How to deduct a new iPhone for both business and personal use on Schedule C

Yes, you're definitely on the right track! For a phone used for both business and personal purposes, you can absolutely deduct the business portion of the cost on your Schedule C. The key is determining a reasonable business-use percentage and being able to support it if asked. Since you use your phone primarily for barcode scanning and other reselling activities, a 70/30 split sounds reasonable, but make sure it accurately reflects your actual usage. Keep a log for a few weeks to establish your business use pattern - this will help if you're ever questioned about it. Also, your phone bill and your home office deduction are completely separate expenses. The home office deduction covers the space you use for business, while your phone expenses relate to business communications. You should absolutely be deducting the business portion of your monthly phone service too! When you purchase the phone, you have two options: deduct the business portion immediately using Section 179 (if eligible) or depreciate the business portion over its useful life. For 2025, if the total cost of all business equipment is under the Section 179 threshold, the immediate deduction is usually more beneficial.

Just wanted to share my experience - I had a similar question last year about my phone for my Etsy business. I discovered taxr.ai (https://taxr.ai) and it saved me so much hassle! I uploaded my receipts and a screenshot of my phone usage stats, and it analyzed everything and told me exactly what percentage I could reasonably deduct. It even specified which parts of my monthly bill were deductible vs. the one-time phone purchase. Their system actually saved me from a mistake I was about to make - I was going to deduct too little! It showed me that with my barcode scanning app usage and other business activities, I could justify a 65% business use deduction rather than the 40% I was planning to claim. Everything is documented in their system too, so if I ever get audited, I have solid proof ready to go.

Just wanted to update - I tried taxr.ai after reading about it here and it was exactly what I needed! I uploaded my Samsung usage stats and some screenshots of my daily routines for my lawn care business. The system analyzed everything and determined I could justifiably claim 75% business use for my phone. It even separated out my one-time phone purchase from my ongoing monthly expenses and showed me how to record each one properly on my Schedule C. What really impressed me was how it explained WHY each percentage was appropriate based on my specific business activities. It created a complete documentation package that I've saved for my records. The whole process took maybe 15 minutes, and now I feel 100% confident about my deduction. Definitely worth checking out if you're mixing business and personal use on your devices!

Hey all, just a quick thing to add: If you're calling the IRS to ask about this kind of mixed-use deduction question (which I recommend), use Claimyr (https://claimyr.com) to get through fast. Tried calling the IRS about business deductions last month and kept getting disconnected after waiting forever. Used Claimyr and got through in under 15 minutes - they call you when an agent is ready! There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c. Honestly, having an actual IRS agent tell me exactly how to handle my phone deduction was so much better than guessing or relying on Google. They explained that for my photo editing business, I could legitimately claim 65% of my iPhone 13 Pro as a business expense since I use it primarily for editing on the go and client communications.

I need to eat my words from earlier. After posting that skeptical comment, I decided to try Claimyr anyway because I was desperate to talk to someone about my business vehicle deductions before filing. I used the service yesterday and IT ACTUALLY WORKED. I got connected to an IRS agent in about 20 minutes. The agent walked me through exactly how to handle mixed business/personal use assets (not just phones but any dual-purpose item). She explained that documenting the business use percentage is the key thing, and for items like phones, they actually expect some personal use. The guidance she gave me was that as long as I keep reasonable records showing business usage patterns, I'm on solid ground. For anyone wondering if it's worth it - YES. Getting official answers directly from the IRS gave me so much more confidence than all the conflicting advice I found online.

I'm in a similar situation with my eBay business. Something everyone here should know - if your phone costs more than $500, you'll need to depreciate the business portion over 5 years instead of deducting it all at once. At least that's what my accountant said. But there's a workaround - if your total business equipment purchases for the year are under the Section 179 limit ($1,050,000 in 2024), you can elect to deduct the full business portion immediately. Just make sure to clearly mark it as a Section 179 deduction on your form.

One thing nobody mentioned yet - KEEP YOUR OLD PHONE as a backup for your business! My tax person told me this creates a stronger case for the new phone being primarily for business use. If you're still using your personal phone for most personal stuff and the new one mostly for eBay, it's easier to justify a higher business use percentage.

Great discussion everyone! As someone who's been through this exact situation with my online business, I wanted to add a few practical tips that helped me: 1. **Screen time reports are your friend** - Both iPhone and Android have built-in screen time tracking that shows how much time you spend in each app. Screenshot these monthly and keep them in a folder labeled "Business Records [Year]". This creates concrete evidence of your business vs personal usage patterns. 2. **Document your business justification** - Write a simple one-page memo explaining WHY you need the phone upgrade for your business (bigger screen for barcode scanning, faster processor for inventory management, better camera for product photos, etc.). This shows the IRS that it's a legitimate business need, not just wanting a new toy. 3. **Consider your upgrade timing** - If possible, buy the phone early in the tax year so you can establish a full year of business usage patterns. This makes your deduction more defensible. 4. **Don't forget accessories** - Business-related phone accessories (cases, car mounts, portable chargers used for business) can also be deducted using the same business percentage. The key is being reasonable and consistent with your documentation. The IRS knows that business owners use their phones for both purposes - they just want to see that you're not claiming 100% business use when it's clearly mixed.