective way to save money on your income taxes. Each dependent you claim allows you to reduce your taxable income by one exemption. Get a step-by-step overview on how to take advantage of itemizing your taxes when claiming dependents in this article on tax tips.

Add a Comment

*0 / 3000 Character Maximum