Utilizing smartphones for business purposes may lead to tax deductions.

Utilizing smartphones for business purposes may lead to tax deductions.

If you use your personal smartphone for both personal and work-related purposes, you might be eligible for deducting the associated costs from your taxes. The Federation of Taxpayers (Bund der Steuerzahler) offers guidance on how to make the most of this opportunity.

Many individuals aren't aware of this: The purchase price and ongoing mobile expenses can be claimed as tax deductions, explains the Federation of Taxpayers.

For a predominantly work-related usage (greater than 90%), the full cost of purchasing the device can be deducted in the year of purchase. However, the gross price should not exceed €952. "If the net price is more than €800, the mobile phone needs to be depreciated over its usage period," says Daniela Karbe-Geßler from the Federation of Taxpayers. The standard depreciation period for smartphones, as determined by the financial administration, is typically five years.

For example, if you own a smartphone used exclusively for work and it has a gross cost of €1200, you would need to depreciate it over five years at €240 per year. If you purchased the phone at any time after January 1, you can only deduct the corresponding months from that year's taxes. For instance, if you bought it on October 1, the tax advantage would be €60 for that year.

Expenses to Include in Your Taxes

If work usage is less than 90%, the deductible amount is also proportionally lower. According to the Federation of Taxpayers, groups with high communication requirements can more easily demonstrate the business use of their smartphones, like at a 50% work usage rate, without the need for proof. In such cases, up to 20% of the expenses can be deducted. Similarly, mobile contract costs - but up to a limit of €20 per month.

To enjoy the tax benefit, it's crucial to list all mobile phone expenses in your tax return. You should enter them in the "Expenses for work equipment" section of Schedule N.

While no documents need to be attached to your tax return, it's advisable to provide explanations about the mobile phone expenses in the comment field of the main form "Additional information for the tax return" to ease the tax office's work and avoid potential inquiries.

Read also:

1. If you work from a home office, ensuring your employer includes your advertising expenses in their tax return can help you avoid potential legal issues.
2. The Taxpayers' Association advises double-checking the tax office's guidelines on deducting computer purchases and related expenses for home office use.
3. To maximize tax deductions for smartphone usage, employees should keep in mind that labor law may dictate specific guidelines for such devices in a home office setting.
4. During times of financial audit, having a tax advisor to review and help clarify tax return information related to smartphones, computers, and home office expenses can be beneficial.
5. It's important to note that not only smartphone and computer expenses but also advertising expenses relevant to the home office can be deductible from the tax return.
6. When it comes to utilizing tax tips related to home office expenses, simple practices like separating smartphone usage for business and personal matters can make the tax office's job easier, avoiding potential inquiries and confusion.

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